-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ODGMFTEDyA5UhWBbiGCBrv1ilsf37gGx+IhpZN0qyETQPrScK/cX6JQovEdA/PCI dxJ53Mqt8gRI415TaFbflg== 0000950131-98-005556.txt : 19981016 0000950131-98-005556.hdr.sgml : 19981016 ACCESSION NUMBER: 0000950131-98-005556 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 13 CONFORMED PERIOD OF REPORT: 19981001 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981015 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOKHEIM CORP CENTRAL INDEX KEY: 0000098559 STANDARD INDUSTRIAL CLASSIFICATION: REFRIGERATION & SERVICE INDUSTRY MACHINERY [3580] IRS NUMBER: 350712500 STATE OF INCORPORATION: IN FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-06018 FILM NUMBER: 98726210 BUSINESS ADDRESS: STREET 1: 10501 CORPORATE DRIVE CITY: FORT WAYNE STATE: IN ZIP: 46845 BUSINESS PHONE: 2194704600 MAIL ADDRESS: STREET 1: 10501 CORPORATE DRIVE CITY: FORT WAYNE STATE: IN ZIP: 46845 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): October 1, 1998 TOKHEIM CORPORATION ------------------------------------- (Exact Name of Registrant as Specified in Charter) Indiana 1-6018 35-0712500 ------- ------ ---------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 10501 Corporate Drive, Fort Wayne, IN 46845 - ------------------------------------- ----- (Address of Principal Executive Office) (Zip Code) (219)-470-4600 -------------------------------------------------- Registrant's telephone number, including area code N/A -------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 2. ACQUISITION OF ASSETS On September 30, 1998, pursuant to a Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of June 19, 1998, between Tokheim Corporation ("Tokheim") and Schlumberger Limited ("Schlumberger"), as amended by Amendment No. 1 thereto dated as of September 30, 1998 (the "Purchase Agreement"), Tokheim completed, subject to certain foreign legal requirements, the acquisition (the "Acquisition") of the fuel dispenser systems and service business (the "RPS Division") of Schlumberger for a price equal to $330.0 million in cash, notes and warrants, subject to certain post-closing adjustments. Unless otherwise indicated herein, the "Company" refers to Tokheim and its subsidiaries following the Acquisition. Pursuant to the Purchase Agreement, Schlumberger has agreed to retain its manufacturing facility in Abbeville, France and all liabilities associated with it, including any costs related to closing the facility. Schlumberger and Tokheim also entered into a services agreement, as provided by the Purchase Agreement, pursuant to which Schlumberger will pay Tokheim a minimum fee of $850,000 a year (regardless of use) for a period of five years. Of the $330.0 million purchase price, $100.0 million was paid in cash borrowed under the terms of the New Credit Agreement (see description below). The $210.0 million note portion of the purchase price consisted of $40.0 million in 10-year, 12% junior subordinated payment-in-kind notes (the "Junior Subordinated Notes") and $170.0 million in 12% senior subordinated notes due 120 days after the closing date (the "Senior Subordinated Notes" and, together with the Junior Subordinated Notes, the "Subordinated Notes"). $20.0 million of the purchase price was paid with warrants (the "Warrants") to purchase up to a maximum of 19.9% of the outstanding shares of Tokheim common stock. The actual number of shares issued upon exercise will be based upon the $20.0 million purchase price divided by the weighted average closing price of Tokheim common stock over the 30 day periods prior to and after the closing date. The Warrants are exercisable for a nominal exercise price for five years beginning 120 days after the closing date. Tokheim has the option, subject to bank approval, to redeem (in whole or in part) the Subordinated Notes and the Warrants. Under the terms of the Senior Subordinated Notes, to the extent Tokheim has not refinanced the Senior Subordinated Notes within 120 days of the closing date, such notes convert into an equal principal amount of eight-year notes with an interest rate starting at 12% and 2 increasing by 0.5% every three months, to a maximum of 14.5%. Interest exceeding 12% will be payable in kind. Simultaneously with the consummation of the Acquisition, Tokheim entered into a new credit agreement (the "New Credit Agreement") with certain banks that replaced its prior credit agreement. Proceeds under the New Credit Agreement were used as working capital, to provide the cash used in the Acquisition and to refinance substantially all of Tokheim's debt outstanding prior to the closing date, including approximately $55.0 million in principal amount of Tokheim's 11 1/2% Senior Subordinated Notes plus interest and premiums thereon. The New Credit Agreement provides for aggregate maximum borrowings by the Company of up to $240.0 million principal amount at variable interest rates. On the closing date, the Company borrowed approximately $180.8 million under the New Credit Agreement for the purposes set forth above and to pay fees associated with the Acquisition and the financing of the Acquisition. Also simultaneously with the consummation of the Acquisition, Tokheim entered into a note purchase agreement with one or more purchasers (the "Note Purchase Agreement"), pursuant to which Tokheim issued $22.5 million aggregate principal amount of senior notes (the "Senior Notes") bearing an interest rate starting at 12.5% and increasing by 0.5% on December 1, 1998, and every three months thereafter to a maximum of 14.5%. Tokheim has the option, subject to bank approval, to redeem (in whole or in part) the Senior Notes. SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS CERTAIN STATEMENTS CONTAINED IN THIS FORM 8-K, INCLUDING, WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES," "ANTICIPATES," "EXPECTS" AND WORDS OF SIMILAR IMPORT, CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD- LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY, OR INDUSTRY RESULTS, TO DIFFER MATERIALLY FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: INCREASES IN INTEREST RATES OR THE COMPANY'S COST OF BORROWING OR A DEFAULT UNDER ANY MATERIAL DEBT 3 AGREEMENT; INABILITY OF THE COMPANY TO SUCCESSFULLY MAKE AND INTEGRATE ACQUISITIONS; INABILITY TO ACHIEVE ANTICIPATED COST SAVINGS OR REVENUE GROWTH; DEPENDENCE ON THE RETAIL PETROLEUM INDUSTRY; INABILITY TO FORECAST OR ACHIEVE FUTURE SALES LEVELS OR OTHER OPERATING RESULTS; FLUCTUATIONS IN EXCHANGE RATES AMONG VARIOUS FOREIGN CURRENCIES, PRINCIPALLY AMONG DOLLARS, FRENCH FRANC ("FFR") AND THE BRITISH POUND; COSTS IN ADJUSTING TO A NEW COMMON EUROPEAN CURRENCY; INABILITY TO PROTECT PROPRIETARY TECHNOLOGY OR TO INTEGRATE NEW TECHNOLOGIES QUICKLY INTO NEW PRODUCTS; CHANGES IN BUSINESS STRATEGY OR DEVELOPMENT PLANS; BUSINESS DISRUPTIONS; CHANGES IN GENERAL ECONOMIC CONDITIONS OR WITH ECONOMIC CONDITIONS OF PARTICULAR MARKETS IN WHICH THE COMPANY COMPETES; UNAVAILABILITY OF FUNDS FOR CAPITAL EXPENDITURES OR RESEARCH AND DEVELOPMENT; CHANGES IN CUSTOMER SPENDING LEVELS AND DEMAND FOR NEW PRODUCTS; CHANGES IN GOVERNMENTAL, ENVIRONMENTAL OR OTHER REGULATIONS, ESPECIALLY AS THEY MAY AFFECT THE CAPITAL EXPENDITURES OF THE COMPANY'S CUSTOMERS; FAILURE OF THE COMPANY TO COMPLY WITH GOVERNMENTAL REGULATIONS; LOSS OF KEY MEMBERS OF MANAGEMENT; ADVERSE PUBLICITY; CONTINGENT LIABILITIES AND OTHER CLAIMS ASSERTED AGAINST THE COMPANY; LOSS OF SIGNIFICANT CUSTOMERS OR SUPPLIERS; "YEAR 2000" PROBLEMS WITH COMPUTER SYSTEMS OR SOFTWARE OF THE COMPANY OR ITS CUSTOMERS, SUPPLIERS OR RESELLERS; AND OTHER FACTORS. GIVEN THESE UNCERTAINTIES, INDIVIDUALS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY DISCLAIMS ANY OBLIGATION TO UPDATE ANY SUCH FACTORS OR TO ANNOUNCE PUBLICLY THE RESULT OF ANY REVISIONS TO ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT FUTURE EVENTS OR DEVELOPMENTS. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of the Business Acquired. Attached as exhibits to this Current Report on Form 8-K are audited combined balance sheets of the RPS Division as of December 31, 1997 and 1996, and the related audited combined statements of income, cash flows and equity (and the notes thereto) for each of the three years in the period ended December 31, 1997. It is impracticable at this time to provide the interim historical financial statements of the RPS Division required by Regulation S-X. They will be filed as soon as practicable but no later than 60 days after this report is required to be filed. 4 (b) Pro Forma Financial Information Attached as exhibits to this Current Report on Form 8-K are the unaudited pro forma consolidated condensed balance sheet and the related consolidated condensed statement of earnings (and the notes thereto) for the year ended November 30, 1997. Also attached as exhibits to this Current Report on Form 8-K are the unaudited pro forma consolidated condensed balance sheet of Tokheim and the related consolidated condensed statement of earnings of Tokheim (and the notes thereto) for the year ended November 30, 1997. It is impracticable at this time to provide the interim pro forma financial statements of the RPS Division required by Regulation S-X. They will be filed as soon as practicable but no later than 60 days after this report is required to be filed. 5 (c) Other Exhibits -(1) Master Agreement for Purchase and Sale of Shares, Assets, and Liabilities, dated as of June 19, 1998, between Tokheim and Schlumberger. -(2) Amendment No. 1 to the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of September 30, 1998 between Tokheim and Schlumberger. -(3) Securities Purchase Agreement, dated September 30, 1998, by Tokheim and Schlumberger. -(4) 12% Senior Subordinated Note Due January 28, 1999 in the amount of $170,000,000. -(5) Senior Subordinated Note Indenture, dated as of September 30, 1998, among Tokheim, Management Solutions, Inc., Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum Equipment, Inc., Envirotronic Systems, Inc., Gasboy International, Inc., Tokheim Automation Corporation, Tokheim Investment Corp., as guarantors, and Harris Trust and Savings Bank, as trustee. -(6) 12% Junior Subordinated Note Due 2008 in the amount of $40,000,000. 6 -(7) Junior Subordinated Note Indenture, dated as of September 30, 1998, among Tokheim, Management Solutions, Inc., Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum Equipment, Inc., Envirotronic Systems, Inc., Gasboy International, Inc., Tokheim Automation Corporation, Tokheim Investment Corp., as guarantors, and Harris Trust and Savings Bank, as trustee. -(8) Warrant to Purchase up to 19.9% of the Shares of Common Stock of Tokheim. -(9) Form of Roll-Over Note. -(10) Registration Rights Agreement, dated September 30, 1998, by Tokheim and Schlumberger. -(11) Note Purchase Agreement, dated as of September 30, 1998, among Tokheim, the Subsidiaries and the Purchasers. -(12) Amended and Restated Credit Agreement, dated as of September 30, 1998, among Tokheim, the Borrowing Subsidiaries, the Lenders and NBD Bank, N.A. as administrative agent and Credit Lyonnais as documentation and collateral agent and Gleacher Natwest Inc. and Bankers Trust Company as co-syndication agents. -(13) Amendment No. 1 to Rights Agreement, dated as of September 30, 1998, between Tokheim and Harris Trust and Savings Bank (incorporated herein by reference to the Company's Registration Statement on Form 8-A/A dated October 14, 1998). 7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. TOKHEIM CORPORATION Date: October 15, 1998 By: /s/ Douglas K. Pinner ---------------------------------- Douglas K. Pinner Chairman of the Board, President and Chief Executive Officer and Director Date: October 15, 1998 By: /s/ John A. Negovetich ---------------------------------- John A. Negovetich Executive Vice President, Finance and Administration EXHIBITS (a) Financial Statements of the Business Acquired. -(1) RPS Division audited combined statements of income for the years ended December 31, 1997, 1996 and 1995 (incorporated herein by reference to the Company's Current Report on Form 8-K dated August 3, 1998). -(2) RPS Division audited combined statements of cash flows for the years ended December 31, 1997, 1996 and 1995 (incorporated herein by reference to the Company's Current Report on Form 8-K dated August 3, 1998). 8 -(3) RPS Division audited combined balance sheets as of December 31, 1997 and 1996 (incorporated herein by reference to the Company's Current Report on Form 8-K dated August 3, 1998). -(4) RPS Division audited combined statements of equity for the years ended December 31, 1997, 1996 and 1995 (incorporated herein by reference to the Company's Current Report on Form 8-K dated August 3, 1998). -(5) RPS Division notes to the audited combined financial statements for the years ended December 31, 1997, 1996 and 1995 (incorporated herein by reference to the Company's Current Report on Form 8-K dated August 3, 1998). (b) Pro Forma Financial Information -(1) Unaudited pro forma consolidated condensed statement of earnings for the year ended November 30, 1997. -(2) Unaudited pro forma consolidated condensed balance sheet as of November 30, 1997. -(3) Notes to unaudited pro forma consolidated condensed financial statements. -(4) Unaudited pro forma Tokheim Corporation consolidated condensed statement of earnings for the year ended November 30, 1997. -(5) Unaudited pro forma Tokheim Corporation consolidated condensed balance sheet as of November 30, 1997. -(6) Notes to unaudited pro forma Tokheim Corporation consolidated condensed financial statements. 9 (c) Other Exhibits -(1) Master Agreement for Purchase and Sale of Shares, Assets, and Liabilities, dated as of June 19, 1998, between Tokheim and Schlumberger. -(2) Amendment No. 1 to the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of September 30, 1998 between Tokheim and Schlumberger. -(3) Securities Purchase Agreement, dated September 30, 1998, by Tokheim and Schlumberger. -(4) 12% Senior Subordinated Note Due January 28, 1999 in the amount of $170,000,000. -(5) Senior Subordinated Note Indenture, dated as of September 30, 1998, among Tokheim, Management Solutions, Inc., Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum Equipment, Inc., Envirotronic Systems, Inc., Gasboy International, Inc., Tokheim Automation Corporation, Tokheim Investment Corp., as guarantors, and Harris Trust and Savings Bank, as trustee. -(6) 12% Junior Subordinated Note Due 2008 in the amount of $40,000,000. -(7) Junior Subordinated Note Indenture, dated as of September 30, 1998, among Tokheim, Management Solutions, Inc., Tokheim Equipment Corporation, Tokheim RPS, LLC, Sunbelt Hose & Petroleum Equipment, Inc., Envirotronic Systems, Inc., Gasboy International, Inc., Tokheim Automation Corporation, Tokheim Investment Corp., as guarantors, and Harris Trust and Savings Bank, as trustee. 10 -(8) Warrant to Purchase up to 19.9% of the Shares of Common Stock of Tokheim. -(9) Form of Roll-Over Note. -(10) Registration Rights Agreement, dated September 30, 1998, by Tokheim and Schlumberger. -(11) Note Purchase Agreement, dated as of September 30, 1998, among Tokheim, the Subsidiaries and the Purchasers. -(12) Amended and Restated Credit Agreement, dated as of September 30, 1998, among Tokheim, the Borrowing Subsidiaries, the Lenders and NBD Bank, N.A. as administrative agent and Credit Lyonnais as documentation and collateral agent and Gleacher Natwest Inc. and Bankers Trust Company as co-syndication agents. -(13) Amendment No. 1 to Rights Agreement, dated as of September 30, 1998, between Tokheim and Harris Trust and Savings Bank. 11 The following unaudited pro forma consolidated condensed financial statements (the "Pro Forma Financial Statements") of the Company are derived from the audited financial statements of Tokheim and the RPS Division and have been adjusted to illustrate the effects of the Transactions. The Pro Forma Consolidated Condensed Financial Statements and accompanying notes should be read in conjunction with the consolidated financial statements of Tokheim and the combined financial statements of the RPS Division, including the notes thereto, appearing elsewhere or incorporated by reference in this Current Report. The pro forma statements of earnings includes the RPS Division's combined statement of income for the year ended December 31, 1997 and Tokheim's consolidated statement of earnings for the year ended November 30, 1997. The pro forma balance sheet includes the RPS Division's combined balance sheet as of December 31, 1997 and Tokheim's consolidated balance sheet as of November 30, 1997. These pro forma statements give effect to the MSI acquisition, the Common Stock Offering and the Transaction, and related purchase accounting adjustments, as if these events had taken place on December 1, 1996 for the statement of earnings and on November 30, 1997 for the balance sheet. The Pro Forma Financial Statements are not necessarily indicative of either future results of operations or the results that might have occurred if the foregoing MSI acquisition, the Common Stock Offering and the Transactions had been consummated on the indicated dates. The Acquisition has been accounted for using the purchase method of accounting, therefore the RPS Division's equity has been eliminated in the pro forma consolidated condensed statements. The allocation of the aggregate purchase price included in the Pro Forma Consolidated Condensed Financial Statements is preliminary. EXHIBIT (b) Unaudited Pro Forma Consolidated Condensed Statement of Earnings for the year ended November 30, 1997 (Amounts in thousands)
Tokheim Pro Forma for Equity Tokheim Refinancing Offering, (a) Pro Forma And MSI Acquisition, RPS RPS for Equity Acquisition Refinancing & RPS Division Division Offering and Pro Forma RPS Division Division Adjustments Adjusted MSI Acquisition Adjustments Acquisition -------- ----------- -------- --------------- ------------ ---------------- Net Sales........................$344,248 $ -- $344,248 $393,272 $ -- $737,520 Cost of sales, exclusive of items listed below.............. 303,196 (9,125) 294,071 287,752 (850)(b) 580,973 Selling, general, and administrative expenses......... 48,798 (11,480) 37,318 70,028 -- 107,346 Depreciation and amortization.................... 3,902 3,973 7,875 10,490 6,163 (c) 24,528 Merger and acquisition cost and other unusual items......... -- 2,338 2,338 3,493 -- 5,831 -------- --------- -------- -------- -------- -------- Operating Profit................. (11,648) 14,294 2,646 21,509 (5,313) 18,842 Interest expense, net............ 1,418 -- 1,418 10,570 36,573 (d) 48,561 Other expense (income), net...... 433 -- 433 (1,039) -- (606) -------- --------- -------- -------- -------- -------- Earnings (loss) before income taxes and extraordinary loss.... (13,499) 14,294 795 11,978 (41,886) (29,113) Income taxes..................... (6,779) 7,190 411 1,895 -- 2,306 -------- --------- -------- -------- -------- -------- Earnings (loss) before extraordinary loss..............$ (6,720) $ 7,104 $ 384 $ 10,083 $(41,886) $(31,419) ======== ========= ======== -------- ======== -------- Preferred Stock Dividends ($1.94 per share)............... $ (1,512) $ (1,512) -------- -------- Earnings (loss) before extraordinary loss applicable to common stock................. $ 8,571 $(32,931) ======== ========
EXHIBIT (b) Unaudited Pro Forma Consolidated Condensed Balance Sheet as of November 30, 1997 (Amounts in thousands)
Tokheim Pro Forma for Equity Tokheim Refinancing Offering, (e) Pro Forma And MSI Acquisition, RPS RPS for Equity Acquisition Refinancing & RPS Division Division Offering and Pro Forma RPS Division Division Adjustments Adjusted MSI Acquisition Adjustments Acquisition -------- ----------- -------- --------------- ------------ ---------------- ASSETS: Current Assets: Cash and cash equivalents......$ 7,321 $ (7,321) $ -- $ 7,458 $ (2,000)(l) $ 5,458 Accounts receivables, net...... 102,540 (3,620) 98,920 84,164 -- 183,084 Total Net Inventory............ 58,859 -- 58,859 64,508 -- 123,367 Other current assets........... 11,872 -- 11,872 6,711 -- 18,583 -------- -------- -------- -------- --------- -------- Total Current Assets......... 180,592 (10,941) 169,651 162,841 (2,000) 330,492 Property, plant & equipment, net............................. 32,183 -- 32,183 42,221 -- 74,404 Other tangible assets............ 1,326 -- 1,326 9,191 -- 10,517 Goodwill......................... 51,757 (51,757) -- 62,695 246,515 (f) 309,210 Other noncurrent assets and deferred charges................ 3,576 -- 3,576 19,561 4,566 (g) 27,703 -------- -------- -------- -------- --------- -------- Total Assets.................$269,434 $(62,698) $206,736 $296,509 $249,081 $752,326 ======== ======== ======== ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY: Liabilities: Current Liabilities: Current portion long-term debt.........................$ 46 $ -- $ 46 $ 2,391 $ -- $ 2,437 Notes payable, bank........... -- -- -- 98 -- 98 Cash Overdraft................ 12,614 (12,614) -- 10,575 -- 10,575 Accounts Payable and accruals..................... 94,526 (6,781) 87,745 105,818 27,575 (h) 221,138 -------- -------- -------- -------- --------- -------- Total Current Liabilities.... 107,186 (19,395) 87,791 118,882 27,575 234,248 Long-Term Debt................. -- -- -- 4,397 4,397 Bank Credit Agreement.......... -- -- -- 8,158 163,047 (i) 171,205 Senior Subordinated Notes...... -- -- -- 55,000 137,500 (i) 192,500 Guaranteed ESOP Obligation..... -- -- -- 9,429 -- (i) 9,429 Junior Subordinated PIK Notes......................... -- -- -- -- 40,000 (i) 40,000 Postretirement Benefits........ 4,188 -- 4,188 14,378 -- 18,566 Minimum Pension Liability...... -- -- -- 2,173 -- 2,173 Minority Interest.............. 133 -- 133 1,319 1,452 Other Lt. Liabilities.......... 3,657 -- 3,657 5,511 -- 9,168 -------- -------- -------- -------- --------- -------- Total Liabilities............ 115,164 (19,395) 95,769 219,247 368,122 683,138 Common Stock Warrants............ -- -- -- -- 20,000 (k) 20,000 Redeemable Convertible Preferred Stock................. -- -- -- 24,000 -- 24,000 Guaranteed ESOP Obligation....... -- -- -- (9,429) -- (9,429) Preferred Treasury Stock at Cost......................... -- -- -- (4,718) -- (4,718) -------- -------- -------- -------- --------- -------- Total Preferred Equity......... -- -- -- 9,853 9,853 Common Stock..................... 162,144 -- 162,144 88,882 (162,144)(j) 88,882 Minimum Pension Liability........ -- -- -- (2,173) -- (2,173) Foreign Currency Translation Adjustments..................... (1,566) -- (1,566) (18,048) 1,566 (j) (18,048) Retained Earnings (accumulated deficit)........................ (8,308) (43,303) (49,611) (1,112) 21,537 (m) (29,186) Common Treasury Stock at Cost.... -- -- -- (140) -- (140) -------- -------- -------- -------- --------- -------- Total Common Equity............ 154,270 (43,303) 110,967 67,409 (139,041) 39,335 -------- -------- -------- -------- --------- -------- Total Liabilities and Stockholders' Equity........$269,434 $(62,698) $206,736 $296,509 $249,081 $752,326 ======== ======== ======== ======== ======== ========
Note 1: Though not reflected in the Unaudited Pro Forma Consolidated Condensed Statement of Earnings, Tokheim believes that through successful integration and consolidation of the RPS Division estimated cost savings of approximately $47.3 million can be achieved per annum after three years. (a) The adjustments to the RPS Division's financial statements reflect amounts that have been reclassified to conform to Tokheim's presentation and to remove certain costs associated with operations as a division of Schlumberger. The details of these reclassifications and adjustments are as follows: Cost of sales: Reclassification of manufacturing depreciation and amortization to depreciation and amortization........... $ (7,087) Reclassification of personnel reductions (restructuring) to merger and acquisitions and other unusual items..................................... (350) Reflects an adjustment to operations of Schlumberger's Abbeville facility for fiscal 1997 which will not be purchased by Tokheim.................. (700) Reclassification of nonrecurring warranty cost associated with design flaws in new product launches. These design flaws were corrected and not expected to impact ongoing operations............... (988) -------- Total adjustments and reclassification from cost of sales........................................... (9,125) -------- Selling, general, and administrative expenses: Adjustments to management and technical fees charged by Schlumberger to its subsidiaries net of expenses Tokheim expects to incur.................... (9,692) Reclassification of selling, general and administrative depreciation and amortization to depreciation and amortization........................... (788) Reclassification of personnel reductions (restructuring) to merger and acquisition costs and other unusual items..................................... (800) Reclassification of other miscellaneous items to merger and acquisition costs and other unusual items.... (200) -------- Total adjustments and reclassification from selling, general and administrative expenses................ (11,480) -------- Depreciation and amortization: Reclassification of manufacturing and amortization........ 7,087 Reclassification of selling, general and administrative depreciation and amortization............ 788 Elimination of preexisting goodwill amortization that Tokheim is not purchasing.......................... (3,902) -------- Total adjustments and reclassification to depreciation and amortization...................... 3,973 -------- Merger and acquisition costs and other unusual items: Reclassification of personnel reductions (restructuring) from cost of sales...................... 350 Reclassification of personnel reductions (restructuring) from selling, general and administrative expenses................................. 800 Reclassification of nonrecurring warranty cost associated with design flaws in new product launches. These design flaws were corrected and not expected to impact ongoing operations................... 988 Reclassification of other miscellaneous items from selling, general and administrative costs............... 200 -------- Total adjustments and reclassification to merger and acquisition cost and other unusual items........... 2,338 -------- Effect of all adjustments on pretax income..................... 14,294 Tax effect on adjustments using the RPS Division's reported tax rate of 50.3%............................................ 7,190 -------- Effect of all adjustments on net earnings............ $ 7,104 ========
(b) Reflects a pro forma adjustment for technology and licensing fees contractually payable by Schlumberger to Tokheim. These fees relate to certain services and licenses provided to Schlumberger by Tokheim. The contract is noncancelable and requires minimum annual payments of $850 per annum to Tokheim over the next 5 years.......................................... $ 850 ======== (c) The pro forma adjustment represents the amortization of purchased goodwill associated with the Acquisition as follows: Anticipated Annual Gross Amortization Amortization Amount Period Amount ----------- ------------ ------------ Purchased goodwill (based on a preliminary estimate of purchase price allocation)............... $ 246,515 40 years $ 6,163 ========== ========
(d) The pro forma interest expense, net, was calculated as follows: Tokheim's pro forma interest expense for the MSI Acquisition and the Common Stock Offering........... $10,570 RPS Division's historical interest expense, net...................................................... 1,418 ------- Total............................................................................... 11,988 Plus: Interest expense on borrowings under: New Bank Credit Agreement ($180,634 at interest rates ranging from 7.65% to 9.5%, spread between three different Facilities)...................................................................... 17,803 12.0% Senior Subordinated Seller Notes............................................................. 20,400 12.5% Senior Notes................................................................................. 2,813 12.0% Junior Subordinated PIK Note................................................................. 4,800 ------- Total............................................................................... 45,816 Less: Interest expense on: Tokheim debt being refinanced: Existing Bank Credit Agreement................................................................... (1,717) 11 1/2% Senior Subordinated Notes due 2006....................................................... (6,325) RPS Division....................................................................................... (1,418) ------- Total............................................................................... (9,460) ------- Sub-total.................................................................................... 48,344 Amortization of deferred financing costs: Remove: Existing Bank Credit Agreement................................................................... (1,380) 11 1/2% Senior Subordinated Notes................................................................ (307) Add: New Bank Credit Agreement........................................................................ 1,512 12.5% Senior Subordinated Notes due 2005........................................................... 393 ------- Pro forma interest expense, net...................................................................... $48,561 =======
The Company has the option, subject to bank approval, to redeem (in whole or in part) the Subordinated Notes and the Warrants. Interest expense, net, includes that portion of interest with respect to the Guaranteed ESOP Obligation which is not paid through dividends on, or redemptions of, the ESOP Preferred Stock.
(e) The following table summarizes the adjustments made to the RPS Division's audited financial statements to conform them to the terms and conditions as outlined in the Purchase Agreement. Assets: Cash not being purchased................................................................................ $ (7,321) Reduction of accounts receivable for related party receivables not being purchased...................... (3,620) Pre existing goodwill not being purchased............................................................... (51,757) -------- Total adjustments to assets........................................................................ $(62,698) ======== Liabilities: Cash overdraft not being assumed........................................................................ $(12,614) Reduction of accounts payable and accruals for related party payables not being assumed................. (6,781) -------- Total adjustments to liabilities................................................................... $(19,395) Shareholders' Equity: Net adjustment to retained earnings for the above adjustments of assets and liabilities................. (43,303) -------- Total adjustments to liabilities and shareholders' equity.......................................... $(62,698) ======== (f) This amount represents the excess of cost over the fair value of the net assets (goodwill) of the RPS Division acquired. Total purchase price of the RPS Division.................................................................... $335,000 Purchase price adjustment for personnel reduction expenses to be reimbursed by Schlumberger............... (5,000) -------- Adjusted purchase price................................................................................. 330,000 Book value of the RPS Division net assets, as adjusted, which is expected to approximate fair value....... 110,967 -------- Excess of cost over fair value of net assets acquired..................................................... 219,033 Direct costs associated with the Acquisition: Legal and financial advisory fees....................................................................... 4,000 Direct acquisition costs (see note below)............................................................... 23,482 -------- Total Goodwill.......................................................................................... $246,515 ========
(g) This amount represents the pro forma adjustment necessary to reflect the Company's write-off of previous unamortized debt issuance cost and the capitalization of the new debt issuance costs associated with the new financing plan. The existing issuance costs will be written-off as a charge to extraordinary loss from debt extinguishment in the period incurred. Write-off of deferred issuance costs associated with the Existing Bank Credit Agreement..................... $ (4,693) Write-off of deferred issuance costs associated with the 11 1/2% Senior Subordinated Notes.................. (2,925) -------- Sub-total................................................................................................ (7,618) Capitalization of deferred issuance costs associated with the New Bank Credit Agreement..................... 9,434 Capitalization of deferred issuance costs associated with the 12.5% Senior Subordinated Notes due 2005...... 2,750 -------- Net adjustment to reflect the fees associated with the financing of the Acquisition and refinancing of existing debt........................................................................................ $ 4,566 ======== The deferred debt issuance costs associated with the New Credit Agreement and the 12.5% Senior Subordinated Notes due 2005 will be amortized over the life of the respective agreements on a straight line basis. (h) Pro forma adjustment to accounts payable and accruals: Accrued interest on $55.000 of 11 1/2% Senior Subordinated Notes due 2006 to be redeemed.................... $ (2,107) Accruable restructuring expenses............................................................................ 6,200 Accrued integration plan costs.............................................................................. 23,482 -------- $ 27,575 ======== Included in accrued liabilities are certain costs Tokheim believes will be spent to close down redundant operations in connection with the reorganization and rationalization of the RPS Division. The table below summarizes the deferred costs included in goodwill and accrued liabilities as they relate to the integration plan for the RPS Division. The amounts do not include costs associated with consolidation of previously existing Tokheim subsidiaries, which will be expensed as incurred, nor do these costs benefit production in future periods. Personnel reductions........................................................................................ $ 18,602 Closure of redundant facilities............................................................................. 4,880 -------- Total.................................................................................................... $ 23,482 ======== In addition to the above expenditures, the Company expects to spend approximately $500 for capital projects with future benefits. The Company estimates future accruable restructuring charges related to the integration plan at approximately $6,200. In addition, nonaccruable operating charges associated with the plan, which will be expensed as incurred, are estimated at $2,000. These amounts have been aggregated and shown as a reduction of cash of $2,000, an increase in accrued expenses of $6,200 and an aggregate reduction of retained earnings of $8,200. (see also Note below)
(i) This amount reflects the repayment of existing Tokheim debt and RPS Division purchase price with the proceeds of the Senior Notes and borrowings under the New Bank Credit Agreement. Borrowings under the New Bank Credit Agreement............ $171,205 Borrowings under the New Bank Credit Agreement (refinance preferred ESOP obligation).............................. 9,429 Issuance of 12.0% Senior Subordinated Note ............... 170,000 Issuance of 12.0% Junior Subordinated PIK Note due 2008... 40,000 Issuance of 12.5% Senior Note due 2005.................... 22,500 Repay: Borrowings under the Existing Bank Credit Agreement....... (8,158) Borrowings under the Existing Bank Credit Agreement (refinance preferred ESOP obligation)................... (9,429) 11 1/2% Senior Subordinated Notes due 2006.............. (55,000) -------- Net Adjustment to reflect Acquisition financing and the application of proceeds to repay existing debt...................................... $340,547 ======== (j) Amounts represent the elimination of the RPS Division's existing net book value (see also Note below). (k) Per the terms of the letter agreement, the Company has financed $20,000 of the purchase price by issuing Schlumberger a warrant to purchase, for a nominal value, shares of Tokheim common stock. The number of shares for which the warrant may be exercised equals the number of shares whose value of the average closing price thirty days prior to and thirty days after closing equals $20,000 but, not to exceed 19.9% of the total outstanding shares of the Company at the closing date. The Company has the option, subject to bank approval, to repurchase the warrants at Par Value. (l) Adjustments to retained earnings (accumulated deficit) are as follows: Extraordinary loss from debt extinguishment: Write-off deferred issuance costs associated with the Existing Bank Credit Agreement...................... $ (4,693) Write-off deferred issuance costs associated with the 11 1/2% Senior Subordinated Notes....................... (2,925) Premiums paid to redeem 11 1/2% Senior Subordinated Notes at the redemption percentage of 120.473% plus Consent payment......................................... (12,256) -------- Total extraordinary loss from debt extinguishment.... (19,874) Other: Accruable restructuring expenses.......................... (6,200) Non accruable restructuring expenses...................... (2,000) RPS Division accumulated deficit eliminated in consolidation........................................... 49,611 -------- Total adjustment to accumulated deficit.............. $ 21,537 ========
Note: Dividends are payable on the Company's ESOP Preferred Stock, the proceeds of which are used to service the Guaranteed ESOP Obligation Exhibit (b) UNAUDITED PRO FORMA TOKHEIM CORPORATION FINANCIAL STATEMENTS (AMOUNTS IN THOUSANDS) The following unaudited pro forma Tokheim Corporation financial statements have been adjusted to reflect the effects of the MSI Acquisition and the issuance of approximately 4.17 million Shares of Tokheim Common Stock pursuant to its 1998 Common Stock Offering. The Unaudited Pro Forma Tokheim Corporation Consolidated Condensed Statement of Earnings gives effect to the MSI Acquisition and the Common Stock Offering as if they had occurred on December 1, 1996. The Unaudited Pro Forma Tokheim Corporation Consolidated Condensed Balance Sheet gives effect to the MSI Acquisition and the Common Stock Offering as if they had occurred on November 30, 1997. The statements do not purport to represent what Tokheim's results of operations or financial position actually would have been if the MSI Acquisition and the Common Stock Offering had occurred as of such dates and are not necessarily indicative of future operating results or financial position. The Unaudited Pro Forma Tokheim Corporation Consolidated Condensed Statement of Earnings for the year ended November 30, 1997 and Pro Forma Tokheim Corporation Consolidated Condensed Balance Sheet as of November 30, 1997 were derived from the Tokheim's audited Consolidated Financial Statements. UNAUDITED PRO FORMA TOKHEIM CORPORATION CONSOLIDATED CONDENSED STATEMENT OF EARNINGS FOR THE YEAR ENDED NOVEMBER 30, 1997
TOKHEIM PRO FORMA FOR COMMON THE COMMON MSI TOKHEIM PRO STOCK STOCK ACQUISITION FORMA FOR OFFERING OFFERING PRO FORMA MSI PRO FORMA AND MSI TOKHEIM MSI ADJUSTMENTS ACQUISITION ADJUSTMENTS ACQUISITION -------- ------ ----------- ----------- ----------- ----------- Net sales............... $385,469 $7,803 $ -- $393,272 $ -- $393,272 Cost of sales, exclusive of items listed below.. 283,932 3,820 -- 287,752 -- 287,752 Selling, general and administrative expenses............... 68,167 1,761 100 (a) 70,028 -- 70,028 Depreciation and amortization........... 9,232 53 1,205 (b) 10,490 -- 10,490 Merger and acquisition cost and other unusual items.................. 3,493 1,347 (1,347)(c) 3,493 -- 3,493 -------- ------ ------ -------- ------ -------- Operating income........ 20,645 822 42 21,509 -- 21,509 Interest expense, net... 16,451 (28) 912 (d) 17,335 (6,765)(f) 10,570 Other income, net....... (1,003) (36) -- (1,039) -- (1,039) -------- ------ ------ -------- ------ -------- Earnings (loss) before income taxes and extraordinary loss..... 5,197 886 (870) 5,213 6,765 11,978 Income taxes............ 1,217 -- 2 (e) 1,219 676 (g) 1,895 -------- ------ ------ -------- ------ -------- Earnings (loss) before extraordinary loss..... $ 3,980 $ 886 $ (872) $ 3,994 $6,089 $ 10,083 ======== ====== ====== ======== ====== ======== Preferred stock dividends ($1.94 per share)................. $ (1,512) $ (1,512) $ (1,512) ======== ======== ======== Earnings (loss) before extraordinary loss applicable to common stock.................. $ 2,468 $ 2,482 $ 8,571 ======== ======== ======== Earnings (loss) per common share: Primary Before extraordinary loss................ $ 0.31 $ 0.31 $ 0.70 ======== ======== ======== Weighted average number of shares outstanding......... 8,083 8,083 4,170 12,253 ======== ======== ======= ======== Fully diluted Before extraordinary loss................ $ 0.27 $ 0.27 $ 0.65 ======== ======== ======== Weighted average number of shares outstanding......... 9,067 9,067 4,170 13,327 ======== ======== ======= ========
Exhibit (b) UNAUDITED PRO FORMA TOKHEIM CORPORATION CONSOLIDATED CONDENSED BALANCE SHEET AS OF NOVEMBER 30, 1997 (AMOUNTS IN THOUSANDS)
TOKHEIM PRO FORMA MSI TOKHEIM PRO COMMON FOR STOCK ACQUISITION FORMA FOR OFFERING OFFERING PRO FORMA MSI PRO FORMA AND MSI TOKHEIM MSI ADJUSTMENTS ACQUISITION ADJUSTMENTS ACQUISITION -------- ------ ----------- ----------- ----------- ----------- ASSETS: Current assets: Cash and cash equivalents........... $ 6,438 $1,020 $ -- (h) $ 7,458 $ -- $ 7,458 Accounts receivable, net................... 83,011 2,002 (850)(i) 84,163 -- 84,163 Net inventory.......... 64,347 161 -- 64,508 -- 64,508 Other current assets... 6,705 7 -- 6,712 -- 6,712 -------- ------ ------- -------- -------- -------- Total current assets............ 160,501 3,190 (850) 162,841 -- 162,841 Property, plant & equipment, net......... 41,966 255 -- 42,221 -- 42,221 Other tangible assets... 9,184 7 -- 9,191 -- 9,191 Goodwill................ 62,695 -- -- 62,695 -- 62,695 Other noncurrent assets and deferred charges... 16,273 42 4,821 (j) 21,136 (1,575)(m) 19,561 -------- ------ ------- -------- -------- -------- Total assets....... $290,619 $3,494 $ 3,971 $298,084 $ (1,575) $296,509 ======== ====== ======= ======== ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY: Liabilities: Current liabilities: Current portion of long-term debt...... $ 2,391 $ -- $ -- $ 2,391 $ -- $ 2,391 Notes payable, bank.. 98 -- -- 98 -- 98 Cash overdraft....... 10,575 -- -- 10,575 -- 10,575 Accounts payable and accruals............ 105,787 1,373 -- 107,160 (1,342)(n) 105,818 -------- ------ ------- -------- -------- -------- Total current liabilities....... 118,851 1,373 -- 120,224 (1,342) 118,882 Long-term debt......... 4,397 -- -- 4,397 -- 4,397 Existing credit agreement............. 24,090 -- 12,000 (k) 36,090 (27,932)(o) 8,158 Senior subordinated notes................. 90,000 -- -- 90,000 (35,000)(n) 55,000 Guaranteed ESOP obligation............ 9,429 -- -- 9,429 -- 9,429 Postretirement benefits.............. 14,378 -- -- 14,378 -- 14,378 Minimum pension liability............. 2,173 -- -- 2,173 -- 2,173 Minority interest...... 1,319 -- -- 1,319 -- 1,319 Other long-term liabilities........... 5,511 -- -- 5,511 -- 5,511 -------- ------ ------- -------- -------- -------- Total liabilities.. 270,148 1,373 12,000 283,521 (64,274) 219,247 Redeemable convertible preferred stock........ 24,000 -- -- 24,000 -- 24,000 Guaranteed ESOP obligation............. (9,429) -- -- (9,429) -- (9,429) Preferred treasury stock at cost................ (4,718) -- -- (4,718) -- (4,718) -------- ------ ------- -------- -------- -------- Total preferred equity............ 9,853 -- -- 9,853 -- 9,853 Common stock............ 21,158 300 (300)(l) 21,158 67,724 (p) 88,882 Minimum pension liability.............. (2,173) -- -- (2,173) -- (2,173) Foreign currency translation adjustments............ (18,048) -- -- (18,048) -- (18,048) Retained earnings (accumulated deficit).. 9,821 1,821 (7,729)(l) 3,913 (5,025)(n) (1,112) Common treasury stock at cost................... (140) -- -- (140) -- (140) -------- ------ ------- -------- -------- -------- Total common equity............ 10,618 2,121 (8,029) 4,710 62,699 67,409 -------- ------ ------- -------- -------- -------- Total liabilities and shareholders' equity............ $290,619 $3,494 $ 3,971 $298,084 $ (1,575) $296,509 ======== ====== ======= ======== ======== ========
(a) Reflects additional compensation paid to the president of MSI pursuant to an employment agreement entered into at the time of the MSI Acquisition........................................ $ 100 (b) Reflects additional amortization expense related to $4,821 of the purchase price that has been allocated to internally developed software, which is being amortized over a four-year period........................................................ $ 1,205 (c) Reflects the elimination of a nonrecurring charge of $980 that relates to a bonus paid to the principal shareholder of MSI. Also reflects the elimination of bonuses paid to employees of MSI in anticipation of the sale to Tokheim, offset by expected bonuses anticipated to be paid by Tokheim to senior management of MSI........................................................ $(1,347) (d) Additional interest expense related to the $12,000 of additional borrowings under the Existing Credit Agreement to fund the purchase of MSI at a 7.6% weighted average interest rate.......................................................... $ 912 (e) MSI has been incorporated into Tokheim's consolidated federal tax return. As such, Tokheim has available approximately $24,669 of NOL carryforwards, which are offset by a corresponding valuation allowance. Therefore, federal tax provisions are only recorded for book purposes equal to the expected Alternative Minimum Tax ("AMT") liability. The pro forma provision for taxes is calculated as follows: State and local tax provision for MSI's pre-tax earnings at an 8.0% effective tax rate.................................. $ 71 Federal tax provision for MSI's pre-tax pro forma earnings reduced by 90% for utilization of Tokheim's Net Operating Loss ("NOL") carryforwards with the remaining amount taxed at a 20% AMT rate........................................... 18 Reduction of state and local tax provision for pre-tax pro forma earnings at an 8.0% effective tax rate................ (70) Federal tax provision for MSI's pre-tax pro forma earnings reduced by 90% for utilization of NOL carryforwards, with the remaining amount taxed at a 20% AMT rate................ (17) ------- $ 2 ======= Note: In addition to the above pro forma adjustments, the Company will incur a one-time charge to operations for the writedown of in-process research and development, of which technological feasibility has not yet been determined and which has no alternative future use. This charge to earnings of approximately $5,908 will be recorded in the first quarter of 1998. (f) Pro forma adjustments to interest expense: Decreased interest expense related to a portion of the $12,000 of additional borrowings under the Existing Credit Agreement to fund the purchase of MSI at a 7.6% interest rate........................................................ $(1,382) Decreased interest expense related to the $35,000 of 11 1/2% Senior Subordinated Notes redeemed at 11.5%................. (4,025) Decreased interest expense related to the $10,000 of 11 1/2% Senior Subordinated Notes repurchased using proceeds from the Existing Credit Agreement ($10,000 at 11.5% for 10.5 months, $10,000 at 7.6% for 1.5 months)..................... (1,101) Decrease in amortization expense related to a pro rata share of deferred issuance cost written off to extraordinary loss on debt retirement.......................................... (257) ------- (6,765) ======= (g) Pro forma provision for taxes: State and local tax provision at an 8.0% effective tax rate.. $ 541 Federal tax provision for pre-tax earnings reduced by 90% for utilization of NOL carryforwards, with the remaining amount taxed at a 20% AMT rate..................................... 135 ------- $ 676 =======
(h)Pro forma adjustment to cash: Reflects the repayment of a loan from a minority shareholder.... $ 850 Reflects an adjustment to record a distribution of cash dividends to MSI shareholders prior to the acquisition......... $ (850) -------- $ -- ======== (i)Reflects the repayment of a loan from a minority shareholder..... $ (850) (j)Reflects the purchase price allocation to capitalized software costs to be amortized over a four-year life.................... $ 4,821 (k)To record additional borrowings under the Existing Credit Agreement to fund the MSI Acquisition.......................... $ 12,000 (l)Pro forma adjustment to shareholders' equity: Elimination of MSI's common stock............................... $ (300) ======== To record the one-time write down of in-process research and development.................................................... (5,908) Reflects an adjustment to record a distribution of cash dividends to MSI shareholders prior to the MSI Acquisition..... (850) Elimination of MSI's retained earnings.......................... (971) -------- Total adjustment to retained earnings......................... $ (7,729) -------- Total adjustment to shareholders' equity...................... $ (8,029) ======== (m)Decrease in deferred issuance cost related to a 35% write down of the unamortized balance........................................ $ (1,575) (n)Redemption of 11 1/2% Senior Subordinated Notes Redemption of 11 1/2% Senior Subordinated Notes with Common Stock Offering proceeds........................................ $(35,000) Elimination of four months of accrued interest on the $35,000 of redeemed 11 1/2% Senior Subordinated Notes..................... (1,342) Redemption premiums, charged to equity.......................... (3,450) Pro rata write-off of deferred debt issuance costs, charged to equity......................................................... (1,575) -------- $(41,367) ======== (o)Pro forma adjustments to Existing Bank Credit Agreement: Repayment of funds borrowed to repurchase $10,000 of 11 1/2% Senior Subordinated Notes...................................... $(10,000) Repayment of funds borrowed to purchase MSI..................... (12,000) Repayment of borrowed to provide Working Capital................ (5,932) -------- $(27,932) ======== (p)Increase in Common Stock reflecting net proceeds of the Common Stock Offering................................................. $ 67,724 Note: In addition to the pro forma adjustments, the Company will incur a one-time extraordinary loss of $4,964 which reflects the premiums paid to redeem the 11 1/2% Senior Subordinated Notes and to write off a pro rata share of the original deferred issuance cost.
EX-99.(C)(1) 2 MASTER AGREEMENT FOR PURCHASE & SALES EXHIBIT (c)(1) MASTER AGREEMENT FOR PURCHASE AND SALE OF SHARES, ASSETS AND LIABILITIES This Master Agreement (the "Agreement"), is made as of June 19, 1998, by and among - - SCHLUMBERGER LIMITED, a Netherlands Antilles Corporation, acting for itself and on behalf of the companies listed in Schedule A (the "Selling Subsidiaries"), (hereinafter referred to as "SCHLUMBERGER") and, - - TOKHEIM CORPORATION an Indiana corporation, acting for itself and on behalf of all its subsidiaries (the "Acquiring Subsidiaries"), (hereinafter referred to as "BUYER"), SCHLUMBERGER and BUYER are sometimes referred to herein as the "Parties". RECITALS Whereas the Selling Subsidiaries are, among other things, directly or indirectly, engaged in the business of design, development, manufacture, marketing, distribution, and sale of fuel pump dispensers (the "RPS Dispenser Business"), and electronic hardware and system software related to retail automation systems and forecourt payment terminals (the "RPS Systems Business"), and design, construction, maintenance of, and other services for service- stations (the "RPS Service Business"); Whereas Selling Subsidiaries conduct the RPS Dispenser Business, the RPS Systems Business and the RPS Service Business (collectively, the "RPS Business") to varying degrees through the entities and divisions of companies listed in Schedule C; Whereas upon the terms and subject to the conditions hereinafter set forth, and subject to certain agreed upon corporate restructurings, BUYER agrees to purchase and assume, and SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to sell, and assign, all of the issued and outstanding capital shares (the "Acquired Shares") of the entities devoted to the RPS Business (the "Acquired Companies") and the RPS Business of the Selling Subsidiaries (the "Acquired RPS Activities") listed in Schedule D and comprised of the assets (the "Acquired Assets") and liabilities (the "Assumed Liabilities") as defined in Schedule E; Whereas the Parties also desire to make certain representations, warranties and other agreements in connection with the transactions contemplated herein and to provide for certain conditions precedent with respect thereto. NOW THEREFORE, the Parties hereto agree as follows: ARTICLE I ---------- PURCHASE AND SALE ----------------- 1.1 The Acquisition Subject to the terms and conditions of this Agreement on the Closing Date (as defined in Section 4.1 hereinafter), SCHLUMBERGER shall cause the Selling Subsidiaries to sell, transfer, convey and deliver to BUYER and the Acquiring Subsidiaries, the Acquired Shares and the Acquired Assets subject to assumption by BUYER and the Acquiring Subsidiaries, of the Assumed Liabilities. 1.2 Separate Acquisition Agreements Each of the acquisitions of Acquired Shares, Acquired Assets and the assumption of the Assumed Liabilities shall be carried out by separate acquisition agreements between the respective Selling Subsidiaries and Acquiring Subsidiaries, which form an integral and indivisible part of this Agreement and which, subject only to mandatory changes imposed by local applicable laws, shall be in accordance with the form of acquisition agreement attached hereto as Schedule 1.2 (the "Specific Acquisition Agreements"). 2 In no event shall any representation or warranty, covenant or any other specific provision possibly imposed by local laws supersede the terms and conditions specified herein. The Parties hereby acknowledge that their relationship shall be solely governed by the terms contained herein. SCHLUMBERGER and BUYER shall respectively cause the Selling Subsidiaries and the Acquiring Subsidiaries to duly execute the Specific Acquisition Agreements forthwith on the Closing Date. 1.3 Total Purchase Price The aggregate purchase price for the Acquired Shares and the Acquired Assets shall be US dollars 335,000,000 (three hundred and thirty five million dollars) (the "Total Purchase Price"), subject to the assumption by BUYER and the Acquiring Subsidiaries of the Assumed Liabilities. The Total Purchase Price shall be allocated to each of the Acquired Companies and to each of the, or group of, Acquired Assets relating to each of the Acquired RPS Activities, as indicated in Schedule 1.3. 1.4 Payment of the Total Purchase Price Payment of the Total Purchase Price for the Acquired Shares and the Acquired Assets shall be made by BUYER on the Closing Date by depositing, by bank wire transfer in US Dollars, the amount of the Total Purchase Price in immediately available funds, into an account designated by SCHLUMBERGER for such purpose, which designation shall be made no later than three (3) business days before the Closing Date by SCHLUMBERGER, acting as agent for the Selling Subsidiaries. 1.5 Base Balance Sheet and Statements of Income Within 15 calendar days of the date of this Agreement, SCHLUMBERGER shall prepare, in accordance with United States generally accepted account ing principles ("US GAAP"), except that no reserve shall be included for outstanding litigation of the RPS Business in France, the United States of America, Russia, the Czech Republic, the United Kingdom and Italy (but solely relating to the RPS Business of the Italian Selling Subsidiary), and in accordance with the accounting rules and practices described in Schedule 1.5 (a) (the "Accounting Principles"), which accounting rules the Parties acknowledge to be consistent with US GAAP, and deliver to BUYER (i) an 3 audited combined balance sheet of the RPS Business as at December 31, 1997, including the related schedules and notes, and (ii) the audited combined statements of income and cash flows of the RPS Business for the year ended on December 31, 1997. The December 31, 1997 balance sheet and the 1997 statements of income and cash flows shall be prepared for the RPS Business on a "stand alone" basis. The pro forma adjustments, which are to be made in the preparation of the combined balance sheet and income statement for 1997, are set out in Schedule 1.5(b). The December 31, 1997 balance sheet, as adjusted in accordance with Schedule 1.5 (b), shall be referred to as the "Base Balance Sheet". The December 31, 1997 statements of income and cash flows, as adjusted in accordance with Schedule 1.5 (b), shall be referred to as the "Base Income Statement". 1.6 Adjustment to the Total Purchase Price (a) Within thirty (30) calendar days from the Closing, SCHLUMBERGER shall deliver to BUYER a combined balance sheet of the RPS Business as of the month-end which shall corre spond to the Closing Date, as defined in Section 4.1 hereto (the "Closing Balance Sheet"). The Closing Balance Sheet shall be prepared in accordance with US GAAP and the Accounting Principles. To the extent that the Net Equity, shown on the Base Balance Sheet is higher than the Net Equity shown on the Closing Balance Sheet, SCHLUMBERGER shall make a payment to BUYER equivalent to the amount of the difference. To the extent that the Net Equity shown on the Base Balance Sheet is less than the Net Equity shown on the Closing Balance Sheet, BUYER shall make a payment to SCHLUMBERGER equivalent to the amount of the surplus. Any payment resulting from this Section 1.6 (a) shall be referred to as the "Post Closing Adjustment". "Net Equity" ("situation reelle") shall mean an amount equal to (i) the aggregate book value of the assets of the RPS Business reflected on a balance sheet prepared at a given date, in accordance with US GAAP and the Accounting Principles, minus (ii) the aggregate book value of the liabilities of the RPS Business reflected on that same balance sheet. (b) BUYER and its auditors will review the Closing Balance Sheet within 20 days from the submission by SCHLUMBERGER of the foregoing. BUYER shall then deliver to SCHLUMBERGER, within 10 days after completion of this review, a detailed statement setting forth its objections to the Closing Balance Sheet, if any. 4 Based on such statement, SCHLUMBERGER shall deliver to BUYER, within 10 days after SCHLUMBERGER's receipt of BUYER's objections, a detailed statement setting forth its position with respect to such objections. In the event that the determination by each of the Parties of the Net Equity is different but within US dollars (1,000,000 one million dollars) of each other, then the Net Equity shall be the average of such determination by each such Party. SCHLUMBERGER and BUYER shall use all reasonable efforts to resolve any further dispute, but if a final resolution is not obtained within 5 business days after BUYER receives SCHLUMBERGER's statement of position, any remaining disputes shall be resolved by Ernst & Young Paris office (the "Arbitrator"). Should Ernst & Young refuse the appointment or be unable to carry out its mission as provided by this paragraph 1.6 (b), each party may request, pursuant to "refere" proceedings, the President of the Paris Commercial Court to appoint the Paris office of another internationally recognized accounting firm to act as the Arbitrator, (c) The Arbitrator will audit the Closing Balance Sheet, will review and try to resolve the Parties' disagreements and will determine the final value of the Net Equity as of the Closing Date and thus of its increase, or decrease, as the case may be, as compared to the Net Equity as of December 31, 1997. Within 10 days from first being informed of the dispute by a Party, the Arbitrator will organize a joint session to enable each party to submit additional arguments and reasoning. Within 20 days from said joint session, the Arbitrator shall deliver to SCHLUMBERGER and BUYER a written report restating the Parties' disputes as well as his determination of the Net Equity as of the Closing Date. These determinations will be conclusive and binding upon the Parties hereto. Each party shall bear the fees and expenses of its auditors in connection with the matters referred to in this Section. SCHLUMBERGER and BUYER shall each pay 50% of the fees charged by the Arbitrator. (d) If any additional payment were to be due by SCHLUMBERGER or owed to SCHLUMBERGER subsequent to the Post Closing Adjustment, such payment will take place within the later of (i) 10 days from the date of issuance of the final determination by the Arbitrator or (ii) 30 days from SCHLUMBERGER's submission of 5 the Closing Balance Sheet, should these documents be agreed upon by BUYER. (e) "Interest Rate" shall mean the rate per annum equal to the London Inter bank Borrowing Rate (LIBOR) for deposits of three months duration. (f) Notwithstanding anything else contained in this Agreement, in no event shall the Post-Closing Adjustment result in an overall adjustment higher than 10% of the Base Balance Sheet Net Equity. 1.7 Assumption of Liabilities With respect to the purchase and sale of the Acquired Assets, in addition to the payment of the Total Purchase Price, and pursuant to the Specific Acquisition Agreements, BUYER and the Acquiring Subsidiaries will assume, as of the Closing Date, and subsequently, in due course, pay or otherwise discharge all Assumed Liabilities. ARTICLE II ----------- PRE-CLOSING COMMITMENTS ----------------------- 2.1 Conduct of Business pending Closing Except as otherwise provided in Schedule 2.1, and as otherwise provided in this Agreement, including without limitation, the restructuring agreed upon by the Parties, SCHLUMBERGER shall, and shall cause the Selling Subsidiaries, and BUYER agree that, from the date hereof to the Closing Date, unless BUYER shall otherwise consent in writing (which consent BUYER shall not unreasonably withhold) or as expressly contemplated by this Agreement the following provisions shall apply: (a) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and the Acquired Companies to, use their best efforts to preserve in all material respects the business organization of the RPS Business intact. SCHLUMBERGER shall cause the RPS Business to be conducted only in the ordinary course of business, consistent with past practice. Such commitment shall include, without limitation, the fact that: 6 (i) SCHLUMBERGER, shall, and shall cause the Selling Subsidiaries and the Acquired Companies to, adequately insure all property, real, personal and mixed, owned or leased by the RPS Business, against all ordinary and insurable risks; and all such property shall be used, operated, maintained and repaired in a careful and reasonably efficient manner; (ii) SCHLUMBERGER shall not, and shall not permit any Selling Subsidiary or any Acquired Company to, do any act or omit to do any act, or permit any act or omission to act, which will cause a breach of any material contract or material commitment of the RPS Business or which would cause the breach of any representation or warranty made hereunder; and (iii) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and the Acquired Companies to, continue to comply in a manner consistent with past practice with all laws applicable to the RPS Business and its properties, operations, business and employees. (b) SCHLUMBERGER shall not, and shall not permit any Selling Subsidiary or any Acquired Company to, pledge, sell or encumber any of the Acquired Assets or assets of the Acquired Companies other than in the ordinary course of business and consistent with past practice; (c) SCHLUMBERGER shall not permit the Selling Subsidiaries ,to the extent related to, or affecting, the RPS Business, and the Acquired Companies, to do any of the following: (i) authorize for issuance, issue, sell, pledge, deliver, or agree or commit to issue, sell, pledge, deliver (whether through the issuance or grant of options, warrants, commitments, subscriptions, rights to purchase or otherwise) any capital stock of the Acquired Companies or securities or rights convertible into, or exchangeable for, shares of capital stock or securities convertible into, or exchangeable for, such shares; (ii) amend or propose to amend their by-laws or articles of incorporation or those of the Acquired Companies; 7 (iii) split, combine or reclassify any shares of the capital stock of the Acquired Companies; (iv) redeem, purchase or otherwise acquire or offer to redeem, purchase or otherwise acquire any share of the capital stock of the Acquired Companies; or (v) authorize any agreement, commitment or arrangement to do any of the foregoing; (vi) make changes in the accounting methods or practices followed by the Selling Subsidiaries and Acquired Companies as regards the RPS Business or make any changes in depreciation or amortization policies or rates; (vii) terminate the employment of, or increase, out of the ordinary course of business, the compensation of, any officer; (d) SCHLUMBERGER shall cause the Selling Subsidiaries and the Acquired Companies, solely as it relates to the RPS Business, with respect to clauses (ii), (iii) and (vi) below, not to: (i) acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof or make any investment either by purchase of stock or securities of any other individual or entity; (ii) acquire any assets for a value in excess of US dollars 100,000 (one hundred thousand dollars) other than pursuant to pending or approved capital acquisition requests of the RPS Business as disclosed to BUYER, and other than purchases in the ordinary course of business; (iii) dispose of any RPS Assets with a value in excess of US dollars 100,000 (one hundred thousand dollars); (iv) incur any indebtedness for borrowed money or issue any debt securities or assume or guarantee the obligations of any other person, make any loans or advances or enter into any other transaction, except the occurrence of intercompany loans or the making of intercompany advances in the ordinary course of business consistent with past practices and except for 8 advances to employees for expenses in the ordinary course of business and consistent with past practices; (v) authorize, recommend or propose any change in its capitalization, unless such capitalization is necessary to comply with applicable laws; or (vi) make changes in the accounting methods or practices followed by the Selling Subsidiaries, Acquired Companies or RPS Business, or make any changes in depreciation or amortization policies or rates relating to the RPS Business; (vii) make their best efforts not to terminate the employment of, or increase the compensation of, employees identified in Schedule 5.20(a)(ii) (including any increase pursuant to any bonus, pension, profit sharing or other plan or commitment) other than as set forth in Schedule 2.1 in the ordinary course of business consistent with past practice; (viii) pay, discharge or satisfy any claim, liability or obligation (absolute, accrued, contingent or otherwise), other than the payment, discharge or satisfaction in the ordinary course of business and consistent with past practice of liabilities or obligations reflected or reserved against in the Base Balance Sheet or incurred in the ordinary course of business and consistent with past practice since the date of the Base Balance Sheet; (ix) write down the value of any inventory or write off as uncollectable any notes or accounts receivable, except for write-downs and write-offs in the ordinary course of business and consistent with past practice; (x) cancel any debts or waive any claims or rights of substantial value, except in the ordinary course of business and consis tent with past practice or with respect to (i) SCHLUMBERGER cash pool agreements, (ii) loan agreements by SCHLUMBERGER affiliates not involved in the RPS Business, and (iii) bank loans or overdrafts facilities; (xi) change any of the banking or safe deposit arrangements described in Schedule 5.22 hereof; 9 (xii) enter into any contract or commitment for, or purchase, any raw material or supplies, except (a) normal contracts or commitments for the purchase of, and normal purchases of, raw materials or supplies, made in the ordinary course of business and consistent with past practice, (b) normal contracts or commitments for the purchase of and normal purchases of, inventory in the ordinary course of business and consistent with past practice, and (c) other contracts, commitments, or purchases in the ordinary course of business and consistent with past practice; or (xiii) authorize or propose any of the foregoing or enter into or modify any contract, agreement, or commitment or arrangement with respect to any of the foregoing; (e) None of the Acquired Companies, the Selling Subsidiaries or SCHLUMBERGER shall waive, release, grant, license or transfer any Intellectual Property (as defined in Section 5.9) or modify or change, in any material respect, any existing material license, distribution agreement, lease, or other document used in the RPS Business, in each case, other than in the ordinary course of business. 2.2 Access/Filing and Authorizations/Reasonable Efforts (a) Between the date hereof and the Closing Date, BUYER shall use its best efforts to enable the conditions precedent listed in the following Article to be satisfied as promptly as practicable. SCHLUMBERGER shall, in all respects, cooperate with BUYER and shall give good faith responses to all requests for information by any governmental agency or under any applicable laws and each party shall notify the other prior to undertaking any action relating to the RPS Business. BUYER shall notify SCHLUMBERGER, prior to the Closing Date, as to whether such conditions are satisfied and, where appropriate, the grounds on which it maintains that any condition is not satisfied. (b) Between the date hereof and the Closing Date, SCHLUMBERGER is prepared, in order to ensure the transition of the operations after the Closing Date, to give BUYER, its counsel, accountants, financing representatives and other representatives, upon BUYER's reasonable request, access to the senior management, the key personnel, the plants and premises, and the books and records of the RPS Business, 10 under conditions to be mutually defined so that such access shall not interfere with the day-to-day operations of the RPS Business and the duties of management, provided that one of the SCHLUMBERGER legal representatives, listed in Schedule 2.2 (b) is present during such contact, communication or visit. Access by BUYER's personnel to RPS Business information shall be subject to guidelines which have been mutually agreed upon by SCHLUMBERGER and BUYER. No access to such personnel, information, plants or premises shall be unreasonably denied by SCHLUMBERGER, the intent of the Parties, as reflected in this Section 2.2(b), being only to carefully plan together the transitional period to the benefit of the RPS Business as an ongoing concern. (c) From the date hereof, SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to, their best efforts with BUYER in order to procure the assignment to BUYER and the Acquiring Companies of all of the contracts relating to the Acquired RPS Activities, including, but not limited to, their direct and indirect distribution agreements (such as dealer agreements, distributor agreements and supply agreements to third Parties including affiliates of SCHLUMBERGER), orders of customers as well as purchase agreements, service agreements with customers and lease agreements. (d) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to, use their best efforts to obtain the resignation of the statutory auditors of the Acquired Companies, effective as of the Closing Date or any other meaningful date agreed to by the Parties hereto. (e) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to, within thirty (30) calendar days from the end of each month from the date hereof to the Closing, furnish BUYER with an unaudited proforma consolidated balance sheet of the RPS Business as at the end of each month, and unaudited proforma consolidating statements of income, changes in stockholder's equity and changes in financial position for the monthly period then ended, all attested by the relevant financial officer of the RPS Business. (f) From time to time after signature of this Agreement and prior to the Closing, SCHLUMBERGER will promptly supplement or amend the Schedules set forth in Article V hereof (the "Disclosure Schedules") with respect to any matter hereafter arising which, if existing or occurring at the date of this Agreement, would have been required to 11 be set forth or described in the Disclosure Schedules. No supplement or amendment of the Disclosure Schedules made pursuant to this Section shall be deemed to cure any breach of any representation or warranty made in this Agreement unless BUYER specifically agrees thereto in writing. (g) As soon as practicable, SCHLUMBERGER and BUYER shall make any and all filings, which are required under, the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and other applicable antitrust or competition laws. Each Party will furnish to the other Party such necessary information and reasonable assistance as the latter may request in connection with its preparation of necessary filings or submissions to any governmental agency, including, without limitation, any filings necessary under the provisions of the HSR Act. Each Party will supply the other Party with copies of all correspondence, filings or communications (or memoranda setting forth the substance thereof) between it or its representatives, on the one hand, and the Federal Trade Commission, the Antitrust Division of the U.S. Department of Justice or any other governmental agency or authority or members of their respective staffs, on the other hand, with respect to this Agreement or the transactions contemplated hereby. (h) SCHLUMBERGER shall, and shall cause the Selling Subsidiaries and the Acquired Companies to, and BUYER shall, and shall cause the Acquiring Subsidiaries to, use its and their best efforts to insure that the conditions set forth in Section 2 hereof are satisfied, insofar as such matters are within the control of any of them. 2.3 Exclusivity Except as specifically disclosed in Schedule 2.3 from the date of this Agreement through the Closing Date, or earlier, if BUYER is in material breach of its obligations and commitments hereunder, SCHLUMBERGER agrees that BUYER will have exclusive rights to consummate the transactions contemplated hereby. SCHLUMBERGER, shall not, and shall not permit the Selling Subsidiaries and the Acquired Companies, and their representatives and agents, to, entertain, accept, or discuss a possible sale or other disposition of any component of the RPS Business, any capital stock of the Acquired Companies or any of the RPS Assets, or any interest therein, with any other party, or provide information to any other party in connection therewith. 12 BUYER hereby agrees that from the date of signature hereof and through the Closing Date, BUYER, the Acquiring Subsidiaries, and their representatives and agents shall not entertain, accept, or discuss a possible purchase or other acquisition of any major competitor of the RPS Business with any other party. 2.4 Specific Tax Indemnification for Restructuring BUYER shall indemnify SCHLUMBERGER against any and all tax liability and associated costs that would derive from any restructuring of the RPS Business requested by BUYER from SCHLUMBERGER prior to Closing. ARTICLE III ------------ CONDITIONS PRECEDENT AND OTHER AUTHORIZATIONS --------------------------------------------- 3.1 Conditions Precedent to SCHLUMBERGER's Obligations The obligations of SCHLUMBERGER to consummate the sale of the RPS Business as contemplated in Article I above are subject to the satisfaction of the following conditions (all or any of which may be waived, in whole or in part, by SCHLUMBERGER): (a) All governmental anti-trust consents and approvals required by law prior to Closing to permit the consummation of the transactions contemplated by this Agreement shall have been obtained and any pre- Closing waiting periods (and any extension thereof) applicable to the consummation of the Agreement shall have expired or been terminated, provided, however, that the obligations to consummate the sale shall remain unchanged, and Article I shall apply, if and where anti-trust consents are subject to divestitures which, in the aggregate, do not substantially alter the ability of BUYER to run the RPS Business as presently conducted. (b) There shall be no material suit, action or other enforcement proceeding instituted or pending by or before any court or governmental or other regulatory or administrative agency or commission requesting an order, judgment or decree challenging all or a substantial portion of the transactions contemplated by this Agreement. (c) There shall be no event, circumstances or current financial disclosures by BUYER or its representatives which would indicate 13 BUYER's inability to finance the cash payment of the Total Purchase Price, as of the Closing Date. (d) BUYER shall have delivered to SCHLUMBERGER a certificate, dated as of the Closing Date, signed by a duly authorized officer of BUYER, to the effect that all representations and warranties of BUYER in this Agreement are true and correct in all material respects as of the Closing Date with the same force and effect as though made at such time, except for changes specifically disclosed or expressly permitted or contemplated by the Agreement. (e) BUYER shall have performed and complied with all agreements, obligations and conditions required by this Agreement to be performed or complied with by it on or prior to the Closing. (f) Opinions of BUYER's counsel, in a form and substance reasonably acceptable to Schlumberger. 3.2 Conditions Precedent to BUYER's Obligations The obligation of BUYER to consummate the acquisition of the RPS Business as contemplated in this Agreement, is subject to the satisfaction of the following conditions (all or any of which may be waived in whole or in part by BUYER): (a) All governmental anti-trust consents and approvals required by law prior to Closing to permit the consummation of the transactions contemplated by this Agreement shall have been obtained and any pre- Closing waiting periods (and any extension thereof) applicable to the consummation of the Agreement shall have expired or been terminated, provided, however, that the obligations to consummate the sale shall remain unchanged, and Article I shall apply, if and where anti-trust consents are subject to divestitures which, in the aggregate, do not substantially alter the ability of BUYER to run the RPS Business as presently conducted. (b) Any and all information of, consultation with or approval by, work councils of the Selling Subsidiaries, and Acquired Companies shall have been given, made or obtained, where required by applicable law. 14 (c) The representations and warranties contained in Article V hereof, the Disclosure Schedules and in all certificates and other documents delivered and to be delivered by SCHLUMBERGER to BUYER or pursuant hereto or in connection with this Agreement shall be true, complete and accurate in all material respects as of the date when made and at and as of the Closing Date as though such representations and warranties were made at and as of such date, except for: (i) changes expressly permitted or contemplated by the terms of this Agreement; (ii) changes resulting from the normal course of the RPS Business; (iii) changes that do not have, alone or in the aggregate, a substantial impact on the RPS Business as a whole; and (iv) changes that SCHLUMBERGER otherwise commits to reflect in a reasonable and adequate manner in the Closing Date Balance Sheet, or in the Post Closing Adjustment, after consultation with BUYER. and SCHLUMBERGER shall have provided BUYER with a certificate of a duly authorized officer to this effect. (d) SCHLUMBERGER shall have materially performed and complied with all agreements, obligations and conditions required by this Agreement to be performed or complied with by it on or prior to the Closing. (e) There shall not be instituted or pending any material suit, action, or other enforcement proceeding by or before any court or governmental or other regulatory or administrative agency or commission requesting an order, judgment or decree which substantially impairs BUYER's ability to exercise control over or manage the RPS Business after the Closing. (f) From the date of the Base Balance Sheet to the Closing Date, the RPS Business as a whole shall not have suffered an event specific to the RPS Business having a material adverse impact upon the RPS Business as a whole (whether or not such change is referred to or described in any supplement to the Disclosure Schedules). An event 15 shall be deemed specific to the RPS Business if it does not concern the industry as a whole or if it is not related to the identity of BUYER. (g) SCHLUMBERGER shall have delivered to BUYER opinions of counsel to SCHLUMBERGER, dated as of the Closing Date, in substantially the form and substance reasonably acceptable to Buyer regarding SCHLUMBERGER, Schlumberger Technologies Inc. and certain US law aspects of the transactions contemplated by this Agreement. 3.3 Other Authorizations In case one or more permits, consents or authorizations other than mentioned in Sections 3.1 and 3.2, which is necessary for the completion of the transactions contemplated herein in a respective country, were not delivered prior to the Closing Date (the "Affected Jurisdictions"), the Closing shall notwithstanding take place with respect to the Acquired Companies and Acquired Assets in all jurisdictions where the permits, consents or authorizations have been granted or are not legally required (the "Non-Affected Jurisdictions"). The Total Purchase Price payable on the Closing Date shall relate to the Non-Affected Jurisdictions and be adjusted on the basis of the allocation of the Total Purchase Price set forth in Schedule 1.3. For each of the Affected Jurisdiction, the Closing, as well as the payment of the portion of the Total Purchase Price allocable to said Affected Jurisdiction, shall take place within fifteen (15) days of the date when the requested permit, consent or authorization are obtained and shall be deemed retroactive as of the Closing Date. ARTICLE IV CLOSING 4.1 The Closing The Closing for the acquisition of the RPS Business shall take places at the offices of Schlumberger Limited, 42, rue St Dominique, 75007 Paris, France on July 31, 1998, or at such other place and date as SCHLUMBERGER and BUYER mutually shall agree (the "Closing Date"), subject to the Closing Date corresponding to the last day of the month in which the last of the conditions precedent, listed in Section 3.1 and 3.2 hereto, is met. 16 If the conditions precedent set forth in Article III, Sections 3.1 and 3.2 have not been satisfied or waived on or before such date, then the Closing Date shall be postponed to a date (not later than December 31, 1998) which is within five business days following the satisfaction or waiver of the last of the conditions precedent. 4.2 Documents to be delivered by SCHLUMBERGER At the Closing Date, SCHLUMBERGER shall perform and deliver, and shall cause each of the Selling Subsidiaries to deliver, to BUYER and to each of the Acquiring Subsidiaries, such documents and instruments to be delivered by them to convey title to all of the Acquired Shares, Acquired Assets and assign all Assumed liabilities, including: (a) Specific Acquisition Agreements allowing for the transfer of the Acquired Shares, the Acquired Assets and the assumption of the Assumed Liabilities, with the exception of the Acquired Shares, Acquired Assets and Assumed Liabilities related to the Affected Jurisdictions, if any; (b) Duly endorsed share certificates, share transfer forms or other instruments required by applicable laws to validly transfer the Acquired Shares other than those relating to the Affected Jurisdictions, if any; (c) Agreements, other than the Specific Acquisition Agreements, required by applicable laws to validly transfer the Acquired Assets, if any; (d) Certified copies of resolutions, duly adopted by the Selling Subsidiaries' Board of Directors, approving the transaction contemplated and authorizing the performance by the Selling Subsidiaries of this Agreement and the execution of the Specific Acquisition Agreements, together with all other agreements necessary to consummate the transactions contemplated by this Agreement, and the stock transfer register ("registre des mouvements de titres") and the stockholders' register ("registre des comptes d'actionnaires") of the Acquired Companies; (e) Letters of resignation signed by each of the directors of the Acquired Companies, as may be requested in writing by BUYER at least seven days prior to the Closing Date; (f) Transfer to the Acquired Companies or the Selling Subsidiaries of the employees set forth in Schedule 4.2(f) who are fully dedicated to the RPS Business and are seconded from other SCHLUMBERGER entities; 17 (g) To the extent possible, a letter of resignation signed by the statutory auditors of the Selling Subsidiaries and the Acquired Companies effective upon the Closing; (h) The minutes of a duly called meeting of the board of directors and the shareholders, where required by applicable law, of the Selling Subsidiaries (other than SCHLUMBERGER) and the Acquired Companies, including provisions with respect to, inter alia, approving the new shareholders and appointing new directors designated in writing by BUYER at least seven days prior to the Closing; (i) Duly endorsed share certificates, share transfer forms or other instruments required by applicable laws to validly transfer all shares of the Acquired Companies held by officers and directors thereof. 4.3 Documents to be delivered by BUYER At the Closing Date, BUYER shall deliver to SCHLUMBERGER the Total Purchase Price and perform and deliver, and shall cause each of the Acquiring Subsidiaries to deliver, to SCHLUMBERGER and each of the Selling Subsidiaries, such documents and instruments to be delivered by them to convey title to all of the Acquired Shares and RPS Activities, including: (a) Specific Acquisition Agreements allowing for the transfer of the Acquired Shares, the Acquired Assets and the assumption of the Assumed Liabilities, with the exception of the Acquired Shares, Acquired Assets and Assumed Liabilities related to the Affected Jurisdictions, if any; (b) Share transfer forms or other instruments required by applicable laws to validly transfer the Acquired Shares other than those relating to the Affected Jurisdictions, if any; (c) Agreements, other than the Specific Acquisition Agreements, required by applicable laws to validly transfer the Acquired Assets, if any; (d) Agreements or other instruments required by applicable law to acknowledge BUYER's assumption of the Assumed Liabilities, if any; (e) Certified copies of resolutions, duly adopted by BUYER's and the Acquiring Subsidiaries' Board of Directors approving the transaction contemplated and authorizing their execution and performance of this Agreement; 18 ARTICLE V REPRESENTATIONS AND WARRANTIES OF SCHLUMBERGER SCHLUMBERGER, in its own name and on behalf of the Selling Subsidiaries, but in respect of the RPS Business only, represents and warrants to BUYER that: 5.1 Organization (a) Each of the Acquired Companies is, and shall be at the Closing Date, a corporation duly organized, validly existing and in good standing under the laws of the state or country in which it was incorporated. (b) The copies of the by-laws and/or articles of association of the Acquired Companies previously requested by and delivered to BUYER are true and complete copies, as presently in effect and the Acquired Companies have materially complied with all the provisions of these documents. (c) The statutory books and registers of the Acquired Companies and all current books of account have been properly maintained in compliance with applicable laws and accounting principles, and are up to date. 5.2 Title to the Acquired Shares and Acquired Assets (a) Except as listed in Schedule D, all of the issued and outstanding shares of the Acquired Companies are owned by a Selling Subsidiary or directors of the Acquired Companies. The Acquired Shares are validly issued and outstanding, fully paid and transferable. There are no outstanding subscriptions, options, warrants, puts, calls, rights, contracts, commitments, agreements, understandings, or arrangements relating to any Acquired Company, including any right of conversion or exchange under any outstanding instrument, and none of such securities are reserved for issuance for any purpose. Except as disclosed in Schedule 5.2 (a), SCHLUMBERGER does not own, directly or indirectly, any capital stock or other equity securities of any corporation or has any direct or indirect equity or ownership interest in any other entity engaged in the RPS Business. (b) On the date hereof, SCHLUMBERGER, the Selling Subsidiaries and the directors of the Acquired Companies are the sole owners of, and have full power and authority to vote with, all of the Acquired Shares, with the full power and authority to deliver to BUYER and the Acquiring Subsidiaries all of the Acquired Shares, respectively, pursuant to Article I of this Agreement 19 and the relevant Specific Acquisition Agreements, free and clear of all options, pledges, mortgages, escrow, rights of first refusal, security interests, liens, claims, charges, encumbrances or restrictions on transfer either written or oral whatsoever. SCHLUMBERGER commits to obtain, on the Closing Date, the transfer by the directors of the Acquired Companies to the Acquiring Subsidiaries of all shares held by them in the Acquired Companies. (c) Except as specified otherwise in Schedule 5.2 (c) of this Agreement and, as the case may be, as per the by-laws of the Acquired Companies, there are, and there shall be, at the Closing Date, no contracts, commitments, agreements, understandings, arrangements, or restrictions relating to ownership or voting of any of the Acquired Shares. (d) Except as specified otherwise in Schedule 5.10 of this Agreement or in any other document delivered by SCHLUMBERGER or any of the Selling Subsidiaries prior to the date of this Agreement, SCHLUMBERGER and the Selling Subsidiaries are the owners of the Acquired Assets with full power and authority to convey them to BUYER and the Acquiring Subsidiaries, pursuant to this Agreement and to the Specific Acquisition Agreements, free and clear of all liens and encumbrances, restrictions, mortgages or charges that could materially affect their value. 5.3 Authority of SCHLUMBERGER (a) SCHLUMBERGER is a Netherlands Antilles Corporation duly organized and validly existing under the laws of the Netherlands Antilles and has all material requisite corporate power to own its properties and carry on its business as now being conducted. SCHLUMBERGER has full power and authority, and has taken all necessary and proper action, to execute and deliver this Agreement and the other agreements and instruments executed in connection with this Agreement to which it is a party, and to consummate the transactions contemplated herein, and to transfer, assign and deliver the Acquired Shares as provided in this Agreement and such delivery will convey to BUYER good and marketable title to the Acquired Shares and to all rights afforded thereby, free and clear of all liens. SCHLUMBERGER has taken, and has caused the Selling Subsidiaries to take, all necessary and proper actions to execute and deliver the agreements and instruments to be executed in connection with this Agreement and the agreements contemplated herein, including the Specific Acquisition Agreements, and to consummate the transactions contemplated hereby or thereby. 20 (b) This Agreement, the Specific Acquisition Agreements and any other agreement contemplated herein to which SCHLUMBERGER or any of the Selling Subsidiaries is a party, constitute valid and binding obligations of SCHLUMBERGER and the Selling Subsidiaries, enforceable against them in accordance with their terms. (c) The Acquired Companies have all power and authority to own the properties and assets they now own or will own at the Closing, to conduct the RPS Business as presently conducted, and are duly qualified or licensed to do business as foreign corporations in good standing in every jurisdiction listed opposite the name of the Acquired Companies in Schedule 5.3 (c) which are the only jurisdictions in which ownership of property or the conduct of its business requires such qualification. 5.4 Subsidiaries Except as disclosed in Schedule 5.4, none of the Acquired Companies holds any direct or indirect ownership interest in any company, business or other legal entities as of the Closing Date. 5.5 Articles of Incorporation: No Violation Except as set forth in Schedule 5.5, neither the execution nor the delivery of this Agreement or any of the Specific Acquisition Agreements and other documents executed in connection with this Agreement, to which SCHLUMBERGER or the Selling Subsidiaries is a party, nor the consummation of the transactions contemplated hereby or thereby violates or conflicts with any provision of, or constitute a default under, the articles of incorporation or by-laws, as amended, of SCHLUMBERGER or of any Selling Subsidiary or any Acquired Company, or violates, or is in conflict with, or constitutes a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or results in the termination of, or accelerates the performance required by, or causes the acceleration of the maturity of any debt or obligation pursuant to, or results in the creation or imposition of any security interest, lien or other encumbrance upon any property or assets of the RPS Business under, any agreement or commitment to which any Selling Subsidiary or other subsidiary of SCHLUMBERGER engaged in the RPS Business is a party or by which any Selling Subsidiary or other subsidiary of SCHLUMBERGER engaged in the RPS Business is bound, or to which the property of any Selling Subsidiary or other subsidiary of SCHLUMBERGER engaged in the RPS Business is subject, or violates any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority. 21 5.6 Financial Statements/Accounts Receivable/Customers (a) SCHLUMBERGER has heretofore delivered, or will deliver, to the BUYER the Base Balance Sheet of the RPS Business, and the balance sheet, combined statements of income and cash flows of the RPS Business for the years ended on December 31, 1995, 1996 and 1997, all certified and audited by Price Waterhouse, independent certified public accountants, whose reports thereon are included therein. Such pro forma combined balance sheets and the notes thereto are true, complete and accurate and fairly present the pro forma consolidated assets, liabilities and financial condition of the RPS Business as at the respective dates thereof, and such combined statements of income and cash flows and the notes thereto are true, complete and accurate and fairly present the results of operations for the periods therein referred to, all in accordance with US GAAP and the Accounting Principles, except for reserves relating to outstanding litigation of the RPS Business in France, the United States of America, Russia, the Czech Republic, the United Kingdom and Italy (but solely relating to the RPS Business of the Italian Selling Subsidiary). (b) The accounts receivable shown on the Base Balance Sheet and all accounts receivable acquired or generated by each Acquired Company and each Acquired RPS Activity since December 31, 1997 (the "Receivables"), are bona fide receivables and represent amounts due with respect to actual transactions entered into in the ordinary course of business and are collectible at their recorded amounts within 250 days from the date of the Closing and are legal, valid and binding obligations of their account obligors; provided, however, that SCHLUMBERGER makes no representation as to the collectability of any Receivable should the account obligor be declared, voluntarily or involuntarily, bankrupt or be involved in a bankruptcy or similar type proceeding or be subject to any judicially imposed stay of payments after the Closing. Those Receivables reflected on the Acquisition Balance Sheet have been so reflected in accordance with the Accounting Principles. No account has been assigned or pledged to any other person and except as set forth in Schedule 5.6 no defense or setoff to any such account has been asserted in writing by an account obligor. The representations and warranties contained in this Section 5.6(b) are not given in respect of RPS intra-company agreements, to which management principles apply. (c) Except ongoing purchases or sales, all inter-company accounts receivable from other SCHLUMBERGER affiliates not involved in the RPS Business and accounts payable to other SCHLUMBERGER affiliates not involved in the RPS Business, as of the date of signature of this Agreement, have been 22 paid or will be paid on or before the Closing Date to, or by, the respective Acquired Companies or to and by the Selling Subsidiaries. 5.7 Customers and Suppliers (a) Schedule 5.7 (a) sets forth: (a) a list of (i) the ten largest customers of the RPS Business in terms of sales during the fiscal year ended December 31, 1997, showing the approximate total sales by the RPS Business to each such customer during each of such fiscal year; (b) a list of the ten largest suppliers of the RPS Business in terms of purchases during the fiscal year ended December 31, 1997, showing the approximate total purchases by the RPS Business from each such supplier during each of such fiscal year. There has not been any material adverse change in the business relationship of the RPS Business with any customer or supplier named in Schedule 5.7 (a). Except for the customers and suppliers named in Schedule 5.7 (a), the RPS Business has not had any customer who accounted for more than 5% of the sales of the RPS Business during the fiscal year ended December 31, 1997, or any supplier from whom it purchased more than 5% of the goods or services which it purchased during the fiscal year ended December 31, 1997. (b) As of the date of this Agreement, there are no claims against the RPS Business to return in excess of an aggregate of US$100,000 of merchandise by reason of alleged overshipments, defective merchandise or otherwise, or of merchandise in the hands of customers under an understanding that such merchandise would be returnable. (c) Nothing in this Agreement shall constitute a representation or warranty by Schlumberger that any of the contracts listed in Schedule 5.7 (c) shall be renewed, continued, or unaffected by a change in control of the RPS Business. 5.8 Taxes As related to the RPS Business and except as set forth in Schedule 5.8: The Selling Subsidiaries and the Acquired Companies have duly and properly filed with the appropriate governmental authorities all national, state, local and other tax returns, as well as social security returns and reports required to be filed by them, and have paid in full or made adequate provisions for the payment of all taxes and social security contributions owed. There are no tax liens upon any property or assets of the Acquired Companies or the Selling Subsidiaries. All amounts to be 23 collected or withheld by the Selling Companies and the Acquired Companies have been duly collected or withheld and all such amounts that are required to be remitted to any taxing authority have been duly remitted to the appropriate authority. There are no contingent tax liabilities not reflected on the Base Balance Sheet, except those which may have arisen since the date of such Base Balance Sheet in the ordinary course of business and consistent with past practice. All deferred tax assets are recoverable either directly as refunds or as future offsets to tax liabilities. None of the Acquired Companies has entered into special arrangements with any tax authority other than the ones listed in Schedule 5.8. None of the Acquired Companies is party to any agreement providing for the allocation or sharing of Taxes, and none of the Acquired Companies shall have any continuing obligations or liabilities under any such agreement after the Closing Date. None of the Acquired Companies or Selling Subsidiaries is a party to any pending or to the best of their knowledge, threatened material action or proceeding by any governmental or other authority for the assessment or collection of income or other taxes or fiscal or social charges, except for those listed in Schedule 5.8. The tax or social security authorities have no liens, charges or other encumbrances on the assets of the Acquired Companies or the Acquired Assets other than liens, charges or encumbrances for taxes or payments not yet due and payable. 5.9 Intellectual and Industrial Property (a) Schedule 5.9(a) hereto exhaustively lists: (i) each patent, patent application, registered copyright and application therefor, registered trademark and application therefor (including those trademarks that have been in continuous use since 1990), registered design and application therefor (including priority dates and registration numbers) registered in the name of SCHLUMBERGER, the Selling Subsidiaries or any of the Acquired Companies related to the RPS Business; (ii) each material license or other agreement relating to any of the items listed in (i) above; and (iii) each material license or other similar agreement relating to any registered intellectual property owned by third parties to which SCHLUMBERGER, the Selling Subsidiaries or any of the Acquired Companies are a party and that are material to the current RPS Business. (b) The foregoing, together with all unregistered copyrights and trademarks, know-how, trade secrets and proprietary technology material to SCHLUMBERGER, the Selling Subsidiaries (or any of the Acquired 24 Companies) in the conduct of the RPS Business or being developed by any third party for SCHLUMBERGER, the Selling Subsidiaries or any of the Acquired Companies, are herein referred to as the "Intellectual Property". On the Closing Date the Selling Subsidiaries shall transfer the Intellectual Property not already held by the Acquired Companies to BUYER and the Acquiring Subsidiaries, as the case may be. (c) Except as indicated in Schedule 5.9(a), SCHLUMBERGER, the Selling Subsidiaries and the Acquired Companies are the sole and exclusive owners of the Intellectual Property disclosed in Section 5.9(a)(i) above, and have a valid contractual right to use the Intellectual Property disclosed in Section 5.9(a)(iii) above. All of the owned Intellectual Property disclosed in Section 5.9(a) above is held free and clear of any material encumbrances, and the right of SCHLUMBERGER, the Selling Subsidiaries and the Acquired Companies to use the licensed Intellectual Property disclosed in Section 5.9(a)(iii) is subject only to the terms of such licenses. (d) Except for intellectual property rights held or controlled by suppliers or sub-contractors of the RPS Business, the Intellectual Property constitutes all of the intellectual property currently used for, and necessary to, the conduct of the RPS Business, as it is presently conducted. No registration or application relating to any Intellectual Property, which is currently used in or is necessary for the conduct of the RPS Business has lapsed, expired or been abandoned or cancelled. (e) Except as set forth on Schedule 5.9 (e), no Intellectual Property is the subject of any pending or threatened opposition, cancellation, interference or similar proceeding before any Governmental Entity, and to the best of SCHLUMBERGER's knowledge there are no claims pending or threatened (nor does SCHLUMBERGER know of any valid basis for any claim), before any court or registration office challenging (i) the registrability, validity, renewal or enforceability of any Intellectual Property, (ii) the ownership rights of SCHLUMBERGER, the Selling Subsidiaries or the Acquired Companies with respect to owned Intellectual Property, or (iii) SCHLUMBERGER's, the Selling Subsidiaries' or the Acquired Companies' right, to use the Intellectual Property on the grounds of infringement upon the proprietary rights of a third party. (f) Subject to the relevant third party rights, consummation of this Agreement by SCHLUMBERGER will not result in the loss, termination or impairment of any of the Intellectual Property nor will it affect the right of the BUYER to use the Intellectual Property after the Closing. Except for confidentiality agreements signed in connection with the divestiture of the RPS Business, 25 neither SCHLUMBERGER nor the Selling Subsidiaries nor the Acquired Companies has entered into any agreement outside of the ordinary course of business with respect to the maintenance of the secrecy or confidentiality of any Intellectual Property. 5.10 Title to Properties; Encumbrances Except as set forth in Schedule 5.10, each of the Selling Subsidiaries and the other subsidiaries of SCHLUMBERGER engaged in the RPS Business has good, valid and marketable title to all the properties and assets which it purports to own (real, personal and mixed, tangible and intangible), including, without limitation, all the properties and assets reflected in the Base Balance Sheet (except for inventory and personal property having an aggregate book value not in excess of US$100,000 sold since the date of the Base Balance Sheet in the ordinary course of business and consistent with past practice), and all the properties and assets (other than inventory) purchased by the Selling Subsidiaries or Acquired Companies since the date of the Base Balance Sheet are listed in Schedule 5.10. All properties and assets are free and clear of all title defects or objections, liens, claims, charges, security interests or other encumbrances of any nature whatsoever including, without limitation, leases, chattel mortgages, conditional sales contracts, collateral security arrangements and other title or interest retention arrangements, and are not, in the case of real property, subject to any rights of way, building use restrictions, exceptions, variances, reservations or limitations of any nature whatsoever except, with respect to all such properties and assets, (a) liens shown on the Base Balance Sheet as securing specified liabilities or obligations with respect to which no default exists; (b) minor imperfections of title, if any, none of which are substantial in amount, materially detract from the value, or impair the use of the property subject thereto, or impair the operations of any Selling Subsidiary or Acquired Company, and which have arisen only in the ordinary course of business and consistent with past practice since the date of the Base Balance Sheet; and (c) liens for current taxes not yet due. The rights, properties and other assets presently owned, leased or licensed by the Subsidiaries (and the Acquired Companies) and described elsewhere in this Agreement include all rights, properties and other assets necessary to permit the Selling Subsidiaries or Acquired Companies to conduct RPS Business in all material respects in the same manner as their businesses have been conducted prior to the date hereof. 5.11 Leases Schedule 5.11 contains an accurate and complete description of the terms of all leases pursuant to which the Selling Subsidiaries and the Acquired Companies lease (i) real property, or (ii) personal property with annual rents above US dollars 100,000 (one hundred thousand dollars) per year. Except as set forth in Schedule 5.11, all 26 such leases are valid, binding and enforceable in accordance with their terms, and are in full force and effect; there are no existing defaults by any Selling Subsidiary or any Acquired Companies thereunder; no event of default has occurred which (whether with or without notice, lapse of time or the happening or occurrence of any other event) would constitute a default thereunder. SCHLUMBERGER shall use its best efforts, and shall cause the Selling Subsidiaries to use their best efforts, to obtain the consent of all lessors whose consent is required in connection with this transaction. In the event that, despite the Selling Subsidiaries' best efforts, not all consents can be obtained from lessors, then, for these premises where such consents cannot be obtained, SCHLUMBERGER shall cause the relevant Selling Subsidiary to seek any alternative, including, without limitation, subletting, if permitted, to BUYER the relevant premises, in order to allow BUYER the use of said premises until a suitable arrangement can be found, and up to a maximum of twelve months. 5.12 Transactions with Affiliates Except as reflected on the Base Balance Sheet or Schedule 5.12, none of the Selling Subsidiaries nor any of the Acquired Companies has any outstanding liabilities or obligations for amounts owing to or from, or leases, contracts or other commitments or arrangements or understandings of a legally binding nature of any kind with SCHLUMBERGER or any affiliate thereof (excluding from such affiliates, the Selling Subsidiaries). 5.13 Machinery/Inventory (a) All machinery owned, leased or used by the Acquired Companies or included in the Acquired Assets have been maintained in the ordinary course of business . (b) All inventory used in or relating to the conduct of the RPS Business is usable or able to be sold (but with no guarantee as to such sale) in the ordinary course of business consistent with past practices or has been depreciated in line with applicable procedures applied in a consistent manner to the RPS Business. All such inventory is owned by the Acquired Companies or the Selling Subsidiaries, free and clear of all liens or encumbrances. 5.14 Plant and Equipment 27 The plants, structures and manufacturing equipment of the RPS Business owned by the Selling Subsidiaries are structurally sound with no known defects and are in good operating condition and repair and are adequate for the uses to which they are being put; and none of such plants, structures or equipment are in need of major maintenance or repairs except for ordinary, routine maintenance and repairs which are not material in nature or cost. Neither SCHLUMBERGER nor any Selling Subsidiary nor any of the Acquired Companies has received notification that it is in violation of any applicable building, or zoning, regulations in respect of its plants or structures or their operations and no such violation exists. 5.15 Product Liability Except as set forth in Schedule 5.15, there is no action, suit, inquiry, proceeding or investigation by or before any court or governmental or other regulatory or administrative agency or commission pending or threatened against or involving any Selling Subsidiary or Acquired Company relating to any product alleged to have been manufactured or sold by the RPS Business and alleged to have been defective, or improperly designed or manufactured, nor is there any valid basis for any such action, proceeding or investigation. 5.16 Year 2000 Compliance Schedule 5.16 sets forth the measures taken by the Selling Subsidiaries and the Acquired Companies to address the risks associated with the Year 2000 event. 5.17 Common European Currency Schedule 5.17 sets forth the measures taken by the Selling Subsidiaries and the Acquired Companies to address the risks associated with the Common European Currency. 5.18 Insurance The Selling Subsidiaries and the Acquired Companies have consistently maintained in full force and effect all insurance policies that are customary in their field of business and all premiums have been paid in due course. Such policies are sufficient for compliance with all requirements of law and of all agreements to which the Selling Subsidiaries or Acquired Companies are a party and provide insurance coverage for the assets and operations of the Selling Subsidiaries or Acquired 28 Companies in accordance with SCHLUMBERGER's practice throughout its group. None of the Acquired Companies and of the Selling Subsidiaries has been denied any insurance with respect to their assets or operations, nor has their coverage been limited, since January 1, 1994, by reason of losses incurred by the RPS Business, in particular as a result of product liability. It is expressly provided that all group insurance policies maintained by SCHLUMBERGER and the Selling Subsidiaries and benefiting the Acquired Companies and the Acquired RPS Activities shall cease with effect from the Closing Date. Until the Closing Date, SCHLUMBERGER and the Selling Subsidiaries shall have maintained in full force and effect such insurance policies and SCHLUMBERGER or the Selling Subsidiaries shall have filed in due course all relevant claims if any, thereunder. 5.19 Contracts and Commitments (a) To the best knowledge of SCHLUMBERGER, except as provided in Schedule 5.19 (a), none of the Acquired Companies or the Selling Subsidiaries has any power of attorney outstanding or any obligations or liabilities (whether absolute, accrued, contingent or otherwise) as guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in respect of obligations of any third party. Neither are there any forward foreign exchange contracts or similar foreign exchange instruments. (b) Schedule 5.19 (b) lists all contracts which are material to the operation of the RPS Business (the "Material Contracts"). For purposes of this Agreement, Material Contracts shall mean (i) supply contracts: those for more than one year not cancelable without penalty, and those for the five highest dollar volumes of purchases for each of the Acquired Companies or Selling Subsidiaries; (ii) contracts for products and services with a sole source supplier which, during the 1997 calendar year, accounted for more than US dollars 1,000,000 (one million dollars); (iii) patent licensing agreements the object of which is specific to an RPS Business application, whether or not payments are required; (iv) sales agreements which, in 1997, accounted for more than US dollars 1,000,000 (one million dollars) worth of sales. (c) Neither the Acquired Companies nor any of the Selling Subsidiaries is in material default under any of the Material Contracts. To the best knowledge of SCHLUMBERGER and of the Selling Subsidiaries, there has not been any material default under any of the Material Contracts by any other party thereto nor to the best of their knowledge have they been informed, as of the 29 date of this Agreement by any such other party of its intent to terminate a Material Contract. (d) None of SCHLUMBERGER, the Acquired Companies or the Selling Subsidiaries has received any written notice or has any knowledge or reason to believe that any current material supplier to any Acquired Company or Acquired RPS Activity will not continue to supply any Acquired Company or Acquired RPS Activity on substantially the same basis as it currently supplies any such Acquired Company or Acquired RPS Activity, except for price increases in accordance with any such supplier's ordinary course of business. (e) SCHLUMBERGER shall, and shall cause each Selling Subsidiary and the Acquired Companies to, not do any act or omit to do any act, or permit any act or omission which would, upon such act or omission or with the passage of time, cause a breach or default under any of the Material Contracts, or materially adversely affect BUYER's use of the properties or the assets of the RPS Business. Beginning on the date hereof, SCHLUMBERGER shall, and shall cause each Selling Subsidiary and the Acquired Companies to, use their respective best efforts to obtain any consents and waivers necessary to maintain such Contracts. (f) The assignment of Material Contracts entered into by the Selling Subsidiaries with respect to the Acquired RPS Activities may require the prior written consent of the other party. However, to SCHLUMBERGER's knowledge, and except as listed in Schedule 5.19 (f), all Material Contracts are assignable to BUYER without undue difficulties, and SCHLUMBERGER shall use its best efforts to facilitate such assignment. (g) The RPS Business is not restricted by agreement from carrying on its business anywhere in the world. (h) The RPS Business does not have any material outstanding loan to any person. (i) Except for employment agreements and those agreements that are listed in Schedule 5.19(i), neither the Selling Subsidiaries nor the Acquired Companies have entered into agreements with their officers and directors that relate to the RPS Business and are being transferred to BUYER either through the Acquired Companies or the Acquired RPS Activities. 30 5.20 Labor Matters (a) Schedule 5.20(a)(i) lists, as of the date hereof, the name of each employee transferable with the RPS Business, including employees of both the Acquired Companies and the Selling Subsidiaries attached to the RPS Business, and Schedule 5.20(a)(ii) lists the key employees of both the Acquired Companies and the Selling Subsidiaries attached to the RPS Business. (b) Except as disclosed by SCHLUMBERGER or any of the Selling Subsidiaries prior to the date hereof or except as disclosed in Schedule 5.20(b), none of SCHLUMBERGER or the Selling Subsidiaries (as it relates to the RPS Business) has, as of the date hereof, established any labor policy such as offered pension, disability, profit sharing, hospitalization insurance or retirement, other than as required by law or any applicable collective bargaining agreement. All such pension plans are fully funded. There are no benefits to employees, officers or directors that shall become due on account of the change in control in the capital of any Acquired Companies or Acquired RPS Activities. (c) SCHLUMBERGER, the Selling Subsidiaries and the Acquired Companies have paid and shall pay until the Closing Date, in full, all wages, salaries, bonuses and other direct or indirect compensation in cash or in kind earned by, and due and payable to, all transferred employees. (d) To the best knowledge of SCHLUMBERGER, each of the Acquired Companies and Selling Subsidiaries as it relates to the RPS Business is, and shall be at the Closing Date, in compliance with local laws and regulations concerning employment, it being understood that SCHLUMBERGER and its affiliates may be held liable only for failure to comply with these laws and regulations up to the Closing Date. (e) The Acquired Companies and the Selling Subsidiaries have in relation to each of their employees, and in accordance with relevant applicable laws and usages: (i) maintained records of the service of the employees: (ii) paid all income tax under applicable laws and payments due in respect of national insurance contributions (including the employer's contributions) after making the applicable, required deductions from 31 salaries, wages and bonuses paid by the Acquired Companies and the Selling Subsidiaries: (iii) maintained proper records of the payments and deductions mentioned above. (f) There is no labor strike, slow down or stoppage pending, or to SCHLUMBERGER's knowledge, threatened against or directly affecting the RPS Business. Neither the Selling Subsidiaries (in relation to the RPS Business) nor the Acquiring Companies have received notice of a labor dispute or claim brought by a terminated employee. There are no pending law suits in relation to employee termination. SCHLUMBERGER has no knowledge of any threatened labor disputes or claims. (g) Except as set forth in Schedule 5.20(g), neither the Selling Subsidiaries nor the Acquired Companies have entered into employment agreements that contain any severance or termination pay liabilities or obligations in excess of what is provided by applicable law or applicable collective bargaining agreements. (h) Except as set forth in Schedule 5.20(h), the Selling Subsidiaries and Acquired Companies have entered into, or apply, no collective bargaining agreements, union contracts or agreements. 5.21 Fringe Benefit Plans Except as set forth in Schedule 5.21, neither the Selling Subsidiaries nor any of the Acquired Companies has any bonus, deferred compensation, pension, profit-sharing, retirement, stock purchase, stock option or any other fringe benefit plan, arrangement or practice, whether formal or informal that would be transferred by BUYER. The Base Balance Sheet reflects in the aggregate an accrual of all amounts accrued but unpaid under the aforesaid plans and arrangements as of December 31, 1997. Neither the Selling Subsidiaries or Acquired Companies has any commitment, whether formal or informal and whether legally binding or not, to create any additional such plan or arrangement. 5.22 Banking Relationships 32 Schedule 5.22 lists the name of each bank, trust company, savings and loan association and other financial institution in which the Acquired Companies have any account or related to the Acquired RPS Activities (giving the account numbers and the names of the person(s) authorized to draw thereon or to have access thereto). 5.23 Litigation Schedule 5.23 lists all known litigation except for (i) matters involving each a claim of less than US dollars 50,000 (fifty thousand dollars) or (ii) matters covered by insurance for which the insurance carrier has accepted the potential liability and defense thereof, Except for (i) matters involving each a claim of less than US dollars 50,000 (fifty thousand dollars) or (ii) matters covered by insurance for which the insurance carrier has accepted the potential liability and defense thereof, there is, to the knowledge of SCHLUMBERGER, no claim, action, suit, proceeding, outside of France, the United States of America, Russia, the Czech Republic, the United Kingdom and Italy (but solely relating to the RPS Business of the Italian Selling Subsidiary) or investigation pending which has not been adequately, or will not have been adequately, reserved for, in the Base Balance Sheet and, in particular, concerning product liability, there are to the knowledge of SCHLUMBERGER no claims pending or threatening as of the date hereof. (a) The Acquired Companies and the Selling Subsidiaries have not received any process, notice or communication, formal or informal, by or on behalf of the Office of Fair trading, the Monopolies and Mergers Commission or any other authority of any country having jurisdiction in anti-trust matters, in relation to any aspect of the RPS Business or any agreement or arrangement to which the Company is or was, or is alleged to be or have been, a party. 5.24 No Material Change Except as set forth in Schedule 5.24, since the date of the Base Balance Sheet, the RPS Business has been conducted in the ordinary course and there have been no events having a material adverse effect on the value of the RPS Business. 5.25 Compliance with Applicable Laws/Permits (a) The Selling Subsidiaries and the Acquired Companies have generally conducted their business in accordance with all applicable laws, regulations and other requirements of all national governmental authorities, and of all states, municipalities and other political subdivisions and agencies thereof, 33 having jurisdiction over the RPS Business. None of the Selling Subsidiaries nor the Acquired Companies has received any notification of any asserted present or past material failure by the Selling Subsidiaries or the Acquired Companies to comply with such laws, rules or regulations except as described in Section 5.26. (b) Except when presently in the process of renewal, in accordance with local regulation and past local practices: (i) the Selling Subsidiaries and the Acquired Companies hold, or will hold at the end of the regular periodic renewal process, all applicable weight and control certificates currently required by any country in which they do business or required with respect to the sale of any RPS product, and all other permits of any kind currently required for the operation of the RPS Business as currently conducted and such certificates and permits are in full force and effect; (ii) at the Closing, each Selling Subsidiary and Acquired Company will hold, or will be in the process of obtaining the renewal of, all material governmental or regulatory permits and authorizations which are required for the conduct of the RPS Business as currently being conducted. No notices have been received by SCHLUMBERGER, any Selling Subsidiary, or any of the Acquired Companies, relating to termination or cancellation of, and neither SCHLUMBERGER nor any Selling Subsidiary or any of Acquired Company is in violation of the material terms and conditions of, any such permits or authorizations. 5.26 Environmental Matters (a) For purposes of this Agreement: (i) "Environmental Law" means any applicable treaties, laws, regulations, directives, circulars, orders, decrees, judgments, injunctions, permits, approvals, authorizations, or permissions relating to pollution or protection of the environment, including, without limitation, laws relating to releases or threatened releases of Hazardous Materials into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater, land, surface and subsurface strata) or pertaining to the protection of natural resources, the environment and public and employee health and safety, or governing or regulating the use, storage, handling, transportation, treatment, processing, disposal or generation of any Hazardous Materials, and the regulations promulgated pursuant thereto as such laws and regulations may be amended or supplemented through the Closing Date; 34 (ii) "Hazardous Materials" means any substance, material or waste which is regulated pursuant to any Environmental Law by any public or governmental authority in the jurisdictions in which the SCHLUMBERGER conducts business, including any material or substance which is defined as a "hazardous waste", "hazardous substance", "contaminant", "pollutant", "explosive", "flammable", "radioactive" or "toxic" under any provision of Environmental Law, but not limited to, petroleum, asbestos, or PCB's (as defined in Section 5.26(c)); (iii) "Release" means any release, spill, effluent, emission, leaking, pumping, injection, deposit, disposal, discharge, or migration into the environment, or into or out of any property subject to this Agreement; (iv) "Remedial Action" means all actions, including any capital expenditures, required by a governmental entity or required under any applicable Environmental Law to (i) investigate, clean-up, remove, treat, or in any other way address any Hazardous Materials in the environment, (ii) prevent the Release of any Hazardous Material so it does not endanger public health or the environment, or (iii) perform pre-remedial studies, and investigations or post-remedial monitoring and care pertaining or relating to a Release, or (iv) bring the applicable party into compliance with any Environmental Law; and (v) Contemporaneously with the execution of this Agreement, to the best of its knowledge, SCHLUMBERGER has delivered to BUYER, true and complete copies of all environmental studies made in the last five years relating to the RPS Business, any Selling Subsidiary or Acquired Company; a list of material Hazardous Materials used or generated by any Selling Subsidiary or Acquired Company; and a general description of the waste disposal practices of the Selling Subsidiaries or Acquired Companies. (b) Except as set forth in Schedule 5.26(b), to the best of Schlumberger's knowledge, all of the Real Property (as defined below) which is part of the RPS Business and the operations of the RPS Business is, or, as of the Closing Date, will be in material compliance with all Environmental Laws, including, without limitation, all restrictions, conditions, standards, limitations, prohibitions, requirements, obligations, schedules and timetables contained in the Environmental Laws or contained in any code, plan or demand letter issued, entered, promulgated or approved thereunder. For the 35 purposes of this Agreement, Real Property shall mean all real property (including plants, buildings, structures and fixtures) used in the operation of the RPS Business and which is owned, leased or used by either SCHLUMBERGER, any of the Selling Subsidiaries or Acquired Companies. (c) Except as set forth in Schedule 5.26(c), to the best of Schlumberger's knowledge, there have been no releases, spills or discharges of Hazardous Materials on or underneath any of the Real Property which is part of the RPS Business or waste disposal by any Acquired Company or Selling Subsidiary at an offsite location that is currently in violation of any Environmental Law; also except as noted in such Schedule, the Real Property in the United States which is part of the RPS Business does not contain any underground storage tanks, asbestos, manufacturing equipment using polychlorinated biphenyls ("PCBs"), underground injection wells, or septic tanks in which process wastewater or any Hazardous Materials have been disposed. (d) Except as set forth in Schedule 5.26(d), to the best of Schlumberger's knowledge, the Selling Subsidiaries and the Acquired Companies have obtained and will, as of the Closing Date, maintain all material permits required under applicable Environmental Laws for the continued operations of the RPS Business as currently conducted (the "Environmental Permits"). (e) Except as set forth in Schedule 5.26(e), to the best of Schlumberger's knowledge, there is no claim, notice or proceeding pending to terminate any Environmental Permit; and SCHLUMBERGER, the Selling Subsidiaries or Acquired Companies have received no communication that alleges that any Selling Subsidiary or Acquired Company is in non- compliance. (f) Except as set forth in Schedule 5.26(f), to the best of Schlumberger's knowledge, the operations of the Selling Subsidiaries or Acquired Companies are not subject to any outstanding written orders, investigations or material contracts with any governmental entity respecting (i) Environmental Laws, (ii) Remedial Actions or (iii) Release of a Hazardous Material. (g) Except as set forth in Schedule 5.26(g), to the best of Schlumberger's knowledge, neither SCHLUMBERGER, the Selling Subsidiaries or Acquired Companies have received any written communication alleging the violation of or a liability under any Environmental Law or liability attributable to the Release of any Hazardous Materials. (h) Except as set forth in Schedule 5.26(h), to the best of Schlumberger's knowledge, neither SCHLUMBERGER, the Selling Subsidiaries or Acquired 36 Companies have any contingent liabilities in connection with the Release of any Hazardous Materials in the environment (whether on-site or off-site). (i) (i) As identified in Schedule 5.26 (i)(i) and Section 9.14 below, or as might be identified after the Closing Date in accordance with this Agreement, SCHLUMBERGER shall perform any Remedial Action (a) as may be deemed necessary or appropriate by SCHLUMBERGER after prior consultation and BUYER's agreement in principle to the applicable remediation plan as presented by SCHLUMBERGER or (b) as may be ordered or approved by a governmental authority and an applicable Environmental Law. ; (ii) With respect to the Remedial Action, SCHLUMBERGER, shall conduct all tests, undertake all monitoring, and perform any and all actions, of whatever scope, kind and nature as (a) may be deemed necessary or appropriate by SCHLUMBERGER after prior consultation and BUYER's agreement in principle to the applicable remediation plan as presented by SCHLUMBERGER or (b) may be ordered or approved by a governmental authority and an applicable Environmental Law. SCHLUMBERGER shall use reasonable efforts to undertake any Remedial Action in such a manner as to minimize interference with normal business operations. With regard to Remedial Actions that may be performed by SCHLUMBERGER, BUYER shall provide SCHLUMBERGER such access to portions of the property as are not otherwise accessible to SCHLUMBERGER, as SCHLUMBERGER deems reasonable and necessary to effect such Remedial Action, provided that such access shall minimize interference with BUYER's normal operations. (iii) BUYER agrees for itself, its directors, officers, employees, agents, invitees, contractors, lessees, successors and assigns, not to (i) interfere unreasonably with the operation of SCHLUMBERGER's Remedial Action, or (ii) contribute to the exacerbation of any environmental situation for which SCHLUMBERGER has a Remedial Action obligation. SCHLUMBERGER shall consult fully with BUYER prior to engaging in any Remedial Action in order to explain what it will do and to establish cooperative means so that the Remedial Action can be conducted properly and efficiently. BUYER shall consult with SCHLUMBERGER prior to engaging in any activity that could reasonably be expected to adversely affect the Remedial Action or exacerbate any related environmental condition, and will comply as appropriate and reasonable with such reasonable safeguards and procedures as SCHLUMBERGER may request. 37 (iv) For purposes of this paragraph 5.26(i)(iv), all actions to be taken by SCHLUMBERGER will be taken by SCHLUMBERGER or any affiliate of its choice designated for purposes of carrying out the Remedial Action. BUYER's obligations towards SCHLUMBERGER will apply towards SCHLUMBERGER's designated affiliate. (v) In the event that SCHLUMBERGER does not perform any work in connection with a Remedial Action called for by an administrative or court order, within 20 days of notice by BUYER of said order, accompanied by all applicable information, BUYER shall be entitled to initiate and perform such work or action on its own, without prejudice to the allocation of related expenses set forth in Section 9.3 herein, until such time as SCHLUMBERGER shall undertake such work or action as called for in such administrative or court order. 5.27 No undisclosed liability The RPS Business does not have any liabilities or obligations of any nature which, under US GAAP, or the Accounting Principles, should be fully reflected or reserved against in the Base Balance Sheet and are not so reflected or reserved against, except for liabilities and obligations incurred in the ordinary course of business and consistent with past practice since the date hereof. 5.28 No implied representation Notwithstanding anything contained in this Article V or any other provision of this Agreement, it is the explicit intent of each Party thereto that SCHLUMBERGER is not making any representation or warranty whatsoever, express or implied, beyond those expressly given in this Agreement, including but not limited to any implied warranty or representation as to condition, merchantability or suitability as to any of the properties or assets of the RPS Business. ARTICLE VI ----------- REPRESENTATIONS AND WARRANTIES OF BUYER --------------------------------------- BUYER represents and warrants that: 38 6.1 Organization of BUYER and the Acquiring Subsidiaries Each of BUYER and as per the Closing Date the Acquiring Subsidiaries is a corporation which is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has the corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. 6.2 Authority of BUYER and the Acquiring Subsidiaries (a) Each of BUYER and as per the Closing Date the Acquiring Subsidiaries has full power and authority to enter into this Agreement and/or the other agreements and instruments executed in connection with this Agreement, and to carry out its respective obligations hereunder. The execution and delivery of this Agreement and the other agreements and instruments executed in connection with this Agreement, to which any of them is a party, have been duly authorized by its Board of Directors and, as necessary, its shareholders. No other corporate or other proceedings on the part of any of them are necessary to authorize this Agreement, the agreements contemplated in this Agreement and the transactions contemplated hereby or thereby, except the declaration or notification required under any stock exchange regulations whatsoever, which BUYER undertakes to make in due course as required: (b) This Agreement and the other agreements and instruments executed in connection with this Agreement to which BUYER or as per the Closing Date the Acquiring Subsidiaries is a party constitute valid and binding obligations of BUYER and said Acquiring Subsidiaries, enforceable against each of them, in accordance with their respective terms. 6.3 Consents and Approvals; No Violation Neither the execution or delivery of this Agreement or any of the other agreements and instruments executed in connection with this Agreement, to which BUYER or as per the Closing Date the Acquiring Subsidiaries is a party, nor the consummation of the transactions contemplated hereby or thereby (i) requires any filing or registration with, or material permit, authorization, consent or approval of, any governmental or regulatory authority other than as shall have been made and obtained on or prior to the Closing Date; (ii) violates any law, rule, regulation, ordinance, order, writ, injunction, judgment, decree or award of any court of governmental or regulatory authority; (iii) violates or conflicts with any provision of, or constitutes a default (or an event which, with notice or lapse of time or both, 39 would constitute a default) under the Articles of Incorporation or by-laws, as amended, of BUYER and of the Acquiring Subsidiaries; and (iv) violates or breaches any material provision of any agreement, commitment or obligation of any kind to which BUYER or one of the Acquiring Subsidiaries is a party. 6.4 Financing BUYER has received from The First National Bank of Chicago, First Chicago Capital Markets, Inc. and Bankers Trust Company, a valid and binding commitment to finance the transactions contemplated hereby, which commitment is entirely described in the letter attached hereto as Schedule 6.4 (the "Financing Letter"). ARTICLE VII ------------ ADDITIONAL COVENANTS -------------------- 7.1 Reasonable Efforts If at any time after the Closing Date any further action is necessary, proper or advisable to implement this Agreement and the other agreements contemplated hereby, as soon as reasonably practicable, each Party to this Agreement shall, or cause the proper employees. officers or directors of such Party or its Subsidiaries to, take all such necessary action. 7.2 Non-Competition Agreements SCHLUMBERGER, for itself and on behalf of each of its affiliates, unless acting with the prior written consent of BUYER, shall not, and shall cause each of its affiliates not to, directly and indirectly, for a period of four (4) years after the Closing Date engage in any business which is in competition with the RPS Dispenser Business and the RPS Service Business (as conducted as of the date hereof), provided, however, that SCHLUMBERGER or its affiliates may participate in a joint venture, similar arrangement or commercial alliance with a third party which engages in a business competitive with the RPS Dispenser Business or RPS Service Business if the purpose and activities of such joint venture, similar arrangement or commercial alliance is not dispensers nor services. It is understood and agreed by the Parties that SCHLUMBERGER or its affiliates are free to engage directly or indirectly in any activity in the area of electronic payment networks, transactions and/or systems in relation to RPS Business applications including but not limited to smart cards, fidelity or payment cards, card 40 validators and payment terminals, with the exception, however, of any electronic systems or programs controlling gasoline dispensers or gasoline pumps which SCHLUMBERGER and each of its affiliates shall not, directly or indirectly, engage in for a period of four (4) years after the Closing Date. In the event that the provisions of this Section 7.2 should ever be deemed to exceed the time or geographic limitations or any other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum permitted by applicable law. 7.3 Public Announcements/Disclosures Upon execution of this Agreement each Party shall be entitled to issue press-releases or public announcements regarding the transactions contemplated hereby, which press releases or announcements shall be submitted for prior approval to the other party which shall not unreasonably withhold the approval. Neither SCHLUMBERGER nor BUYER will disclose any other information regarding this Agreement except: - with the prior written consent of the other party; - as required under securities and stock exchange laws and regulations or other applicable laws and governmental regulations, including the Treaty of Rome; - to their employees, agents and consultants (including, without limitation, any entity providing credit to BUYER) and only to the extent such persons have a need to know such information and are bound by the Confidentiality Agreement executed on April 21, 1998, or unless such disclosure is required by applicable law. 7.4 SCHLUMBERGER Guarantees As of the Closing Date, BUYER shall assume the obligations of the Acquired Companies or related to the Acquired RPS Activities under any guarantees and similar obligations including any comfort letters related to the RPS Business so that SCHLUMBERGER is relieved of all liabilities with respect to such guarantees as of the Closing Date and hold harmless of any claims and expenses related thereto. 7.5 Product Liability 41 SCHLUMBERGER agrees to be responsible for all claims in respect of all legal and contractual product liability and all other warranty obligations in respect of the products manufactured and sold, as well as the services provided in connection therewith, in the course of the RPS Business prior to the Closing Date. BUYER agrees to be responsible for all claims in respect of all legal and contractual product liability and all other warranty obligations in respect of the products sold, as well as of the services provided in connection therewith, in the course of the RPS Business after the Closing Date. 7.6 SCHLUMBERGER Names and Trademarks Within six (6) months from the Closing Date, BUYER and the Acquiring Subsidiaries shall promptly discontinue the direct use of the name, trademark and corporate denomination "SCHLUMBERGER" and of SCHLUMBERGER's corporate logo, or of any variation thereof. BUYER, the Acquiring Subsidiaries and the Acquired Companies shall be authorized to use the stock of technical and commercial documentation held by the Acquired Companies or related to the Acquired RPS Activities as existing at the Closing Date during six months only as from this Date. At the end of this period, they shall immediately return to SCHLUMBERGER or destroy the remaining documentation in compliance with its instructions. BUYER and the Acquiring Subsidiaries shall be authorized for a period not exceeding six (6) months from the Closing Date, to continue to commercialize directly or through the Acquired Companies or its distributors the RPS Business products which will be in stock at said date, marked with the "SCHLUMBERGER" names, trademarks or logos. At the end of this period, BUYER and the Acquiring Subsidiaries shall be prohibited to manufacture and sell new RPS Business products or RPS Business products in stock labeled with these names, trademarks or logos, and any mention thereof shall be removed from any and all of the products remaining in stock and SCHLUMBERGER shall be given access to all premises so that it may proceed with all reasonable investigations with respect to this undertaking. 7.7 Release of liens or encumbrances Should liens or encumbrances exist which happened not to have been disclosed by SCHLUMBERGER or the Selling Subsidiaries, SCHLUMBERGER covenants to cause such liens or encumbrances to be released, at its cost, upon request from 42 BUYER or any of the Acquiring Subsidiaries, unless such encumbrances or liens are granted in relation to lease agreements for equipment, financial leasing agreements for equipment and the like, which agreements are transferred to, and assumed by, BUYER pursuant to the terms of this Agreement, which liens shall not be in excess of an aggregate amount of US dollars 100,000 (one hundred thousand dollars). 7.8 Other SCHLUMBERGER employees (a) Schedule 7.8(a) sets out a list of sales personnel located in South America and Asia, that, although not on payrolls of the RPS Business, exclusively sell RPS products. These employees will remain employed by SCHLUMBERGER affiliates for a maximum of twelve months after the Closing Date but will continue to sell RPS products, in the name and on behalf of BUYER. Their cost (salary, benefits and expenses) will be billed to BUYER by their employer, with no margin, during that period. At the end of the twelve-month period, the Parties shall decide jointly on the future of these employees. (b) Schedule 7.8(b) sets out a list of employees of SCHLUMBERGER or affiliates thereof that SCHLUMBERGER will second, or will cause to be seconded, to BUYER or Acquiring Subsidiaries for a period of at least one year and at most two years. This exact period will be decided by BUYER. SCHLUMBERGER or its affiliates shall bill BUYER or the Acquiring Subsidiaries for the cost of these employees (salary, benefits and expenses), with no margin, during the period of the secondment. 7.9 Customer Information All customers and prospects, the customers data base including all information on history of customers as from installation date, files, commercial and technical documentation of the Selling Subsidiaries and all other subsidiaries of SCHLUMBERGER engaged in the RPS Business shall be transferred to BUYER and the Acquiring Companies at the Closing. 7.10 Contracts awaiting consent to transfer Should the consent of a party to a contract that is part of the Acquired Assets fail to be obtained in relation to the transfer of such contract to the Acquiring Subsidiary, SCHLUMBERGER shall, and shall cause the Selling Subsidiaries to, cooperate with 43 BUYER in any arrangement reasonably requested by BUYER to provide BUYER or the Acquiring Subsidiaries the benefits under such contract, including the enforcement at the cost of and for the benefit of BUYER or the Acquiring Subsidiaries of any and all rights thereunder of SCHLUMBERGER or the Selling Subsidiaries against the other party thereto that are attributable to the RPS Business. 7.11 Shared Premises As soon as practicable after the Closing Date but at the latest within nine (9) months of such date, BUYER shall have relocated all the RPS Business presently operated out of the SCHLUMBERGER Montrouge site. The Parties will review, and agree upon, on a case by case basis, other lease or sublease arrangements relating to shared premises to ensure a practical transitional period. 7.12 Access After the Closing Date, SCHLUMBERGER and the Selling Subsidiaries shall continue to give access to BUYER and the Acquiring Subsidiaries to any information and archives relating to the RPS Business not transferred to BUYER or the Acquiring Subsidiaries pursuant to this Agreement and to provide reasonable assistance with all tax, customs and social security inquiries and claims in relation to the RPS Business. 7.13 Waiver of Subrogation To the extent of liabilities assumed by BUYER or Acquiring Subsidiaries pursuant to this Agreement, BUYER shall ensure that its insurers, and the Acquiring Subsidiaries' insurers, agree to waive all rights of subrogation against SCHLUMBERGER or the Selling Subsidiaries and their insurers. 7.14 Pension Plans (a) In the USA, SCHLUMBERGER shall continue to maintain the existing defined benefit pension plan and defined contribution savings plan. Said plans shall continue to remain under the sponsorship and direction of the Selling Subsidiary in the USA, and no direct transfer of the assets or liabilities shall occur with respect to said plans. The treatment of benefits under said plans is detailed in Schedule 7.14 (a). 44 (b) In the UK, SCHLUMBERGER and BUYER undertake to cooperate to procure that (i) BUYER (or any Acquiring Subsidiary that employs the UK Employees, as defined in Schedule 7.14 (b) after Closing) is appointed as the principal company of the Dunclare Scheme, as defined in Schedule 7.14 (b) with effect from Closing; (ii) subject to the requirements of sections 16-21 of the Pension Act 1995, new trustees nominated by BUYER are appointed as trustees of the Dunclare Scheme with effect from Closing in the place of the existing trustees. The treatment of the replacement benefits and the participation period in the Schlumberger Scheme are defined and treated in Schedule 7.14 (b). 7.15 Continuing relationships In the event relationships with SCHLUMBERGER affiliates not involved in the RPS Business survive the Closing, the Parties shall continue such relationships at standard arm's length conditions. 7.16 Cashflow forecasts SCHLUMBERGER commits to provide BUYER with historical cashflow requirement data, for 1997 and for each of the significant Acquired Companies and Acquired RPS Assets, within one month from the date of signature of this Agreement. 7.17 Chinese Joint Venture Within 90 days from the date of signature of this Agreement, BUYER commits to notify SCHLUMBERGER of its decision whether to acquire SCHLUMBERGER's indirect interest in a Chinese joint venture (58% shareholding in Schlumberger-Xin Yang Retail Petroleum Systems Corporation Ltd) (the "Chinese Joint Venture"), at conditions to be discussed. Failing such notification, BUYER shall be deemed not to acquire this interest and SCHLUMBERGER shall be free to keep it, transfer it or otherwise dispose of it, notwithstanding any other provision of this Agreement. Should BUYER not acquire the Chinese Joint Venture, it commits to continue all existing agreements between the RPS Business and the Chinese Joint Venture until 45 their respective term, all renewals excluded. The major agreements are attached in Schedule 7.17 hereto. If SCHLUMBERGER is obliged to stay as a shareholder of the Chinese Joint Venture, SCHLUMBERGER shall not be considered in violation of any non-competition obligation or warranty as it relates to such Chinese Joint Venture, provided that SCHLUMBERGER shall exit the share capital of the Chinese Joint Venture by December 31, 2014. 7.18 BUYER's commitments with regards to employees (a) BUYER shall maintain the employment conditions of all employees of the Acquired Companies and all employees transferred by the Selling Subsidiaries to the Acquiring Subsidiaries, including, without limitation: (i) the seniority acquired during their employment with the Acquired Companies, the Selling Subsidiaries and any SCHLUMBERGER affiliates; (ii) severance pay, such severance payment, for all US employees of the RPS Business, being equal to the sum of one week's pay per year of employment up to a maximum of 26 weeks pay, with a minimum severance payment equal to two week's pay; and (iii) retiree medical benefits, to the extent such benefits are currently offered by BUYER. (b) BUYER shall continue the incentive compensation programs in place with the Acquired Companies and the Selling Subsidiaries for the year 1998 with measurements and awards consistent with such programs and past practices, but subject to appropriately redefined business objectives. (c) BUYER shall ensure that the employees of the Acquired Companies and the Selling Subsidiaries be entitled to take any remaining accrued and unused vacation or receive pay in lieu thereof, for the year 1998. 7.19 Cooperation in Connection with Outstanding Litigation SCHLUMBERGER and BUYER shall fully cooperate in connection with all litigation outstanding at the Closing Date and continuing beyond the Closing Date. Without limitation, in France, the United States of America, Russia, the Czech Republic, the United Kingdom and Italy (but solely relating to the RPS Business of the Italian Selling Subsidiary), BUYER shall provide reasonable access to all records, documents, employees and information of the RPS Business as may be required from time to time to properly defend in such litigation. Failure to cooperate as provided in this Section 7.19, if it prevents one Party to adequately defend its interest, shall render the other party liable for all amounts that may become due as a result. 46 For any litigation outstanding at the Closing Date relating to the RPS Business, no settlement shall be entered into by either BUYER or SCHLUMBERGER with respect to such litigation unless (i) the amounts to be paid are entirely covered by insurance; or (ii) the Parties agree to such settlement, to which their consent shall not be unreasonably withheld. ARTICLE VIII ------------- TERMINATION ----------- 8.1 Failure of Conditions Precedent If the conditions precedent set out in Article III, Sections 3.1 and 3.2 above shall not have been fulfilled on or before December 31, 1998, this Agreement may be terminated by either party, in which case no party shall have any claim of any nature whatsoever hereunder against any other party. 8.2 Mutual Consent This Agreement may be terminated at any time by mutual consent. 8.3 Procedure Upon Termination In the event of termination of this Agreement as provided herein, written notice thereof shall forthwith be given to the other party and the transactions contemplated by this Agreement shall be terminated and abandoned, without further action by SCHLUMBERGER or BUYER. If the transactions contemplated by this Agreement are terminated and abandoned as provided herein: (a) Each Party will redeliver all documents, work papers and other material of any other party relating to the transactions contemplated hereby, whether so obtained before or after the execution hereof, to the Party furnishing the same; (b) All confidential information received by any Party hereto with respect to the business of any other Party or its subsidiaries shall be treated in accordance with Section 8.4 hereof; and (c) No party hereto shall have any liability or further obligation to any other party to this Agreement except as stated in subparagraphs (a) and (b) of this Section 8.3. 47 8.4 Confidentiality Subject to the terms of any non-disclosure agreement in effect between the Parties, if, for any reason, this Agreement is terminated or if the transactions contemplated herein were not completed, BUYER and the Acquiring Subsidiaries shall not use or disclose any information concerning the RPS Business, SCHLUMBERGER, the Selling Subsidiaries and any of the persons with whom the foregoing entertain business relations which they shall have obtained in the course of the negotiation leading to the signature of this Agreement and to the Closing, unless such information becomes publicly available other than as a result of a disclosure by SCHLUMBERGER or becomes available on a non-confidential basis from a source other than SCHLUMBERGER which is not prohibited from disclosing such information. ARTICLE IX ---------- GENERAL AGREEMENTS ------------------ 9.1 Expenses (a) Whether or not the acquisition of the RPS Business is consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses. (b) Notwithstanding anything to the contrary, stock transfer tax, stamp duties, and similar taxes (but not income, capital gains, and similar taxes) imposed by any jurisdiction on the sale of the Acquired Shares or the Acquired Assets contemplated by this Agreement shall be borne by BUYER or any of the Acquiring Subsidiaries. 9.2 Brokers SCHLUMBERGER represents and warrants that no broker or finder is entitled to any brokerage or finders fee or other commission from BUYER or any Acquiring Subsidiary based on agreements, arrangements or undertakings made by SCHLUMBERGER or any Selling Subsidiary in connection with the transactions contemplated hereby. 48 BUYER represents and warrants that no broker or finder is entitled to any brokerage or finders fee or other commission from SCHLUMBERGER or any Selling Subsidiary based on agreements, arrangements or undertakings made by BUYER or any Acquiring Subsidiary or affiliates in connection with the transactions contemplated hereby. 9.3 Survival of Representations and Warranties (a) The representations and warranties made by SCHLUMBERGER and BUYER in this Agreement or in any of the Specific Acquisition Agreement delivered pursuant to said Agreement shall terminate at the expiration of the periods set out below and starting from the Closing Date, except as to any matters occurred before the expiration of said periods as to which a specific claim for indemnification will have been notified in writing and in detail to the Indemnifying Party (as defined in subparagraph d below) prior to the expiration of said periods: (i) with respect to the tax and social security liability, representations: the periods shall be that of the applicable statute of limitation, excluding any available extensions thereof; (ii) with respect to Environmental matters, December 31, 2004 for issues arising in the United States of America, and outside the United States of America, December 31, 2001, providing however, that, beyond December 31, 1999, all Damages, costs and expenses relating to environmental matters shall be shared equally by the Parties; (iii) with respect to all other representations and warranties: December 31, 1999. (b) Subject to the provisions of this Section 9.3, SCHLUMBERGER shall, or shall cause a Selling Subsidiary, provided such subsidiary satisfies such obligation, to indemnify and hold harmless BUYER and the Acquiring Subsidiaries from any liability, damage, loss, judgment, assessments, cost or expense, including all reasonable attorney's fees, with the exception of those attorney's fees expressly dealt with in Section 9.3(d) (the "Damages") arising from and attributable to: (i) the material breach of any representation or warranty made by SCHLUMBERGER in this Agreement; 49 (ii) any failure of SCHLUMBERGER or the Selling Subsidiaries duly to materially perform or observe any covenant or agreement to be performed or observed by SCHLUMBERGER or the Selling Subsidiaries pursuant to this Agreement; and (iii) all other liabilities of the RPS Business which are not (i) liabilities of an Acquired Company on the date hereof, (ii) incurred by an Acquired Company after the date hereof in the ordinary course of business and consistent with past practice, (iii) liabilities listed in Exhibit E, or (iv) reflected on the Closing Balance Sheet. (c) Subject to the provisions of this Section 9.3, BUYER shall indemnify and hold harmless SCHLUMBERGER and the Selling Subsidiaries from any Damages arising from and attributable to: (i) the material breach of any representation or warranty made by BUYER in this Agreement; (ii) any failure of Buyer or the Acquiring Subsidiaries duly to materially perform or observe any covenant or agreement to be performed or observed by BUYER or the Acquiring Subsidiaries pursuant to this Agreement; and (iii) the Assumed Liabilities. (d) Any claim for indemnity shall be made by the party seeking indemnification (the "Aggrieved Party") to the other party (the "Indemnifying Party"), by written notice specifying in reasonable detail the basis of the claim. Such notice, as well as the compliance with the procedure set forth in the subsequent paragraph, shall be a condition precedent to any liability hereunder. In regard to claims brought by BUYER or Acquiring Subsidiaries, SCHLUMBERGER shall determine which Selling Subsidiary or Subsidiaries, if any, shall be responsible as the Indemnifying Party or Parties, and shall cause such Selling Subsidiary to satisfy such obligation. In the event of a direct claim, the Indemnifying Party shall have thirty (30) days following its receipt of the relevant claim notice (the "Review Period") to make such investigation of the underlying claim as it considers necessary or desirable and the Aggrieved Party shall cooperate therewith. If, on or prior to the expiration of the Review Period, the Parties agree upon the validity and amount of such 50 claim, the Indemnifying Party shall pay to the Aggrieved Party, within three (3) business days following the date of such agreement, the full agreed amount of the indemnification due on account of such claim. If the Parties are unable to reach agreement prior to the expiration of the Review Period, the parties may then refer the matter to arbitration as provided pursuant to Section 9.13 of the Agreement. In the event indemnification is likely to be sought with respect to a claim, action or proceeding brought by a third party against the Aggrieved Party, the Aggrieved Party shall permit the Indemnifying Party to assume the defense of such third party claim, action or proceeding and shall cooperate fully with the Indemnifying Party in the conduct of such defense. Failure by the Indemnifying Party to notify the Aggrieved Party of its election to defend any such claim or litigation within fifteen (15) days from receipt of the notice thereof, shall be deemed a waiver by the Indemnifying Party of its right to defend such claim or litigation. If the Indemnifying Party assumes the defense of any such claim or litigation, the obligations of the Indemnifying Party as to such claim shall be limited to taking all steps necessary in the defense or settlement of the claim or litigation and to holding the Aggrieved Party harmless from and against any and all Damages caused by or arising out of any settlement or judgment in connection with such claim or litigation, subject to the limitations of Section 9.3 (e) hereunder. The Aggrieved Party may participate, at its expense, in the defense of such claim or litigation, provided that the Indemnifying Party shall direct and control the defense of such claim or litigation. The Indemnifying Party shall not, in the defense of such claim or litigation, consent to entry of any judgment or settlement, except with the written consent of the Aggrieved Party. In case of failure by the Indemnifying Party to duly elect to defend a claim or litigation, it may participate, at its expense, in the defense of such claim or litigation, provided that the Aggrieved Party shall direct and control the defense of such claim or litigation. Subject to final authority regarding direction and control as set forth above, SCHLUMBERGER and BUYER will coordinate the conduct of the matter and in particular the statements to be made, as well as the advisability of settling or contesting the proceedings, will confer regarding their respective choice of counsel and will each make available to the other the documents related to the RPS Business under its control available to the other for purposes of the defense. (i) An Aggrieved Party shall not be entitled to an indemnity from an Indemnifying Party for claims which individually do not exceed US dollars 75,000 (seventy five thousand dollars) and in the aggregate do not exceed US dollars 1,000,000 (one million dollars). 51 The total liability of an Indemnifying Party (including all affiliates involved in the transactions contemplated by this agreement) shall not exceed a total equal to US dollars 35,000,000 (thirty five million dollars). This amount shall be reduced by the same percentage as the Total Purchase Price, should the Total Purchase Price be reduced pursuant to Section 1.6 above. It is expressly understood that subject to the limitations above, an Aggrieved Party shall be liable only for the net loss in excess of the US dollars 1,000,000 (one million dollars) deductible amount referred to in the first sentence of this paragraph 9.3 (e). (e) Any net loss to be indemnified pursuant to this Section shall mean the amount of the aggregate Damages actually suffered by affiliated Aggrieved Parties less any provision on the Closing Balance Sheet no longer justified, less any reduction, saving or repayment of taxes or duties, or associated payments due or paid under any insurance policy or other third party indemnity arrangement as well as any other receipt or benefit which it might receive, whether or not these amounts are related in any way to the claim giving rise to the indemnification. It is expressly agreed that an Aggrieved Party shall endeavor to mitigate any and all the damages for which an Indemnifying Party may be exposed and held responsible under this Agreement. 9.4 Currencies All financial documents and information contained in this Agreement, provided or to be provided pursuant to this Agreement, shall be in US dollars. The applicable exchange rate shall be that used by SCHLUMBERGER at the relevant date. For purposes of the Base Balance Sheet; the applicable exchange rate is that defined in Schedule 9.4. 9.5 Interpretation The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 9.6 Notices All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given: when delivered, if delivered by messenger 52 during normal business hours of the recipient: when sent, if transmitted by facsimile transmission (receipt confirmed) during normal business hours of the recipient, or, if mailed by registered mail, postage prepaid, on the third business day following mailing, in each case addressed as follows: (a) if to SCHLUMBERGER or any of the Selling Subsidiaries to: Schlumberger Limited Legal Department Attention Acquisitions Counsel 42 rue St Dominique - 75007 Paris With a copy to: Gibson Dunn & Crutcher LLP 104 avenue Raymond Poincare 75116 Paris, France Attention: Bernard Grinspan (b) if to BUYER or any of the Acquiring Subsidiaries, to: Tokheim Coporation 10501 Corporate Drive Ft. Wayne, Indiana 46845 USA Attention: Chief Financial Officer With a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 68, rue du Faubourg Saint-Honore 75008 Paris, France Attention: Thomas R. Bateman 9.7 Entire Agreement This Agreement (including the documents and instruments referred to herein or therein) (i) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the Parties with respect to the subject matter hereof, except the confidentiality Agreement executed on April 21, 1998; and (ii) is not intended to confer upon any other person any rights or remedies hereunder, except as explicitly mentioned herein. 9.8 Amendment 53 This Agreement may be amended or modified in whole or in part at any time by an agreement in writing executed in the same manner as this Agreement. 9.9 Waiver of Compliance Any failure of SCHLUMBERGER, on the one hand, or BUYER, on the other, to comply with any obligation, covenant, agreement or condition herein may be expressly waived in writing by SCHLUMBERGER or the BUYER, respectively, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. 9.10 Governing Law This Agreement as well as the Specific Acquisition Agreements shall be governed by and construed in accordance with the laws of France. 9.11 Assignability; Successors and Assigns The rights and obligations under this Agreement may not be assigned or delegated by any party hereto, in whole or in part, to any third party without the prior written consent of the other party hereto; provided, however, that without such prior consent, BUYER shall have the right to assign all or any part of its rights and obligations hereunder to (i) any of BUYER's directly or indirectly wholly-owned affiliates, or (ii) by way of security, guaranty or pledge, to any person providing credit to BUYER; provided further that BUYER irrevocably and unconditionally guarantees the prompt and complete performance by such transferee of BUYER's obligations thereunder, and notifies SCHLUMBERGER of such assignment at least ten (10) business days before the Closing. 9.12 Severability Any provision of this Agreement which is held invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 54 9.13 Arbitration All disputes, controversy or claim arising out of or in connection with the Agreement shall be finally settled by arbitration under the rules of the International Chamber of Commerce then in effect by three arbitrators appointed in accordance with the said Rules. The seat of arbitration shall be Paris (France). The arbitration language shall be conducted and the award shall be rendered in English. It is further expressly stated that the arbitrators appointed as provided above shall have sole and final jurisdiction for all disputes which may arise in connection with this Agreement and its schedules but also for all specific Acquisition Agreements, as well as their schedules and exhibits executed pursuant to Article I above. The award shall be final and binding upon the Parties as from the date rendered and shall be the sole and exclusive remedy between the Parties regarding any claims, counterclaims or issues presented to the arbitral tribunal. Any monetary award shall be made and promptly payable in US Dollars free of any tax. Any costs, fees or taxes incident to enforcing the award shall, to the maximum extent permitted by law, be charged against the Party resisting such enforcement. BUYER guarantees that all Acquiring Subsidiaries shall strictly observe this arbitration provision and shall not sue SCHLUMBERGER or any of the Selling Subsidiaries in any Court of justice. SCHLUMBERGER guarantees that all Selling Subsidiaries shall strictly observe this arbitration provision and shall not sue BUYER or any of the Acquiring Subsidiaries in any Court of justice. These guarantees shall be supported in writing by the Acquiring subsidiaries and the Selling Subsidiaries but the failure to give such support or the possible invalidity of said guarantees shall not invalidate commitments of BUYER and SCHLUMBERGER under this provision. 9.14 Bladel Remediation In accordance with Section 5.26(i), SCHLUMBERGER shall arrange and bear the cost at the Bladel, Netherlands site for monitoring and remediation of the soil 55 and groundwater contamination currently known by SCHLUMBERGER, as discussed in part in the Bladel Environmental Reports listed in Schedule 9.14. The Remedial Action required to address this contamination will be conducted in accordance with applicable Environmental Laws and under the oversight and with the approval of the appropriate governmental authorities. SCHLUMBERGER's obligation to arrange and bear the costs for the Bladel Remedial Action as required under this Section 9.14, expires eight years from the date of this Agreement, provided, however, that during this period SCHLUMBERGER shall make its best efforts to proceed with such Remedial Action. 56 IN WITNESS WHEREOF, this Master Agreement has been signed on behalf of SCHLUMBERGER Limited and TOKHEIM CORPORATION by a duly authorized officer of each corporation, all as of the date first abovewritten. __________________________ __________________________ SCHLUMBERGER LIMITED TOKHEIM CORPORATION By: ______________________ By: ______________________ Title:____________________ Title:____________________ 57 EX-99.(C)(2) 3 AMENDMENT NO. 1 TO MASTER AGREEMENT EXHIBIT (c)(2) AMENDMENT NO. 1 This Amendment No. 1 (this "Amendment") to the Purchase Agreement (as defined below) is entered into between Tokheim Corporation ("Tokheim") and Schlumberger Limited ("Schlumberger") as of September 30, 1998. RECITALS A. Tokheim and Schlumberger entered into a Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of June 19, 1998 (the "Purchase Agreement"), pursuant to which Tokheim agreed to purchase the fuel dispenser manufacturing, sales and service business units (the "RPS Division") of Schlumberger for a price equal to $335 million, subject to certain adjustments (the "Acquisition"). Pursuant to letter agreements dated as of July 21, 1998, July 31, 1998 and August 28, 1998, Schlumberger agreed to certain concessions which are superseded by this Amendment No. 1. Tokheim and Schlumberger now agree, as defined in those letter agreements, to retain the Abbeville facility. Defined terms used in this Amendment No.1 that are not defined herein shall have the meanings ascribed to them in the Purchase Agreement. B. The Purchase Agreement requires the parties to close the Acquisition on the last day of the month in which the last of the conditions precedent to the closing is met. On September 23, 1998, Schlumberger notified Tokheim that such conditions precedent to closing had been met and scheduled the closing for September 30, 1998. C. Tokheim has proposed to pay only $100 million of the purchase price in cash and has requested Schlumberger to agree to (i) amend the Purchase Agreement to provide that the balance of the purchase price will be paid as provided herein and (ii) accept the debt securities and warrants of Tokheim referred to herein in payment of the balance of the purchase price. D. Schlumberger is willing to amend the Purchase Agreement as provided herein and to finance the balance of the purchase price on the terms and conditions set forth below and in the summary term sheet (the "Term Sheet") attached as Exhibit A. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Tokheim and Schlumberger agree as follows: Section 1. Corporate Restructurings. At Tokheim's request, Schlumberger has agreed to proceed with certain corporate restructurings, on or before Closing, that had not initially been contemplated. These restructurings include (i) the transfer to a French Schlumberger entity, ETPM SA, of the Acquired RPS Activities in France (listed in Schedule C to the Purchase Agreement), with the exception of the Abbeville facility, which facility Schlumberger has agreed to keep, together with all liabilities associated thereto and (ii) the transfer of the Acquired RPS Activities in Italy (RPS activities operated by Schlumberger Industries Spa and listed in Schedule C to the Purchase Agreement) to the Acquired Company in Italy (CME-RIMIC Spa). An amended version of Schedules D and E and E-1(b) and E-1(a)(vi) are attached hereto as Exhibit B. Schedules E-1(a)(i), E-1(a)(iii) and E-1(m) to the Purchase Agreement are deleted. Schlumberger has also, with Tokheim's approval, restructured the share capital of the RPS entity in Switzerland, Denmark and Slovakia in order for said entities to be in compliance with local law. An amended version of Schedule C is attached hereto as Exhibit C. Section 2. Intercompany Loan Agreements. In order to reduce the Acquired Companies' bank exposure in view of the Closing, and with Tokheim's approval, Schlumberger set up a number of inter-company loans between Acquired Companies or between Acquired Companies and the Selling Subsidiaries, a list of which is attached hereto as Exhibit D (the "Intercompany Loans"). The Intercompany Loans will be reimbursed at Closing by Tokheim as part of the Total Purchase Price. Section 3. Employees. Schlumberger will provide Tokheim with an amended version of Schedule 5.20 to the Purchase Agreement updated as of the Closing Date, within ten business days from the Closing Date. Exhibit E hereto sets forth a list of five Chinese university graduates hired as part of a Resident Development Program. Schlumberger is willing to continue executing its commitments towards these employees should Tokheim be willing to release them. An amended version of Schedule 7.8(a) is also attached hereto in Exhibit E. Section 4. Chinese Joint Venture. Pursuant to section 7.17 of the Purchase Agreement, BUYER was given 90 days form the date of signature of the Purchase Agreement to notify SCHLUMBERGER of its decision to acquire SCHLUMBERGER's indirect interest in the Chinese Joint Venture. This time period is now expired. However, SCHLUMBERGER has agreed to give BUYER a new period of 90 days from the date of this Amendment to notify it of BUYER's decision to acquire SCHLUMBERGER's interest in the Chinese Joint Venture. Section 7.17 of the Purchase Agreement is to be read accordingly. Section 5. Non-Competition. Tokheim acknowledges that pursuant to its agreement with Schlumberger, Schlumberger has agreed not to transfer to Tokheim the Abbeville facility that is fully devoted to the RPS Business. Tokheim agrees that Schlumberger shall be entitled to continue operating the Abbeville facility as currently operated and that such continuation shall not be deemed a breach of Schlumberger's non-competition commitment as provided by Section 7.2 of the Purchase Agreement so long as it continue to operate the facility as currently operated. During the 90-day period as of the date of this Amendment and after such term, should SCHLUMBERGER be obliged to stay as a shareholder of the Chinese Joint Venture, SCHLUMBERGER shall not be considered in violation of any non-competition obligation or warranty as it relates to the Chinese Joint Venture so long as it conducts the Chinese Joint Venture as currently conducted, provided SCHLUMBERGER shall exit the share capital of the Chinese Joint Venture by December 31, 2014. Section 6. Russia. SCHLUMBERGER has agreed to postpone the transfer of the RPS Business in Russia pending the incorporation by BUYER of a local entity. During a period not to exceed 12 months form the date of this Agreement, the cost (salary, benefits and expenses) of the employees exclusively providing services to with the RPS Business in Russia, as listed in Schedule 5.20 to the Purchase Agreement will be billed to BUYER by their employer with no margin. 2 Section 7. Amendment of Purchase Agreement. (a) Section 1.3 of the Purchase Agreement is amended to read as follows: "The aggregate of the reimbursement of the Intercompany Loans and the purchase price for the Acquired Shares and the Acquired Assets shall be US dollars 330,000,000 (three hundred and thirty million dollars) (the "Total Purchase Price"), subject to the assumption by Tokheim and the Acquiring Subsidiaries of the Assumed Liabilities. The Total purchase Price shall be allocated to each of the Acquired Companies, and to each of the, or group of, Acquired Assets relating to each of the Acquired RPS Activities as indicated in Schedule 1.3 of the Purchase Agreement." An amended version of Schedule 1.3 is attached hereto as Exhibit F. The rest of Section 1.3 remains unchanged. (b) Section 1.4 of the Purchase Agreement is amended to read as follows: "Payment of the Total Purchase Price for the Acquired Shares and the Acquired Assets shall be made by BUYER on the Closing Date by: (i) depositing, by wire transfer in US Dollars, $100,000,000 in immediately available funds, into an account designated by SCHLUMBERGER for such purpose, which designation shall be made as soon as practicable by SCHLUMBERGER, acting as agent for the Selling Subsidiaries; and (ii) delivering to SCHLUMBERGER the Junior Subordinated Notes as provided in Section 7, the Senior Subordinated Notes, as provided in Section 8 and the Warrants as provided in Section 9. (c) Section 1.6(a) of the Purchase Agreement is amended to read as follows: "Within thirty (30) calendar days from the Closing, SCHLUMBERGER shall deliver to BUYER a combined audited balance sheet of the RPS Business as of the month-end which shall correspond to the Closing Date, as defined in Section 4.1 hereto (the "Closing Balance Sheet"). The Closing Balance Sheet shall be prepared in accordance with US GAAP and the Accounting Principles. To the extent that the Net Equity, shown on the Base Balance Sheet is higher than the Net Equity shown on the Closing Balance Sheet, SCHLUMBERGER shall make a payment to BUYER equivalent to the amount of the difference, subject to a deductible of US dollars 3,000,000 (three million dollars). To the extent that the Net Equity shown on the Base Balance Sheet is less than the Net Equity shown on the Closing Balance Sheet, BUYER shall make a payment to SCHLUMBERGER equivalent to the amount of the surplus, subject to a deductible of US dollars 3,000,000 (three million thousand dollars). Any payment resulting from this Section 1.6(a) shall be referred to as the "Post Closing Adjustment". "Net Equity" ("situation reelle") shall mean an amount equal to (i) the aggregate book value of the assets of the RPS Business, excluding cash, cash equivalents and intercompany receivables, as the case may be, reflected on a balance sheet prepared at a given date, in accordance with US GAAP and the Accounting Principles, minus (ii) the aggregate book value of the liabilities, excluding third party (bank) debt and intercompany payables, as the case may be, of the RPS Business reflected on that same balance sheet." 3 (d) Section 1.6(f) of the Purchase Agreement is amended to add the phrase", inclusive of the $3,000,000 deductible referred to in Section 1.6(a)," immediately after the phrase "in no event shall the Post-Closing Adjustment". (e) Section 4.1 of the Purchase Agreement is amended to read as follows: "The Closing for the acquisition of the RPS Business shall take places at the offices of Skadden Arps Slate Meagher & Flom LLP, avenue Louise 523, 1050 Brussels and at the offices of Skadden Arps Slate Meagher & Flom LLP, 333 West Wacker Drive, Chicago, IL 60606, on September 30, 1998 and October 1, 1998." (f) Section 9.14 of the Purchase Agreement is amended to read as follows: "In accordance with Section 5.26(i), SCHLUMBERGER shall arrange and bear the cost at the Bladel, Netherlands site for monitoring and remediation of the soil and groundwater contamination currently known by SCHLUMBERGER, as discussed in part in the Bladel Environmental Report listed in Schedule 9.14, subject to a US dollars 700,000 (seven hundred thousand dollars) deductible. The Remedial Action required to address this contamination will be conducted in accordance with applicable Environmental Laws and under the oversight and with the approval of the appropriate governmental authorities. SCHLUMBERGER's obligation to arrange and bear the costs for the Bladel Remedial Action as required under this Section 9.14, expires eight years form the date of this Agreement, provided, however, that during this period, SCHLUMBERGER shall make its best efforts to proceed with such Remedial Action." Section 8. Services Agreement. On the Closing Date or thereafter, Schlumberger and Tokheim will enter into one or more services agreements. Under the agreements, Schlumberger will pay Tokheim a minimum fee of US$850,000 a year (regardless of use) for a period of five years, payable monthly. The payments under the services agreements are due in full even if Schlumberger terminates the agreements or discontinues use of the services at any time during the five year payment period. The provisions of this Section 6 supersede any prior agreements or understandings between Schlumberger and Tokheim on this subject. Section 9. Junior Subordinated Notes. Subject to the terms and conditions hereof and in the Term Sheet, in payment of a portion of the Purchase Price Tokheim will issue, and Schlumberger will acquire, junior subordinated notes of Tokheim in the principal amount of $40 million (the "Junior Subordinated Notes"), pursuant to a Securities Purchase Agreement substantially in the form of Exhibit G. Section 10. Senior Subordinated Notes. Subject to the terms and conditions hereof and in the Term Sheet, in payment of a portion of the Purchase Price Tokheim will issue, and Schlumberger will acquire, junior subordinated notes of Tokheim in the principal amount of $170 million (the "Senior Subordinated Notes"), pursuant to a Securities Purchase Agreement substantially in the form of Exhibit G. 4 Section 11. Warrants. Subject to the terms and conditions hereof and in the Term Sheet, in payment of a portion of the Purchase Price Tokheim will issue, and Schlumberger will acquire, warrants to purchase up to an aggregate of up to 19.9% of the outstanding shares of common stock of Tokheim (the "Warrants"), pursuant to a Securities Purchase Agreement substantially in the form of Exhibit G. Section 12. Partial Escrow. In order to provide adequate time for Tokheim to comply with certain provisions of French law, Schlumberger will continue to hold in escrow the Acquired Assets of the French subsidiary for up to ten days. Section 13. Documentation. The Junior Subordinated Notes, the Senior Subordinated Notes and the Warrants will be governed by definitive agreements and documentation, including the Securities Purchase Agreement, an indenture governing the terms of the Junior Subordinated Notes, an indenture governing the terms of the Senior Subordinated Notes and a Warrant Agreement governing the terms of the Warrants (collectively, the "Financing Documentation"), in form and substance reasonably satisfactory to Schlumberger. The Financing Documentation will be prepared by Gibson, Dunn & Crutcher LLP, special counsel to Schlumberger. The Financing Documentation will contain such covenants, terms and conditions as are customary for transactions of this type and consistent with this Amendment No. 1 and the Term Sheet. Section 14. Conditions. The obligation of Schlumberger to accept the Junior Subordinated Notes, the Senior Subordinated Notes and the Warrants in payment of a portion of the purchase price is subject to fulfillment of the following conditions: (a) Financing Documentation. Tokheim and Schlumberger shall have entered into the Financing Documentation on terms and in form and substance reasonably satisfactory to Schlumberger. (b) Bank Financing. Tokheim shall have entered into definitive documentation on terms and in form and substance reasonably satisfactory to Schlumberger with respect to an aggregate at least $230 million of senior bank financing (collectively with all documents and instruments related thereto or delivered in connection therewith, the "Bank Documents") with a commercial lender or lenders or a syndicate of commercial lenders. At the closing, the Bank Documents shall be in full force and effect and the parties thereto shall be in compliance with all material agreements thereunder. (c) Capital Structure. The pro forma consolidated capital structure of Tokheim and its subsidiaries, after giving effect to the Acquisition, shall be consistent with the capital structure contemplated herein, and other than the Bank Financing, the Junior Subordinated Notes, the Senior Subordinated Notes and other indebtedness reasonably satisfactory to Schlumberger, Tokheim and its subsidiaries, after giving effect to, and upon consummation of, the Acquisition, shall have no outstanding indebtedness for money borrowed. 5 (d) Opinions. At the closing, Schlumberger shall have received a legal opinion and other certificates of officers (including with respect to solvency) from persons, and covering matters, reasonably acceptable to Schlumberger. (e) Take-Out Bank. Tokheim shall have engaged BT Alex. Brown, Donaldson, Lufkin & Jenrette Securities Corporation or other investment banker reasonably satisfactory to Tokheim and Schlumberger (the "Take-Out Bank") to privately place securities of Tokheim, the proceeds of which will be used to prepay the Senior Subordinated Notes. (f) Rights Plan. Tokheim shall have amended its shareholder rights plan to provide that the transactions contemplated hereby and by the documents and instruments referred to herein may be consummated without triggering any rights under the shareholder rights plan. Section 15. Board Representation. Within 120 days of the Closing, Tokheim shall take all necessary action to cause two nominees of Schlumberger, selected by Tokheim from among Irwin Pfister, James Gunderson or Jean-Paul Bize, to be added to the Tokheim Board of Directors on January 29, 1999 if the Senior Subordinated Notes or the Roll-Over Notes are outstanding and have not been paid in full prior thereto. Section 16. Termination. Schlumberger's agreements and obligations hereunder will terminate on October 1, 1998 if the closing has not occurred at such time. IN WITNESS WHEREOF, the parties have hereunto set their respective hands as of the date first above written. TOKHEIM CORPORATION By______________________ SCHLUMBERGER LIMITED By_______________________ 6 EXHIBIT A Summary Term Sheet Junior Subordinated Notes Issuer: Tokheim Corporation. Guarantors: All obligations under the Junior Subordinated Notes will be unconditionally guaranteed on a junior subordinated basis by each of Tokheim's domestic subsidiaries, and each of Tokheim's non-U.S. subsidiaries to the extent that they provide credit support with respect to the Bank Financing (collectively, the "Guarantors"). Purchaser: Schlumberger Limited Amount: U.S. $40 million. Maturity: Ten years from the closing date. Interest Rate: 12%, payable quarterly in arrears in cash or in kind at Tokheim's option. Optional Redemption: At any time, at par plus accrued interest. Change of Control: Holder has put at 101% of par plus accrued interest. Use of Proceeds: To fund a portion of the purchase price of the Acquisition. Registration Rights: One demand registration right, exercisable at any time, at Tokheim's expense. Unlimited piggy-back registration rights at Schlumberger's expense. Ranking: The obligations of Tokheim and the Guarantors under the Junior Subordinated Notes will be junior subordinated obligations of Tokheim and the Guarantors and will rank (i) junior in right of payment to all senior bank indebtedness of Tokheim or the Guarantors, (ii) junior in right of payment to all indebtedness for borrowed money of Tokheim or the Guarantors outstanding on the closing date and (iii) junior in right of payment to all indebtedness for borrowed money of Tokheim incurred within 18 months after the closing date. Mandatory Prepayment: Subject to the terms of the Bank Documents, net proceeds of sales of debt securities or equity securities, in a public offering or private placement by Tokheim or any of its subsidiaries, shall be used to A1 prepay the Junior Subordinated Notes plus accrued interest and any other amount payable thereunder to the full extent of the net proceeds so received to the extent such net proceeds are not used to retire bank debt or the Senior Subordinated Notes. Covenants: The documentation for the Junior Subordinated Notes will contain customary covenants, including without limitation restrictions on the ability of Tokheim and its subsidiaries to pay dividends and make certain other restricted payments and investments, impose restrictions on the ability of Tokheim's subsidiaries to pay dividends or make certain payments to Tokheim, create liens, enter into transactions with affiliates, and merge, consolidate or transfer substantially all of their respective assets. Representations and Customary for transactions of this type. Warranties Conditions Precedent: Customary for transactions of this type. Events of Default: Customary for transactions of this type, including without limitation payment defaults, covenant defaults, bankruptcy and insolvency, judgments, cross acceleration of and failure to pay at final maturity other indebtedness aggregating $5 million or more, subject to, in certain cases, notice and grace provisions. Governing Law and Forum: The State of New York. A2 Senior Subordinated Notes Issuer: Tokheim Corporation. Guarantors: All obligations under the Senior Subordinated Notes will be unconditionally guaranteed on a senior subordinated basis by each of the Guarantors. Purchaser: Schlumberger Limited Amount: U.S. $170 million. Maturity: 120 days from the date of issuance. In the event that Tokheim has failed to raise sufficient additional capital to repay the Senior Subordinated Notes on or prior to the stated maturity thereof, the Senior Subordinated Notes will be converted, subject to the conditions described in the term sheet for the Roll- Over Notes, to the Roll-Over Notes. Interest Rate: 12%, payable quarterly in arrears in cash. Change of Control: Holder has put at 101% of par plus accrued interest. Use of Proceeds: To fund a portion of the purchase price of the Acquisition. Registration Rights: None. Ranking: The obligations of Tokheim and the Guarantors under the Senior Subordinated Notes will be senior subordinated obligations of Tokheim and the Guarantors and will rank (i) junior in right of payment to all senior bank indebtedness of Tokheim or the Guarantors, (ii) pari passu with indebtedness incurred after the closing to the extent that the proceeds of such indebtedness are used to repay the Senior Subordinated Notes and (iii) senior in right of payment to all other subordinated indebtedness of Tokheim or the Guarantors. Mandatory Prepayment: Subject to the terms of the Bank Documents, net proceeds of sales of debt securities or equity securities, in a public offering or private placement by Tokheim or any of its subsidiaries, and net proceeds of significant asset sales, shall be used to prepay the Senior Subordinated Notes plus accrued interest and any other amount payable thereunder to the full extent of the net proceeds so received to the extent such net proceeds are not used to retire bank debt and permanently reduce the bank facility. A3 Optional Prepayment: Tokheim may prepay the Senior Subordinated Notes, in whole or in part, at any time at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon. Covenants: The documentation for the Senior Subordinated Notes will contain customary affirmative and negative covenants, including without limitation restrictions on the ability of Tokheim and its subsidiaries to incur additional indebtedness and to incur indebtedness which is subordinated to senior debt and not subordinated to the Senior Subordinated Notes, pay certain dividends and make certain other restricted payments and investments, impose restrictions on the ability of Tokheim's subsidiaries to pay dividends or make certain payments to Tokheim, create liens, make asset sales, enter into transactions with affiliates, and merge, consolidate or transfer substantially all of their respective assets. Representations and Customary for transactions of this type. Warranties Conditions Precedent: Customary for transactions of this type. Events of Default: Customary for transactions of this type, including without limitation payment defaults, covenant defaults, bankruptcy and insolvency, judgments, cross acceleration of and failure to pay at final maturity other indebtedness aggregating $5 million or more, subject to, in certain cases, notice and grace provisions. Governing Law and Forum: The State of New York. A4 Warrants Issuer Tokheim Purchaser Schlumberger Warrants: Warrants representing up to 19.9% of the outstanding common stock of Tokheim (the "Warrants") before giving effect to such issuance with customary anti-dilution provisions for transactions of this type. The actual number of shares issuable upon exercise of the Warrants will be determined by dividing (i) $20 million by (ii) the weighted average closing price of the Tokheim common stock on the NYSE-Composite Tape for a two-month period beginning one month prior to and ending one month after the closing date. If the number of shares so obtained represents less than 19.9% of the number of shares of Tokheim common stock outstanding on the closing date, the Warrants will be exercisable for such number of shares. If the number of shares so obtained exceeds 19.9%, the actual number of shares for which the Warrants may be exercised will be 19.9% of the number of shares of Tokheim common stock outstanding on the closing date. Exercise Price: $0.01 per share. Term: Exercisable at any time during the five-year period beginning 120 days after the closing date. Optional Redemption: Can be redeemed in whole or in part within the 120-day term of the Senior Subordinated Notes, provided that the Senior Subordinated Notes have been paid in full and a portion of the Junior Subordinated Notes (determined by multiplying the then-outstanding principal amount of Junior Subordinated Notes by a fraction, the numerator of which is the value of the warrants being redeemed and the denominator of which is $20 million) simultaneously is redeemed. Representations and Customary for transactions of this type. Warranties Conditions Precedent: Customary for transactions of this type. A5 Roll-Over Notes Issuer Tokheim Guarantors: All obligations under the Senior Subordinated Notes will be unconditionally guaranteed on a senior subordinated basis by each of the Guarantors. Purchaser Schlumberger Amount: The lesser of (i) U.S. $170 million or (ii) the unpaid principal amount of the Senior Subordinated Notes. Maturity: Eight years from the date of issuance. Interest Rate: 12% (the "Base Rate") for the first three months from the date of issuance 12.5% for the next three months 13.0% for the next three months 13.5% for the next three months 14.0% for the next three months 14.5% thereafter,in each case payable quarterly in arrears; The Base Rate will be payable in cash, and interest in excess of the base rate will be added to the outstanding principal amount on the applicable interest payment date. Conversion Conditions (i) Neither Tokheim nor any Subsidiary is subject to a bankruptcy or other insolvency proceeding and (ii) no payment default exists or would exist with the passage of time or the giving of notice. Change of Control: Holder has put at 101% of par plus accrued interest. Use of Proceeds: To fund the repayment of the Senior Subordinated Notes. Registration Rights: Holders of the Roll-Over Notes will be entitled to the benefits of an Exchange and Registration Rights Agreement, with terms customary for Rule 144A-offered securities (except as to any provisions increasing the rate other than as set forth above), pursuant to which Tokheim will agree to file with the Securities and Exchange Commission (i) a registration statement under the Securities Act registering an issue of senior subordinated notes of Tokheim which are identical in all material respects to the Roll-Over Notes and (ii) under certain circumstances, a shelf registration statement pursuant to Rule 415 under the Securities Act. A6 Ranking: The obligations of Tokheim and the Guarantors under the Roll-Over Notes will be senior subordinated obligations of Tokheim and the Guarantors and will rank (i) junior in right of payment to all senior bank indebtedness of Tokheim or the Guarantors and (ii) senior in right of payment to all other indebtedness of Tokheim or the Guarantors. Mandatory Prepayment: Subject to the terms of the Bank Documents, net proceeds of sales of debt securities or equity securities, in a public offering or private placement by Tokheim or any of its subsidiaries, and net proceeds of significant asset sales, shall be used to prepay the Senior Subordinated Notes plus accrued interest and any other amount payable thereunder to the full extent of the net proceeds so received to the extent such net proceeds are not used to retire bank debt and permanently reduce the bank facility. Optional Prepayment: Tokheim may prepay the Roll-Over Notes, in whole or in part, at any time at a redemption price equal to 100% of the principal amount thereof plus accrued interest thereon. Covenants: The documentation for the Senior Subordinated Notes will contain customary affirmative and negative covenants, including without limitation restrictions on the ability of Tokheim and its subsidiaries to incur additional indebtedness and to incur indebtedness which is subordinated to senior debt and not subordinated to the Senior Subordinated Notes, pay certain dividends and make certain other restricted payments and investments, impose restrictions on the ability of Tokheim's subsidiaries to pay dividends or make certain payments to Tokheim, create liens, make asset sales, enter into transactions with affiliates, and merge, consolidate or transfer substantially all of their respective assets. Representations and Customary for transactions of this type. Warranties Conditions Precedent: Customary for transactions of this type. Governing Law and Forum: The State of New York. A7 EXHIBIT B TO AMENDMENT NO. 1 MASTER AGREEMENT Schedule D Acquired Companies and Acquired RPS Activities ACQUIRED COMPANIES - ------------------ Schlumberger Technologies GesmbH A company incorporated in Austria, with a capital of ATS 46,500,000 formed of one share with a nominal value of ATS 46,500,000 and having its registered address at Eitzenbergstrasse 4-6, 2544 Leobersdorf, Austria. Shareholder: Schlumberger B.V., The Netherlands Schlumberger Tanksysteme GmbH A company incorporated in Germany, with a capital of DM 5,300,000 divided into 3 shares with respective nominal values of DM 2,505,000, DM 2,495,000, and DM 300,000, and having its registered address at Loherstrasse 1, 58332 Schwelm, Germany. Shareholder: Schlumberger GmbH, Germany Schlumberger Germann GmbH A company incorporated in Germany, with a capital of DM 50,000 formed of one share with a nominal value of DM 50,000 and having its registered address at Brandstuecken 29, 22549 Hamburg, Germany. Shareholder: Schlumberger GmbH, Germany Schlumberger Measurement & Systems KFT A company incorporated in Hungary, with a capital of HUF 19,900,000 divided into 19,900,000 shares with a nominal value of HUF 1 each, and having its registered address at Csillaghegyi UT 25, 1037 Budapest, Hungary; Shareholders: MC and C Holdings Limited, British Virgin Island 17,910,000 shares Schlumberger BV, The Netherlands 1,990,000 shares Schlumberger Technologies Ltd A company incorporated in Ireland, with a capital of I.P 10,000 divided into 10,000 shares with a nominal value of IP 1 each, and having its registered address at Unit 1, Parkway House, Ballymount Road, Ballymount, Dublin 12, Ireland. Shareholders: Schlumberger B.V., the Netherlands 9,999 shares BVI Holdings Ltd, British Virgin Islands 1 share Tulla Electronics Ltd A company incorporated in Ireland, with a capital of I.P 56,576 divided into 56,576 shares with a nominal value of I.P 1 each, having its registered address at Tulla County Clare, Ireland. Shareholders: BVI Holdings Ltd, British Virgin Islands 56,575 shares Schlumberger Eastern Holding Inc., Panama 1 share CME RIMIC S.r.l A company incorporated in Italy, with a capital of Lire 20,000,000 formed of one share of Lire 20,000,000, and having its registered address at Via Milano 178, Caronno Pertusella (VA), Italy. Shareholder: Schlumberger Industries S.P.A., Italy Koppens Automatic Fabrieken B.V. A company incorporated in the Netherlands, with a capital of DFL 100,000 divided into 100 shares with a nominal value of DFL 1,000 each, and having its registered address at Industrieweg 5, 5531 AD Bladel, the Netherlands. Shareholder: Schlumberger Investment Services B.V., The Netherlands. Koppens Schlumberger B.V. A company incorporated in the Netherlands, with a capital of DFL 5,000 divided into 20 shares with a nominal value of DFL 250 each, and having its registered address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands. Shareholder: Schlumberger Investment Services B.V., The Netherlands Koppens Holding Nederland B.V. A company incorporated in The Netherlands, with a capital of DFL 28,000 divided into 28 shares with a nominal value of DFL 1,000 each, and having its registered address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands. Shareholder: Schlumberger Limited Schlumberger Industries S.r.o. A company incorporated in the Slovak Republic, with a capital of SK 6,200,000 formed of one share with a nominal value of SK 6,200,000, and having its registered address at Cukrova 14, Bratislava 81108, Slovak Republic. Shareholder: Schlumberger B.V., The Netherlands Koppens Iberica SA A company incorporated in Spain, with a capital of Ptas 200,000,000 divided into 200,000 shares with a nominal value of Ptas 1,000 each, and having its registered address at Imprenta 5, Poligono Industrial de Alcobendas, 28100 Alcobendas (Madrid), Spain. Shareholders: Schlumberger Measurement & Systems SA 196,000 shares 1 share Cedipsa 4,000 shares E.T.P.M. S.A A company incorporated in France, with a capital of FF 39,178,800 divided into 391,788 shares with a nominal value of FF 100 each, and having its registered address at 9, avenue Galilee, 92350 Le Plessis Robinson, France. Shareholders: Schlumberger Industries SA, France 391,788 shares Schlumberger Technologies S.A A company incorporated in Switzerland, with a capital of CHF 3,750,000 divided into 2,450 shares with a nominal value of CHF 1,000 each, and having its registered address at Route du Crochet 7, 1762 Givisiez, Switzerland. Shareholder: Schlumberger B.V., The Netherlands 3,746 shares 4 individuals 4 shares to bearer Schlumberger-Xin Yang Retail Petroleum Systems Corporation Limited A company incorporated in China, with a capital of $2,850,000 and having a registered address at Xin Yang High Tech Industrial Park, Dao Yi Development Zone, Shenyang, China (subject to the exercise by BUYER of the option set forth in section 7.17) Shareholders: Schlumberger Eastern Holding Inc., Panama 58% Xin Xin Corporation (non related Schlumberger party) 42% ACQUIRED RPS ACTIVITIES - ----------------------- Czech Republic Schlumberger RPS, a division of Schlumberger Industries S.r.o, a company incorporated in Czech Republic, and having commercial and/or industrial offices located at Pernerova 48, CZ - 186 02 Praha 8. Russia Schlumberger RPS, a division of Schlumberger Industries, a company incorporated in Russia, and having commercial and/or industrial offices located at 18 Schipok Str., 113054 Moscow. U.K Schlumberger RPS, a division of Schlumberger Public Limited Company, a company incorporated in U.K, and having commercial and/or industrial offices located at Unit 4, Cliveden Office Village, Lancaster road, High Wycombe, Buckinghamshire HP12 3YZ and at Unit 3, Baker Road, West Pitkerro Industrial Estate, Dundee DD5 3RT. USA Schlumberger RPS, a division of Schlumberger Technologies Inc., a company incorporated in the State of Delaware, and having commercial and/or industrial offices at 201 East 1st Street, 2900 N Center and Bonham Manufacturing Center, 1300 Bicentannial Drive, Bonham, TX 75418 and 825-M Greenbier Circle, Chesapeake, VA 23320 MASTER AGREEMENT Schedule E Acquired Assets / Assumed Liabilities 1. Acquired Assets shall mean: (a) all machinery, equipment, furniture, office equipment, computer equipment (including all hardware and software), communications equipment, vehicles, storage tanks, space and replacement parts, fuel and other tangible property (and interests in any of the foregoing) of the Selling Subsidiaries used for purposes of the Acquired RPS Activities (collectively, the "Equipment"). Listings of the Equipment are attached hereto for the Acquired Activities in the UK (Schedule E-1(a)(ii)), the Czech Republic (Schedule E-1(a)(iv)) and Russia (Schedule E-1(a)(v)), and the USA (Schedule E-1(a)(vi)); (b) all real estate owned by the Selling Subsidiaries and fully dedicated to the Acquired Activities (collectively the "Real Estate"). A list of the Real Estate is attached hereto as Schedule E-1(b); (c) all items of inventory used for purposes of the Acquired RPS Activities notwithstanding how classified in the financial records of the Selling Subsidiaries, including all raw materials, work-in- process, finished goods, supplies, spare parts and samples (collectively, the "Inventory"); (d) all contracts, agreements options, leases, licenses, sales and purchase orders, commitments and other instruments of any kind, whether written or oral, to which the Selling Subsidiaries are a party and which relate to the Acquired RPS Activities on the Closing Date (collectively, the "Contracts"); (e) all accounts, with the exception of the bank account cash balances, accounts receivable and note receivable, together with any unpaid interest or fees accrued thereon or other amounts due with respect thereto, of the Selling Subsidiaries, which relate to the Acquired RPS Activities and any security or collateral therefor, including recoverable advances and deposits; (f) all prepaid charges and expenses of the Selling Companies, allocated to the Acquired RPS Activities, including any such charges and expenses with respect to ad valorem taxes, leases and rentals and utilities; (g) all rights of the Selling Subsidiaries to insurance proceeds with respect to claims for damages to the Acquired Assets occurring prior to the Closing Date, unless such proceeds reimburse the Selling Subsidiaries for the repair or restoration of such Acquired Assets; (h) all of the Selling Subsidiaries' rights, claims, credits, causes of action or rights of set-off against third parties relating to the Acquired RPS Activities or the Acquired Assets, whether liquidated or unliquidated, fixed or contingent, including claims pursuant to all warranties, representations and guarantees made by suppliers, manufacturers, contractors and other third parties in connection with products or services purchased by or furnished to Seller for use in the Acquired RPS Activities or affecting any to the Acquired Assets; (i) all of the Selling Subsidiaries' registered patents, patent applications, registered copyrights and applications therefor, registered trademarks applications therefor and designs as listed in Schedule 5.9(a) to the Agreement, all know-how, processes, trade secrets, inventions, and other proprietary data, used exclusively for purposes of the Acquired RPS Activities, with the exception of the "SCHLUMBERGER" name, trademark and logos and the following patents held by the Selling Subsidiary of the French RPS Business: . Fluid Viscosity Measurement Device (French filing n(degrees) 97.15042) . Fluid Flow Meter (French filing n(degrees) 97.15043) . Multicurrency display (French filing n(degrees) 97.15973) (j) all transferable franchises, licenses, permits or other authorizations issued or granted by any Governmental Authority that are owned by, granted to or held or used by the Selling Subsidiaries and used in the Acquired RPS Activities; (k) to the extent available, all books, records, files and papers of the Selling Subsidiaries, whether in hard copy or computer format, including bank account records, books of account, invoices, engineering information, sales and promotional literature, manuals and data, sales and purchase correspondence, lists of present and former suppliers, personnel and employment records or present and, to the extent lawful, former employees, and documentation developed or used for accounting, marketing, engineering, manufacturing or any other purpose related exclusively to the conduct of the Acquired RPS Activities at any time prior to the Closing; (l) to the extent available, all lists of present customers and lists of former customers of the Selling Subsidiaries for the Acquired RPS Activities; 2. Assumed Liabilities shall mean: ------------------------------ (a) all obligations and liabilities under Contracts; and (b) any obligation, liability or debt, other than an Excluded Liability, incurred or assumed by a Selling Subsidiary in the ordinary course of business of the Acquired RPS Activities and arising out of the normal conduct of the RPS Business, including all debt of Selling Subsidiaries properly accrued on the Base Balance Sheet in the following categories: suppliers, employee and other creditors, estimated liability for taxes on income, deferred taxes on income, other long term liabilities, minority interest, or any subsection thereto. 3. Excluded Liabilities shall mean: ------------------------------- (a) any liability of the Selling Subsidiaries that is not attributable to, or that does not arise out of, the normal conduct of, the RPS Business; (b) any liability whether presently in existence or arising hereafter which is attributable to an asset that is not included in the Acquired Assets; (c) any liability the existence of which constitutes a breach of any representation or warranty under the Agreement; (d) any liability of the Selling Subsidiaries for any taxes attributable to the RPS Business in any period prior to the Closing Date and overdue of the Closing Date; and (e) any liability of the RPS Business for outstanding litigation in France, the USA and the United Kingdom, on the Closing Date. MASTER AGREEMENT Schedule E-1(b) Real Property - - UNITED KINGDOM Unit 3, Baker Road, West Pikerro Industrial Estate, Dundee DD4 8 AG - - CZECH REPUBLIC None - - RUSSIA None - - USA Bonham Manufacturing Center 1300 Bicentannial Drive Bonham, TX 75418 MASTER AGREEMENT Schedule E-1(a)(VI) USA--Fixed Assets EXHIBIT C TO AMENDMENT NO. 1 MASTER AGREEMENT Schedule C The RPS Business ENTITIES Schlumberger Technologies GesmbH A company incorporated in Austria, with a capital of ATS 46,500,000 formed of one share with a nominal value of ATS 46,500,000 and having its registered address at Eitzenbergstrasse 4-6, 2544 Leobersdorf, Austria. Schlumberger Technologies N.V A company incorporated in Belgium, with a capital of BEF 10,000,000 divided into 2,500 shares with a nominal value of BEF 4,000 each and having its registered address at Everdongenlaan 31, 2300 Turnhout, Belgium. Schlumberger Industrier A/S A company incorporated in Denmark, with a capital of DKK 500,000 divided into 1 share with a nominal value of DKK 500,000 and having its registered address at Hejrevang 10, POB 186, 3450 Allerod, Denmark and with a foreign registered branch located at Verkseier, Furulunds vei 11B, PO Box 45, Alnabru, 0614 Oslo, Norway. Schlumberger Tanksysteme GmbH A company incorporated in Germany, with a capital of DM 5,300,000 divided into 3 shares with respective nominal values of DM 2,505,000, DM 2,495,000, and DM 300,000, and having its registered address at Loherstrasse 1, 58332 Schwelm, Germany. Schlumberger German GmbH A company incorporated in Germany, with a capital of DM 50,000 formed of one share with a nominal value of DM 50,000 and having its registered address at Bandstuecken 29, 22549 Hamburg, Germany. Schlumberger Measurement & Systems KFT A company incorporated in Hungary, with a capital of HUF 19,900,000 divided into 19,900,000 shares with a nominal value of HUF 1 each, and having its registered address at Csillaghegyi UT 25, 1037 Budapest, Hungary. -2- Schlumberger Technologies Limited A company incorporated in Ireland, with a capital of I.P 10,000 divided into 10,000 shares with a nominal value of I.P 1 each, and having its registered address at Unit 1, Parkway House, Ballymount Road, Ballymount, Dublin 12, Ireland. Tulla Electronics Limited A company incorporated in Ireland, with a capital of I.P 56,576 divided into 56,576 shares with a nominal value of I.P 1 each, having its registered address at Tulla County Clare, Ireland. CME RIMIC S.r.l A company incorporated in Italy, with a capital of Lire 20,000,000 formed of one share of Lire 20,000,000, and having its registered address at Via Milano 178, Caronno Pertusella (VA), Italy. Koppens Automatic Fabrieken B.V. A company incorporated in the Netherlands, with a capital of DFL 100,000 divided into 100 shares with a nominal value of DFL 1,000 each, and having its registered address at Industrieweg 5, 5531 AD Bladel, the Netherlands. Koppens Schlumberger B.V. A company incorporated in the Netherlands, with a capital of DFL 5,000 divided into 20 shares with a nominal value of DFL 250 each, and having its registered address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands. Houdster Maatschappij Automatic Rotterdam B.V. A company incorporated in the Netherlands, with a capital of DFL 15,000 divided into 15 shares with a nominal value of DFL 1,000 each, and having its registered address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands. Koppens Holding Nederlands B.V. A company incorporated in the Netherlands, with a capital of DFL 28,000 divided into 28 shares with a nominal value of DFL 1,000 each, and having its registered address at Touwslagerstraat 17, 2984 AW, Ridderkerk, the Netherlands. Schlumberger Industries S.r.o. A company incorporated in the Slovak Republic, with a capital of SK 6,200,000 formed of one share with a nominal value of SK 6,200,000, and having its registered address at Cukrova 14, Bratislava 81108, Slovak Republic. -3- Schlumberger Technologies S.A A company incorporated in Switzerland, with a capital of CHF 2,450,000 divided into 2,450 shares with a nominal value of CHF 1,000 each, and having its registered address at Route du Crochet 7, 1762 Givisiez, Switzerland. E.T.P.M. S.A A company incorporated in France, with a capital of FF 39,178,000 divided into 391,788 shares with a nominal value of FF 100 each, and having its registered address at 9, avenue Galilee, 92350 Le Plessis Robinson, France. Pol Germann Schlumberger Spolka Z.o.o A company incorporated in Poland, with a capital of PLZ 253,500 divided into 780 shares with a nominal value of PLZ325 each and having its registered address at U1 Narwicka 1, 80-557 Gdansk, Poland. Rossgermann Joint Stock Company A company incorporated in Russia, with a capital of Russian Rubel 200,000,000 and having its registered address at 9th, January Street 39, 394000 Voroney, Russia. GNC-Systemas e Servicios de Medicao, Limitada A company incorporated in Portugal, with a capital of ESC 831,017,728 and having its registered address at Lugar de Louredo, Freguesia de Calendario, Vila Nova de Famalicao, Portugal. Schlumberger-Xin Yang Retail Petroleum Systems Corporation Limited A company incorporated in China, with a capital of $2,850,000 and having a registered address at Xin Yang High Tech Industrial Park, Dao Yi Development Zone, Shenyang, China. DIVISIONS - --------- Czech Republic Schlumberger RPS, a division of Schlumberger Industries S.r.o, a company incorporated in Czech Republic, and having commercial and/or industrial offices located at Pernerova 48, CZ-186 02 Praha 8. France Schlumberger RPS, a division of Schlumberger Industries SA, a company incorporated in France, and having commercial and/or industrial offices located at: /./ Montrouge - 50, avenue Jean Jaures, 92542 Montrouge Cedex /./ Abbeville - Z.I. Route de Domqueur, 80100 Abbeville /./ Lille - Centre Gros N(degrees)2, 2bd du Petit Quinquin, 59815 Lesquin -4- /./ Reims - Z.A. rue Alfred Boelle, 51110 Bourgogne /./ Nancy - Z.I. Est, 8 allee des Grands Paquis, 54180 Heillecourt /./ Dijon - 19, rue des Grandes Varennes, Zac d'Ahuy, 21121 Ahuy /./ Cambrai - 11, rue des Ecluses de Selles, 59405 Cambrai Cedex /./ Strasbourg - Z.I. 10, avenue de l'Energie, 67800 Bischeim /./ Lognes - Z.A. du Mandinet 20 rue des Campanules, 77185 Lognes /./ Saint Brieue - 15 zone des Grands Champs St. Rene, 22120 Hillion /./ Tours- 2 rue Nicolas Appert, 37300 Joue-les-Tours /./ Nantes 8, rue du Coutelier, 44805 Saint Herblain Cedex /./ Limoges - Z.I. de Romanet, Rue leonard Samie, 87000 Limoges /./ Lyon - C.A Chateau de l'Isle, 5, rue Henri Becquerel, 69320 Feyzin /./ Chambery - PAE Landiers Nord, 313, av de Villarcher, 73000 Chambery /./ Nice - Les Cardoulines, route des Dolines, Bt HT 3, 06560 Sophia Antipolis /./ Bordeaux - Chemin du Solarium, Z.A. de Moulerens, 33170 Gradignan /./ Toulouse -82 av des Chalets, 31140 Launaguet /./ Marseille - Z.I. les Estroublans, 1/ere/ av N(degrees) 12. 13127 Vitrolles /./ Plessis Robinson - 9 av Galilee, 92350 Le Plessis Robinson Transferred to E.T.P.M. as of September 30, 1998, with the exception of the Abbeville facility that will continue being operated by Schlumberger Industries SA. Italy Schlumberger RPS, a division of Schlumberger Industries Spa, a company incorporated in Italy, and having commercial and/or industrial offices at Via Milano, 178 angolo Via Lodi, 21042 Caronno Pertusella (VA) Transferred to CME-Rimic as of September 30, 1998. Russia Schlumberger RPS, a division of Schlumberger Industries, a company incorporated in Russia, and having commercial and/or industrial offices located at 18 Schipok Str., 113054 Moscow. U.K Schlumberger RPS, a division of Schlumberger Industries Limited Company, a company incorporated in U.K, and having commercial and/or industrial offices located at Unit 4, Cliveden Office Village, Lancaster road, High Wycombe, Buckinghamshire HP12 3YZ and at Unit 3, Baker Road, West Pitkerro Industrial Estate, Dundee DD5 3RT. U.S.A. Schlumberger RPS, a division of Schlumberger Technologies Inc., a company incorporated in the State of Delaware, and having commercial and/or industrial offices at 201 East 1/st/ Street, 2900 N Center and Bonham Manufacturing Center, 1300 Bicentannial Drive, Bonham, TX 75418 and 825-M Greenbrier Circle, Chesapeake, VA 23320. EXHIBIT D TO AMENDMENT NO. 1 INTERCOMPANY LOANS - -------------------------------------------------------------------------------- LENDING COMPANY BORROWING COMPANY MAXIMUM LOAN AMOUNT - -------------------------------------------------------------------------------- Tulla Electronics Limited Schlumberger Technologies IEP 1,500,000 Limited - -------------------------------------------------------------------------------- GNC-Sistemas e Servicos de Koppens Iberica SA ESP 665,000,000 Medicao Limitada - -------------------------------------------------------------------------------- Schlumberger Measurement Koppens Iberica SA ESP 385,000,000 & Systems SA - -------------------------------------------------------------------------------- Schlumberger Industries Engineering, Techniques FRF 90,000,000 Petrolieres, Maitrise "ETPM" - -------------------------------------------------------------------------------- Schlumberger Industries SpA CME Rimic SRL Lira 15,000,000,000 - -------------------------------------------------------------------------------- Schlumberger Gmbh Schlumberger Germann DM 20,000,000 Gmbh - -------------------------------------------------------------------------------- Germann GmbH PolGermann Poland DM 750,000 - -------------------------------------------------------------------------------- Schlumberger B.V. Schlumberger Technologies AG NLG 4,600,000 - -------------------------------------------------------------------------------- Schlumberger Investment Koppens Automatic NLG 5,000,000 Services B.V. Fabricken B.V. - -------------------------------------------------------------------------------- Schlumberger Investment Koppens Schlumberger B.V. NLG 3,000,000 Service B.V. - -------------------------------------------------------------------------------- Schlumberger Investment Koppens Holding Nederland NLG 10,500,000 Services B.V. B.V. - -------------------------------------------------------------------------------- Koppens Holding Nederland Schlumberger Technologies NLG 8,000,000 B.V. SA - -------------------------------------------------------------------------------- Schlumberger B.V. Schlumberger Technologies NLG 4,000,000 GesmbH - -------------------------------------------------------------------------------- EXHIBIT E TO AMENDMENT NO. 1 MASTER AGREEMENT Schedule 5.20(a) (i) RPS Employees Shuhui Zhu, located in Bladel (The Netherlands), Gu Jinghua, located in Montrougc (France), Teguh Setiawan, located in Bladel (The Netherlands), Nurul Hussinis, located in Chesapeake (USA), Zhang Le, located in Dundee (UK) have been hired by Schlumberger as new graduates from Chinese universities and are part of the Resident Development Program (RDP). Under the RDP, such individuals are sent to various units around the world for successive 2 year period and are committed to work for Schlumberger during 4 years prior to returning to their native country to implement locally their experience. Such obligation is not any more applicable in the hypothesis of the contemplated sale of the RPS Activity; however and due to the Schlumberger commitment on that respect please be informed that if Tokheim is willing to release them, Schlumberger is prepared to take them back within the Schlumberger group of companies, in line with our related moral obligations. MASTER AGREEMENT Schedule 7.8 (a) Employees of other SCHLUMBERGER divisions and entities fully dedicated to the RPS Business Employees: South America/Latin America/Asia - Mexico - Claudia Lora, Sales Manager - Flavia Cardala, Sales Administration - Alberto Mesinas, Service Engineer - Edgar Perez, SW Engineer - South America: . Argentina - Javier Garcia, Sales . Brazil - Antonio de Paula, Sales . Chile - Emmanuael Lemouroux, Sales - Asia - Spencer Folk, Technical & Services Asia, Hong Kong - Joseph Yap, Mkt & Sales Asia, Singapore - Paul Podoprat, RPS Technical Centre, Hong Kong - TK Hing, JV Manager, Shen Yang - Zeng You, Aipha/Harmony Technical Support Beijing - Bing Luo and Yi Xu, Shunde office, service engineers fully dedicated to the RPS service activity in China - India - Anil Shevde, Sales & Service India - Pramod Bapna, Sales & Services Delhi (presently on temporary secondment. Planned to return to Electricity Division in the very near future) - Harish Suri, Service Engineer Calcutta - D.S. Gupta, Field Technician Delhi - Bashir Shiekh, Field Technician Mumbai - Y. Bhatia, Field Technician Mumbai - Jagtar Singh, Field Technician Delhi - Vinay R. Service Engineer Bangalore (shared resource with the ATE & Telecom Divisions) - Govindrajan, Field Technician Chennai MASTER AGREEMENT EXHIBIT F TO AMENDMENT 1 Schedule 1.3 ------------------------ Allocation of Total Purchase Price
Shares or Assets Shares or Assets Intercompany Loan Intercompany Loan Total Agreements Agreements (K USD) (K LOCAL CURRENCY) (K USD) (K LOCAL CURRENCY) (K USD) France 24 119 FF 226,692 15 881 FF 90,000 40 000 USA 65 000 65 000 Spain 15 018 ESP 2,540,835 2 682 ESP 385,000 17 700 Germany 46 164 11 836 DM 20,000 58 000 Holland(1) 53 442 10 858 NLG 20,700 64 300 Switzerland 5 187 2 413 NLG 4,600 7 600 UK 42 500 42 500 Ireland 7 200 7 200 Italy 315 Lira 15,526,350 8 985 Lira 15,000,000 9 300 Austria 4 577 2 623 NLG 5,000 7 200 Hungary 5 000 5 000 Czech Republic 4 500 4 500 Slovakia 1 700 1 700 ------- ------ ------- 274 722 55 278 330 000 ======= ====== =======
(1) Including Belgium and Denmark EXHIBIT G TOKHEIM CORPORATION SECURITIES PURCHASE AGREEMENT September 30, 1998 SCHLUMBERGER LIMITED 277 Park Avenue New York, New York 10172-0266 Ladies and Gentlemen: Tokheim Corporation, an Indiana corporation (the "Company"), purposes to issue and sell: (i) $170,000,000 aggregate principal amount of its 12% Senior Subordinated Notes due January 28, 1999 (the "Senior Subordinated Notes"); (ii) $40,000,000 aggregate principal amount of its 12% Junior Subordinated Notes due September 30, 2008 (the "Junior Subordinated Notes"); and (iii) warrants (the "Warrants") to purchase up to 19.9% of the outstanding shares of common stock of Tokheim. The Senior Subordinated Notes will be issued pursuant to an Indenture to be dated as of September 30, 1998 (the "Senior Indenture") between the Company and Harris Trust and Savings Bank, as trustee (the "Senior Trustee"), substantially in the form of Exhibit A. The Junior Subordinated Notes will be issued pursuant to an Indenture to be dated as of September 30, 1998 (the "Junior Indenture") between the Company and Harris Trust and Savings Bank, as trustee (the "Junior Trustee"), substantially in the form of Exhibit B. In the event that the Company is unable to repay the Senior Subordinated Notes at their stated maturity, the Senior Subordinated Notes will convert, subject to certain conditions, into Increasing Rate Senior Subordinated Notes due 2007 (the "Roll- Over Notes"). The Company's obligations under the Senior Subordinated Notes and the Junior Subordinated Notes will be guaranteed by certain of the Company's subsidiaries (the "Guarantor Subsidiaries"). The Warrants will be issued pursuant to a Warrant Agreement to be dated as of September 30, 1998 (the "Warrant Agreement") between the Company and Schlumberger, substantially in the form of Exhibit C. The Senior Subordinated Notes, Junior Subordinated Notes, Roll-Over Notes and Warrants are sometimes referred to collectively as the "Securities". The Company will grant certain registration rights to the holders of the Securities pursuant to a Registration Rights Agreement to be dated as of September 30, 1998 (the "Registration Rights Agreement"), substantially in the form of Exhibit D. The Company is issuing the Securities to Schlumberger in satisfaction of a portion of the purchase price payable by the Company to Schlumberger pursuant to the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities dated as of June 19, 1998 between the Company and Schlumberger, as amended by letter agreements dated July 21, 1998, July 31, 1998 and August 28, 1998 and Amendment No. 1 thereto dated September 30, 1998 (as so amended, the "Purchase Agreement"). 1. Representations, Warranties and Agreements of the Company. The Company represents and warrants to, and agrees with, Schlumberger on and as of the date hereof and the Closing Date (as defined in Section 3) that: (a) The Company's Annual Report on Form 10-K for the year ended November 30, 1997 (the "Form 10-K"), Quarterly Reports on Form 10-Q for the quarters ended February 28, 1998 and May 31, 1998 and Current Reports on Form 8-K filed subsequent to May 31, 1998 (the "Exchange Act Reports") taken together do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty in this Section 1(a) with respect to the public disclosure of the transaction contemplated by the Purchase Agreement. (b) Assuming the accuracy of the representations and warranties of Schlumberger contained in Section 2, it is not necessary, in connection with the issuance of the Securities to Schlumberger, to register the Securities or the Guarantees (as defined in Section 1(e)) under the Securities Act or to qualify the Senior Indenture or the Junior Indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). (c) The Company and each of its subsidiaries (the "Subsidiaries") have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to so qualify or have such power or authority would not, singularly or in the aggregate, have a material adverse effect on the condition (financial or otherwise), results of operations, business or prospects of the Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"). (d) The Company has an authorized capitalization as set forth under the heading "Capitalization" in the Company's Preliminary Offering Memorandum dated July 31, 1998 relating to the proposed offering of its __% Senior Subordinated Notes due 2008 (the "Preliminary Offering Memorandum"). All of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non- assessable. All of the outstanding shares of capital stock of each Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable and are, to the extent indicated in the Form 10-K, owned indirectly by the Company. (e) The Company has full right, power and authority to execute and deliver this Agreement, the Senior Indenture, the Junior Indenture, the Warrant Agreement, the Registration Rights Agreement and the Securities (collectively, the "Transaction Documents") and to perform its obligations hereunder and thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of 2 each of the Transaction Documents and the consummation of the transactions contemplated thereby have been duly and validly taken. Each of the Guarantor Subsidiaries has full right, power and authority to execute and deliver the Senior Indenture, the Junior Indenture and their respective guarantees thereunder (the "Guarantees") and to perform its obligations thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of each such agreement or instrument and the consummation of the transactions contemplated thereby have been duly and validly taken. (f) This Agreement had been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement of the Company. (g) The Registration Rights Agreement has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by Schlumberger, will constitute a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law) and, with respect to the indemnification provisions, public policy considerations. (h) The Senior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries and, when duly executed and delivered in accordance with its terms by the Senior Trustee, will constitute a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). On the Closing Date, the Senior Indenture will conform in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder. (i) The Junior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries and, when duly executed and delivered in accordance with its terms by the Junior Trustee, will constitute a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (j) The Warrant Agreement has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by Schlumberger, will constitute 3 each of the Transaction Documents and the consummation of the transactions contemplated thereby have been duly and validly taken. Each of the Guarantor Subsidiaries has full right, power and authority to execute and deliver the Senior Indenture, the Junior Indenture and their respective guarantees thereunder (the "Guarantees") and to perform its obligations thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of each such agreement or instrument and the consummation of the transactions contemplated thereby have been duly and validly taken. (f) This Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement of the Company. (g) The Registration Rights Agreement has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by Schlumberger, will constitute a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law) and, with respect to the indemnification provisions, public policy considerations. (h) The Senior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries and, when duly executed and delivered in accordance with its terms by the Senior Trustee, will constitute a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). On the Closing Date, the Senior Indenture will conform in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder. (i) The Junior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries and, when duly executed and delivered in accordance with its terms by the Junior Trustee, will constitute a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (j) The Warrant Agreement has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by Schlumberger, will constitute 4 a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (k) The Securities have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided herein and in the Senior Indenture, the Junior Indenture and the Warrant Agreement, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). The Guarantees have been duly authorized by the Guarantor Subsidiaries and, when duly executed, authenticated, issued and delivered as provided in the Senior Indenture and the Junior Indenture, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Guarantor Subsidiaries, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (l) The execution, delivery and performance by the Company and the Guarantor Subsidiaries of each of the Transaction Documents, the issuance, authentication, sale and delivery of the Securities and the Guarantees and compliance by the Company and the Guarantor Subsidiaries with the terms thereof and of the Purchase Agreement and the consummation of the transactions contemplated by the Transaction Documents and the Purchase Agreement will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Guarantor Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument that remains in effect after the Closing Date to which the Company or any of the Guarantor Subsidiaries is a party or by which the Company or any of the Guarantor Subsidiaries is bound or to which any of the property or assets of the Company or any of the Guarantor Subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of the Guarantor Subsidiaries or any statute or any judgment, order, decree, rule or regulation of any court or arbitrator or governmental agency or body having jurisdiction over the Company or any of the Guarantor Subsidiaries or any of their properties or assets which would have a material adverse effect; and no consent, approval, authorization or order of, or filing or registration with, any such court or arbitrator or governmental agency or body under any such statute, judgment, order, decree, rule or regulation is required for the execution, delivery and performance by the Company or any of the Guarantor Subsidiaries of each of the Transaction Documents or the Purchase Agreement, the issuance, authentication, sale and delivery of the Securities and the 5 Guarantees and compliance by the Company and the Guarantor Subsidiaries with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents and the Purchase Agreement, except for such consents, approvals, authorizations, filings, registrations or qualifications (i) which shall have been obtained or made prior to the Closing Date and (ii) as may be required to be obtained or made under the Securities Act of 1933, as amended (the "Securities Act") and applicable state securities laws as provided in the Registration Rights Agreement. (m) PricewaterhouseCoopers, to the knowledge of the Company, are independent certified public accountants with respect to the Company and the Subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants ("AICPA") and its interpretations and rulings thereunder. The historical financial statements (including the related notes) contained in the Preliminary Offering Memorandum with respect to the Company comply in all material respects with the requirements applicable to a registration statement on Form S-1 under the Securities Act (except that certain supporting schedules are omitted); such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and fairly present, in all material respects, the financial position of the entities purported to be covered thereby at the respective dates indicated and the results of their operations and their cash flows for the respective periods indicated; and the financial information contained in the Preliminary Offering Memorandum under the headings "Summary--Summary Financial Data of Tokheim", "Capitalization", "Selected Financial Data of Tokheim" and "Management's Discussion and Analysis of Results of Operations and Financial Condition" are derived from the accounting records of the Company and the Subsidiaries and fairly present the information purported to be shown thereby. The pro forma financial information contained in the Preliminary Offering Memorandum has been prepared on a basis consistent with the historical financial statements contained in the Preliminary Offering Memorandum (except for the pro forma adjustments specified therein), includes all material adjustments to the historical financial information required by Rule 11-02 of Regulation S-X under the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act") to reflect the transactions described in the Preliminary Offering Memorandum, gives effect to assumptions made on a reasonable basis and fairly presents, in all material respects, the historical and proposed transactions contemplated by the Preliminary Offering Memorandum, the Transaction Documents and the Purchase Agreement. The other historical financial and statistical information and data included in the Preliminary Offering Memorandum with respect to the Company are, in all material respects, fairly presented. (n) Except as disclosed in the Exchange Act Reports, there are no legal or governmental proceedings pending to which the Company or any of the Subsidiaries is a party or of which any property or assets of the Company or any of the Subsidiaries is the subject which, singularly or in the aggregate, if determined adversely to the Company or any of the Subsidiaries, could reasonably be expected to have a Material Adverse Effect; and to the best knowledge of the Company, no such proceedings are threatened or 6 contemplated by governmental authorities or threatened by others. (o) No action has been taken and no statute, rule, regulation or order has been enacted, adopted or issued by any governmental agency or body which prevents the issuance of the Securities; no injunction, restraining order or order of any nature by any federal or state court of competent jurisdiction has been issued with respect to the Company or any of the Subsidiaries which would prevent or suspend the issuance of the Securities; no action, suit or proceeding is pending against or, to the best knowledge of the Company, threatened against or affecting the Company or any of the Subsidiaries before any court or arbitrator or any governmental agency, body or official, domestic or foreign, which could reasonably be expected to interfere with or adversely affect the issuance of the Securities or in any manner draw into question the validity or enforceability of any of the Transaction Documents or the Purchase Agreement or any action taken or to be taken pursuant thereto. (p) Neither the Company nor any of the Subsidiaries is (i) in violation of its charter or by-laws, (ii) in default in any material respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject or (iii) in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject, which would have a material adverse effect. (q) The Company and each of the Subsidiaries possess all material licenses, certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate federal, state or foreign regulatory agencies or bodies which are necessary or desirable for the ownership of their respective properties or the conduct of their respective businesses as described in the Preliminary Offering Memorandum, except where the failure to possess or make the same would not, singularly or in the aggregate, have a Material Adverse Effect, and neither the Company nor any of the Subsidiaries has received notification of any revocation or modification of any such license, certificate, authorization or permit or has any reason to believe that any such license, certificate, authorization or permit will not be renewed in the ordinary course, except where such revocation or modification or failure to renew would not have a material adverse effect. (r) The Company and each of the Subsidiaries have filed all material federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof and have paid all taxes due thereon, and no tax deficiency has been determined adversely to the Company or any of the Subsidiaries which has had (nor does the Company or any of the Subsidiaries have any knowledge of any tax deficiency which, if determined adversely to the Company or any of the Subsidiaries, could reasonably be expected to have) a Material Adverse Effect. 7 (s) Neither the Company nor any of the Subsidiaries is (i)an "investment company" or a company "controlled by" an investment company within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations of the Commission thereunder or (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the Public Utility Holding Company Act of 1935, as amended. (t) The Company and each of the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (u) To the best of the Company's knowledge, the Company and each of the Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, which insurance is in such amounts and insures against such losses and risks as are adequate to protect the Company and the Subsidiaries and their respective businesses. Neither the Company nor any of the Subsidiaries has received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance. (v) The Company and each of the Subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses; and the conduct of their respective businesses will not conflict in any material respect with, and the Company and the Subsidiaries have not received any notice of any claim of conflict with, any such rights of others. (w) The Company and each of the Subsidiaries have good and valid title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property which are material to the business of the Company and the Subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except as set forth in the Bank Credit Agreement and disclosed in the Preliminary Offering Memorandum or such as (i) do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries or (ii) could not reasonably be expected to have a Material Adverse Effect. (x) No labor disturbance by or dispute with the employees of the Company or any of the Subsidiaries exists or, to the best knowledge of the Company, is contemplated or 8 threatened. (y) No "prohibited transaction" (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the "Code")) or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the 30-day notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any employee benefit plan of the Company or any of the Subsidiaries which could reasonably be expected to have a Material Adverse Effect; each such employee benefit plan is in compliance in all material respects with applicable law, including ERISA and the Code; the Company and each of the Subsidiaries have not incurred and do not expect to incur material liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan for which the Company or any of the Subsidiaries would have any liability; and each such pension plan that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which could reasonably be expected to cause the loss of such qualification. (z) Neither the Company nor, to the best knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company has: (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. (aa) On and immediately after the Closing Date, the Company (after giving effect to the issuance of the Securities and to the consummation of the Acquisition) will be Solvent. As used in this paragraph, the term "Solvent" means, with respect to a particular date, that on such date: (i) the present fair market value (or present fair salable value) of the assets of the Company (on a consolidated basis) is not less than the total amount required to pay the probable liabilities of the Company on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (ii) the Company is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business, (iii) assuming the issuance of the Securities as contemplated by this Agreement, the Company is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature and (iv) the Company is not engaged in any business or transaction, and is not about to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which the Company is engaged. In computing the amount of such contingent liabilities at any time, it is intended that such liabilities will be 9 computed at the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. (bb) Except as set forth herein or described in the Preliminary Offering Memorandum, there are no outstanding subscriptions, rights, warrants, calls or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of, any shares of capital stock of or other equity or other ownership interest in the Company or any of the Subsidiaries. (cc) None of the proceeds of the sale of the Securities will be used, directly or indirectly, in violation or conflict with Regulation T, U or X of the Federal Reserve Board. (dd) Neither the Company nor any of the Subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or Schlumberger for a brokerage commission, finder's fee or like payment in connection with the offering and sale of the Securities. (ee) Neither the Company nor any of its affiliates has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as such term is defined in the Securities Act), which is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act. 2. Issuance of the Securities. (a) The Company agrees to issue to Schlumberger, and Schlumberger, on the basis of the representations, warranties and agreements contained herein and in the Purchase Agreement, and subject to the terms and conditions set forth herein, agrees to accept from the Company, the Junior Subordinated Indentures as payment of $40 million of the purchase price, the Senior Subordinated Notes as payment of S 170 million of the purchase price, and the Warrants as payment of $20 million of the purchase price, for the Acquisition. (b) Schlumberger represents and warrants to the Company that it is purchasing the Securities for investment purposes and not with a view to the resale or other distribution thereof. 3. Delivery of the Securities. (a) Delivery of the Securities shall be made at such place or places as shall be agreed upon by Schlumberger and the Company, at 10:00 A.M., local time, on September 30, 1998 in connection with the closing of the Acquisition pursuant to the Purchase Agreement (such date and time of payment and delivery being referred to herein as the "Closing Date"). (b) On the Closing Date, payment of the purchase price for the Securities shall be made to the Company by crediting the amounts set forth in Section 2(a) against the purchase price for the Acquisition. Upon delivery, the Securities shall be in global form, registered in such names and in such denominations as Schlumberger shall have requested in writing not less than one business day prior to the Closing Date. 10 4. Further Agreements of the Company. The Company agrees with Schlumberger: (a) to advise Schlumberger promptly prior to the Closing Date and, if requested, confirm such advice in writing, of the happening of any event which makes any statement of a material fact made in the Exchange Act Reports untrue or which requires the making of any amendments to or changes in the Exchange Act Reports in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (b) for so long as the Securities are outstanding, to furnish to Schlumberger copies of any annual reports, quarterly reports and current reports filed by the Company with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by the Commission, and such other documents, reports and information as shall be furnished by the Company to the Senior Trustee or the Junior Trustee or to the holders of the Securities pursuant to the Senior Indenture or the Junior Indenture or the Exchange Act or any rule or regulation of the Commission thereunder; (c) to do and perform all things required to be done and performed by it under this Agreement that are within its control prior to or after the Closing Date, and to use its best efforts to satisfy all conditions precedent on its part to the delivery of the Securities; and (d) not to take any action prior to the execution and delivery of the Senior Indenture or the Junior Indenture which, if taken after such execution and delivery, would have violated any of the covenants contained in the Senior Indenture or the Junior Indenture. 5. Conditions of Schlumberger' obligations. The obligations of Schlumberger hereunder are subject to the accuracy, on and as of the date hereof and the Closing Date, of the representations and warranties of the Company contained herein and in the Purchase Agreement, to the accuracy of the statements of the Company and its officers made in any certificates delivered pursuant hereto and thereto, to the performance by the Company of its obligations hereunder and thereunder, and to each of the following additional terms and conditions: (a) All conditions to the closing of the Acquisition shall have been satisfied, and all documents, certificates and opinions required to be delivered to Schlumberger pursuant to the Purchase Agreement shall have been executed and delivered to Schlumberger and shall be satisfactory in all material respects to Schlumberger. (b) Schlumberger shall not have discovered and disclosed to the Company on or prior to the Closing Date that the Exchange Act Reports or any amendment thereto contains an untrue statement of a fact which, in the opinion of counsel for Schlumberger, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading. 11 (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of each of the Transaction Documents and the Purchase Agreement, and all other legal matters relating to the Transaction Documents, the Purchase Agreement and the Transactions contemplated thereby, shall be satisfactory in all material respects to Schlumberger, and the Company shall have furnished to Schlumberger all documents and information that it or its counsel may reasonably request to enable them to pass upon such matters. (d) Skadden, Arps, Slate, Meagher & Flom (Illinois) and Norman L. Roelke, General Counsel of the Company, shall have furnished to Schlumberger their written opinions, as counsel to the Company, addressed to Schlumberger and dated the Closing Date, in form and substance reasonably satisfactory to Schlumberger, substantially to the aggregate effect set forth in Exhibit E. (e) Schlumberger shall have received from Gibson, Dunn & Crutcher LLP, counsel for Schlumberger, such opinion or opinions, dated the Closing Date, with respect to such matters as Schlumberger may reasonably require, and the Company shall have furnished to such counsel such documents and information as they request for the purpose of enabling them to pass upon such matters. (f) The Company shall have furnished to Schlumberger a certificate, dated the Closing Date, of its chief executive officer and its chief financial officer, stating that (A) such officers have carefully examined the Exchange Act Reports, (B) in their opinion, the Exchange Act Reports, as of their respective dates, did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (C) as of the Closing Date, the representations and warranties of the Company in this Agreement and the Purchase Agreement are true and correct in all material respects, the Company has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder and thereunder on or prior to the Closing Date, and subsequent to the date of the Purchase Agreement and prior to the Closing Date there has been no material adverse change in the financial position or results of operation of the Company or any of the Subsidiaries, or any change, or any development including a prospective change, in or affecting the condition (financial or otherwise), results of operations, business or prospects of the Company and the Subsidiaries taken as a whole. (g) Schlumberger shall have received a counterpart of the Registration Rights Agreement which shall have been executed and delivered by a duly authorized officer of the Company. (h) The Senior Indenture shall have been duly executed and delivered by the Company, the Guarantor Subsidiaries and the Senior Trustee, and the Senior Subordinated Notes shall have been duly executed and delivered by the Company and duly authenticated by the Senior Trustee. 12 (i) The Junior Indenture shall have been duly executed and delivered by the Company, the Guarantor Subsidiaries and the Junior Trustee, and the Junior Subordinated Notes shall have been duly executed and delivered by the Company and duly authenticated by the Junior Trustee. (j) The Rights Agreement, dated as of January 22, 1997, between the Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights Plan"), shall have been duly amended to exempt the issuance of the Warrant and the shares issuable thereunder from the operations of the Rights Plan. (k) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Securities or the closing of the Acquisition; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Securities or the closing of the Acquisition. (l) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the over-the-counter market shall have been suspended or limited, or minimum prices shall have been established on any such exchange or market by the Commission, by any such exchange or by any other regulatory body or governmental authority having jurisdiction, or trading in any securities of the Company on any exchange or in the over-the-counter market shall have been suspended or (ii) any moratorium on commercial banking activities shall have been declared by federal or New York state authorities or (iii) an outbreak or escalation of hostilities or a declaration by the United States of a national emergency or war or (iv) a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) the effect of which, in the case of this clause (iv), is, in the judgment of Schlumberger, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or the delivery of the Securities and the closing of the Acquisition on the terms and in the manner contemplated by this Agreement and in the Purchase Agreement. All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for Schlumberger. 6. Termination. The obligations of Schlumberger hereunder may be terminated by Schlumberger, in its absolute discretion, by notice to the Company prior to delivery of the Securities if, prior to that time, any of the conditions precedent to the closing of the Acquisition shall fail to be satisfied to the reasonable satisfaction of Schlumberger. 7. Reimbursement of Schlumberger's Expenses. If (a) this Agreement shall have been 13 terminated pursuant to Section 6 or (b) the Company shall fail to tender the Securities for delivery to Schlumberger, the Company shall reimburse Schlumberger for such out-of-pocket expenses (including reasonable fees and disbursements of counsel) as shall have been reasonably incurred by Schlumberger in connection with this Agreement and the proposed issuance of the Securities. 8. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company and Schlumberger contained in this Agreement or made by or on behalf of the Company or Schlumberger pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any of them or any of their respective affiliates, officers, directors, employees, representatives, agents or controlling persons. 9. Notices, etc. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) if to Schlumberger, shall be delivered or sent by mail or telecopy transmission to Schlumberger Limited, 277 Park Avenue, New York, New York 10172-0266, Attention: James L. Gunderson (telecopier no.: (212) 350-9409); or (b) if to the Company, shall be delivered or sent by mail or telecopy transmission to Tokheim Corporation, 1600 Wabash Avenue, Fort Wayne, Indiana 46801-0360, Attention: Douglas K. Pinner (telecopier no.: 219-484- 1110). 10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 11. Counterparts. This Agreement may be executed in one or more counterparts (which may include counterparts delivered by telecopier) and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 12. Amendments. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto. 14 13. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us a counterpart hereof, whereupon this instrument will become a binding agreement between the Company and Schlumberger in accordance with its terms. Very truly yours, TOKHEIM CORPORATION By --------------------------- Accepted: SCHLUMBERGER LIMITED By ------------------ 15 EXHIBIT A [Form of Senior Subordinated Indenture] 16 EXHIBIT B [Form of Junior Subordinated Indenture] 17 EXHIBIT C [Form of Warrant Agreement] 18 EXHIBIT D [Form of Exchange and Registration Rights Agreement] 19 EXHIBIT E [Form of Opinion of Counsel for the Company] Skadden, Arps, Slate, Meagher & Flom (Illinois) and Norman L. Roelke, General Counsel of the Company, shall have furnished to Schlumberger their written opinions, as counsel to the Company, addressed to Schlumberger and dated the Closing Date, in form and substance reasonably satisfactory to Schlumberger, substantially to the aggregate effect set forth below: (i) The Company and each of its subsidiaries (the "Subsidiaries") have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to so qualify or have such power or authority would not, singularly or in the aggregate, have a material adverse effect on the condition (financial or otherwise), results of operations, business or prospects of the Company and the Subsidiaries taken as a whole (a "Material Adverse Effect").[NR] (ii) The Company has an authorized capitalization as set forth under the heading "Capitalization" in the Company's Preliminary Offering Memorandum dated July 31, 1998 relating to the proposed offering of its _____% Senior Subordinated Notes due 2008 (the "Preliminary Offering Memorandum"). All of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable.[NR] (iii) Assuming the accuracy of the representations and warranties of Schlumberger contained in Secdon 2, it is not necessary, in connection with the issuance of the Securities to Schlumberger to register the Securities or the Guarantees under the Securities Act or to qualify the Senior Indenture or the Junior Indenture under the Trust Indenture Act.[SASMF] (iv) The Company has full right, power and authority to execute and deliver this Agreement, the Senior Indenture, the Junior Indenture, the Warrant Agreement, the Registration Rights Agreement and the Securities and to perform its obligations thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated thereby have been duly and validly taken.[NR] (v) This Agreement has been duly authorized, executed and delivered by the Company [NR] and constitutes a valid and legally binding agreement of the 20 Company[SASMF]. (vi) The Registration Rights Agreement has been duly authorized by the Company[NR] and, assuming due execution and delivery thereof by Schlumberger, is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law)[SASMF]. (vii) The Senior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries [NR] and, assuming due execution and delivery thereof by the Senior Trustee, is a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). The Senior Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder[SASMF]. (viii) The Junior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries [NR] and, assuming due execution and delivery thereof by the Junior Trustee, is a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law)[SASMF]. (ix) The Warrant Agreement has been duly authorized by the Company [NR] and, assuming due execution and delivery thereof by Schlumberger, is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law)[SASMF]. (xi) Neither the Company nor any of the Subsidiaries is (i) an "investment company" or a company "controlled by" an investment company within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations of the Commission thereunder.[SASMF] 21 EX-99.(C)(3) 4 SECURITIES PURCHASE AGREEMENT EXHIBIT (c)(3) TOKHEIM CORPORATION SECURITIES PURCHASE AGREEMENT September 30, 1998 SCHLUMBERGER LIMITED 277 Park Avenue New York, New York 10172-0266 Ladies and Gentlemen: Tokheim Corporation, an Indiana corporation (the "Company"), proposes to issue and sell: (i) $170,000,000 aggregate principal amount of its 12% Senior Subordinated Notes due January 28, 1999 (the "Senior Subordinated Notes"); (ii) $40,000,000 aggregate principal amount of its 12% Junior Subordinated Notes due September 30, 2008 (the "Junior Subordinated Notes"); and (iii) warrants (the "Warrants") to purchase up to 19.9% of the outstanding shares of common stock of Tokheim. The Senior Subordinated Notes will be issued pursuant to an Indenture to be dated as of September 30, 1998 (the "Senior Indenture") between the Company and Harris Trust and Savings Bank, as trustee (the "Senior Trustee"), substantially in the form of Exhibit A. The Junior Subordinated Notes will be issued pursuant to an Indenture to be dated as of September 30, 1998 (the "Junior Indenture") between the Company and Harris Trust and Savings Bank, as trustee (the "Junior Trustee"), substantially in the form of Exhibit B. In the event that the Company is unable to repay the Senior Subordinated Notes at their stated maturity, the Senior Subordinated Notes will convert, subject to certain conditions, into Increasing Rate Senior Subordinated Notes due 2007 (the "Roll- Over Notes"). The Company's obligations under the Senior Subordinated Notes and the Junior Subordinated Notes will be guaranteed by certain of the Company's subsidiaries (the "Guarantor Subsidiaries"). The Warrants will be issued pursuant to a Warrant Agreement to be dated as of September 30, 1998 (the "Warrant Agreement") between the Company and Schlumberger, substantially in the form of Exhibit C. The Senior Subordinated Notes, Junior Subordinated Notes, Roll-Over Notes and Warrants are sometimes referred to collectively as the "Securities". The Company will grant certain registration rights to the holders of the Securities pursuant to a Registration Rights Agreement to be dated as of September 30, 1998 (the "Registration Rights Agreement"), substantially in the form of Exhibit D. The Company is issuing the Securities to Schlumberger in satisfaction of a portion of the purchase price payable by the Company to Schlumberger pursuant to the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities dated as of June 19, 1998 between the Company and Schlumberger, as amended by letter agreements dated July 21, 1998, July 31, 1998 and August 28, 1998 and Amendment No. 1 thereto dated September 30, 1998 (as so amended, the "Purchase Agreement"). 1. Representations, Warranties and Agreements of the Company. The Company represents and warrants to, and agrees with, Schlumberger on and as of the date hereof and the Closing Date (as defined in Section 3) that: (a) The Company's Annual Report on Form 10-K for the year ended November 30, 1997 (the "Form 10-K"), Quarterly Reports on Form 10-Q for the quarters ended February 28, 1998 and May 31, 1998 and Current Reports on Form 8-K filed subsequent to May 31, 1998 (the "Exchange Act Reports") taken together do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty in this Section 1(a) with respect to the public disclosure of the transaction contemplated by the Purchase Agreement. (b) Assuming the accuracy of the representations and warranties of Schlumberger contained in Section 2, it is not necessary, in connection with the issuance of the Securities to Schlumberger, to register the Securities or the Guarantees (as defined in Section 1(e)) under the Securities Act or to qualify the Senior Indenture or the Junior Indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). (c) The Company and each of its subsidiaries (the "Subsidiaries") have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to so qualify or have such power or authority would not, singularly or in the aggregate, have a material adverse effect on the condition (financial or otherwise), results of operations, business or prospects of the Company and the Subsidiaries taken as a whole (a "Material Adverse Effect"). (d) The Company has an authorized capitalization as set forth under the heading "Capitalization" in the Company's Preliminary Offering Memorandum dated July 31, 1998 relating to the proposed offering of its ___% Senior Subordinated Notes due 2008 (the "Preliminary Offering Memorandum"). All of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable. All of the outstanding shares of capital stock of each Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable and are, to the extent indicated in the Form 10-K, owned indirectly by the Company. (e) The Company has full right, power and authority to execute and deliver this Agreement, the Senior Indenture, the Junior Indenture, the Warrant Agreement, the Registration Rights Agreement and the Securities (collectively, the "Transaction Documents") and to perform its obligations hereunder and thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of 2 each of the Transaction Documents and the consummation of the transactions contemplated thereby have been duly and validly taken. Each of the Guarantor Subsidiaries has full right, power and authority to execute and deliver the Senior Indenture, the Junior Indenture and their respective guarantees thereunder (the "Guarantees") and to perform its obligations thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of each such agreement or instrument and the consummation of the transactions contemplated thereby have been duly and validly taken. (f) This Agreement has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding agreement of the Company. (g) The Registration Rights Agreement has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by Schlumberger, will constitute a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law) and, with respect to the indemnification provisions, public policy considerations. (h) The Senior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries and, when duly executed and delivered in accordance with its terms by the Senior Trustee, will constitute a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). On the Closing Date, the Senior Indenture will conform in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder. (i) The Junior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries and, when duly executed and delivered in accordance with its terms by the Junior Trustee, will constitute a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (j) The Warrant Agreement has been duly authorized by the Company and, when duly executed and delivered in accordance with its terms by Schlumberger, will constitute 3 a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (k) The Securities have been duly authorized by the Company and, when duly executed, authenticated, issued and delivered as provided herein and in the Senior Indenture, the Junior Indenture and the Warrant Agreement, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). The Guarantees have been duly authorized by the Guarantor Subsidiaries and, when duly executed, authenticated, issued and delivered as provided in the Senior Indenture and the Junior Indenture, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Guarantor Subsidiaries, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (l) The execution, delivery and performance by the Company and the Guarantor Subsidiaries of each of the Transaction Documents, the issuance, authentication, sale and delivery of the Securities and the Guarantees and compliance by the Company and the Guarantor Subsidiaries with the terms thereof and of the Purchase Agreement and the consummation of the transactions contemplated by the Transaction Documents and the Purchase Agreement will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Guarantor Subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument that remains in effect after the Closing Date to which the Company or any of the Guarantor Subsidiaries is a party or by which the Company or any of the Guarantor Subsidiaries is bound or to which any of the property or assets of the Company or any of the Guarantor Subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of the Company or any of the Guarantor Subsidiaries or any statute or any judgment, order, decree, rule or regulation of any court or arbitrator or governmental agency or body having jurisdiction over the Company or any of the Guarantor Subsidiaries or any of their properties or assets which would have a material adverse effect; and no consent, approval, authorization or order of, or filing or registration with, any such court or arbitrator or governmental agency or body under any such statute, judgment, order, decree, rule or regulation is required for the execution, delivery and performance by the Company or any of the Guarantor Subsidiaries of each of the Transaction Documents or the Purchase Agreement, the issuance, authentication, sale and delivery of the Securities and the 4 Guarantees and compliance by the Company and the Guarantor Subsidiaries with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents and the Purchase Agreement, except for such consents, approvals, authorizations, filings, registrations or qualifications (i) which shall have been obtained or made prior to the Closing Date and (ii) as may be required to be obtained or made under the Securities Act of 1933, as amended (the "Securities Act") and applicable state securities laws as provided in the Registration Rights Agreement. (m) PricewaterhouseCoopers, to the knowledge of the Company, are independent certified public accountants with respect to the Company and the Subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants ("AICPA") and its interpretations and rulings thereunder. The historical financial statements (including the related notes) contained in the Preliminary Offering Memorandum with respect to the Company comply in all material respects with the requirements applicable to a registration statement on Form S-1 under the Securities Act (except that certain supporting schedules are omitted); such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and fairly present, in all material respects, the financial position of the entities purported to be covered thereby at the respective dates indicated and the results of their operations and their cash flows for the respective periods indicated; and the financial information contained in the Preliminary Offering Memorandum under the headings "Summary--Summary Financial Data of Tokheim", "Capitalization", "Selected Financial Data of Tokheim" and "Management's Discussion and Analysis of Results of Operations and Financial Condition" are derived from the accounting records of the Company and the Subsidiaries and fairly present the information purported to be shown thereby. The pro forma financial information contained in the Preliminary Offering Memorandum has been prepared on a basis consistent with the historical financial statements contained in the Preliminary Offering Memorandum (except for the pro forma adjustments specified therein), includes all material adjustments to the historical financial information required by Rule 11-02 of Regulation S-X under the Securities Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act") to reflect the transactions described in the Preliminary Offering Memorandum, gives effect to assumptions made on a reasonable basis and fairly presents, in all material respects, the historical and proposed transactions contemplated by the Preliminary Offering Memorandum, the Transaction Documents and the Purchase Agreement. The other historical financial and statistical information and data included in the Preliminary Offering Memorandum with respect to the Company are, in all material respects, fairly presented. (n) Except as disclosed in the Exchange Act Reports, there are no legal or governmental proceedings pending to which the Company or any of the Subsidiaries is a party or of which any property or assets of the Company or any of the Subsidiaries is the subject which, singularly or in the aggregate, if determined adversely to the Company or any of the Subsidiaries, could reasonably be expected to have a Material Adverse Effect; and to the best knowledge of the Company, no such proceedings are threatened or 5 contemplated by governmental authorities or threatened by others. (o) No action has been taken and no statute, rule, regulation or order has been enacted, adopted or issued by any governmental agency or body which prevents the issuance of the Securities; no injunction, restraining order or order of any nature by any federal or state court of competent jurisdiction has been issued with respect to the Company or any of the Subsidiaries which would prevent or suspend the issuance of the Securities; no action, suit or proceeding is pending against or, to the best knowledge of the Company, threatened against or affecting the Company or any of the Subsidiaries before any court or arbitrator or any governmental agency, body or official, domestic or foreign, which could reasonably be expected to interfere with or adversely affect the issuance of the Securities or in any manner draw into question the validity or enforceability of any of the Transaction Documents or the Purchase Agreement or any action taken or to be taken pursuant thereto. (p) Neither the Company nor any of the Subsidiaries is (i) in violation of its charter or by-laws, (ii) in default in any material respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject or (iii) in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject, which would have a material adverse effect. (q) The Company and each of the Subsidiaries possess all material licenses, certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate federal, state or foreign regulatory agencies or bodies which are necessary or desirable for the ownership of their respective properties or the conduct of their respective businesses as described in the Preliminary Offering Memorandum, except where the failure to possess or make the same would not, singularly or in the aggregate, have a Material Adverse Effect, and neither the Company nor any of the Subsidiaries has received notification of any revocation or modification of any such license, certificate, authorization or permit or has any reason to believe that any such license, certificate, authorization or permit will not be renewed in the ordinary course, except where such revocation or modification or failure to renew would not have a material adverse effect. (r) The Company and each of the Subsidiaries have filed all material federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof and have paid all taxes due thereon, and no tax deficiency has been determined adversely to the Company or any of the Subsidiaries which has had (nor does the Company or any of the Subsidiaries have any knowledge of any tax deficiency which, if determined adversely to the Company or any of the Subsidiaries, could reasonably be expected to have) a Material Adverse Effect. 6 (s) Neither the Company nor any of the Subsidiaries is (i) an "investment company" or a company "controlled by" an investment company within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations of the Commission thereunder or (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the Public Utility Holding Company Act of 1935, as amended. (t) The Company and each of the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (u) To the best of the Company's knowledge, the Company and each of the Subsidiaries have insurance covering their respective properties, operations, personnel and businesses, which insurance is in such amounts and insures against such losses and risks as are adequate to protect the Company and the Subsidiaries and their respective businesses. Neither the Company nor any of the Subsidiaries has received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance. (v) The Company and each of the Subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses; and the conduct of their respective businesses will not conflict in any material respect with, and the Company and the Subsidiaries have not received any notice of any claim of conflict with, any such rights of others. (w) The Company and each of the Subsidiaries have good and valid title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property which are material to the business of the Company and the Subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except as set forth in the Bank Credit Agreement and disclosed in the Preliminary Offering Memorandum or such as (i) do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries or (ii) could not reasonably be expected to have a Material Adverse Effect. (x) No labor disturbance by or dispute with the employees of the Company or any of the Subsidiaries exists or, to the best knowledge of the Company, is contemplated or threatened. 7 (y) No "prohibited transaction" (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the "Code")) or "accumulated funding deficiency" (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the 30-day notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any employee benefit plan of the Company or any of the Subsidiaries which could reasonably be expected to have a Material Adverse Effect; each such employee benefit plan is in compliance in all material respects with applicable law, including ERISA and the Code; the Company and each of the Subsidiaries have not incurred and do not expect to incur material liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan for which the Company or any of the Subsidiaries would have any liability; and each such pension plan that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which could reasonably be expected to cause the loss of such qualification. (z) Neither the Company nor, to the best knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company has: (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. (aa) On and immediately after the Closing Date, the Company (after giving effect to the issuance of the Securities and to the consummation of the Acquisition) will be Solvent. As used in this paragraph, the term "Solvent" means, with respect to a particular date, that on such date: (i) the present fair market value (or present fair salable value) of the assets of the Company (on a consolidated basis) is not less than the total amount required to pay the probable liabilities of the Company on its total existing debts and liabilities (including contingent liabilities) as they become absolute and matured, (ii) the Company is able to realize upon its assets and pay its debts and other liabilities, contingent obligations and commitments as they mature and become due in the normal course of business, (iii) assuming the issuance of the Securities as contemplated by this Agreement, the Company is not incurring debts or liabilities beyond its ability to pay as such debts and liabilities mature and (iv) the Company is not engaged in any business or transaction, and is not about to engage in any business or transaction, for which its property would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which the Company is engaged. In computing the amount of such contingent liabilities at any time, it is intended that such liabilities will be 8 computed at the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. (bb) Except as set forth herein or described in the Preliminary Offering Memorandum, there are no outstanding subscriptions, rights, warrants, calls or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of, any shares of capital stock of or other equity or other ownership interest in the Company or any of the Subsidiaries. (cc) None of the proceeds of the sale of the Securities will be used, directly or indirectly, in violation or conflict with Regulation T, U or X of the Federal Reserve Board. (dd) Neither the Company nor any of the Subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or Schlumberger for a brokerage commission, finder's fee or like payment in connection with the offering and sale of the Securities. (ee) Neither the Company nor any of its affiliates has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any security (as such term is defined in the Securities Act), which is or will be integrated with the sale of the Securities in a manner that would require registration of the Securities under the Securities Act. 2. Issuance of the Securities. (a) The Company agrees to issue to Schlumberger, and Schlumberger, on the basis of the representations, warranties and agreements contained herein and in the Purchase Agreement, and subject to the terms and conditions set forth herein, agrees to accept from the Company, the Junior Subordinated Indentures as payment of $40 million of the purchase price, the Senior Subordinated Notes as payment of $170 million of the purchase price, and the Warrants as payment of $20 million of the purchase price, for the Acquisition. (b) Schlumberger represents and warrants to the Company that it is purchasing the Securities for investment purposes and not with a view to the resale or other distribution thereof. 3. Delivery of the Securities. (a) Delivery of the Securities shall be made at such place or places as shall be agreed upon by Schlumberger and the Company, at 10:00 A.M., local time, on September 30, 1998 in connection with the closing of the Acquisition pursuant to the Purchase Agreement (such date and time of payment and delivery being referred to herein as the "Closing Date"). (b) On the Closing Date, payment of the purchase price for the Securities shall be made to the Company by crediting the amounts set forth in Section 2(a) against the purchase price for the Acquisition. Upon delivery, the Securities shall be in global form, registered in such names and in such denominations as Schlumberger shall have requested in writing not less than one business day prior to the Closing Date. 9 4. Further Agreements of the Company. The Company agrees with Schlumberger: (a) to advise Schlumberger promptly prior to the Closing Date and, if requested, confirm such advice in writing, of the happening of any event which makes any statement of a material fact made in the Exchange Act Reports untrue or which requires the making of any amendments to or changes in the Exchange Act Reports in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (b) for so long as the Securities are outstanding, to furnish to Schlumberger copies of any annual reports, quarterly reports and current reports filed by the Company with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by the Commission, and such other documents, reports and information as shall be furnished by the Company to the Senior Trustee or the Junior Trustee or to the holders of the Securities pursuant to the Senior Indenture or the Junior Indenture or the Exchange Act or any rule or regulation of the Commission thereunder; (c) to do and perform all things required to be done and performed by it under this Agreement that are within its control prior to or after the Closing Date, and to use its best efforts to satisfy all conditions precedent on its part to the delivery of the Securities; (d) not to take any action prior to the execution and delivery of the Senior Indenture or the Junior Indenture which, if taken after such execution and delivery, would have violated any of the covenants contained in the Senior Indenture or the Junior Indenture; and (e) Tokheim shall take all necessary action to cause two nominees of Schlumberger, selected by Tokheim from among Irwin Pfister, James Gunderson or Jean-Paul Bize, to be added to the Tokheim Board of Directors on January 29, 1999 if the Senior Subordinated Notes or the Roll-Over Notes are outstanding and have not been paid in full prior thereto. 5. Conditions of Schlumberger' Obligations. The obligations of Schlumberger hereunder are subject to the accuracy, on and as of the date hereof and the Closing Date, of the representations and warranties of the Company contained herein and in the Purchase Agreement, to the accuracy of the statements of the Company and its officers made in any certificates delivered pursuant hereto and thereto, to the performance by the Company of its obligations hereunder and thereunder, and to each of the following additional terms and conditions: (a) All conditions to the closing of the Acquisition shall have been satisfied, and all documents, certificates and opinions required to be delivered to Schlumberger pursuant to the Purchase Agreement shall have been executed and delivered to Schlumberger and shall be satisfactory in all material respects to Schlumberger. (b) Schlumberger shall not have discovered and disclosed to the Company on or prior to the Closing Date that the Exchange Act Reports or any amendment thereto contains an untrue statement of a fact which, in the opinion of counsel for Schlumberger, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading. 10 (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of each of the Transaction Documents and the Purchase Agreement, and all other legal matters relating to the Transaction Documents, the Purchase Agreement and the transactions contemplated thereby, shall be satisfactory in all material respects to Schlumberger, and the Company shall have furnished to Schlumberger all documents and information that it or its counsel may reasonably request to enable them to pass upon such matters. (d) Skadden, Arps, Slate, Meagher & Flom (Illinois) and Norman L. Roelke, General Counsel of the Company, shall have furnished to Schlumberger their written opinions, as counsel to the Company, addressed to Schlumberger and dated the Closing Date, in form and substance reasonably satisfactory to Schlumberger, substantially to the aggregate effect set forth in Exhibit E. (e) Schlumberger shall have received from Gibson, Dunn & Crutcher LLP, counsel for Schlumberger, such opinion or opinions, dated the Closing Date, with respect to such matters as Schlumberger may reasonably require, and the Company shall have furnished to such counsel such documents and information as they request for the purpose of enabling them to pass upon such matters. (f) The Company shall have furnished to Schlumberger a certificate, dated the Closing Date, of its chief executive officer and its chief financial officer, stating that (A) such officers have carefully examined the Exchange Act Reports, (B) in their opinion, the Exchange Act Reports, as of their respective dates, did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (C) as of the Closing Date, the representations and warranties of the Company in this Agreement and the Purchase Agreement are true and correct in all material respects, the Company has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder and thereunder on or prior to the Closing Date, and subsequent to the date of the Purchase Agreement and prior to the Closing Date there has been no material adverse change in the financial position or results of operation of the Company or any of the Subsidiaries, or any change, or any development including a prospective change, in or affecting the condition (financial or otherwise), results of operations, business or prospects of the Company and the Subsidiaries taken as a whole. (g) Schlumberger shall have received a counterpart of the Registration Rights Agreement which shall have been executed and delivered by a duly authorized officer of the Company. (h) The Senior Indenture shall have been duly executed and delivered by the Company, the Guarantor Subsidiaries and the Senior Trustee, and the Senior Subordinated Notes shall have been duly executed and delivered by the Company and duly authenticated by the Senior Trustee. 11 (i) The Junior Indenture shall have been duly executed and delivered by the Company, the Guarantor Subsidiaries and the Junior Trustee, and the Junior Subordinated Notes shall have been duly executed and delivered by the Company and duly authenticated by the Junior Trustee. (j) The Rights Agreement, dated as of January 22, 1997, between the Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights Plan"), shall have been duly amended to exempt the issuance of the Warrant and the shares issuable thereunder from the operations of the Rights Plan. (k) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Securities or the closing of the Acquisition; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Securities or the closing of the Acquisition. (l) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the over-the-counter market shall have been suspended or limited, or minimum prices shall have been established on any such exchange or market by the Commission, by any such exchange or by any other regulatory body or governmental authority having jurisdiction, or trading in any securities of the Company on any exchange or in the over-the-counter market shall have been suspended or (ii) any moratorium on commercial banking activities shall have been declared by federal or New York state authorities or (iii) an outbreak or escalation of hostilities or a declaration by the United States of a national emergency or war or (iv) a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) the effect of which, in the case of this clause (iv), is, in the judgment of Schlumberger, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or the delivery of the Securities and the closing of the Acquisition on the terms and in the manner contemplated by this Agreement and in the Purchase Agreement. All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for Schlumberger. 6. Termination. The obligations of Schlumberger hereunder may be terminated by Schlumberger, in its absolute discretion, by notice to the Company prior to delivery of the Securities if, prior to that time, any of the conditions precedent to the closing of the Acquisition shall fail to be satisfied to the reasonable satisfaction of Schlumberger. 7. Reimbursement of Schlumberger's Expenses. If (a) this Agreement shall have been 12 terminated pursuant to Section 6 or (b) the Company shall fail to tender the Securities for delivery to Schlumberger, the Company shall reimburse Schlumberger for such out-of-pocket expenses (including reasonable fees and disbursements of counsel) as shall have been reasonably incurred by Schlumberger in connection with this Agreement and the proposed issuance of the Securities. 8. Survival. The respective indemnities, rights of contribution, representations, warranties and agreements of the Company and Schlumberger contained in this Agreement or made by or on behalf of the Company or Schlumberger pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Securities and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any of them or any of their respective affiliates, officers, directors, employees, representatives, agents or controlling persons. 9. Notices, etc. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) if to Schlumberger, shall be delivered or sent by mail or telecopy transmission to Schlumberger Limited, 277 Park Avenue, New York, New York 10172-0266, Attention: James L. Gunderson (telecopier no.: (212) 350-9409); or (b) if to the Company, shall be delivered or sent by mail or telecopy transmission to Tokheim Corporation, 1600 Wabash Avenue, Fort Wayne, Indiana 46801-0360, Attention: Douglas K. Pinner (telecopier no.: 219-484-1110). 10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 11. Counterparts. This Agreement may be executed in one or more counterparts (which may include counterparts delivered by telecopier) and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 12. Amendments. No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto. 13 13. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. If the foregoing is in accordance with your understanding of our agreement, kindly sign and return to us a counterpart hereof, whereupon this instrument will become a binding agreement between the Company and Schlumberger in accordance with its terms. Very truly yours, TOKHEIM CORPORATION By ----------------------------------- Accepted: SCHLUMBERGER LIMITED By --------------------------- 14 EXHIBIT A [Form of Senior Subordinated Indenture] 15 EXHIBIT B [Form of Junior Subordinated Indenture] 16 EXHIBIT C [Form of Warrant Agreement] 17 EXHIBIT D [Form of Exchange and Registration Rights Agreement] 18 EXHIBIT E [Form of Opinion of Counsel for the Company] Skadden, Arps, Slate, Meagher & Flom (Illinois) and Norman L. Roelke, General Counsel of the Company, shall have furnished to Schlumberger their written opinions, as counsel to the Company, addressed to Schlumberger and dated the Closing Date, in form and substance reasonably satisfactory to Schlumberger, substantially to the aggregate effect set forth below: (i) The Company and each of its subsidiaries (the "Subsidiaries") have been duly incorporated and are validly existing as corporations in good standing under the laws of their respective jurisdictions of incorporation, are duly qualified to do business and are in good standing as foreign corporations in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to so qualify or have such power or authority would not, singularly or in the aggregate, have a material adverse effect on the condition (financial or otherwise), results of operations, business or prospects of the Company and the Subsidiaries taken as a whole (a "Material Adverse Effect").[NR] (ii) The Company has an authorized capitalization as set forth under the heading "Capitalization" in the Company's Preliminary Offering Memorandum dated July 31, 1998 relating to the proposed offering of its ___% Senior Subordinated Notes due 2008 (the "Preliminary Offering Memorandum"). All of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable.[NR] (iii) Assuming the accuracy of the representations and warranties of Schlumberger contained in Section 2, it is not necessary, in connection with the issuance of the Securities to Schlumberger to register the Securities or the Guarantees under the Securities Act or to qualify the Senior Indenture or the Junior Indenture under the Trust Indenture Act.[SASMF] (iv) The Company has full right, power and authority to execute and deliver this Agreement, the Senior Indenture, the Junior Indenture, the Warrant Agreement, the Registration Rights Agreement and the Securities and to perform its obligations thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated thereby have been duly and validly taken.[NR] (v) This Agreement has been duly authorized, executed and delivered by the Company [NR] and constitutes a valid and legally binding agreement of the Company[SASMF]. 19 (vi) The Registration Rights Agreement has been duly authorized by the Company[NR] and, assuming due execution and delivery thereof by Schlumberger, is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law)[SASMF]. (vii) The Senior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries [NR] and, assuming due execution and delivery thereof by the Senior Trustee, is a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). The Senior Indenture conforms in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder[SASMF]. (viii) The Junior Indenture has been duly authorized by the Company and the Guarantor Subsidiaries [NR] and, assuming due execution and delivery thereof by the Junior Trustee, is a valid and legally binding agreement of the Company and the Guarantor Subsidiaries enforceable against the Company and the Guarantor Subsidiaries in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law)[SASMF]. (ix) The Warrant Agreement has been duly authorized by the Company [NR] and, assuming due execution and delivery thereof by Schlumberger, is a valid and legally binding agreement of the Company enforceable against the Company in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law)[SASMF]. (xi) Neither the Company nor any of the Subsidiaries is (i) an "investment company" or a company "controlled by" an investment company within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations of the Commission thereunder.[SASMF] 20 EX-99.(C)(4) 5 12% SENIOR SUBORDINATED NOTE EXHIBIT (c)(4) THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. TOKHEIM CORPORATION 12% SENIOR SUBORDINATED NOTE DUE JANUARY 28, 1999 No. 1 $170,000,000 TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to pay to SCHLUMBERGER TECHNOLOGY CORPORATION, as Transfer Agent for the Selling Subsidiaries as defined in the Master Agreement between Tokheim Corporation and Schlumberger Limited dated as of June 19, 1998, as amended, or registered assigns, the principal sum of $170,000,000 on January 28, 1999. Interest Payment Date: January 28, 1999 Record Date: January 15, 1999 Additional provisions of this security are set forth on the other side of this security. Dated: September 30, 1998 TOKHEIM CORPORATION By_____________________ Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION HARRIS TRUST AND SAVINGS BANK, as Trustee, certifies that this is one of the securities referred to in the Senior Indenture By_________________________ Authorized Signatory 12% Senior Subordinated Note due January 28, 1999 1. Interest TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to pay interest on the principal amount of this 12% Senior Subordinated Note due January 28, 1999 (the "Senior Subordinated Notes") at 12% per annum. The Company will pay interest on the Senior Subordinated Notes in arrears in cash on January 28, 1999. Interest on the Senior Subordinated Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance of the Senior Subordinated Notes. Interest will be computed on the basis of a 360-day year of twelve 30- day months. The Company will pay interest on overdue interest at the rate borne by the Senior Subordinated Notes. 2. Method of Payment The Company will pay interest (except defaulted interest) on and in respect of the Senior Subordinated Notes to the Persons who are registered holders of the Senior Subordinated Notes at the close of business on the third business day next preceding the interest payment date even if such Senior Subordinated Notes are canceled after the record date and on or before the interest payment date. Holders must surrender Senior Subordinated Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by official bank check payable in same day funds or by wire transfer of federal funds. 3. Paying Agent and Registrar Initially, Harris Trust and Savings Bank (the "Trustee") will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice to the Holders. The Company may act as Paying Agent, Registrar or co-registrar. 4. Indenture The Company issued the Senior Subordinated Notes under an Indenture dated as of September 30, 1998 (the "Senior Indenture"), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Senior Subordinated Notes include those stated in the Senior Indenture and those made part of the Senior Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Senior Indenture (the "Act"). Terms defined in the Senior Indenture and not defined herein have the meanings ascribed thereto in the Senior Indenture. The Senior Subordinated Notes are subject to all such terms, and Holders are referred to the Senior Indenture and the Act for a statement of those terms. The Senior Subordinated Notes are unsecured senior subordinated obligations of the Company and are limited to $170,000,000 in aggregate principal amount outstanding. In the event that the Company is unable to repay the Senior Subordinated Notes at their stated maturity, the Senior Subordinated Notes will be exchanged, subject to certain conditions, for Increasing Rate Senior Subordinated Notes due 2007 (the "Roll-Over Notes"). This security is one of the Senior Subordinated Notes referred to in the Senior Indenture. The Senior Subordinated Securities include the Senior Subordinated Notes, any Roll-Over Notes issued in exchange for the Senior Subordinated Notes and any Exchange Notes issued in exchange for the Roll-Over Notes pursuant to the Senior Indenture. The Senior Subordinated Notes, the Roll-Over Notes and the Exchange Notes are treated as a single class of securities under the Senior Indenture. The Senior Indenture imposes certain limitations on the Incurrence of Indebtedness by the Company and its subsidiaries; the payment of dividends and other payments by the Company and its subsidiaries; Investments; sales of assets of the Company and its subsidiaries; certain transactions with Affiliates; Liens; and consolidations, mergers and transfers of all or substantially all of the Company's or its subsidiaries' assets. In addition, the Senior Indenture prohibits certain restrictions on distributions from subsidiaries. 5. Optional Redemption Subject to the terms of the Senior Indenture, the Senior Subordinated Notes may be redeemed at any time, in whole or in part, at the option of the Company at a redemption price equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date (subject to the right of holders of the Senior Subordinated Notes on the relevant record date to receive interest due on the relevant interest payment date). 6. Mandatory Redemption If after the Issue Date the Company or any of its Subsidiaries shall Incur any Indebtedness, other than Indebtedness Incurred under the Credit Agreement, or shall issue any Capital Stock, the Company shall redeem Senior Subordinated Notes in an aggregate principal amount equal to the principal amount of the Indebtedness so Incurred or the total price at which such Capital Stock was sold. The redemption price of the Senior Subordinated Notes so redeemed shall be equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date. 7. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Senior Subordinated Notes to be redeemed at its registered address all in accordance with the Senior Indenture. If less than all of the Senior Subordinated Notes are to be redeemed at any time, selection 2 of Senior Subordinated Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Senior Subordinated Notes are listed, or, if the Senior Subordinated Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Senior Subordinated Notes of $1,000 or less shall be redeemed in part. 8. Repurchase at the Option of the Holder Upon a Change of Control, any Holder of Senior Subordinated Notes will have the right, subject to certain conditions set forth in the Senior Indenture, to cause the Company to repurchase all or any part of the Senior Subordinated Notes of such Holder at a purchase price equal to 101% of the principal amount of the Senior Subordinated Notes to be repurchased plus accrued and unpaid interest thereon, (if any) to the date of repurchase as provided in, and subject to the terms of, the Senior Indenture. 9. Subordination The Senior Subordinated Notes are subordinated to Senior Debt of the Company, as defined in the Senior Indenture. To the extent provided in the Senior Indenture, Senior Debt of the Company must be paid before the Senior Subordinated Notes may be paid. The Company agrees, and each Holder by accepting a Senior Subordinated Note agrees, to the subordination provisions contained in the Senior Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose. 10. Denominations; Transfer; Exchange The Senior Subordinated Notes are in registered form without coupons. A Holder may transfer or exchange Senior Subordinated Notes in accordance with the Senior Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Senior Indenture. The Registrar need not register the transfer of or exchange any Senior Subordinated Notes selected for redemption (except, in the case of a Senior Subordinated Note to be redeemed in part, the portion of the Senior Subordinated Note not to be redeemed) or to transfer or exchange any Senior Subordinated Notes for a period of 15 days prior to a selection of Senior Subordinated Notes to be redeemed or 15 days before an interest payment date. 11. Persons Deemed Owners The Holder of this Senior Subordinated Note may be treated as the owner of it for all purposes. 3 12. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 13. Discharge and Defeasance Subject to certain conditions set forth in the Senior Indenture, the Company at any time may terminate some or all of its obligations under the Senior Subordinated Notes and the Senior Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Senior Subordinated Notes to redemption or maturity, as the case may be. 14. Amendment, Waiver Subject to certain exceptions set forth in the Senior Indenture, from time to time, the Company, the Guarantors and the Trustee, without the consent of the Holders, may amend the Senior Indenture or the Senior Subordinated Notes for the following purposes, so long as such change does not, in the opinion of the Trustee, adversely affect the rights of any of the Holders in any material respect: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for uncertificated Senior Subordinated Notes in addition to or in place of certificated Senior Subordinated Notes (provided that the uncertificated Senior Subordinated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Senior Subordinated Notes are described in Section 163(f)(2)(B) of the Code); (iii) to provide for the assumption of the Company's or any Guarantor's obligations to Holders of Senior Subordinated Notes in the case of a merger, consolidation or sale of assets; (iv) to release any Subsidiary Guarantee in accordance with the provisions of the Senior Indenture; (v) to provide for additional Guarantors; (vi) to make any change that would provide any additional rights or benefits to the Holders of Senior Subordinated Notes or that does not adversely affect the legal rights under the Senior Indenture of any such Holder; or (vii) to comply with requirements of the SEC in order to effect or maintain the qualification of the Senior Indenture under the TIA. The Company, the Guarantors and the Trustee may amend the Senior Indenture or the Senior Subordinated Notes with the written consent of the Holders of at least a majority in principal amount of the Senior Subordinated Notes. However, without the consent of each affected Holder of a Senior Subordinated Notes, an amendment may not: (i) reduce the principal amount of Senior Subordinated Notes whose Holders must consent to an amendment; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any Senior Subordinated Note; (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Senior Subordinated Note, or change the date on which any Senior Subordinated Note may be subject to redemption or repurchase, or reduce the redemption 4 or repurchase price therefor; (iv) make any Senior Subordinated Notes payable in money other than that stated in the Senior Subordinated Notes; (v) make any change in provisions of the Senior Indenture protecting the right of each Holder to receive payment of principal of and interest on such Holder's Senior Subordinated Notes on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Senior Subordinated Notes to waive Defaults or Events of Default; (vi) modify or change any provision of the Senior Indenture or the related definitions affecting the subordination or ranking of the Senior Subordinated Notes in a manner which adversely affects the Holders; provided, however, that it is understood that any amendment, the purpose of which is to permit the Incurrence of additional Indebtedness under the Indenture shall not be construed as adversely affecting the ranking of the Senior Subordinated Notes; or (viii) make any change to the Subsidiary Guarantees in any manner that adversely affects the rights of the Holders. 15. Defaults and Remedies Under the Senior Indenture, the following events are "Events of Default": (a) the failure to pay interest on any Senior Subordinated Note when the same becomes due and payable and such default continues for a period of 30 days (whether or not such payment shall be prohibited by the provisions of Article X); (b) the failure to pay the principal on any Senior Subordinated Note when such principal becomes due and payable, at maturity, upon redemption or otherwise, whether or not such payment shall be prohibited by the provisions of Article X; (c) a default in the observance or performance of any other covenant or agreement contained in the Senior Indenture, subject to applicable grace periods; (d) there shall be a default under any Indebtedness of the Company or any Subsidiary resulting in acceleration of Indebtedness aggregating $10.0 million or more at any one time outstanding; (e) certain judgments in an aggregate amount in excess of $5.0 million; or (f) certain events of voluntary or involuntary bankruptcy. If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) of the Senior Indenture with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Senior Subordinated Notes may declare the principal of and accrued interest on all the Senior Subordinated Notes to be due and payable by notice in writing to the Company and the Trustee, and the same (i) shall become immediately due and payable or (ii) if there are any amounts outstanding under the Credit Agreement or the ESOP Credit Agreement, shall become immediately due and payable upon the first to occur of an acceleration under the Credit Agreement or the ESOP Credit Agreement or five business days after receipt by the Company and the Representative under the Credit Agreement or the ESOP Credit Agreement of such notice of acceleration. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Company occurs and is continuing, then all unpaid principal of and accrued and unpaid interest on all of the outstanding Senior Subordinated Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. 5 16. Trustee Dealings with the Company Subject to certain limitations imposed by the Act, the Trustee under the Senior Indenture, in its individual or any other capacity, may become the owner or pledgee of securities and may otherwise deal with and collect obligations owed to it by the Company and may otherwise deal with the Company with the same rights it would have if it were not Trustee. 17. No Personal Liability of Directors, Officers, Employees and Stockholders No director, officer, employee, incorporator, stockholder of the Company, as such, will have any liability for any obligations of the Company under the Senior Subordinated Notes, the Senior Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. 18. Governing Law THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 19. Authentication This security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this security. 20. Abbreviations Customary abbreviations may be used in the name of a securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 21. CUSIP Numbers Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Senior Subordinated Notes and have directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to securityholders. No representation is made as to the accuracy of such numbers either as printed on the securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 6 The Company will furnish to any securityholder upon written request and without charge to the securityholder a copy of the Senior Indenture which has in it the text of this security in larger type. Requests may be made to: TOKHEIM CORPORATION 1600 Wabash Avenue Fort Wayne, IN 46801-0360 Attention: Douglas Pinner 7 ASSIGNMENT FORM To assign this security, fill in the form below: I or we assign and transfer this security to _______________________________________________________ (Print or type assignee's name, address and zip code) _______________________________________________________ (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____________________________________________ ,as agent, to transfer this security on the books of the Company. The agent may substitute another to act for him. Date: ________________ Your Signature: _____________________ Signature Guarantee:_______________________________________ (Signature must be guaranteed by a participant in a recognized signature guarantee medallion program) ____________________________________________________________ Sign exactly as your name appears on the other side of this Security. 8 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this security purchased by the Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, check the box: [_] 4.06 Asset Sale [_] 4.08 Change of Control If you want to elect to have only part of this security purchased by the Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, state the amount: $ . Date: __________________ Your Signature: __________________ (Sign exactly as your name appears on the other side of the Security) __________________ Tax I.D. number Signature Guarantee:_______________________________________ (Signature must be guaranteed by a participant in a recognized signature guarantee medallion program) 9 EX-99.(C)(5) 6 SENIOR SUBORDINATED NOTE INDENTURE EXHIBIT (c)(5) TOKHEIM CORPORATION Senior Subordinated Notes INDENTURE Dated as of September 30, 1998 HARRIS TRUST AND SAVINGS BANK, Trustee TABLE OF CONTENTS ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................ 1 SECTION 1.01. Definitions.............................................. 1 SECTION 1.02. Other Definitions........................................ 20 SECTION 1.03. Incorporation by Reference of Trust Indenture Act........ 21 SECTION 1.04. Rules of Construction.................................... 22 ARTICLE II THE SENIOR SUBORDINATED SECURITIES............................... 22 SECTION 2.01. Form and Dating; Issuance................................ 22 SECTION 2.02. Execution and Authentication............................. 23 SECTION 2.03. Registrar and Paying Agent............................... 24 SECTION 2.04. Paying Agent To Hold Money in Trust...................... 25 SECTION 2.05. Senior Subordinated Securityholder Lists................. 26 SECTION 2.06. Registration of Transfer and Exchange.................... 26 SECTION 2.07. Replacement Senior Subordinated Securities............... 27 SECTION 2.08. Outstanding Senior Subordinated Securities............... 27 SECTION 2.09. Temporary Senior Subordinated Securities................. 28 SECTION 2.10. Cancellation............................................. 28 SECTION 2.11. Defaulted Interest....................................... 28 SECTION 2.12. CUSIP Numbers............................................ 28 SECTION 2.13. Book-Entry Provisions for Global Senior Subordinated Securities............................................... 29 SECTION 2.14. Special Transfer Provisions.............................. 30 ARTICLE III REDEMPTION...................................................... 30 SECTION 3.01. Notices to Trustee....................................... 30 SECTION 3.02. Selection............................................... 30 SECTION 3.03. Notice.................................................. 31 SECTION 3.04. Effect of Notice of Redemption.......................... 32 SECTION 3.05. Deposit of Redemption Price............................. 32 SECTION 3.06. Senior Subordinated Securities Redeemed in Part......... 32 SECTION 3.07. Optional Redemption..................................... 32 SECTION 3.08. Mandatory Redemption.................................... 32 ARTICLE IV COVENANTS....................................................... 33 SECTION 4.01. Payment of Senior Subordinated Securities............... 33 SECTION 4.02. Reports................................................. 33 SECTION 4.03. Incurrence of Indebtedness.............................. 33 SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries............................................ 35 SECTION 4.06. Asset Sales............................................. 35 SECTION 4.07. Transactions with Affiliates............................ 38 SECTION 4.08. Change of Control....................................... 39 SECTION 4.09. Compliance Certificate.................................. 41 SECTION 4.10. Preferred Stock of Subsidiaries......................... 42 SECTION 4.11. Liens................................................... 42 SECTION 4.12. Additional Subsidiary Guarantees........................ 42 SECTION 4.13. No Layering............................................. 42 ARTICLE V SUCCESSOR COMPANY................................................ 43 SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets of the Company................. 43 SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All Assets of a Guarantor................. 44 ARTICLE VI DEFAULTS AND REMEDIES........................................... 44 SECTION 6.01. Events of Default and Remedies.......................... 44 SECTION 6.02. Acceleration.............................................46 SECTION 6.03. Other Remedies...........................................46 SECTION 6.04. Waiver of Past Defaults..................................46 SECTION 6.05. Control by Majority......................................47 SECTION 6.06. Limitation on Suits......................................47 SECTION 6.07. Rights of Holders to Receive Payment.....................48 SECTION 6.08. Collection Suit by Trustee...............................48 SECTION 6.09. Trustee May File Proofs of Claim.........................48 SECTION 6.10. Priorities...............................................48 SECTION 6.11. Undertaking for Costs....................................49 SECTION 6.12. Waiver of Stay or Extension Laws.........................49 ARTICLE VII THE TRUSTEE.....................................................49 SECTION 7.01. Duties of Trustee........................................49 SECTION 7.02. Rights of Trustee........................................50 SECTION 7.03. Individual Rights of Trustee.............................51 SECTION 7.04. Trustee's Disclaimer.....................................51 SECTION 7.05. Notice of Defaults.......................................51 SECTION 7.06. Reports by Trustee to Holders............................52 SECTION 7.07. Compensation and Indemnity...............................52 SECTION 7.08. Replacement of Trustee...................................53 SECTION 7.09. Successor Trustee by Merger..............................54 SECTION 7.10. Eligibility; Disqualification............................54 SECTION 7.11. Preferential Collection of Claims Against Company........54 ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE.............................55 SECTION 8.01. Legal Defeasance and Covenant Defeasance.................55 SECTION 8.02. Conditions to Legal or Covenant Defeasance...............56
SECTION 8.03. Deposited Money and Government Senior Subordinated Securities to be Held in Trust; Other Miscellaneous Provisions.....57 SECTION 8.04. Repayment to Company.....................................57 SECTION 8.05. Reinstatement............................................57 SECTION 8.06. Satisfaction and Discharge of Indenture..................58 ARTICLE IX AMENDMENTS.......................................................59 SECTION 9.01. Without Consent of Holders...............................59 SECTION 9.02. With Consent of Holders..................................60 SECTION 9.03. Compliance with Trust Indenture Act......................61 SECTION 9.04. Revocation and Effect of Consents and Waivers............61 SECTION 9.05. Notation on or Exchange of Senior Subordinated Securities........................................................61 SECTION 9.06. Trustee To Sign Amendments...............................62 SECTION 9.07. Payment for Consent......................................62 ARTICLE X SUBORDINATION.....................................................62 SECTION 10.01. Agreement To Subordinate................................62 SECTION 10.02. Liquidation, Dissolution, Bankruptcy....................62 SECTION 10.03. Default on Senior Debt..................................63 SECTION 10.04. Acceleration of Payment of Senior Subordinated Securities.........................................................63 SECTION 10.05. When Distribution Must Be Paid Over.....................64 SECTION 10.06. Subrogation.............................................64 SECTION 10.07. Relative Rights.........................................64 SECTION 10.08. Subordination May Not Be Impaired by Company............64 SECTION 10.09. Rights of Trustee and Paying Agent......................64 SECTION 10.10. Distribution or Notice to Representative................65
ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO ACCELERATE.....65 SECTION 10.12. Trust Funds Not Subordinated............................65 SECTION 10.13. Trustee Entitled To Rely................................65 SECTION 10.14. Trustee To Effectuate Subordination.....................66 SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt........66 SECTION 10.16. Reliance by Holders of Senior Debt on Subordination Provisions.........................................................66 SECTION 10.17. Trustee's Compensation Not Prejudiced...................66 ARTICLE XI SUBSIDIARY GUARANTEES............................................66 SECTION 11.01. Subsidiary Guarantees...................................66 SECTION 11.02. Limitation on Liability.................................68 SECTION 11.03. Successors and Assigns..................................68 SECTION 11.04. No Waiver...............................................69 SECTION 11.05. Modification............................................69 ARTICLE XII SUBORDINATION OF THE SUBSIDIARY GUARANTEES......................69 SECTION 12.01. Agreement To Subordinate................................69 SECTION 12.02. Liquidation, Dissolution, Bankruptcy....................69 SECTION 12.03. Default on Guarantor Senior Debt........................70 SECTION 12.04. Demand for Payment......................................70 SECTION 12.05. When Distribution Must Be Paid Over.....................71 SECTION 12.06. Subrogation.............................................71 SECTION 12.07. Relative Rights.........................................71 SECTION 12.08. Subordination May Not Be Impaired by a Guarantor........71 SECTION 12.09. Rights of Trustee and Paying Agent......................71 SECTION 12.10. Distribution or Notice to Representative................72
SECTION 12.11. Article XII Not To Prevent Events of Default or Limit Right To Accelerate.........................................72 SECTION 12.12. Trustee Entitled To Rely...............................72 SECTION 12.13. Trustee To Effectuate Subordination....................73 SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of a Guarantor.........................................................73 SECTION 12.15. Reliance by Holders of Guarantor Senior Debt on Subordination Provisions..........................................73 ARTICLE XIII MISCELLANEOUS.................................................73 SECTION 13.01. Trust Indenture Act Controls...........................73 SECTION 13.02. Notices................................................73 SECTION 13.03. Communication by Holders with Other Holders............74 SECTION 13.04. Certificate and Opinion as to Conditions Precedent.....74 SECTION 13.05. Statements Required in Certificate or Opinion..........75 SECTION 13.06. When Senior Subordinated Securities Disregarded........75 SECTION 13.07. Rules by Trustee, Paying Agent and Registrar...........75 SECTION 13.08. Legal Holidays.........................................75 SECTION 13.09. GOVERNING LAW..........................................76 SECTION 13.10. No Recourse Against Others.............................76 SECTION 13.11. Successors.............................................76 SECTION 13.12. Multiple Originals.....................................76 SECTION 13.13. Table of Contents; Headings............................76
INDENTURE, dated as of September 30, 1998, among TOKHEIM CORPORATION, an Indiana corporation (the "Company"), Management Solutions, Inc., a Colorado corporation, Tokheim Equipment Corporation, a Delaware corporation, Tokheim RPS, LLC, a Delaware corporation, Sunbelt Hose & Petroleum Equipment, Inc., a Georgia corporation, Envirotronic Systems, Inc., an Indiana corporation, Gasboy International, Inc., a Pennsylvania corporation, Tokheim Automation Corporation, a Texas corporation, Tokheim Investment Corp., a Texas corporation, as guarantors (collectively, the "Initial Guarantors"), and HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation (the "Trustee"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (i) the Company's 12% Senior Subordinated Notes due January 28, 1999 (the "Senior Subordinated Notes") issued on the date hereof, (ii) any Roll-Over Notes (as defined herein) that may be issued upon the Stated Maturity (as defined herein) of the Senior Subordinated Notes and (iii) any Exchange Notes (as defined herein) if and when issued as provided in the Registration Rights Agreement (as defined herein) in exchange for any Roll-Over Notes. The Senior Subordinated Notes, any Roll-Over Notes and any Exchange Notes are collectively referred to as the "Senior Subordinated Securities". ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE ------------------------------------------ SECTION 1.01. Definitions. "Acquired Indebtedness" means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Subsidiary of the Company or at the time it merges or consolidates with the Company or any of its Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary of the Company or such acquisition, merger or consolidation. "Acquisition" means the acquisition by the Company of the fuel dispenser, systems and services business of Schlumberger. "Additional Exchange Note" means any Exchange Note issued in lieu of cash payment of interest accrued on any outstanding Exchange Note (including on any Additional Exchange Note) pursuant hereto. "Additional Roll-Over Note" means any Roll-Over Note issued in lieu of cash payment of interest accrued on any outstanding Roll-Over Note (including on any Additional Roll-Over Note) pursuant hereto and thereto. "Affiliate" means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person; provided, however, that neither Schlumberger nor any of its Affiliates shall be deemed to be an Affiliate of the Company. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative of the foregoing. "Asset Acquisition" means (a) an Investment by the Company or any Subsidiary of the Company in any other Person pursuant to which such Person shall become a Subsidiary of the Company or any Subsidiary of the Company, or shall be merged with or into the Company or any Subsidiary of the Company, or (b) the acquisition by the Company or any Subsidiary of the Company of the assets of any Person (other than a Subsidiary of the Company) which constitute all or substantially all of the assets of such Person or comprises any division or line of business of such Person. "Asset Sale" means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by the Company or any of its Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Company or a Wholly Owned Subsidiary of the Company of (a) any Capital Stock of any Subsidiary of the Company or (b) any other property or assets of the Company or any Subsidiary of the Company other than in the ordinary course of business; provided, however, that Asset Sales shall not include (i) a transaction or series of related transactions for which the Company or its Subsidiaries receive aggregate consideration of less than $500,000 and (ii) the sale, lease, conveyance, disposition or other transfer (w) of all or substantially all of the assets of the Company as permitted under Section 5.01, (x) pursuant to any foreclosure of assets or other remedy provided by applicable law to a creditor of the Company or any Subsidiary of the Company with a Lien on such assets, which Lien is permitted under Section 4.11; provided that such foreclosure or other remedy is conducted in a commercially reasonable manner or in accordance with any bankruptcy law, (y) involving only Cash Equivalents or inventory in the ordinary course of business or obsolete equipment in the ordinary course of business consistent with past practices of the Company or (z) involving only the lease or sublease of any real or personal property in the ordinary course of business. "Board of Directors" means, as to any Person, the board of directors of such Person or any duly authorized committee thereof. "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means a day other than a Saturday, Sunday or other day on which banking institutions in the State of New York or the City of Chicago, Illinois are authorized or required by law to close. "Capitalized Lease Obligation" means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations 2 under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP. "Capital Stock" means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person and (ii) with respect to any Person that is not a corporation, any and all partnership or other equity interests of such Person. "Cash Equivalents" means (i) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or bankers' acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $250.0 million; (v) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iv) above; and (vi) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (i) through (v) above. "Change of Control" means the occurrence of one or more of the following events: (i) the approval by the holders of Capital Stock of the Company of any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the provisions of the Indenture); (ii) any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act shall become the owner, directly or indirectly, beneficially or of record, of shares representing either more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of the Company or more than 40% of the aggregate issued and outstanding Common Stock of the Company; or (iii) the replacement of a majority of the Board of Directors of the Company over a two-year period from the directors who constituted the Board of Directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Company then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved. "Code" means the Internal Revenue Code of 1986, as amended. 3 "Commodity Hedging Agreement" means any futures contract or other similar agreement or arrangement designed to protect the Company or any Subsidiary against fluctuations in commodities prices. "Common Stock" of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person's common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock. "Company" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the indenture securities. "Consolidated EBITDA" means, with respect to any Person, for any period, the sum (without duplication) of (i) Consolidated Net Earnings and (ii) to the extent Consolidated Net Earnings has been reduced thereby, (A) all income taxes of such Person and its Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary, unusual or nonrecurring gains or losses or taxes attributable to sales or dispositions outside the ordinary course of business or other transactions the effect of which has been excluded from Consolidated Net Earnings), (B) Consolidated Interest Expense and (C) Consolidated Non-cash Charges less any non-cash items increasing Consolidated Net Earnings for such period, all as determined on a consolidated basis for such Person and its Subsidiaries in accordance with GAAP. "Consolidated Fixed Charge Coverage Ratio" means, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the four most recent full fiscal quarters for which financial information is available (the "Four Quarter Period") ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period. In addition to and without limitation of the foregoing, for purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving effect on a pro forma basis for the period of such calculation to (i) the Incurrence or repayment of any Indebtedness of such Person or any of its Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any Incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the Incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital or revolving credit facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such Incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period and (ii) any Asset Sales or Asset Acquisitions (including any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Subsidiaries (including any Person who becomes a Subsidiary as a result of the Asset Acquisition) Incurring, assuming or otherwise being liable for Acquired Indebtedness and also including any Consolidated EBITDA (provided that such Consolidated EBITDA shall be included only to the extent includible 4 pursuant to the definition of "Consolidated Net Earnings") attributable to the assets which are the subject of the Asset Acquisition or Asset Sale during the Four Quarter Period) occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the Incurrence, assumption or liability for any such Acquired Indebtedness) occurred on the first day of the Four Quarter Period. If such Person or any of its Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the Incurrence of such guaranteed Indebtedness as if such Person or any Subsidiary of such Person had directly Incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; (2) if interest on any Indebtedness actually Incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four Quarter Period; and (3) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements. "Consolidated Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of (i) Consolidated Interest Expense, plus (ii) the product of (x) the amount of all dividend payments on any series of Preferred Stock of such Person and its Subsidiaries (other than dividends paid in Qualified Capital Stock of the Company or dividends to the extent payable to the Company or its Subsidiaries) paid, accrued or scheduled to be paid or accrued during such period times (other than in the case of Preferred Stock of such Person and its Subsidiaries for which the dividends are tax deductible for federal income tax purposes) (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated federal, state and local tax rate of such Person, expressed as a decimal. "Consolidated Interest Expense" means, with respect to any Person for any period, the sum of, without duplication: (i) the aggregate of the interest expense of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including (a) any amortization of debt discount (but excluding the amortization of debt issuance costs), (b) the net costs under Interest Swap Obligations, (c) all capitalized interest and (d) the interest portion of any deferred payment obligation; and (ii) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP. "Consolidated Net Earnings" means, with respect to any Person, for any period, the aggregate net earnings (or loss) of such Person and its Subsidiaries for such period on a 5 consolidated basis (before preferred stock dividend requirements), determined in accordance with GAAP; provided that there shall be excluded therefrom (a) after- tax gains or losses from Asset Sales or abandonments or reserves relating thereto, (b) after-tax items classified as extraordinary or nonrecurring gains or losses, (c) the net earnings of any Person acquired in a "pooling of interests" transaction accrued prior to the date it becomes a Subsidiary of the referent Person or is merged or consolidated with the referent Person or any Subsidiary of the referent Person, (d) the net earnings (but not loss) of any Subsidiary of the referent Person to the extent that the declaration of dividends or similar distributions by that Subsidiary of that income is restricted by a contract, operation of law or otherwise, (e) the net earnings of any Person, other than a Subsidiary of the referent Person, except to the extent of cash dividends or distributions paid to the referent Person or to a Wholly Owned Subsidiary of the referent Person by such Person, (f) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Earnings accrued at any time following the Issue Date, (g) income or loss attributable to discontinued operations (including operations disposed of during such period whether or not such operations were classified as discontinued), (h) in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person's assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets and (i) all gains or losses from the cumulative effect of any change in accounting principles. "Consolidated Net Worth" of any Person means the consolidated shareholders' equity of such Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to Disqualified Capital Stock of such Person. "Consolidated Non-cash Charges" means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Subsidiaries reducing Consolidated Net Earnings of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve relating to possible cash charges or expenditures for any future or past period). "Credit Agreement" means the Credit Agreement among the Company, certain of its Subsidiaries, the lenders party thereto in their capacities as lenders thereunder and The First National Bank of Chicago, as administrative agent, together with the related documents thereto (including any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted under Section 4.03) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement. 6 "Custodian" means the custodian with respect to any Global Senior Subordinated Security (as appointed by the Depository), or any successor entity thereto as provided in Section 2.03. "Default" means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default. "Depository" means, with respect to the Senior Subordinated Securities issuable or issued in whole or in part in global form, the person specified in Section 2.03 as the Depository with respect to the Senior Subordinated Securities, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, "Depository" shall mean or include such successor. "Designated Senior Debt" means (i) Indebtedness under or in respect of the Credit Agreement or the ESOP Credit Agreement and (ii) any other Indebtedness constituting Senior Debt which, at the time of determination, has an aggregate principal amount of at least $25.0 million and is specifically designated in the instrument evidencing such Senior Debt as "Designated Senior Debt" by the Company. "Designated Guarantor Senior Debt" means (i) Indebtedness of a Guarantor under or in respect of the Credit Agreement or the ESOP Credit Agreement and (ii) any other Indebtedness constituting Senior Debt which, at the time of determination, has an aggregate principal amount of at least $25.0 million and is specifically designated in the instrument evidencing such Senior Debt as "Designated Guarantor Senior Debt" by the Guarantor. "Disqualified Capital Stock" means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof on or prior to the final maturity date of the Senior Subordinated Securities. "ESOP Credit Agreement" means that certain credit agreement among the Company, the Tokheim Employee Stock Ownership Plan, NBD Bank, N.A., and certain other banks, together with the related documents thereto (including any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted under Section 4.03) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders. "Escrow Agent" means Bankers Trust Company. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto. 7 "Exchange Notes" means any of the Senior Subordinated Securities issued in exchange for Roll-Over Notes pursuant to an exchange offer conducted by the Company in compliance with the provisions of the Registration Rights Agreement. "Exchange Offer" means an offer to exchange Exchange Notes for Roll-Over Notes pursuant to the Registration Rights Agreement. "Exchange Offer Registration Statement" means a registration statement filed by the Company with the Commission as required by Section 1 of the Registration Rights Agreement. "Fair Market Value" means, with respect to any asset or property, the price which could be negotiated in an arms'-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the Board of Directors of the Company acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the Trustee. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of the Issue Date. "Global Senior Subordinated Security" means a Senior Subordinated Security that is in the form of Exhibit A, Exhibit B or Exhibit C hereto that includes the Global Senior Subordinated Securities Legend therein. "Global Senior Subordinated Securities Legend" means the legend set forth in the first paragraph of Exhibit A. "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "Guarantor Senior Debt" means, the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other Obligations with respect to, any Indebtedness of the Guarantors, whether outstanding on the Issue Date or thereafter created, Incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Senior Subordinated Securities. Without limiting the generality of the foregoing, "Guarantor Senior Debt" shall also include the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not 8 such interest is an allowed claim under applicable law) on, and all other monetary obligations of the Guarantors owing in respect of, Guarantees of (w) the Senior Notes issued on the Issue Date in the amount of $22.5 million (including any Refinancing thereof, the "Senior Notes"), (x) the Credit Agreement and the ESOP Credit Agreement, including obligations to pay principal and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities, (y) all Interest Swap Obligations and (z) Currency Agreements, in each case whether outstanding on the Issue Date or thereafter Incurred. Notwithstanding the foregoing, "Guarantor Senior Debt" shall not include (i) any Indebtedness of a Guarantor to a Subsidiary of the Guarantor, (ii) Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer or employee of the Guarantor or any Subsidiary of the Guarantor (including, without limitation, amounts owed for compensation), (iii) Indebtedness to trade creditors and other amounts Incurred in connection with obtaining goods, materials or services, (iv) Indebtedness represented by Disqualified Capital Stock, (v) any liability for federal, state, local or other taxes owed or owing by the Guarantors, (vi) Indebtedness Incurred in violation of the provisions of Section 4.03, (vii) Indebtedness which, when Incurred and without respect to any election under Section 1111(b) of Title 11, United States Code, is without recourse to the Company and (viii) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of the Company, other than the Senior Notes. "Holder" or "Senior Subordinated Securityholder" means the Person in whose name a Senior Subordinated Security is registered on the Registrar's books. "Indebtedness" means with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all Capitalized Lease Obligations of such Person, (iv) all indebtedness or other obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all Obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted), (v) all indebtedness for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction, (vi) guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (i) through (v) above and clause (viii) below, (vii) all indebtedness of any other Person of the type referred to in clauses (i) through (vi) which are secured by any lien on any property or asset of such Person, the amount of such Obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the Obligation so secured, (viii) all indebtedness under Currency Agreements and Interest Swap Agreements of such Person and (ix) all Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant any provision hereof, and if such price is based upon, or measured by, the 9 fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock. "Indenture" means this Indenture as amended or supplemented from time to time. "Independent Financial Advisor" means a firm (i) which does not, and whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company and (ii) which, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is to be engaged. "Initial Maturity Date" means January 28, 1999, the maturity date of the Senior Subordinated Notes. "Interest Swap Obligations" means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include interest rate swaps, caps, floors, collars and similar agreements. "Investment" means, with respect to any Person, any direct or indirect loan or other extension of credit (including a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person. "Investment" shall exclude extensions of trade credit by the Company and its Subsidiaries on commercially reasonable terms in accordance with normal trade practices of the Company or such Subsidiary, as the case may be. For the purposes of Section 4.04, the amount of any Investment shall be the original cost of such Investment plus the cost of all additional Investments by the Company or any of its Subsidiaries, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment: provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Earnings. "Issue Date" means the date of original issuance of the Senior Subordinated Notes. "Junior Subordinated Notes" means the Company's 12% Junior Subordinated Notes due September 30, 2008 issued pursuant to the Securities Purchase Agreement in partial payment of the Company's obligations under the Purchase Agreement. 10 "Lien" means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest). "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Subsidiaries from such Asset Sale net of (a) reasonable out-of-pocket expenses and fees relating to such Asset Sale (including legal, accounting, brokerage and investment banking fees and sales commissions), (b) taxes paid or payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements, (c) repayment of Indebtedness that is required to be repaid in connection with such Asset Sale and (d) appropriate amounts to be provided by the Company or any Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any Subsidiary, as the case may be, after such Asset Sale, including pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale. "Obligations" means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Officer" means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary or the Controller of the Company. "Officers' Certificate" means a certificate signed by two Officers. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "Permitted Indebtedness" means, without duplication, each of the following: (i) Indebtedness under the Senior Subordinated Securities and this Indenture, and Indebtedness Incurred after the Issue Date in connection with a mandatory redemption of the Senior Subordinated Indebtedness pursuant to Section 3.08; (ii) Indebtedness Incurred pursuant to the Credit Agreement, the ESOP Credit Agreement and the Senior Notes in an aggregate principal amount at any time outstanding not to exceed (A) $7.62 million with respect to the Indebtedness under the ESOP Credit Agreement, less the amount of all mandatory principal payments, if any (excluding any such payments to the extent refinanced at the time of payment under a replaced ESOP Credit Agreement), (B) $250.0 million in the aggregate with respect to Indebtedness under the Credit Agreement, reduced 11 by any required permanent repayments, if any (which are accompanied by a corresponding permanent commitment reduction), thereunder and (C) $22.5 million with respect to the Senior Notes; (iii) Other Indebtedness of the Company and its Subsidiaries outstanding on the Issue Date (after giving effect to the Acquisition), including the Junior Subordinated Notes and bank overdrafts and any indebtedness with respect to the 11 1/2% Notes not repurchased, reduced by the amount of any scheduled amortization payments or mandatory prepayments when actually paid or permanent reductions thereon; (iv) Interest Swap Obligations of the Company covering Indebtedness of the Company or any of its Subsidiaries and Interest Swap Obligations of any Subsidiary of the Company covering Indebtedness of such Subsidiary; provided, however, that (x) such Interest Swap Obligations are designed to protect the Company and its Subsidiaries from fluctuations in interest rates on Indebtedness Incurred in accordance with the Indenture (and are used for bona fide hedging, and not speculative, purposes); and (y) the notional principal amount of such Interest Swap Obligation does not exceed the principal amount of the Indebtedness to which such Interest Swap Obligation relates at the time entered into; (v) Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements (i) are designed to protect against fluctuations in currency value (and are used for bona fide hedging, and not speculative, purposes) and (ii) do not increase the Indebtedness of the Company and its Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; (vi) Indebtedness of a Wholly Owned Subsidiary of the Company to the Company or to a Wholly Owned Subsidiary of the Company for so long as such Indebtedness is held by the Company or a Wholly Owned Subsidiary of the Company, in each case subject to no Lien held by a Person other than the Company or a Wholly Owned Subsidiary of the Company other than a Lien required under the Credit Agreement; provided that if as of any date any Person other than the Company or a Wholly Owned Subsidiary of the Company owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the Incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer of such Indebtedness; (vii) Indebtedness of the Company to a Wholly Owned Subsidiary of the Company for so long as such Indebtedness is held by a Wholly Owned Subsidiary of the Company, in each case subject to no Lien other than a Lien required under the Credit Agreement; provided that (a) any Indebtedness of the Company to any 12 Wholly Owned Subsidiary of the Company is unsecured and subordinated, pursuant to a written agreement, to the Company's obligations under the Indenture and the Senior Subordinated Securities and (b) if as of any date any Person other than a Wholly Owned Subsidiary of the Company owns or holds any such Indebtedness or any Person holds a Lien in respect of such Indebtedness, such date shall be deemed the Incurrence of Indebtedness not constituting Permitted Indebtedness by the Company; (viii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten business days of Incurrence; (ix) Indebtedness of the Company or any of its Subsidiaries represented by letters of credit for the account of the Company or such Subsidiary, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business; (x) Refinancing Indebtedness; (xi) Indebtedness Incurred by the Company or any Subsidiary of the Company in connection with the purchase or improvement of property (real or personal) or equipment or other capital expenditures in the ordinary course of business or consisting of Capitalized Lease Obligations, provided that (i) at the time of the Incurrence thereof, such Indebtedness, together with any other Indebtedness Incurred during the most recently completed four fiscal quarter period in reliance upon this clause (xi) does not exceed, in the aggregate, 3% of the net sales of the Company and the Subsidiaries during the most recently completed four fiscal quarter period on a consolidated basis (calculated on a pro forma basis if the date of Incurrence is prior to the end of the fourth fiscal quarter following the Issue Date) and (ii) such Indebtedness, together with all then outstanding Indebtedness Incurred in reliance upon this clause (xi) does not exceed, in the aggregate, 3% of the aggregate net sales of the Company and its Subsidiaries during the most recently completed twelve fiscal quarter period on a consolidated basis (calculated on a pro forma basis if the date of Incurrence is prior to the end of the twelfth fiscal quarter following the Issue Date); (xii) Indebtedness arising from agreements of the Company or a Subsidiary of the Company providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the disposition of any business, assets or Subsidiary, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum 13 aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and the Subsidiary in connection with such disposition; (xiii) Obligations in respect of performance bonds and completion guarantees provided by the Company or any Subsidiary of the Company in the ordinary course of business; (xiv) Guarantees by the Company or a Subsidiary of the Company of Indebtedness Incurred by the Company or a Subsidiary of the Company so long as the Incurrence of such Indebtedness by the Company or any such Subsidiary of the Company is otherwise permitted by the terms of the Indenture; (xv) the Junior Subordinated Notes; (xvi) Indebtedness Incurred by the Company or any Subsidiary of the Company in exchange for the use of Traits as collateral made in the ordinary course of business to financial institutions which Indebtedness has a value of no less than 90% of face value of such Traits; (xvii) Indebtedness of the Company or a Subsidiary of the Company to a Subsidiary of the Company that is not a Wholly Owned Subsidiary in the aggregate principal amount not to exceed at any one time $10.0 million; provided that if as of any date any Person other than a Subsidiary of the Company that is not a Wholly Owned Subsidiary owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the Incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer of such Indebtedness; and (xviii) $10.0 million of other indebtedness of the Company or any of its Subsidiaries (which amount may, but need not, be Incurred in whole or in part under the Credit Agreement). "Permitted Investments" means: (i) Investments by the Company or any Subsidiary of the Company in any Person that is or will become immediately after such Investment a Wholly Owned Subsidiary of the Company or that will merge or consolidate into the Company or a Wholly Owned Subsidiary of the Company; (ii) Investments in the Company by any Subsidiary of the Company; provided that any Indebtedness evidencing such Investment is unsecured and subordinated, pursuant to a written agreement and to the same extent that the Senior Subordinated Securities are subordinated to Senior Debt, to the Company's obligations under the Senior Subordinated Securities and this Indenture; (iii) Investments in cash and Cash Equivalents; (iv) loans and advances to employees and officers of the Company and its Subsidiaries in the ordinary course of business for bona fide business purposes; (v) Currency Agreements and Interest Swap Obligations entered into in the ordinary course of the Company's or its Subsidiaries' businesses and otherwise in compliance with this Indenture; (vi) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or 14 similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers; (vii) Investments made by the Company or its Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with the provisions of Section 4.06; (viii) Investments existing on the Issue Date; (ix) Investments in an African Subsidiary in an aggregate amount not to exceed $2.0 million for which the Company is committed on the Issue Date; and (x) additional Investments in an aggregate amount not exceeding $5.0 million. "Permitted Liens" means the following types of Liens: (i) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Company or its Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP; (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law Incurred in the ordinary course of business for sums not yet delinquent for a period of more than 60 days or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof; (iii) Liens Incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security; (iv) Liens securing letters of credit issued in the ordinary course of business consistent with past practice in connection with the items referred to in clause (iii), or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (v) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired; (vi) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the ordinary conduct of the business of the Company or any of its Subsidiaries; (vii) any interest or title of a lessor under any Capitalized Lease Obligation: provided that such Liens do not extend to any property or assets which is not leased property subject to such Capitalized Lease Obligation; 15 (viii) purchase money Liens to finance property or assets of the Company or any Subsidiary of the Company acquired in the ordinary course of business; provided, however, that (A) the related purchase money Indebtedness shall not exceed the cost of such property or assets and shall not be secured by any property or assets of the Company or any Subsidiary of the Company other than the property and assets so acquired and (B) the Lien securing such Indebtedness shall be created within 90 days of such acquisition: (ix) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; (x) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof; (xi) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or any of its Subsidiaries, including rights of offset and set-off; (xii) Liens securing Interest Swap Obligations which Interest Swap Obligations relate to Indebtedness that is otherwise permitted under the Indenture; (xiii) Liens securing Indebtedness under Currency Agreements; (xiv) Liens securing Acquired Indebtedness Incurred in accordance with the provisions of Section 4.03; provided that (A) such Liens secured such Acquired Indebtedness at the time of and prior to the Incurrence of such Acquired Indebtedness by the Company or a Subsidiary of the Company and were not granted in connection with, or in anticipation of, the Incurrence of such Acquired Indebtedness by the Company or a Subsidiary of the Company and (B) such Liens do not extend to or cover any property or assets of the Company or of any of its Subsidiaries other than the property or assets that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Company or a Subsidiary of the Company and are no more favorable to the lienholders than those securing the Acquired Indebtedness prior to the Incurrence of such Acquired Indebtedness by the Company or a Subsidiary of the Company: (xv) Leases or subleases granted to others not interfering in any material respect with the business of the Company or any of its Subsidiaries: (xvi) Any interest or title of a lessor in the property subject to any lease, whether characterized as capitalized or operating other than any such interest or title resulting from or arising out of a default by the Company or any of its Subsidiaries of its obligations under such lease; 16 (xvii) Liens arising from filing UCC financing statements for precautionary purposes in connection with true leases of personal property that are otherwise permitted under the Indenture and under which the Company or any of its Subsidiaries is lessee; (xviii) Liens placed on Traits used as collateral in exchange for loans provided to the Company or its Subsidiaries; and (xix) Liens in favor of the Trustee and any substantially equivalent Lien granted to any trustee or similar institution under any indenture governing Indebtedness permitted to be Incurred or outstanding under the Indenture. "Person" means an individual, partnership, corporation, unincorporated organization. trust or joint venture, or a governmental agency or political subdivision thereof. "Preferred Stock" of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation. "Purchase Agreement" means the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of June 19, 1998, between the Company and Schlumberger, as amended by the letter agreements dated July 21, 1998, July 31, 1998 and August 28, 1998 and by Amendment No. 1 thereto dated September 30, 1998. "Qualified Capital Stock" means any Capital Stock of the Company that is not Disqualified Capital Stock. "Refinance" means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. "Refinanced" and "Refinancing" have correlative meanings. "Refinancing Indebtedness" means any Refinancing by the Company or any Subsidiary of the Company of Indebtedness Incurred in accordance with the provisions of Section 4.03 (other than pursuant to clause (iv), (v), (vi), (vii), (viii), (ix), (xi) or (xvi) of the definition of Permitted Indebtedness), in each case that does not (1) result in an increase in the aggregate principal amount of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium or penalty required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable fees and expenses incurred by the Company in connection with such Refinancing) or (2) create Indebtedness with (A) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that (x) if such Indebtedness being Refinanced is Indebtedness of the Company, then such Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if such Indebtedness being Refinanced is subordinate or junior to the Senior Subordinated Securities, then such Refinancing Indebtedness shall be subordinate to the 17 Senior Subordinated Securities at least to the same extent and in the same manner as the Indebtedness being Refinanced. "Registration Rights Agreement" means the Registration Rights Agreement dated as of September 30, 1998, among the Company, the Initial Guarantors and Schlumberger, as such agreement may be amended, modified, or supplemented from time to time in accordance with the terms thereof. "Representative" means the indenture trustee or other trustee, agent or representative in respect of any Designated Senior Debt; provided that if, and for so long as, any Designated Senior Debt lacks such a representative, then the Representative for such Designated Senior Debt shall at all times constitute the holders of a majority in outstanding principal amount of such Designated Senior Debt in respect of any Designated Senior Debt. "Restricted Securities Legend" means the legend set forth in Exhibit A. "Roll-Over Notes" means any of the Company's Increasing Rate Senior Subordinated Notes due 2007 issued upon the Stated Maturity of the Senior Subordinated Notes pursuant to the provisions of the Securities Purchase Agreement and this Indenture. "Sale and Leaseback Transaction" means any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to the Company or a Subsidiary of any property, whether owned by the Company or any Subsidiary at the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or such Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such Property. "Securities Act" means the Securities Act of 1933, as amended, or any successor statute or statutes thereto. "Securities Purchase Agreement" means the Securities Purchase Agreement, dated as of September 30, 1998 between the Company and Schlumberger providing for the issuance by the Company of (i) the Senior Subordinated Securities, (ii) the Junior Subordinated Notes and (iii) the Warrants. "Senior Debt" means, the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other Obligations with respect to, any Indebtedness of the Company, whether outstanding on the Issue Date or thereafter created, Incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Senior Subordinated Securities. Without limiting the generality of the foregoing, "Senior Debt" shall also include the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under 18 applicable law) on, and all other monetary obligations of the Company owing in respect of, (x) the Credit Agreement, the ESOP Credit Agreement and the Senior Notes, including obligations to pay principal and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities, (y) all Interest Swap Obligations and (z) Currency Agreements, in each case whether outstanding on the Issue Date or thereafter Incurred. Notwithstanding the foregoing, "Senior Debt" shall not include (i) any Indebtedness of the Company to a Subsidiary of the Company, (ii) Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer or employee of the Company or any Subsidiary of the Company (including, without limitation, amounts owed for compensation), (iii) Indebtedness to trade creditors and other amounts Incurred in connection with obtaining goods, materials or services, (iv) Indebtedness represented by Disqualified Capital Stock, (v) any liability for federal, state, local or other taxes owed or owing by the Company, (vi) Indebtedness Incurred in violation of the provisions of Section 4.03, (vii) Indebtedness which, when Incurred and without respect to any election under Section 1111(b) of Title 11, United States Code, is without recourse to the Company and (viii) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of the Company, other than the Senior Notes. "Senior Subordinated Securities" has the meaning stated in the recital of this Indenture and more particularly means any Senior Subordinated Securities authenticated and delivered under this Indenture. For all purposes of this Indenture, the term "Senior Subordinated Securities" shall include any Roll-Over Notes to be issued and exchanged for any Senior Subordinated Notes, and any Exchange Notes to be issued and exchanged for any Roll-Over Notes, pursuant to this Indenture, the Securities Purchase Agreement or the Registration Rights Agreement. "Significant Subsidiary" shall have the meaning set forth in Rule 1.02(v) of Regulation S-X under the Securities Act. "Schlumberger" means Schlumberger Limited, a Netherlands Antilles corporation. "Stated Maturity" means, with respect to any installment of interest or principal on any Senior Subordinated Securities, the date on which such payment of interest or principal was scheduled to be paid pursuant hereto, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date scheduled for the payment thereof. "Subordinated Indebtedness" means any Indebtedness of the Company or any Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is subordinate or junior in right of payment to the Senior Subordinated Securities or the applicable Subsidiary Guarantee pursuant to written agreement. "Subsidiary," with respect to any Person, means (i) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person or (ii) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person. 19 "Subsidiary Guarantee" shall mean any Guarantee of the Senior Subordinated Securities by any Guarantor pursuant to Article XI. "Subsidiary Guarantors" means any Subsidiary of the Company which Guarantees the Senior Subordinated Securities pursuant to Article XI. "TIA" means the Trust Indenture Act of 1939, as amended and as in effect on the date of this Indenture. "Traits" means accounts receivable sold without recourse. "Transfer Restricted Securities" means Senior Subordinated Securities that bear or are required to bear the Restricted Securities Legend. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Warrants" means the warrants to purchase shares of Common Stock of the Company issued pursuant to the Warrant Agreement and the Securities Purchase Agreement in partial payment of the purchase price under the Purchase Agreement. "Warrant Agreement" means the Warrant Agreement dated as of September 30, 1998 between the Company and Schlumberger. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment. "Wholly Owned Subsidiary" of any Person means any Subsidiary of such Person of which all the outstanding voting securities (other than in the case of a foreign Subsidiary, directors' qualifying shares or an immaterial amount of shares required to be owned by other Persons pursuant to applicable law) are owned by such Person or any Wholly Owned Subsidiary of such Person. SECTION 1.02. Other Definitions. 20
Term Defined in Section -------------------------------- ----------------------------------------- "Affiliate Transaction"................................4.07 "Agent Members"........................................2.13(a) "Bankruptcy Law".......................................6.01 "Blockage Period".....................................10.03, 12.03 "Change of Control Offer"..............................4.08(a) "Change of Control Payment Date".......................4.08(c) "Covenant Defeasance"..................................8.01(c) "CUSIP"................................................2.12 "Default Notice"......................................10.03, 12.03 "Event of Default".....................................6.01 "Net Proceeds Offer"...................................4.06(a) "Guaranteed Obligations"..............................11.01 "Incur"................................................4.03 "Indemnified Party"....................................7.07 "Legal Defeasance".....................................8.01(b) "Legal Holiday".......................................13.08 "Net Proceeds Offer Trigger Date"......................4.06 "Notice of Default"....................................6.01 "outstanding"..........................................8.01(b) "Paying Agent".........................................2.03 "Net Proceeds Offer"...................................4.06(a) "Net Proceeds Offer Amount"............................4.06 "Net Proceeds Offer Payment Date"......................4.06 "Net Proceeds Trigger Date"............................4.06 "Reference Date".......................................4.04 "Registrar"............................................2.03 "Replacement Assets"...................................4.06(a) "Restricted Payments"..................................4.04(a) "Securities Register"..................................2.06 "Senior Subordinated Notes".....................Recitals "Surviving Entity".....................................5.01 "Trustee"..............................................8.03
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC. "indenture securities" means the Senior Subordinated Securities. 21 "indenture security holder" means a Holder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company and any other obligor on the Senior Subordinated Securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule and not otherwise defined herein have the meanings assigned to them by such definitions. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; (5) words in the singular include the plural and words in the plural include the singular; and (6) "herein", "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. ARTICLE II THE SENIOR SUBORDINATED SECURITIES ---------------------------------- SECTION 2.01. Form and Dating; Issuance. (a) The Senior Subordinated Notes issued on the date hereof and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture, and as otherwise provided in this Article II. Any Roll-Over Notes and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit B, which is hereby incorporated in and expressly made a part of this Indenture, and as otherwise provided in this Article II. Any Exchange Notes and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit C, which is hereby incorporated in and expressly made a part of this Indenture, and as otherwise provided in this Article II. The Senior Subordinated Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company or any Guarantor is subject, if any, or usage. Each Senior Subordinated Security shall be dated the date of its authentication. The terms of the Senior Subordinated Securities set forth in Exhibit A, Exhibit B and Exhibit C are part of the terms of 22 this Indenture. The Senior Subordinated Securities shall be issuable only in registered form without coupons of $1,000 and integral multiples thereof, or, in the case of Additional Roll-Over Notes or Additional Exchange Notes, $100 or any integral multiple thereof (or any lesser amount to the extent necessary). (b) The Senior Subordinated Notes are being issued by the Company pursuant to the Securities Purchase Agreement in partial satisfaction of its payment obligations under to the Purchase Agreement. Upon initial issuance, the Senior Subordinated Notes may be represented by certificates registered in the names of the Holders or by one or more Global Senior Subordinated Securities. The aggregate principal amount of any Global Senior Subordinated Security may from time to time be increased or decreased by adjustments made on the records of the Trustee as Custodian. (c) On the Issue Date, the Company will issue, and the Trustee will authenticate in accordance with Section 2.02, the Senior Subordinated Notes in an aggregate principal amount of $170,000,000. (d) If the Company fails to refinance the Senior Subordinated Notes on or prior to the Initial Maturity Date, the Holders, subject to the provisions of this Section 2.01(d), on the Initial Maturity Date will exchange their Senior Subordinated Notes for Roll-Over Notes in an equal aggregate principal amount and the Company will issue, and the Trustee will authenticate in accordance with Section 2.02, Roll-Over Notes in an original aggregate principal amount of $170,000,000. The obligation of the Holders to exchange their Senior Subordinated Notes for Roll-Over Notes is subject to the following conditions: (i) the Company shall have paid in full in cash all interest accrued on the Senior Subordinated Notes through the Initial Maturity Date; (ii) no Default or Event of Default under Section 6.01(f) or (g) shall have occurred and be continuing; and (iii) no Default or Event of Default under Section 6.01(d) or (e) shall have occurred and be continuing. (e) At such time as an Exchange Offer Registration Statement has been declared effective by the Commission and an Exchange Offer has been consummated as contemplated by the Registration Rights Agreement, the Company will issue, and the Trustee will authenticate in accordance with Section 2.02, Exchange Notes in an aggregate principal amount equal to the principal amount of Roll- Over Notes surrendered for exchange as contemplated by the Registration Rights Agreement. SECTION 2.02. Execution and Authentication. One or more Officers of the Company shall sign the Senior Subordinated Securities by manual or facsimile signature. If an Officer whose signature is on a Senior Subordinated Security no longer holds that office at the time the Trustee authenticates the Senior Subordinated Security, the Senior Subordinated Security shall be valid nevertheless. A Senior Subordinated Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Senior Subordinated Security. The 23 signature shall be conclusive evidence that the Senior Subordinated Security has been authenticated under this Indenture. The Trustee shall authenticate and make available for delivery upon a written order of the Company signed by two of its Officers (1) Senior Subordinated Notes for original issue on the date hereof in an aggregate principal amount of $170,000,000, (2) subject to Section 2.01(d), Roll-Over Notes in an aggregate principal amount of up to $170,000,000 and (3) subject to Section 2.01(e), Exchange Notes issued upon surrender of an equal aggregate principal amount of Roll-Over Notes pursuant to the Registration Rights Agreement in an Exchange Offer. Such order shall specify the amount of the Senior Subordinated Securities to be authenticated, the date on which the original issue of Senior Subordinated Securities is to be authenticated and whether the Senior Subordinated Securities are to be Senior Subordinated Notes, Roll-Over Notes or Exchange Notes. In the case of a written order of the Company relating to the issuance of Additional Roll-Over Notes or Additional Exchange Notes, such written order shall also demonstrate the computation of the principal amount of Additional Roll-Over Notes or Additional Exchange Notes issuable to each Holder. The aggregate principal amount of Senior Subordinated Notes outstanding at any time may not exceed $170,000,000. The aggregate principal amount of Roll-Over Notes or Exchange Notes at any time outstanding may not exceed the sum of (i) $170,000,000 plus (ii) the aggregate principal amount of Additional Roll-Over Notes or Additional Exchange Notes issued by the Company pursuant to the terms hereof in respect of interest in excess of 12% per annum accrued on outstanding Roll-Over Notes or Exchange Notes (including outstanding Additional Roll-Over Notes and Additional Exchange Notes). The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Senior Subordinated Securities. Any such appointment shall be evidenced by an instrument signed by a Trust Officer of the Trustee, a copy of which shall be furnished to the Company. Unless limited by the terms of such appointment, an authenticating agent may authenticate Senior Subordinated Securities whenever the Trustee may do so. After any such appointment, each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an office or agency where Senior Subordinated Securities may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Senior Subordinated Securities may be presented for payment (the "Paying Agent"). The Company may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be 24 entitled to appropriate compensation therefor pursuant to Section 7.07. The Company may act as Paying Agent, Registrar, co-registrar or transfer agent. The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Senior Subordinated Securities. The Company initially appoints The Depository Trust Company to act as Depository with respect to the Global Senior Subordinated Securities, and the Trustee shall initially be the Senior Subordinated Securities Custodian with respect to the Global Senior Subordinated Securities. The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee, provided that no such removal shall become effective until (1) acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (2) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (1) above. The Registrar or Paying Agent may resign at any time upon not less than three Business Days' prior written notice to the Company; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08. SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due date of the principal and interest on any Senior Subordinated Security, the Company shall deposit with the Paying Agent (or if the Company is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Senior Subordinated Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Senior Subordinated Securities and shall notify the Trustee in writing of any default by the Company in making any such payment within one Business Day thereof. If the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section 2.04, the Paying Agent shall have no further liability for the money delivered to the Trustee. Any money deposited with any Paying Agent, or then held by the Company in trust for the payment of principal or interest on any Senior Subordinated Security and remaining unclaimed for two years after such principal and interest has become due and payable shall be paid to the Company at its request, or, if then held by the Company, shall be discharged from such trust; and the Senior Subordinated Securityholders shall thereafter, as general unsecured creditors, look only to the Company for payment thereof, and all liability of the Paying Agent with respect to such money, and all liability of the Company as trustee thereof, shall thereupon cease. 25 SECTION 2.05. Senior Subordinated Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of Senior Subordinated Securities. If the Trustee is not the Registrar, the Company shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Senior Subordinated Securities. SECTION 2.06. Registration of Transfer and Exchange. The Senior Subordinated Securities shall be issued in registered form only. The Company shall cause to be kept at the principal corporate trust office of the Trustee a register (the "Securities Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Senior Subordinated Securities and the registration of transfer of Senior Subordinated Securities entitled to be registered or transferred as herein provided. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Senior Subordinated Securities at the Registrar's or co-registrar's request. The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any registration of transfer or exchange pursuant to this Section 2.06. The Company shall not be required to make, and the Registrar need not register, transfers or exchanges of Senior Subordinated Securities selected for redemption (except, in the case of Senior Subordinated Securities to be redeemed in part, the portion thereof not to be redeemed) or transfers or exchanges of any Senior Subordinated Securities for a period of 15 days before a selection of Senior Subordinated Securities to be redeemed. Prior to the due presentation for registration of transfer of any Senior Subordinated Security, the Company, the Guarantors, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the Person in whose name a Senior Subordinated Security is registered as the absolute owner of such Senior Subordinated Security for the purpose of receiving payment of principal of and accrued and unpaid interest on such Senior Subordinated Security and for all other purposes whatsoever, whether or not such Senior Subordinated Security is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary. Any Holder of a Global Senior Subordinated Security shall, by acceptance of such Global Senior Subordinated Security, agree that transfers of beneficial interests in such Global Senior Subordinated Security may be effected only through the Depository, in accordance with the provisions of this Indenture and such Depository's usual procedures. All Senior Subordinated Securities issued upon any registration of transfer or exchange pursuant to this Section 2.06 will evidence the same debt and will be entitled to the same benefits under this Indenture as the Senior Subordinated Securities surrendered upon such registration of transfer or exchange. SECTION 2.07. Replacement Senior Subordinated Securities. If a mutilated Senior Subordinated Security is surrendered to the Registrar or if the Holder of a Senior Subordinated 26 Security claims that the Senior Subordinated Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Senior Subordinated Security if the Holder satisfies any reasonable requirements of the Trustee and the Company including evidence of the destruction, loss or theft of the Senior Subordinated Security. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss that any of them may suffer if a Senior Subordinated Security is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Senior Subordinated Security, including the payment of a sum sufficient to cover any tax or other governmental charge that may be required. In the event any such mutilated, lost, destroyed or wrongfully taken Senior Subordinated Security has become or is about to become due and payable, the Company in its discretion may pay such Senior Subordinated Security instead of issuing a new Senior Subordinated Security in replacement thereof. Every replacement Senior Subordinated Security is an additional obligation of the Company. The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Senior Subordinated Securities. SECTION 2.08. Outstanding Senior Subordinated Securities. The Senior Subordinated Securities outstanding at any time are all Senior Subordinated Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.08 as not outstanding. A Senior Subordinated Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Senior Subordinated Security. If a Senior Subordinated Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Senior Subordinated Security is held by a protected purchaser (as defined in Article 8 of the Uniform Commercial Code). If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Senior Subordinated Securities (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders of Senior Subordinated Securities on that date pursuant to the terms of this Indenture, then on and after that date such Senior Subordinated Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue. SECTION 2.09. Temporary Senior Subordinated Securities. Until definitive Senior Subordinated Securities and Global Senior Subordinated Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Senior Subordinated Securities. Temporary Senior Subordinated Securities shall be substantially in the form of 27 definitive Senior Subordinated Securities but may have variations that the Company considers appropriate for temporary Senior Subordinated Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Senior Subordinated Securities and deliver them in exchange for temporary Senior Subordinated Securities upon surrender of such temporary Senior Subordinated Securities at the office or agency of the Company, without charge to the Holder. SECTION 2.10. Cancellation. The Company at any time may deliver Senior Subordinated Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Senior Subordinated Securities surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Senior Subordinated Securities surrendered for registration of transfer, exchange, payment or cancellation and deliver canceled Senior Subordinated Securities to the Company pursuant to written direction by an Officer of the Company. The Company may not issue new Senior Subordinated Securities to replace Senior Subordinated Securities that have been redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Senior Subordinated Securities in place of canceled Senior Subordinated Securities other than pursuant to the terms of this Indenture. SECTION 2.11. Defaulted Interest. If the Company defaults in a payment of interest on the Senior Subordinated Securities, the Company shall pay the defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the persons who are Holders of Senior Subordinated Securities on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or cause to be mailed to each Holder of Senior Subordinated Securities a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. The Company may make payment of any defaulted interest in any other lawful manner not inconsistent with the requirements (if applicable) of any securities exchange on which the Senior Subordinated Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this paragraph, such manner of payment shall be deemed practicable by the Trustee. SECTION 2.12. CUSIP Numbers. The Company in issuing the Senior Subordinated Securities may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Senior Subordinated Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Senior Subordinated Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. SECTION 2.13. Book-Entry Provisions for Global Senior Subordinated Securities. If the Senior Subordinated Securities are issued in the form of a Global Senior Subordinated Security, the following provisions shall apply: 28 (a) Each Global Senior Subordinated Security initially shall (i) be registered in the name of the Depository for such Global Senior Subordinated Security or the nominee of such Depository and (ii) be delivered to the Trustee as the initial Custodian for such Depository. Beneficial interests in Global Senior Subordinated Securities may be held indirectly through members of or participants in ("Agent Members") the Depository). Agent Members shall have no rights under this Indenture with respect to any Global Senior Subordinated Security held on their behalf by the Depository, or the Trustee as Custodian, or under such Global Senior Subordinated Security, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Senior Subordinated Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or shall impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Senior Subordinated Security. (b) Transfers of a Global Senior Subordinated Security shall be limited to transfers of such Global Senior Subordinated Security in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in a Global Senior Subordinated Security may be transferred in accordance with the rules and procedures of the Depository (and Agent Member, if applicable) and the provisions of Section 2.14. The Trustee shall register the transfer of Senior Subordinated Securities to all beneficial owners in exchange for their beneficial interests in a Global Senior Subordinated Security if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Senior Subordinated Security or the Depository ceases to be a clearing agency registered under the Exchange Act, at a time when the Depository is required to be so registered in order to act as Depository, and in each case a successor Depository is not appointed by the Company within 90 days of such notice or, (ii) the Company executes and delivers to the Trustee and Registrar an Officers' Certificate stating that such Global Senior Subordinated Security shall be so exchangeable or (iii) an Event of Default has occurred and is continuing and the Registrar has received a request from the Depository to permit such transfers. SECTION 2.14. Special Transfer Provisions. Unless and until a Transfer Restricted Security is transferred or exchanged under an effective registration statement under the Securities Act, the following provisions shall apply: (a) Upon the transfer, exchange or replacement of Senior Subordinated Securities not bearing the Restricted Securities Legend, the Registrar shall deliver Senior Subordinated Securities that do not bear the Restricted Securities Legend. Upon the transfer, exchange or replacement of Senior Subordinated Securities bearing the Restricted Securities Legend, the Registrar shall deliver only Senior Subordinated Securities that bear the Restricted Securities Legend unless there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. 29 (b) By its acceptance of any Senior Subordinated Security bearing the Restricted Securities Legend, each Holder of such a Senior Subordinated Security acknowledges that transfer of such Senior Subordinated Security may be restricted pursuant to the provisions of the Securities Act as set forth in the Restricted Securities Legend and agrees that it shall transfer such Senior Subordinated Security only in a transaction that is exempt from the registration requirements of the Securities Act. ARTICLE III REDEMPTION ---------- SECTION 3.01. Notices to Trustee. If the Company elects to redeem Senior Subordinated Securities pursuant to Section 3.07 or is required to redeem Senior Subordinated Securities pursuant to Section 3.08, it shall notify the Trustee in writing of the redemption date, the principal amount of Senior Subordinated Securities to be redeemed and the paragraph of the Senior Subordinated Securities pursuant to which the redemption will occur. The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 60 days before the redemption date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers' Certificate and an Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. SECTION 3.02. Selection. If less than all of the Senior Subordinated Securities are to be redeemed at any time, selection of Senior Subordinated Securities for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Senior Subordinated Securities are listed, or, if the Senior Subordinated Securities are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Senior Subordinated Security of $1,000 or less shall be redeemed in part. If any Senior Subordinated Security is to be redeemed in part only, the notice of redemption that relates to such Senior Subordinated Security shall state the portion of the principal amount thereof to be redeemed. On and after the redemption date, interest ceases to accrue on Senior Subordinated Securities or portions of them called for redemption. SECTION 3.03. Notice. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Senior Subordinated Securities to be redeemed at its registered address. Notices of redemption may not be conditional. The Trustee shall notify the Company promptly of the Senior Subordinated Securities or portions of Senior Subordinated Securities to be redeemed. The notice shall identify the Senior Subordinated Securities to be redeemed and shall state: (1) the redemption date; 30 (2) the redemption price; (3) the name and address of the Paying Agent; (4) that Senior Subordinated Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) if fewer than all the outstanding Senior Subordinated Securities are to be redeemed, the certificate numbers and principal amounts of the particular Senior Subordinated Securities to be redeemed; (6) that, unless the Company defaults in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Senior Subordinated Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (7) the paragraph of the Senior Subordinated Securities pursuant to which the Senior Subordinated Securities called for redemption are being redeemed; (8) the CUSIP number, if any, printed on the Senior Subordinated Securities being redeemed; and (9) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Senior Subordinated Securities. At the Company's request (which may be revoked at any time in writing prior to the time at which the Trustee shall have given such notice to the Holders), the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. In such event, the Company shall provide the Trustee with the information required by this Section 3.03. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed, Senior Subordinated Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Senior Subordinated Securities shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date; provided that if the redemption date is after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Holder of the redeemed Senior Subordinated Securities registered on the relevant record date. If mailed in the manner herein, the notice shall be conclusively presumed to have been given whether or not the Holder receives such notice. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Senior Subordinated Securities to be redeemed on the redemption date other than 31 Senior Subordinated Securities or portions of Senior Subordinated Securities called for redemption that have been delivered by the Company to the Trustee for cancellation. SECTION 3.06. Senior Subordinated Securities Redeemed in Part. Upon surrender of a Senior Subordinated Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company's expense) a new Senior Subordinated Security equal in principal amount to the unredeemed portion of the Senior Subordinated Security surrendered. SECTION 3.07. Optional Redemption. The Senior Subordinated Securities may be redeemed at any time, in whole or in part, at the option of the Company at a redemption price equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). SECTION 3.08. Mandatory Redemption. If after the Issue Date the Company or any of its Subsidiaries shall Incur any Indebtedness, other than Indebtedness Incurred under the Credit Agreement, or shall issue any Capital Stock, the Company shall redeem Senior Subordinated Securities in an aggregate principal amount equal to the principal amount of the Indebtedness so Incurred or the total price at which such Capital Stock was sold. The redemption price of the Senior Subordinated Securities so redeemed shall be equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date. ARTICLE IV COVENANTS --------- SECTION 4.01. Payment of Senior Subordinated Securities. The Company shall promptly pay the principal of and interest on the Senior Subordinated Securities on the dates and in the manner provided in the Senior Subordinated Securities and in this Indenture (including the payment of interest on the Roll- Over Notes or the Exchange Notes by the delivery of Additional Roll-Over Notes or Additional Exchange Notes as contemplated herein and in the Indenture). Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent (but only if other than the Company) holds by 10:00 a.m., New York City time, in accordance with this Indenture available funds (or Additional Roll-Over Notes or Additional Exchange Notes, in the case of interest in excess of 12% per annum) sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders of Senior Subordinated Securities on that date pursuant to the terms of this Indenture. The Company shall pay interest on overdue principal at the rate specified therefor in the Senior Subordinated Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. SECTION 4.02. Reports. The Company will deliver to the Trustee, within 15 day after the filing of the same with the Commission, copies of the quarterly and annual reports and of the 32 information, documents and other reports, if any, which the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the Commission, to the extent permitted, and provide the Trustee and Holders with such annual reports and such information, documents and other reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will also comply with the other provisions of TIA (S) 3 14(a). SECTION 4.03. Incurrence of Indebtedness. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, "Incur") any Indebtedness (other than Permitted Indebtedness): provided, however, that if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the Incurrence of any such Indebtedness the Company may Incur Indebtedness (including Acquired Indebtedness) and Subsidiaries of the Company may Incur Acquired Indebtedness, in each case if on the date of the Incurrence of such Indebtedness, after giving effect to the Incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.00 to 1.00 if Incurred on or prior to the second anniversary of the Issue Date or greater than 2.25 to 1.00 if Incurred thereafter. SECTION 4.04. Restricted Payments. The Company will not, and will not cause or permit any of its Subsidiaries to, directly or indirectly, (a) declare or pay any dividend or make any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Company) on or in respect of shares of the Company's Capital Stock, (b) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any warrants, rights or options to purchase or acquire shares of any class of such Capital Stock (other than any warrant issued by the Company in connection with the Acquisition), (c) make any Investment other than Permitted Investments) or (d) repurchase or redeem any Indebtedness junior in right of payment to the Securities Subordinated Securities, or make any cash payments of interest thereon (other than refinancing such junior Indebtedness with debt instruments having similar payment-in-kind and subordination features) (each of the foregoing actions set forth in clauses (a), (b), (c) and (d) being referred to as a "Restricted Payment"), if at the time of such Restricted Payment or immediately after giving effect thereto, (i) a Default or an Event of Default shall have occurred and be continuing, or (ii) the Company is not able to Incur at least $1.00 of additional Indebtedness other than Permitted Indebtedness) in compliance with the provisions of Section 4.03 or (iii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than cash, being the Fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company) shall exceed the sum of: (w) 50% of the cumulative Consolidated Net Earnings (or, if cumulative Consolidated Net Earnings shall be a loss, minus 100% of such loss) of the Company earned subsequent to the Issue Date and on or prior to the date the Restricted Payment occurs (the "Reference Date"), treating such period as a single accounting period; plus (x) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of 33 the Company plus (y) 100% of the net cash proceeds from the sale of Investments by the Company (other than Permitted Investments) provided that such Investment was made after the Issue Date; plus (z) without duplication of any amounts included in clause (iii)(x) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock (excluding, in the case of clauses (iii)(x) and (z), any net cash proceeds from a sale of Capital Stock of the Company to the extent utilized as provided in clause (2)(ii) of the next succeeding paragraph). Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do no prohibit: (1) the payment of any dividend within 60 days after the date of declaration of such dividend if such dividend would have been permitted on the date of declaration; or (2) the acquisition of any shares of Capital Stock of the Company, either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of the net cash proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company; or (3) dividends on, and redemptions of, the shares of the Company's preferred stock held by the trust of the Company's retirement savings plan in accordance with the terms thereof on the date of this Indenture; or (4) payments to redeem or repurchase stock or similar rights from management of the Company in connection with the repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate management employees upon the termination of employment, death or disability of any such person; provided that such redemptions or repurchases shall not exceed $1.0 million. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the immediately preceding paragraph, amounts expended pursuant to clauses (1) and (4) shall be included in such calculation. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment complies with the Indenture and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company's latest available internal quarterly financial statements. SECTION 4.05. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company will not, and will not cause or permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary of the Company to (a) pay dividends or make any other distributions on or in respect of its Capital Stock; (b) make loans or advances or to pay or guarantee any Indebtedness or other obligation owed to the Company or any other Subsidiary of the Company, provided that the terms of the Credit Agreement may restrict loans or advances from the Company and those of its Subsidiaries that are borrowers under the Credit Agreement to any of the Company's Subsidiaries that are not borrowers under the Credit Agreement or Guarantees by the Company or Subsidiaries of the Company that are borrowers under the Credit Agreement of any Indebtedness or other obligation owed by any of the Company's Subsidiaries that are not borrowers under the Credit Agreement; or (c) transfer any of its property or assets to the Company or any other Subsidiary of the Company, except for such encumbrances or 34 restrictions existing under or by reason of: (1) applicable law; (2) this Indenture; (3) customary non-assignment provisions of any contract or any lease governing a leasehold interest of any Subsidiary of the Company; (4) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired; (5) agreements existing on the Issue Date to the extent and in the manner such agreements are in effect on the Issue Date; (6) the Credit Agreement or the ESOP Credit Agreement; or (7) an agreement governing Indebtedness Incurred to Refinance the Indebtedness issued, assumed or Incurred pursuant to an agreement referred to in clause (2), (4) or (5) above; provided, however, that the provisions relating to such encumbrance or restriction contained in any such Refinancing Indebtedness are no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clause (2), (4) or (5). SECTION 4.06. Asset Sales. (a) The Company will not, and will not permit any of its Subsidiaries to, consummate an Asset Sale unless (i) the Company or the applicable Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of (as determined in good faith by the Company's Board of Directors), (ii) with respect to Asset Sales by the Company or any Wholly Owned Subsidiary of the Company, at least 80% of the consideration received by the Company or such Subsidiary, as the case may be, from such Asset Sale shall be in the form of cash or Cash Equivalents and is received at the time of such disposition and (iii) upon the consummation of an Asset Sale, the Company shall apply, or cause such Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof (A) to prepay any Senior Debt or Indebtedness of any Subsidiary of the Company, (B) to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties or assets that will be used in the business of the Company and its Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets") or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each a "Net Proceeds Offer Amount") shall be applied by the Company or such Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Senior Subordinated Securities equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Senior Subordinated Securities to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds 35 Offer Amount equal to or in excess of $5.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5.0 million, shall be applied as required pursuant to this paragraph). (b) Notwithstanding the provisions of Section 4.06(a), the Company and its Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraph to the extent (i) at least 80% of the consideration for such Asset Sale constitutes Replacement Assets and the remainder constitutes cash or Cash Equivalents and (ii) such Asset Sale is for Fair market value; provided that any consideration not constituting Replacement Assets received by the Company or any of its Subsidiaries in connection with any Asset Sale permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of Section 4.06(a). (c) Each Net Proceeds Offer will be mailed to the record Holders as shown on the Security Register within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Senior Subordinated Securities in whole or in part in integral multiples of $1,000 in exchange for cash. To the extent Holders properly tender Senior Subordinated Securities in an amount exceeding the Net Proceeds Offer Amount, Senior Subordinated Securities of tendering Holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law. Each notice of a Net Proceeds Offer pursuant to this Section 4.06 shall be mailed or caused to be mailed, by first class mail, by the Company not more than 25 days after the Net Proceeds Offer Trigger Date to all Holders at their last registered addresses as of a date within 15 days of the mailing of such notice, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Senior Subordinated Securities pursuant to the Net Proceeds Offer and shall state the following terms: (i) that the Net Proceeds Offer is being made pursuant to this Section 4.06 and that all Senior Subordinated Securities tendered will be accepted for payment; provided, however, that if the aggregate principal amount of Senior Subordinated Securities tendered in a Net Proceeds Offer plus accrued interest at the expiration of such offer exceeds the aggregate amount of the Net Proceeds Offer, the Company shall select the Senior Subordinated Securities to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Senior Subordinated Securities in denominations of $1,000 or multiples thereof shall be purchased); (ii) the purchase price (including the amount of accrued interest) and the Net Proceeds Offer Payment Date; provided that the Net Proceeds Offer Payment Date for the Senior Subordinated Securities shall be a date subsequent to any payment dates for the purchase or other repayment of Senior Debt having similar provisions; 36 (iii) that any Note not tendered will continue to accrue interest; (iv) that unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date; (v) that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Net Proceeds Offer Payment Date; (vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than five Business Days prior to the Net Proceeds Offer Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Senior Subordinated Securities the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and (vii) that Holders whose Senior Subordinated Securities are purchased only in part will be issued new Senior Subordinated Securities in a principal amount equal to the unpurchased portion of the Senior Subordinated Securities surrendered; provided that each Note purchased and each new Note issued shall be in an original principal amount of $1,000 or integral multiples thereof, On or before the Net Proceeds Offer Payment Date, the Company shall (i) accept for payment Senior Subordinated Securities or portions thereof tendered pursuant to the Net Proceeds Offer which are to be purchased in accordance with item (c)(i) above, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price plus accrued interest, if any, of all Senior Subordinated Securities to be purchased and (iii) deliver to the Trustee Senior Subordinated Securities so accepted together with an Officers' Certificate stating the Senior Subordinated Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Senior Subordinated Securities so accepted payment in an amount equal to the purchase price plus accrued interest, if any. For purposes of this Section 4.06, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase of Senior Subordinated Securities pursuant to a Net Proceeds Offer shall be returned by the Trustee to the Company. (e) The Company will comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Senior Subordinated Securities pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities 37 laws or regulations conflict with the provisions of this Section 4.06, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.06 by virtue thereof. SECTION 4.07. Transactions with Affiliates. (a) The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate Transactions permitted under Section 4.07(b) and (y) Affiliate Transactions on terms that are no less favorable to the Company or such Subsidiary than those that could reasonably have been obtained in a comparable transaction at such time on an arm's-length basis from a Person that is not an Affiliate of the Company or such Subsidiary. All Affiliate Transactions (and each series of related Affiliate Transactions which are similar or part of a common plan) involving aggregate payments or other property with a fair market value in excess of $1.0 million shall be approved by the Board of Directors of the Company or such Subsidiary, as the case may be, such approval to be evidenced by a Board Resolution stating that such Board of Directors has determined that such transaction complies with the foregoing provisions. If the Company or any Subsidiary of the Company enters into an Affiliate Transaction (or a series of related Affiliate Transactions related to a common plan) that involves aggregate payments or other property with a fair market value of more than $5.0 million, the Company or such Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor and file the same with the Trustee. (b) The restrictions set forth in Section 4.07(a) shall not apply to: (i) reasonable fees and compensation paid to, and indemnity provided on behalf of, officers, directors or employees of the Company or any Subsidiary of the Company as determined in good faith by the Company's Board of Directors; (ii) transactions exclusively between or among the Company and any of its Wholly Owned Subsidiaries or exclusively between or among such Wholly Owned Subsidiaries, provided such transactions are not otherwise prohibited by the Indenture; (iii) Restricted Payments permitted by the Indenture; (iv) transactions permitted by, and complying with, the provisions of Article V; (v) transactions with distributors or other purchases or sales of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture which are fair to the Company, in the reasonable determination of the Board of Directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party; (vi) any management agreement as in effect as of the Issue Date or any amendment thereto or any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Issue Date and any similar agreements entered into after the Issue Date; and (vii) intercompany loans from the Company to any of its Subsidiaries; provided such loans are otherwise in compliance with the terms of the Indenture. 38 SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change of Control, each Holder will have the right to require that the Company purchase all or a portion of such Holder's Senior Subordinated Securities pursuant to the offer described below (the "Change of Control Offer"), at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase. (b) Prior to the mailing of the notice referred to below, but in any event within 30 days following any Change of Control, the Company will (i) repay in full all Indebtedness and terminate all commitments under the Credit Agreement and all other Senior Debt the terms of which require repayment upon a Change of Control or offer to repay in full and terminate all commitments under all Indebtedness under the Credit Agreement and all other such Senior Debt and to repay the Indebtedness owed to each lender which has accepted such offer or (ii) obtain the requisite consents under the Credit Agreement and all other Senior Debt to permit the repurchase of the Senior Subordinated Securities as provided below. (c) Within 30 days following the date upon which the Change of Control occurred (the "Change of Control Date"), the Company will send, by first class mail, a notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. The notice to the Holders shall contain all instructions and materials necessary to enable such Holders to tender Senior Subordinated Securities pursuant to the Change of Control Offer. Such notice shall state: (1) that the Change of Control Offer is being made pursuant to this Section 4.08 and that all Senior Subordinated Securities tendered and not withdrawn will be accepted for payment; (2) the purchase price (including the amount of accrued interest) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law) (the "Change of Control Payment Date"); provided that the Change of Control Payment Date for the Senior Subordinated Securities shall be a date subsequent to any payment dates for the purchase or other repayment of Senior Debt having similar provisions; (3) that any Senior Subordinated Securities not tendered will continue to accrue interest; (4) that, unless the Company defaults in making payment therefor, any Senior Subordinated Securities accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that Holders electing to have a Senior Subordinated Security purchased pursuant to a Change of Control Offer will be required to surrender the 39 Senior Subordinated Security, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Senior Subordinated Security completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than five Business Days prior to the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Senior Subordinated Securities the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Senior Subordinated Securities purchased; (7) that Holders whose Senior Subordinated Securities are purchased only in part will be issued new Senior Subordinated Securities in a principal amount equal to the unpurchased portion of the Senior Subordinated Securities surrendered; provided that each Senior Subordinated Security purchased and each new Senior Subordinated Security issued shall be in an original principal amount of $1,000 or integral multiples thereof; and (8) the circumstances and relevant facts regarding such Change of Control. On or before the Change of Control Payment Date, the Company shall (i) accept for payment Senior Subordinated Securities or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price plus accrued interest, if any, of all Senior Subordinated Securities so tendered and (iii) deliver to the Trustee Senior Subordinated Securities so accepted together with an Officers' Certificate stating the Senior Subordinated Securities or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Senior Subordinated Securities so accepted payment in an amount equal to the purchase price plus accrued interest, if any, and the Trustee shall promptly authenticate and mail to such Holders new Senior Subordinated Securities equal in principal amount to any unpurchased portion of the Senior Subordinated Securities surrendered. Any Senior Subordinated Securities not so accepted shall be promptly mailed by the Company to the Holder thereof. For purposes of this Section 4.08, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase of Senior Subordinated Securities pursuant to a Change of Control Offer shall be returned by the Trustee to the Company. (d) Neither the Board of Directors of the Company nor the Trustee may waive the provisions of this Section 4.08 relating to a Holder's right to redemption upon a Change of Control. The Company will comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Senior Subordinated Securities pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations 40 conflict with the provisions of this Section 4.08, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the provisions of this Section 4.08 by virtue thereof. SECTION 4.09. Compliance Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do have such knowledge, the certificate shall describe the Default, its status and what action the Company is taking or proposes to take with respect thereto. The Company also shall comply with Section 314(a)(4) of the TIA. SECTION 4.10. Preferred Stock of Subsidiaries. The Company will not permit any of its Subsidiaries to issue any Preferred Stock (other than to the Company or to a Wholly Owned Subsidiary of the Company) or permit any Person (other than the Company or a Wholly Owned Subsidiary of the Company) to own any Preferred Stock of any Subsidiary of the Company. SECTION 4.11. Liens. The Company will not, and will not cause or permit any of its Subsidiaries to, directly or indirectly, create, Incur, assume or permit or suffer to exist any Liens of any kind against or upon any property or assets of the Company or any of its Subsidiaries whether owned on the Issue Date or acquired after the Issue Date, or any proceeds therefrom, or assign or otherwise convey any right to receive income or profits therefrom unless (i) in the case of Liens securing Indebtedness that is expressly subordinate or junior in right of payment to the Senior Subordinated Securities, the Senior Subordinated Securities are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens and (ii) in all other cases, the Senior Subordinated Securities are equally and ratably secured, except for (A) Liens existing as of the Issue Date to the extent and in the manner such Liens are in effect on the Issue Date; (B) Liens securing Senior Debt; (C) Liens securing the Senior Subordinated Securities; (D) Liens of the Company or a Wholly Owned Subsidiary of the Company on assets of any Subsidiary of the Company; (E) Liens securing Refinancing Indebtedness which is Incurred to Refinance any Indebtedness which has been secured by a Lien permitted under the Indenture and which has been Incurred in accordance with the provisions of the Indenture; provided, however, that such Liens (x) are no less favorable to the Holders and are not more favorable to the lienholders with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced and (y) do not extend to or cover any property or assets of the Company or any of its Subsidiaries not securing the Indebtedness so Refinanced; and (F) Permitted Liens. SECTION 4.12. Additional Subsidiary Guarantees. All current and future Subsidiaries of the Company that Guarantee Indebtedness under the Credit Agreement will be Subsidiary Guarantors in accordance with the terms of this Indenture. Any future Subsidiary that Guarantees Indebtedness under the Credit Agreement shall become a Subsidiary Guarantor and shall execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit E pursuant to which such Subsidiary shall Guarantee payment of the Senior Subordinated Securities pursuant to Article XI. 41 SECTION 4.13. No Layering. The Company will not Incur or suffer to exist Indebtedness that is senior in right of payment to the Senior Subordinated Securities and subordinate in right of payment to any other Indebtedness of the Company, except that the Senior Notes may rank senior in right of payment to the Senior Subordinated Securities and junior in right of payment to the Credit Agreement. ARTICLE V SUCCESSOR COMPANY ----------------- SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets of the Company. (a) The Company will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company's assets (determined on a consolidated basis for the Company and the Company's Subsidiaries) whether as an entirety or substantially as an entirety to any Person unless: (i) either (1) the Company shall be the surviving or continuing corporation or (2) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company and of the Company's Subsidiaries substantially as an entirety (the "Surviving Entity") (x) shall be a corporation organized and validly existing under the laws of the United States or any State thereof or the District of Columbia and (y) shall expressly assume, by supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, the due and punctual payment of the principal of and interest on all of the Senior Subordinated Securities and the performance of every covenant of the Senior Subordinated Securities, the Indenture and the Registration Rights Agreement on the part of the Company to be performed or observed; (ii) immediately after giving effect to such transaction and the assumption contemplated by clause (i)(2)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness Incurred or anticipated to be Incurred in connection with or in respect of such transaction), the Company or such Surviving Entity, as the case may be, shall have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction; (iii) immediately before and immediately after giving effect to such transaction and the assumption contemplated by clause (i)(2)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness Incurred or anticipated to be Incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default shall have occurred or be continuing; and (iv) the Company or the Surviving Entity shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the applicable provisions of the Indenture and that all conditions precedent in the Indenture relating to such transaction have been satisfied. 42 (b) Upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of the Company in accordance with the provisions of Section 5.01(a), in which the Company is not the continuing corporation, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture and the Senior Subordinated Securities with the same effect as if such surviving entity had been named as such. SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All Assets of a Guarantor. No Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person (other than the Company or another Guarantor) unless: (i) the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) assumes all the obligations of such Guarantor under the Senior Subordinated Securities and this Indenture pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists; and (iii) the Guarantor or such Surviving Entity, as the case may be, shall have a Consolidated Net Worth equal to or greater than the Guarantor's or such other Person's Consolidated Net Worth, as the case may be, immediately prior to such transaction. Notwithstanding the foregoing clauses (ii) and (iii) above, (a) any Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to any Subsidiary Guarantor and (b) any Guarantor may merge with an Affiliate incorporated solely for the purpose of reincorporating such Guarantor in another jurisdiction. ARTICLE VI DEFAULTS AND REMEDIES --------------------- SECTION 6.01. Events of Default and Remedies. The following events are "Events of Default": (a) the failure to pay interest on any Senior Subordinated Securities when the same becomes due and payable and such default continues for a period of 30 days (whether or not such payment shall be prohibited by the provisions of Article X); (b) the failure to pay the principal on any Senior Subordinated Securities when such principal becomes due and payable, at maturity, upon redemption or otherwise (including the failure to make a payment to purchase Senior Subordinated Securities tendered pursuant to a Change of Control Offer or a Net Proceeds Offer), whether or not such payment shall be prohibited by the provisions of Article X; 43 (c) a default in the observance or performance of any other covenant or agreement contained in the Indenture which default continues for a period of 30 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of least 25% of the outstanding principal amount of the Senior Subordinated Securities (except in the case of a default with respect to the provisions of Article V, which will constitute an Event of Default with such notice requirement but without such passage of time requirement); (d) there shall be a default under any Indebtedness of the Company or any Subsidiary, whether such Indebtedness now exists or shall hereinafter be created, if both (A) such default either (1) results from the failure to pay any such Indebtedness at its stated final maturity or (2) relates to an obligation other than the obligation to pay such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated final maturity and (B) the amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity or the maturity of which has been so accelerated, aggregates $10.0 million or more at any one time outstanding; (e) one or more judgments in an aggregate amount in excess of $5.0 million (which are not covered by third party insurance as to which the insurer has not disclaimed coverage) shall have been rendered against the Company or any of its Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a period of 60 days after such judgment or judgments become final and non-appealable; or (f) the Company or any Subsidiary that is a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a custodian of it or for any substantial part of its property; (D) makes a general assignment for the benefit of its creditors; or takes any comparable action under any foreign laws relating to insolvency; (g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Subsidiary that is a Significant Subsidiary in an involuntary case; (B) appoints a custodian of the Company or any Subsidiary that is a Significant Subsidiary or for any substantial part of its property; or (C) orders the winding up or liquidation of the Company or any Subsidiary that is a Significant Subsidiary; or (D) any similar relief is granted under any foreign laws and the order or decree relating thereto remains unstayed and in effect for 60 days; The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. The term "Bankruptcy Law" means Title 11, United States Code, or any similar federal or 44 state law for the relief of debtors. For purposes of this Section 6.01, the term "custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. SECTION 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Senior Subordinated Securities may declare the principal of and accrued interest on all the Senior Subordinated Securities to be due and payable by notice in writing to the Company and the Trustee specifying the respective Event of Default and that it is a "notice of acceleration" (the "Acceleration Notice"), and the same (i) shall become immediately due and payable or (ii) if there are any amounts outstanding under the Credit Agreement or the ESOP Credit Agreement, shall become immediately due and payable upon the first to occur of an acceleration under the Credit Agreement or the ESOP Credit Agreement or five business days after receipt by the Company and the Representative under the Credit Agreement or the ESOP Credit Agreement of such Acceleration Notice. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Company occurs and is continuing, then all unpaid principal of and accrued and unpaid interest on all of the outstanding Senior Subordinated Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. At any time after a declaration of acceleration with respect to the Senior Subordinated Securities as described in the preceding paragraph, the Holders of a majority in principal amount of Senior Subordinated Securities may rescind and cancel such declaration and its consequences (i) if the rescission would not conflict with any judgment or decree, (ii) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration, (iii) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid, (iv) if the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances and (v) in the event of the cure or waiver of an Event of Default of the type described in Section 6.01(f) or (g), the Trustee shall have received an Officers' Certificate and an Opinion of Counsel that such Event of Default has been cured or waived. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Senior Subordinated Securities or to enforce the performance of any provision of the Senior Subordinated Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Senior Subordinated Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of Senior Subordinated Securities in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of 45 or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law. SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the Senior Subordinated Securities then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Senior Subordinated Securities waive any existing Default or Event of Default and its consequences except (i) a continuing Default or Event of Default in the payment of interest on, or the principal of, the Senior Subordinated Securities or (ii) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Senior Subordinated Securityholder affected. When a Default is waived, it is deemed cured and ceases to exist and any Event of Default arising therefrom shall be deemed to have been cured and waived for every purpose under this Indenture, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right. SECTION 6.05. Control by Majority. The Holders of a majority in aggregate principal amount of the outstanding Senior Subordinated Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee by this Indenture. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of other Holders of Senior Subordinated Securities, it being understood that subject to Section 7.01 the Trustee shall have no duty or obligation to determine whether or not such actions or forbearances are unduly prejudicial to such Holders, or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. SECTION 6.06. Limitation on Suits. Except to enforce the right to receive payment of principal or interest when due, a Holder of Senior Subordinated Securities may not pursue any remedy with respect to this Indenture or the Senior Subordinated Securities unless: (1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25% in aggregate principal amount of the Senior Subordinated Securities make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee reasonable security or indemnity against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and 46 (5) the Holders of a majority in aggregate principal amount of the Senior Subordinated Securities do not give the Trustee a direction inconsistent with the request during such 60-day period. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on such Holder's Senior Subordinated Securities, on or after the respective due dates expressed in the Senior Subordinated Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, any Subsidiary or any Guarantor, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order: FIRST: to the Trustee for amounts due under Section 7.07; SECOND: to the holders of Senior Debt to the extent required by Article X; THIRD: to Holders for amounts due and unpaid on the Senior Subordinated Securities for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Senior Subordinated Securities for principal and interest, respectively; and FOURTH: to the Company. 47 The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such record date, the Trustee shall mail to each Holder and the Company a notice that states the record date, the payment date and amount to be paid. SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Senior Subordinated Securities. SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company nor any Guarantor (to the extent they may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and each Guarantor (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VII THE TRUSTEE SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person's own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. 48 (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) this Section 7.01(c) does not limit the effect of Section 7.01(b); (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to subsections (a), (b) and (c) of this Section 7.01. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and to the provisions of the TIA. SECTION 7.02. Rights of Trustee. Subject to Section 7.01: (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in any such document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. 49 (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee's conduct does not constitute willful misconduct or negligence. (e) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Senior Subordinated Securities at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney. (f) The Trustee shall not be required to give any note, bond or surety in respect of the execution of the trusts and powers under this Indenture. (g) The permissive rights of the Trustee to take any action enumerated in this Indenture shall not be construed as a duty to take such action. SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Senior Subordinated Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Senior Subordinated Securities and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the issuance of the Senior Subordinated Securities or in the Senior Subordinated Securities other than the Trustee's certificate of authentication. SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing and if it is actually known to the Trustee, the Trustee shall mail to each Holder of Senior Subordinated Securities at the expense of the Company notice of the Default within the earlier of 90 days after it occurs or 30 days after it is known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in payment of principal of or interest on any Senior Subordinated Security, the Trustee may withhold the notice if and so long as a committee of its trust officers in good faith determines that withholding the notice is in the interests of the Holders of the Senior Subordinated Securities. Notwithstanding anything to the contrary expressed in this Indenture, the Trustee shall not be deemed to have knowledge of any Default or Event of Default hereunder, except in the case of an Event of Default under Section 6.01(a) and (b) if the Trustee is acting as the Paying Agent, unless and until a Trust Officer receives written notice thereof at its Corporate Trust Office specified in Section 13.02, from the Company or a Holder that such Default or Event of Default has occurred. 50 SECTION 7.06. Reports by Trustee to Holders. The Trustee shall transmit to the Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the TIA at the times and in the manner provided pursuant thereto. To the extent that any such report is required by the TIA with respect to any 12-month period, such report shall cover the 12- month period ending December 31 and shall be transmitted by the next succeeding March 1. A copy of each report at the time of its mailing to Holders of Senior Subordinated Securities shall be filed with the SEC and each stock exchange (if any) on which the Senior Subordinated Securities are listed. The Company agrees to notify promptly the Trustee whenever the Senior Subordinated Securities become listed on any stock exchange and of any delisting thereof. SECTION 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time such compensation as is agreed to in writing by the Trustee and Company for the Trustee's services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket disbursements, advances and expenses Incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company and each Guarantor, jointly but not severally, shall indemnify the Trustee and its officers, directors, shareholders, agents and employees (each, an "Indemnified Party") for and hold each Indemnified Party harmless against any and all loss, liability or expense (including reasonable attorneys' fees) Incurred by them without negligence or bad faith on their part arising out of or in connection with the acceptance or administration of this Indenture or the Senior Subordinated Securities and the performance of their duties hereunder, including the cost and expense of enforcing this Indenture against the Company (including this Section 7.07), and defending itself against any claim (whether asserted by a Holder or any other person). The Trustee and its officers, directors, shareholders, agents and employees in its capacity as Paying Agent, Registrar, Custodian and agent for service of notice and demands shall have the full benefit of the foregoing indemnity as well as all other benefits, rights and privileges accorded to the Trustee in this Indenture when acting in such other capacity. The Trustee shall notify the Company of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided that any failure so to notify the Company shall not relieve the Company or any Subsidiary Guarantor of its indemnity obligations hereunder. The Company shall defend the claim and the Indemnified Party shall provide reasonable cooperation at the Company's expense in the defense. Such Indemnified Parties may have separate counsel and the Company shall pay the fees and expenses of such counsel; provided that the Company shall not be required to pay such fees and expenses if it assumes such Indemnified Parties' defense and, in such Indemnified Parties' reasonable judgment, there is no conflict of interest between the Company and such parties in connection with such defense. The Company need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an Indemnified Party through such party's own willful misconduct, negligence or bad faith. The Company need not pay any settlement made without its consent (which consent shall not be unreasonably withheld). 51 To secure the Company's payment obligations in this Section 7.07 and all other obligations to the Trustee pursuant to this Indenture, including all fees, expenses and rights to indemnification, the Trustee shall have a lien on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Senior Subordinated Securities. Such lien shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee. The Trustee's right to receive payment of any amounts due under this Indenture shall not be subordinated to any other indebtedness of the Company and the Senior Subordinated Securities shall be subordinate to the Trustee's rights to receive such payment. The Company's payment obligations pursuant to this Section 7.07 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(f) or (g) with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law. SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time by so notifying the Company in writing. The Holders of a majority in principal amount of the Senior Subordinated Securities may remove the Trustee by so notifying the Trustee and the Company in writing and may appoint a successor Trustee. The Company shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged bankrupt or insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal amount of the Senior Subordinated Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of Senior Subordinated Securities. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. 52 If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in aggregate principal amount of the Senior Subordinated Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Holder of Senior Subordinated Securities may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee, provided that such Person shall be qualified and eligible under this Article VII. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Senior Subordinated Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Senior Subordinated Securities so authenticated; and in case at that time any of the Senior Subordinated Securities shall not have been authenticated, any successor to the Trustee may authenticate such Senior Subordinated Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Senior Subordinated Securities or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA (S) 310(b); provided, however, that there shall be excluded from the operation of TIA (S) 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA (S) 310(b)(1) are met. SECTION 7.11. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to the extent indicated therein. 53 ARTICLE VIII Discharge of Indenture; Defeasance ---------------------------------- SECTION 8.01. Legal Defeasance and Covenant Defeasance. (a) The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.01(b) or 8.01(c) be applied to all outstanding Senior Subordinated Securities upon compliance with the conditions set forth below in this Article VIII. (b) Upon the Company's exercise under Section 8.01(a) of the option applicable to this Section 8.01(b), the Company and each Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.02, be deemed to have been discharged from their obligations with respect to all outstanding Senior Subordinated Securities and any Subsidiary Guarantee on the date the conditions set forth below are satisfied ("Legal Defeasance"). For this purpose, Legal Defeasance means that the Company and each Guarantor shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Senior Subordinated Securities and any Subsidiary Guarantee, which Senior Subordinated Securities and Subsidiary Guarantees shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.03 and the other Sections of this Indenture referred to in clauses (i) and (ii) below, and to have satisfied all their other obligations under such Senior Subordinated Securities and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of outstanding Senior Subordinated Securities to receive payments in respect of the principal of and interest on such Senior Subordinated Securities, solely from the trust fund described in Section 8.02, when such payments are due, (ii) the Company's obligations with respect to the Senior Subordinated Securities under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 7.07 and 7.08, which shall survive until the Senior Subordinated Securities have been paid in full (thereafter, the Company's obligations in Section 7.07 shall survive), and (iii) this Article VIII. Subject to compliance with this Article VIII, the Company may exercise its option under this Section 8.01(b) notwithstanding the prior exercise of its option under Section 8.01(c). (c) Upon the Company's exercise under Section 8.01(a) of the option applicable to this Section 8.01(c), the Company and each Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.02, be released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13 and 4.14 and Article V with respect to the outstanding Senior Subordinated Securities on and after the date the conditions set forth below are satisfied ("Covenant Defeasance"), and the Senior Subordinated Securities shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration of act of Holders (and the consequences of any thereof) in connection with such Sections, but shall continue to be deemed "outstanding" for all the other purposes hereunder. For this purpose, Covenant Defeasance means that, with respect of any term, condition or limitation set forth in any such Section, whether directly or indirectly, by reason of any reference elsewhere herein to 54 any such Section or by reason of any reference in any such Section to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01, but, except as specified above, the remainder of this Indenture and such Senior Subordinated Securities shall be unaffected thereby. SECTION 8.02. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.01(b) or 8.01(c) to the outstanding Senior Subordinated Securities: In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable U.S. government obligations or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of and interest on the Senior Subordinated Securities on the stated date for payment thereof or on the applicable redemption date, as the case may be; (ii) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (iv) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, the Indenture or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others; and (vii) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with, except that the Opinion of Counsel shall speak only to clauses (ii), (iii) and (v) of this Section 8.02. SECTION 8.03. Deposited Money and Government Senior Subordinated Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.04, all money and U.S. 55 Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.03, the "Trustee") pursuant to Section 8.02 in respect of the outstanding Senior Subordinated Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Senior Subordinated Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of the Senior Subordinated Securities of all sums due and to become due thereon in respect of principal and interest, but such money need not be segregated from other funds except to the extent required by law. Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or U.S. Government Obligations held by it as provided in Section 8.02 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.02(a)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. SECTION 8.04. Repayment to Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or interest on any Senior Subordinated Security and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Senior Subordinated Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company, cause to be published once, in The New York Times (national edition) and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 8.05. Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or U.S. Government Obligations in accordance with this Article VIII by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Senior Subordinated Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with this Article VIII; provided, however, that, if the Company or any Guarantor makes any payment of principal of or interest on any Senior Subordinated Security following the reinstatement of its obligations, the Company or any Guarantor, as the case may be, shall be subrogated to the rights of the Holders of such Senior Subordinated Securities to receive such payment from the money held by the Trustee or Paying Agent. 56 SECTION 8.06. Satisfaction and Discharge of Indenture. Upon the request of the Company, this Indenture will be discharged and will cease to be of further effect (except as to surviving rights of registration of transfer or exchange of the Senior Subordinated Securities, as expressly provided for herein or pursuant hereto), the Company and the Guarantors will be discharged from their obligations under the Senior Subordinated Securities and the Subsidiary Guarantees, and the Trustee, at the expense of the Company, will execute proper instruments acknowledging satisfaction and discharge of the Indenture when: (a) either (i) all the Senior Subordinated Securities theretofore authenticated and delivered (other than mutilated, destroyed, lost or stolen Senior Subordinated Securities that have been replaced or paid and Senior Subordinated Securities that have been subject to defeasance under this Article VIII) have been delivered to the Trustee for cancellation or (ii) all Senior Subordinated Securities not theretofore delivered to the Trustee for cancellation (A) have become due and payable, (B) will become due and payable at maturity within one year or (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (A), (B) or (C) above, has irrevocably deposited or caused to be deposited with the Trustee funds in trust for such purpose in an amount sufficient to pay and discharge, without the need to reinvest any proceeds thereof, the entire Indebtedness on such Senior Subordinated Securities not theretofore delivered to the Trustee for cancellation, for principal and interest on the Senior Subordinated Securities to the date of such deposit (in the case of Senior Subordinated Securities that have become due and payable) or to the Stated Maturity or redemption date, as the case may be; (b) the Company has paid or caused to be paid all sums payable under the Indenture by the Company; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided in this Indenture relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.07 and, if money shall have been deposited with the Trustee pursuant to clause (a)(ii) of this Section 8.06, the obligations of the Trustee under Section 8.06 and Section 2.04 shall survive. ARTICLE IX Amendments ---------- SECTION 9.01. Without Consent of Holders. From time to time, the Company, the Guarantors and the Trustee, without the consent of the Holders, may amend this Indenture or the Senior Subordinated Securities for the following purposes, so long as such change does not, in the opinion of the Trustee, adversely affect the rights of any of the Holders in any material respect. As to such matters, the Trustee shall be entitled to rely, and shall be protected in relying, upon an Opinion of Counsel. 57 (1) to cure any ambiguity, defect or inconsistency; (2) to provide for uncertificated Senior Subordinated Securities in addition to or in place of certificated Senior Subordinated Securities (provided that the uncertificated Senior Subordinated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Senior Subordinated Securities are described in Section 163(f)(2)(B) of the Code); (3) to provide for the assumption of the Company's or any Guarantor's obligations to Holders of Senior Subordinated Securities in the case of a merger, consolidation or sale of assets; (4) to release any Subsidiary Guarantee in accordance with the provisions of this Indenture; (5) to provide for additional Guarantors; (6) to make any change that would provide any additional rights or benefits to the Holders of Senior Subordinated Securities or that does not adversely affect the legal rights under this Indenture of any such Holder; or (7) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. An amendment under this Section may not make any change that adversely affects the rights under Article X of any holder of Senior Debt then outstanding unless the holders of such Senior Debt (or any group or representative thereof authorized to give a consent) consent to such change. After an amendment under this Section 9.01 becomes effective, the Company shall mail to Holders of Senior Subordinated Securities a notice briefly describing such amendment. The failure to give such notice to all Holders of Senior Subordinated Securities, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01. SECTION 9.02. With Consent of Holders. The Company, the Guarantors and the Trustee may amend this Indenture or the Senior Subordinated Securities with the written consent of the Holders of at least a majority in principal amount of the Senior Subordinated Securities. However, without the consent of each affected Holder of a Senior Subordinated Security, an amendment may not: (i) reduce the principal amount of Senior Subordinated Securities whose Holders must consent to an amendment; ; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any Senior Subordinated Securities; 58 (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Senior Subordinated Securities, or change the date on which any Senior Subordinated Securities may be subject to redemption or repurchase, or reduce the redemption or repurchase price therefor; (iv) make any Senior Subordinated Securities payable in money other than that stated in the Senior Subordinated Securities; (v) make any change in provisions of the Indenture protecting the right of each Holder to receive payment of principal of and interest on such Holder's Senior Subordinated Securities on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Senior Subordinated Securities to waive Defaults or Events of Default; (vi) modify or change any provision of the Indenture or the related definitions affecting the subordination or ranking of the Senior Subordinated Securities in a manner which adversely affects the Holders; provided, however, that it is understood that any amendment, the purpose of which is to permit the Incurrence of additional Indebtedness under the Indenture shall not be construed as adversely affecting the ranking of the Senior Subordinated Securities; or (viii) make any change to the Subsidiary Guarantees in any manner that adversely affects the rights of the Holders. In addition, without the consent of Holders of not less than 66-2/3% in aggregate principal amount of Senior Subordinated Securities then outstanding, no such amendment, supplement or waiver may amend, change or modify in any material respect the obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control or make and consummate a Net Proceeds Offer with respect to any Asset Sale that has been consummated or modify any of the provisions or definitions with respect thereto. It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. No amendment under this Section 9.02 may make any change that adversely affects the rights under Article X of any holder of Senior Debt then outstanding unless the holders of such Senior Debt (or any group or representative thereof authorized to give a consent) consent to such change. After an amendment under this Section 9.02 becomes effective, the Company shall mail to Holders of Senior Subordinated Securities a notice briefly describing such amendment. The failure to give such notice to all Holders of Senior Subordinated Securities, or any defect therein, shall not impair or affect the validity of an amendment under this Section. 59 SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Senior Subordinated Securities shall comply with the TIA as then in effect. SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a Holder of a Senior Subordinated Security shall bind the Holder and every subsequent Holder of that Senior Subordinated Security or portion of the Senior Subordinated Security that evidences the same debt as the consenting Holder's Senior Subordinated Security, even if notation of the consent or waiver is not made on the Senior Subordinated Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Senior Subordinated Security or portion of the Senior Subordinated Security if the Trustee receives written notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Senior Subordinated Securityholder. Except if otherwise specified in such amendment or waiver, an amendment or waiver becomes effective once the requisite number of consents are received by the Company or the Trustee. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders of Senior Subordinated Securities entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. SECTION 9.05. Notation on or Exchange of Senior Subordinated Securities. If an amendment changes the terms of a Senior Subordinated Security, the Trustee may require the Holder of the Senior Subordinated Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Senior Subordinated Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Senior Subordinated Security shall issue and the Trustee shall authenticate a new Senior Subordinated Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Senior Subordinated Security shall not affect the validity of such amendment. SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture that such amendment is the legal, valid and binding obligation of the Company and the Guarantors enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03). 60 SECTION 9.07. Payment for Consent. Neither the Company nor any Affiliate of the Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Senior Subordinated Securities unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. ARTICLE X Subordination ------------- SECTION 10.01. Agreement To Subordinate. The Company agrees, and each Senior Subordinated Securityholder by accepting a Senior Subordinated Security agrees, that the Indebtedness evidenced by the Senior Subordinated Securities is subordinated in right of payment, to the extent and in the manner provided in this Article X, to the prior payment in full in cash or Cash Equivalents of all Obligations on Senior Debt, whether outstanding on the Issue Date or thereafter Incurred, and that the subordination is for the benefit of and enforceable by the holders of Senior Debt. All provisions of this Article X shall be subject to Section 10.12. SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any liquidation, dissolution, winding- up, reorganization, assignment for the benefit of creditors or marshaling of assets of the Company or in a bankruptcy, reorganization, insolvency, receivership or other similar proceeding relating to the Company or its property, whether voluntary or involuntary, all Obligations due upon all Senior Debt shall first be paid in full in cash or Cash Equivalents, or such payment duly provided for to the satisfaction of the holders of Senior Debt, by the Company or any of its Subsidiaries before any payment or distribution of any kind or character is made on account of any Obligations on the Senior Subordinated Securities, or for the acquisition by the Company or any of its Subsidiaries of any of the Senior Subordinated Securities for cash or property. If any default occurs and is continuing in the payment when due, whether at maturity, upon any redemption, by declaration or otherwise, of any principal of, interest on, unpaid drawings for letters of credit issued in respect of, or regularly accruing fees with respect to, any Senior Debt, no payment of any kind or character (other than payments by a trust previously established pursuant to the provisions of Article VIII) shall be made by the Company or any of its Subsidiaries with respect to any Obligations on the Senior Subordinated Securities or to acquire any of the Senior Subordinated Securities for cash or property. SECTION 10.03. Default on Senior Debt. In addition, if any other event of default occurs and is continuing with respect to any Designated Senior Debt, as such event of default is defined in the instrument creating or evidencing such Designated Senior Debt, permitting the holders of such Designated Senior Debt then outstanding to accelerate the maturity thereof and if the Representative for the respective issue of Designated Senior Debt gives written notice of the event of default to the Trustee (a "Default Notice"), then, unless and until all events of default 61 have been cured or waived or have ceased to exist or the Trustee receives notice from the Representative for the respective issue of Designated Senior Debt terminating the Blockage Period (as defined below), during the 180 days after the delivery of such Default Notice (the "Blockage Period"), neither the Company nor any of its Subsidiaries shall (x) make any payment of any kind or character (other than payments by a trust previously established pursuant to the provisions of Article VIII) with respect to any Obligations on the Senior Subordinated Notes or (y) acquire any of the Senior Subordinated Notes for cash or property. Notwithstanding anything herein to the contrary, in no event will a Blockage Period extend beyond 180 days from the date of the commencement of the Blockage Period, and only one such Blockage Period may be commenced within any 365 consecutive days. No event of default which existed or was continuing on the date of the commencement of any Blockage Period with respect to the Designated Senior Debt shall be, or be made, the basis for commencement of a second Blockage Period by the Representative of such Designated Senior Debt whether or not within a period of 365 consecutive days, unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants for a period commencing after the date of commencement of such Blockage Period that, in either case, would give rise to an event of default pursuant to any provisions under which an event of default previously existed or was continuing shall constitute a new event of default for this purpose). SECTION 10.04. Acceleration of Payment of Senior Subordinated Securities. If payment of the Senior Subordinated Securities is accelerated because of an Event of Default, the Company shall promptly notify the Representative of the lenders under the Credit Agreement of the acceleration. If any Indebtedness under the Credit Agreement is outstanding, the Company may not make any payment on account of such accelerated Senior Subordinated Securities until five Business Days after such holders of such Indebtedness receive notice of such acceleration and, thereafter, may pay the Senior Subordinated Securities only if this Article X otherwise permits payment at that time. SECTION 10.05. When Distribution Must Be Paid Over. If a distribution is made to Holders of Senior Subordinated Securities that because of this Article X should not have been made to them, the Holders who receive such distribution shall hold it in trust for holders of Senior Debt and pay it over to them as their interests may appear. SECTION 10.06. Subrogation. After all Senior Debt of the Company is paid in full and until the Senior Subordinated Securities are paid in full, Holders of Senior Subordinated Securities shall be subrogated to the rights of holders of Senior Debt of the Company to receive distributions applicable to Senior Debt of the Company. A distribution made under this Article X to holders of Senior Debt of the Company which otherwise would have been made to Holders of Senior Subordinated Securities is not, as between the Company and Holders of Senior Subordinated Securities, a payment by the Company on Senior Debt of the Company. SECTION 10.07. Relative Rights. This Article X defines the relative rights of Holders of Senior Subordinated Securities and holders of Senior Debt of the Company. Nothing in this Indenture shall: 62 (1) impair, as between the Company and the Holders of Senior Subordinated Securities the obligations of the Company, which is absolute and unconditional, to pay principal of and interest on the Senior Subordinated Securities in accordance with their terms; or (2) prevent the Trustee or any Holder of Senior Subordinated Securities from exercising its available remedies upon a Default, subject to the rights of holders of Senior Debt of the Company to receive distributions otherwise payable to Holders of Senior Subordinated Securities. SECTION 10.08. Subordination May Not Be Impaired by Company. No right of any holder of Senior Debt of the Company to enforce the subordination of the Indebtedness evidenced by the Senior Subordinated Securities shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture. SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to make payments on the Senior Subordinated Securities and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives written notice satisfactory to it that payments may not be made under this Article X. The Company, the Registrar or co- registrar, the Paying Agent, a Representative or a holder of Senior Debt of the Company may give the notice; provided, however, that, if an issue of Senior Debt of the Company has a Representative, only the Representative may give the notice. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a holder of any Senior Debt of the Company (or a Representative of such holder) to establish that such notice has been given by a holder of such Senior Debt of the Company or Representative thereof. The Trustee in its individual or any other capacity may hold Senior Debt of the Company with the same rights it would have if it were not Trustee. The Registrar and co-registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article X with respect to any Senior Debt of the Company which may at any time be held by it, to the same extent as any other holder of Senior Debt of the Company; and nothing in Article VII shall deprive the Trustee of any of its rights as such holder. Nothing in this Article X shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 10.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Senior Debt of the Company, the distribution may be made and the notice given to their Representative (if any). SECTION 10.11. Article X Not To Prevent Events of Default or Limit Right To Accelerate. The failure to make a payment pursuant to the Senior Subordinated Securities by reason of any provision in this Article X shall not be construed as preventing the occurrence of a Default. Nothing in this Article X shall have any effect on the right of the Holders of Senior Subordinated Securities or the Trustee to accelerate the maturity of the Senior Subordinated Securities. 63 SECTION 10.12. Trust Funds Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust under Article VIII by the Trustee for the payment of principal of and interest on the Senior Subordinated Securities shall not be subordinated to the prior payment of any Senior Debt or subject to the restrictions set forth in this Article X, and no Holder of the Senior Subordinated Securities shall be obligated to pay over any such amount to the Company or any holder of Senior Debt of the Company or any other creditor of the Company. SECTION 10.13. Trustee Entitled To Rely. Upon any payment or distribution pursuant to this Article X, the Trustee and the Holders of Senior Subordinated Securities shall be entitled to rely (i) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 10.02 are pending, (ii) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders of Senior Subordinated Securities or (iii) upon the Representative for the holders of Senior Debt of the Company for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt of the Company and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article X. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Debt of the Company to participate in any payment or distribution pursuant to this Article X, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt of the Company held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article X, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article X. SECTION 10.14. Trustee To Effectuate Subordination. Each Holder of a Senior Subordinated Security by accepting such Senior Subordinated Security authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders and the holders of Senior Debt of the Company as provided in this Article X and appoints the Trustee as attorney-in-fact for any and all such purposes. SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt. With respect to the holders of Senior Debt of the Company, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article X. The Trustee shall not be deemed to owe any fiduciary or other duty to the holders of Senior Debt of the Company and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders of Senior Subordinated Securities or the Company or any other Person, money or assets to which any holders of Senior Debt of the Company shall be entitled by virtue of this Article X or otherwise. 64 SECTION 10.16. Reliance by Holders of Senior Debt on Subordination Provisions. Each Holder by accepting a Senior Subordinated Security acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Debt of the Company, whether such Senior Debt was created or acquired before or after the issuance of the Senior Subordinated Securities, to acquire and continue to hold, or to continue to hold, such Senior Debt and such holder of Senior Debt shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Debt. SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing in this Article X shall apply to amounts due to the Trustee pursuant to other sections of this Indenture. ARTICLE XI SUBSIDIARY GUARANTEES --------------------- SECTION 11.01. Subsidiary Guarantees. Each Guarantor hereby jointly and severally unconditionally and irrevocably guarantees as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns (a) the full and punctual payment of principal of and interest on the Senior Subordinated Securities when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Company under this Indenture (including obligations to the Trustee) and the Senior Subordinated Securities and (b) the full and punctual performance of all other obligations of the Company whether for expenses, indemnification or otherwise under this Indenture and the Senior Subordinated Securities (all of the foregoing being collectively called the "Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such Guarantor shall remain bound under this Article XI notwithstanding any extension or renewal of any Guaranteed Obligation. Each Guarantor waives presentation to, demand of, payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Senior Subordinated Securities or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (a) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Senior Subordinated Securities or any other agreement or otherwise; (b) any extension or renewal of any Guaranteed Obligations; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Senior Subordinated Securities or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (e) the failure of any Holder or Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (f) any change in the ownership of such Guarantor. 65 Each Guarantor further agrees that its Subsidiary Guarantee herein constitutes a Guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Senior Subordinated Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity. Each Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise. In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest, premium and Liquidated Damages, if any, on such Guaranteed Obligations (but only to the extent not prohibited by law) and (iii) all other monetary Guaranteed Obligations of the Company to the Holders and the Trustee. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of any Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in 66 Article VI, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 11.01. Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees and expenses) Incurred by the Trustee or any Holder in enforcing any rights under this Section. SECTION 11.02. Limitation on Liability. Any term or provision of this Indenture to the contrary notwithstanding, the maximum, aggregate amount of the obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be guaranteed (after giving effect to all its Guarantees of Indebtedness under the Credit Agreement) without rendering this Indenture, as it relates to any Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. SECTION 11.03. Successors and Assigns. This Article XI shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Senior Subordinated Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. SECTION 11.04. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article XI shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XI at law, in equity, by statute or otherwise. SECTION 11.05. Modification. No modification, amendment or waiver of any provision of this Article XI, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances. ARTICLE XII SUBORDINATION OF THE SUBSIDIARY GUARANTEES ------------------------------------------ SECTION 12.01. Agreement To Subordinate. The Guarantor agrees, and each Senior Subordinated Securityholder by accepting a Senior Subordinated Security agrees, that such Guarantor's obligations under its Subsidiary Guarantee are subordinated in right in right of payment, to the extent and in the manner provided in this Article XII, to the prior payment in full in cash or Cash Equivalents of all Obligations on Guarantor Senior Debt, whether outstanding on the Issue Date or thereafter Incurred, and that the subordination is for the benefit of and 67 enforceable by the holders of Guarantor Senior Debt. All provisions of this Article XII shall be subject to Section 10.12. SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of assets of any Guarantor of any kind or character, whether in cash, property or securities, to creditors upon any liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors or marshaling of assets of any Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other similar proceeding relating to any Guarantor or its property, whether voluntary or involuntary, all Obligations due upon all Guarantor Senior Debt shall first be paid in full in cash or Cash Equivalents, or such payment duly provided for to the satisfaction of the holders of Guarantor Senior Debt, by the Company or any of its Subsidiaries before any payment or distribution of any kind or character is made on account of any Guaranteed Obligations by such Guarantor, or for the acquisition by such Guarantor of any of the Senior Subordinated Securities for cash or property. If any default occurs and is continuing in the payment when due, whether at maturity, upon any redemption, by declaration or otherwise, of any principal of, interest on, unpaid drawings for letters of credit issued in respect of, or regularly accruing fees with respect to, any Guarantor Senior Debt, no payment of any kind or character (other than payments by a trust previously established pursuant to the provisions of Article VIII) shall be made by such Guarantor with respect to any Guaranteed Obligations or to acquire any of the Senior Subordinated Securities for cash or property. SECTION 12.03. Default on Guarantor Senior Debt. In addition, if any other event of default occurs and is continuing with respect to any Designated Guarantor Senior Debt, as such event of default is defined in the instrument creating or evidencing such Designated Guarantor Senior Debt, permitting the holders of such Designated Guarantor Senior Debt then outstanding to accelerate the maturity thereof and if the Representative for the respective issue of Designated Senior Debt gives written notice of the event of default to the Trustee (a "Guarantor Default Notice"), then, unless and until all events of default have been cured or waived or have ceased to exist or the Trustee receives notice from the Representative for the respective issue of Designated Senior Debt terminating the Guarantor Blockage Period (as defined below), during the 180 days after the delivery of such Guarantor Default Notice (the "Guarantor Blockage Period"), such Guarantor shall not (x) make any payment of any kind or character (other than payments by a trust previously established pursuant to the provisions of Article VIII) with respect to any Guaranteed Obligations or (y) acquire any of the Senior Subordinated Securities for cash or property. Notwithstanding anything herein to the contrary, in no event will a Guarantor Blockage Period extend beyond 180 days from the date of the commencement of the Guarantor Blockage Period, and only one such Guarantor Blockage Period may be commenced within any 365 consecutive days. No event of default which existed or was continuing on the date of the commencement of any Guarantor Blockage Period with respect to the Designated Senior Debt of such Guarantor shall be, or be made, the basis for commencement of a second Guarantor Blockage Period by the Representative of such Designated Senior Debt whether or not within a period of 365 consecutive days, unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants for a period commencing after the date of commencement of such Guarantor Blockage Period that, in either case, would give rise to an 68 event of default pursuant to any provisions under which an event of default previously existed or was continuing shall constitute a new event of default for this purpose). SECTION 12.04. Demand for Payment. If payment of the Senior Subordinated Securities is accelerated because of an Event of Default and a demand for payment is made on a Guarantor pursuant to Article XI, the Trustee shall promptly notify the Company, and the Company shall promptly (and in no event more than five Business Days after receipt of such notice) notify the Representative of the lenders under the Credit Agreement of the acceleration. If any Indebtedness under the Credit Agreement is outstanding, such Guarantor may not pay its Guaranteed Obligations under its Subsidiary Guarantee until five Business Days after the holders of such Indebtedness receive notice of such demand and, thereafter, may pay its Guaranteed Obligations under its Subsidiary Guarantee only if this Article XII otherwise permits payment at that time. SECTION 12.05. When Distribution Must Be Paid Over. If a distribution is made to holders of Senior Subordinated Securities that because of this Article XII should not have been made to them, the Holders who receive the distribution shall hold it in trust for holders of Guarantor Senior Debt of the relevant Guarantor and pay it over to them as their interests may appear. SECTION 12.06. Subrogation. After all Guarantor Senior Debt of a Guarantor is paid in full and until the Holders of Senior Subordinated Securities are paid in full, Holders of Senior Subordinated Securities shall be subrogated to the rights of holders of Guarantor Senior Debt of such Guarantor to receive distributions applicable to Guarantor Senior Debt of such Guarantor. A distribution made under this Article XII to holders of Guarantor Senior Debt of such Guarantor which otherwise would have been made to Holders is not, as between such Guarantor and Holders of Senior Subordinated Securities, a payment by such Guarantor on Guarantor Senior Debt of such Guarantor. SECTION 12.07. Relative Rights. This Article XII defines the relative rights of Holders of Senior Subordinated Securities and holders of Guarantor Senior Debt. Nothing in this Indenture shall: (1) impair, as between a Guarantor and Holders of Senior Subordinated Securities, the obligation of a Guarantor which is absolute and unconditional, to pay its Obligations under its Subsidiary Guarantee to the extent set forth in Article XI; or (2) prevent the Trustee or any Holder of Senior Subordinated Securities from exercising its available remedies upon a default by a Guarantor under its Obligations under its Subsidiary Guarantee, subject to the rights of holders of Senior Debt of such Guarantor to receive distributions otherwise payable to Holders of Senior Subordinated Securities. SECTION 12.08. Subordination May Not Be Impaired by a Guarantor. No right of any holder of Senior Debt of a Guarantor to enforce the subordination of the Obligations under the 69 Subsidiary Guarantee of such Guarantor shall be impaired by any act or failure to act by such Guarantor or by its failure to comply with this Indenture. SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to make payments on the Senior Subordinated Securities and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives notice satisfactory to it that payments may not be made under this Article XII. A Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative or a holder of Senior Debt of a Guarantor may give the notice; provided, however, that, if an issue of Guarantor Senior Debt has a Representative, only the Representative may give the notice. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a holder of any Guarantor Senior Debt (or a Representative of such holder) to establish that such notice has been given by a holder of such Senior Debt or Representative thereof. The Trustee in its individual or any other capacity may hold Guarantor Senior Debt with the same rights it would have if it were not Trustee. The Registrar and co-registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article XII with respect to any Guarantor Senior Debt which may at any time be held by it, to the same extent as any other holder of Guarantor Senior Debt; and nothing in Article VII shall deprive the Trustee of any of its rights as such holder. Nothing in this Article XII shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 12.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Guarantor Senior Debt, the distribution may be made and the notice given to their Representative (if any). SECTION 12.11. Article XII Not To Prevent Events of Default or Limit Right To Accelerate. The failure of a Guarantor to make a payment on any of its Obligations under its Subsidiary Guarantee by reason of any provision in this Article XII shall not be construed as preventing the occurrence of a default by such Guarantor under its Subsidiary Guarantee. Nothing in this Article XII shall have any effect on the right of the Holders of Senior Subordinated Securities or the Trustee to make a demand for payment on a Guarantor pursuant to Article XII. SECTION 12.12. Trustee Entitled To Rely. Upon any payment or distribution pursuant to this Article XII, the Trustee and the Holders of Senior Subordinated Securities shall be entitled to rely (i) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 are pending, (ii) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders of Senior Subordinated Securities or (iii) upon the Representatives for the holders of Guarantor Senior Debt for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Guarantor Senior Debt and other Indebtedness of a Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed 70 thereon and all other facts pertinent thereto or to this Article XII. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Guarantor Senior Debt to participate in any payment or distribution pursuant to this Article XII, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Guarantor Senior Debt of such Guarantor held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article XII, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article XI. SECTION 12.13. Trustee To Effectuate Subordination. Each Holder of Senior Subordinated Securities by accepting a Senior Subordinated Security authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders of Senior Subordinated Securities and the holders of Guarantor Senior Debt of each of the Guarantors as provided in this Article XII and appoints the Trustee as attorney-in-fact for any and all such purposes. SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of a Guarantor. The Trustee shall not be deemed to owe any fiduciary or other duty to the holders of Guarantor Senior Debt and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Senior Subordinated Securityholders or the relevant Guarantor or any other Person, money or assets to which any holders of Guarantor Senior Debt of such Guarantor shall be entitled by virtue of this Article XII or otherwise. SECTION 12.15. Reliance by Holders of Guarantor Senior Debt on Subordination Provisions. Each holder of a Senior Subordinated Security by accepting such Senior Subordinated Security acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Guarantor Senior Debt, whether such Guarantor Senior Debt was created or acquired before or after the issuance of the Senior Subordinated Securities, to acquire and continue to hold, or to continue to hold, such Guarantor Senior Debt and such holder of Guarantor Senior Debt shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Guarantor Senior Debt. ARTICLE XIII MISCELLANEOUS ------------- SECTION 13.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. SECTION 13.02. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows: 71 if to the Company: Tokheim Corporation 1600 Wabash Avenue Fort Wayne, IN 46801-0360 Attention of: Douglas K. Pinner if to the Trustee: Harris Trust and Savings Bank 311 W. Monroe Street Chicago, Illinois 60606 Attention: Indenture Trustee The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication to the Company or the Trustee shall be deemed to have been given or made as of the date so delivered if personally delivered; and five calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a change of address shall not be deemed to have been given until actually received by the addressee). Any notice or communication mailed to a Holder of Senior Subordinated Securities shall be made in compliance with Section 313(c) of the TIA and mailed to such Holder at such Holder's address as it appears on the Security Register and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Holder of Senior Subordinated Securities or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 13.03. Communication by Holders with Other Holders. Holders of Senior Subordinated Securities may communicate pursuant to TIA (S) 312(b) with other Holders with respect to their rights under this Indenture or the Senior Subordinated Securities. The Company, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA (S) 312(c). SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, at the request of the Trustee the Company shall furnish to the Trustee: (1) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and 72 (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05) stating that, in the opinion of such counsel, all such conditions precedent have been complied with. To the extent applicable, the Company shall comply with the provisions of TIA (S) 314(c)(3). SECTION 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the individual making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with. SECTION 13.06. When Senior Subordinated Securities Disregarded. In determining whether the Holders of the required principal amount of Senior Subordinated Securities have concurred in any direction, waiver or consent, Senior Subordinated Securities owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Senior Subordinated Securities which the Trustee actually knows are so owned shall be so disregarded. SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders of Senior Subordinated Securities. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE SENIOR SUBORDINATED SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN 73 ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. SECTION 13.10. No Recourse Against Others. A director, officer, incorporator, employee, stockholder or Affiliate as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company or any Guarantor under the Senior Subordinated Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Senior Subordinated Security, each Holder waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of the Senior Subordinated Securities. SECTION 13.11. Successors. All agreements of the Company and each Guarantor in this Indenture and the Senior Subordinated Securities shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 13.13. Table of Contents; Headings. The table of contents, cross- reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. 74 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. TOKHEIM CORPORATION By:___________________________ Name: Title: MANAGEMENT SOLUTIONS, INC. By:___________________________ Name: Title: TOKHEIM EQUIPMENT CORPORATION By:___________________________ Name: Title: TOKHEIM RPS, LLC By:___________________________ Name: Title: ENVIRONTRONIC SYSTEMS, INC. By:___________________________ Name: Title: 75 SUNBELT HOSE & PETROLEUM EQUIPMENT INC., By:___________________________ Name: Title: GASBOY INTERNATIONAL, INC. By:___________________________ Name: Title: TOKHEIM AUTOMATION CORPORATION By:___________________________ Name: Title: TOKHEIM INVESTMENT CORP. By:___________________________ Name: Title: HARRIS TRUST AND SAVINGS BANK, as Trustee, By:___________________________ Name: Title: 76 EX-99.(C)(6) 7 12% JUNIOR SUBORDINATED NOTE EXHIBIT (c)(6) THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. TOKHEIM CORPORATION 12% JUNIOR SUBORDINATED NOTE DUE 2008 No. 1 $40,000,000 TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to pay to SCHLUMBERGER TECHNOLOGY CORPORATION, as Transfer Agent for the Selling Subsidiaries as defined in the Master Agreement between Tokheim Corporation and Schlumberger Limited dated as of June 19, 1998, as amended, or registered assigns, the principal sum of $40,000,000 on September 30, 2008. Interest Payment Dates: December 30, March 30, June 30 and September 30 Record Dates: December 15, March 15, June 15 and September 15 Additional provisions of this security are set forth on the other side of this security. Dated: September 30, 1998 TOKHEIM CORPORATION By: --------------------------------- Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION HARRIS TRUST AND SAVINGS BANK, as Trustee, certifies that this is one of the securities referred to in the Junior Indenture, By Authorized Signatory 12% Junior Subordinated Note due 2008 1. Interest TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to pay interest on the principal amount of this security at the rate per annum shown above. The Company will pay interest quarterly in arrears, in cash or in kind at its option, on December 30, March 30, June 30 and September 30. Interest on the Junior Subordinated Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date with respect to the Junior Subordinated Note. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Junior Subordinated Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. To the extent that a cash interest payment made is not sufficient to pay the interest payments due upon any Interest Payment Date under the Junior Subordinated Notes in full in cash, then the cash shall be allocated to the interest payments pro rata among the holders of such notes in the proportion that the aggregate amount of interest due under such notes held by the holder thereof bears to the combined aggregate amount of interest due under all Junior Subordinated Notes. To the extent any interest payment on Junior Subordinated Notes due upon any Interest Payment Date is not paid in full in cash, the Company shall pay such interest payment by the issuance of Additional Junior Subordinated Notes having a principal amount equal to the amount of interest not paid in cash on such Interest Payment Date. 2. Method of Payment The Company will pay interest (except defaulted interest) on and in respect of the Junior Subordinated Notes to the Persons who are registered holders of the Junior Subordinated Notes at the close of business on the December 15, March 15, June 15 and September 15 next preceding the interest payment date even if such securities are canceled after the record date and on or before the interest payment date. Holders must surrender Junior Subordinated Notes to a Paying Agent to collect principal payments. The Company will pay principal and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by check payable in such money or by wire transfer of federal funds. 3. Paying Agent and Registrar Initially, Harris Trust and Savings Bank (the "Trustee") will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice to the Holders. The Company or any domestically organized Wholly Owned Restricted Subsidiary may act as Paying Agent, Registrar or co-registrar. 4. Indenture The Company issued the Junior Subordinated Notes under an Indenture dated as of 2 September 30, 1998 (the "Junior Indenture"), among the Company, the Initial Guarantors and the Trustee. The terms of the Junior Subordinated Notes include those stated in the Junior Indenture and those made part of the Junior Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Junior Indenture (the "Act"). Terms defined in the Junior Indenture and not defined herein have the meanings ascribed thereto in the Junior Indenture. The Junior Subordinated Notes are subject to all such terms, and securityholders are referred to the Junior Indenture and the Act for a statement of those terms. The Junior Subordinated Notes are unsecured Junior subordinated obligations of the Company. The aggregate principal amount of Junior Subordinated Notes at any time outstanding may not exceed the sum of (i) $40,000,000 plus (ii) the aggregate principal amount of Additional Junior Subordinated Notes issued by the Company pursuant to the terms of the Junior Indenture in respect of interest accrued on outstanding Junior Subordinated Notes (including outstanding Additional Junior Subordinated Notes). This security is one of the Junior Subordinated Notes referred to in the Junior Indenture. The Junior Indenture imposes certain limitations on the Incurrence of Indebtedness by the Company and its subsidiaries; the payment of dividends and other payments by the Company and its subsidiaries; Investments; sales of assets of the Company and its subsidiaries; certain transactions with Affiliates; Liens; and consolidations, mergers and transfers of all or substantially all of the Company's or its subsidiaries' assets. In addition, the Junior Indenture prohibits certain restrictions on distributions from subsidiaries. 5. Optional Redemption Subject to the terms of the Junior Indenture, the Junior Subordinated Notes may be redeemed at any time, in whole or in part, at the option of the Company at a redemption price equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date (subject to the right of holders of the Junior Subordinated Notes on the relevant record date to receive interest due on the relevant interest payment date). 6. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Junior Subordinated Notes to be redeemed at its registered address all in accordance with the Junior Indenture. If less than all of the Junior Subordinated Notes are to be redeemed at any time, selection of Junior Subordinated Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Junior Subordinated Notes are listed, or, if the Junior Subordinated Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Junior Subordinated Notes of $1,000 or less shall be redeemed in part. 7. Repurchase at the Option of the Holder Upon a Change of Control, any Holder of Junior Subordinated Notes will have the right, subject to certain conditions set forth in the Junior Indenture, to cause the Company to 3 repurchase all or any part of the Junior Subordinated Notes of such Holder at a purchase price equal to 101% of the principal amount of the Junior Subordinated Notes to be repurchased plus accrued and unpaid interest thereon, (if any) to the date of repurchase as provided in, and subject to the terms of, the Junior Indenture. 8. Subordination The Junior Subordinated Notes are subordinated to Senior Debt of the Company, as defined in the Junior Indenture. To the extent provided in the Junior Indenture, Senior Debt of the Company must be paid before the Junior Subordinated Notes may be paid. The Company agrees, and each securityholder by accepting a Junior Subordinated Note agrees, to the subordination provisions contained in the Junior Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose. 9. Denominations; Transfer; Exchange The Junior Subordinated Notes are in registered form without coupons. A Holder may transfer or exchange Junior Subordinated Notes in accordance with the Junior Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Junior Indenture. The Registrar need not register the transfer of or exchange any Junior Subordinated Notes selected for redemption (except, in the case of a Junior Subordinated Note to be redeemed in part, the portion of the Junior Subordinated Note not to be redeemed) or to transfer or exchange any Junior Subordinated Notes for a period of 15 days prior to a selection of Junior Subordinated Notes to be redeemed or 15 days before an interest payment date. 10. Persons Deemed Owners The registered Holder of this Junior Subordinated Note may be treated as the owner of it for all purposes. 11. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 12. Discharge and Defeasance Subject to certain conditions set forth in the Junior Indenture, the Company at any time may terminate some or all of its obligations under the Junior Subordinated Notes and the Junior Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Junior Subordinated Notes to redemption or maturity, as the case may be. 4 13. Amendment, Waiver Subject to certain exceptions set forth in the Junior Indenture, from time to time, the Company, the Guarantors and the Trustee, without the consent of the Holders, may amend the Junior Indenture or the Junior Subordinated Notes for the following purposes, so long as such change does not, in the opinion of the Trustee, adversely affect the rights of any of the Holders in any material respect: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for uncertificated Junior Subordinated Notes in addition to or in place of certificated Junior Subordinated Notes (provided that the uncertificated Junior Subordinated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Junior Subordinated Notes are described in Section 163(f)(2)(B) of the Code); (iii) to provide for the assumption of the Company's or any Guarantor's obligations to Holders of Junior Subordinated Notes in the case of a merger, consolidation or sale of assets; (iv) to release any Subsidiary Guarantee in accordance with the provisions of the Junior Indenture; (v) to provide for additional Guarantors; (vi) to make any change that would provide any additional rights or benefits to the Holders of Junior Subordinated Notes or that does not adversely affect the legal rights under the Junior Indenture of any such Holder; or (vii) to comply with requirements of the SEC in order to effect or maintain the qualification of the Junior Indenture under the TIA. The Company, the Guarantors and the Trustee may amend the Junior Indenture or the Junior Subordinated Notes with the written consent of the Holders of at least a majority in principal amount of the Junior Subordinated Notes. However, without the consent of each affected Holder of a Junior Subordinated Note, an amendment may not: (i) reduce the principal amount of Junior Subordinated Notes whose Holders must consent to an amendment; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any Junior Subordinated Note; (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Junior Subordinated Note, or change the date on which any Junior Subordinated Note may be subject to redemption or repurchase, or reduce the redemption or repurchase price therefor; (iv) make any Junior Subordinated Notes payable in money other than that stated in the Junior Subordinated Notes; (v) make any change in provisions of the Junior Indenture protecting the right of each Holder to receive payment of principal of and interest on such Holder's Junior Subordinated Notes on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Junior Subordinated Notes to waive Defaults or Events of Default; (vi) modify or change any provision of the Junior Indenture or the related definitions affecting the subordination or ranking of the Junior Subordinated Notes in a manner which adversely affects the Holders; provided, however, that it is understood that any amendment, the purpose of which is to permit the Incurrence of additional Indebtedness under the Indenture shall not be construed as adversely affecting the ranking of the Junior Subordinated Notes; or (viii) make any change to the Subsidiary Guarantees in any manner that adversely affects the rights of the Holders. 14. Defaults and Remedies Under the Junior Indenture, the following events are "Events of Default": (a) the failure to 5 pay interest on any Junior Subordinated Note when the same becomes due and payable and such default continues for a period of 30 days (whether or not such payment shall be prohibited by the provisions of Article X); (b) the failure to pay the principal on any Junior Subordinated Note when such principal becomes due and payable, at maturity, upon redemption or otherwise, whether or not such payment shall be prohibited by the provisions of Article X; (c) a default in the observance or performance of any other covenant or agreement contained in the Junior Indenture, subject to applicable grace periods; (d) there shall be a default under any Indebtedness of the Company or any Subsidiary resulting in acceleration of Indebtedness aggregating $10.0 million or more at any one time outstanding; (e) certain judgments in an aggregate amount in excess of $5.0 million; or (f) certain events of voluntary or involuntary bankruptcy. If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) of the Junior Indenture with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Junior Subordinated Notes may declare the principal of and accrued interest on all the Junior Subordinated Notes to be due and payable by notice in writing to the Company and the Trustee, and the same (i) shall become immediately due and payable or (ii) if there are any amounts outstanding under the Credit Agreement or the ESOP Credit Agreement, shall become immediately due and payable upon the first to occur of an acceleration under the Credit Agreement or the ESOP Credit Agreement or five business days after receipt by the Company and the Representative under the Credit Agreement or the ESOP Credit Agreement of such notice of acceleration. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Company occurs and is continuing, then all unpaid principal of and accrued and unpaid interest on all of the outstanding Junior Subordinated Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. 15. Trustee Dealings with the Company Subject to certain limitations imposed by the Act, the Trustee under the Junior Indenture, in its individual or any other capacity, may become the owner or pledgee of securities and may otherwise deal with and collect obligations owed to it by the Company and may otherwise deal with the Company with the same rights it would have if it were not Trustee. 16. No Personal Liability of Directors, Officers, Employees and Stockholders No director, officer, employee, incorporator, stockholder of the Company, as such, will have any liability for any obligations of the Company under the Junior Subordinated Notes, the Junior Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. 17. Governing Law THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE 6 EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 18. Authentication This security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this security. 19. Abbreviations Customary abbreviations may be used in the name of a securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 20. CUSIP Numbers Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Junior Subordinated Notes and have directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to securityholders. No representation is made as to the accuracy of such numbers either as printed on the securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any securityholder upon written request and without charge to the securityholder a copy of the Junior Indenture which has in it the text of this security in larger type. Requests may be made to: TOKHEIM CORPORATION 1600 Wabash Avenue Fort Wayne, Indiana 46801-0360 Attention: Douglas Pinner 7 ASSIGNMENT FORM To assign this security, fill in the form below: I or we assign and transfer this security to (Print or type assignee's name, address and zip code) (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _______________, as agent, to transfer this security on the books of the Company. The agent may substitute another to act for him. Date: Your Signature: Signature Guarantee: (Signature must be guaranteed by a participant in a recognized signature guarantee medallion program) Sign exactly as your name appears on the other side of this Security. 8 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this security purchased by the Company pursuant to Section 4.06 or 4.08 of the Junior Indenture, check the box: 4.06 Asset Sale 4.08 Change of Control If you want to elect to have only part of this security purchased by the Company pursuant to Section 4.06 or 4.08 of the Junior Indenture, state the amount: $_____. Date: Your Signature: Signature Guarantee: (Sign exactly as your name appears on the other side of the Security) Tax I.D. number Signature Guarantee: (Signature must be guaranteed by a participant in a recognized signature guarantee medallion program) 9 EX-99.(C)(7) 8 JUNIOR SUBORDINATED NOTE INDENTURE EXHIBIT (c)(7) TOKHEIM CORPORATION Junior Subordinated Notes INDENTURE Dated as of September 30, 1998 HARRIS TRUST AND SAVINGS BANK, Trustee TABLE OF CONTENTS ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................ 1 SECTION 1.01. Definitions.............................................. 1 SECTION 1.02. Other Definitions........................................ 12 SECTION 1.03. Incorporation by Reference of Trust Indenture Act........ 13 SECTION 1.04. Rules of Construction.................................... 13 ARTICLE II THE JUNIOR SUBORDINATED NOTES.................................... 13 SECTION 2.01. Form and Dating; Issuance................................ 13 SECTION 2.02. Execution and Authentication............................. 14 SECTION 2.03. Registrar and Paying Agent............................... 15 SECTION 2.04. Paying Agent To Hold Money in Trust...................... 15 SECTION 2.05. Junior Subordinated Noteholder Lists..................... 16 SECTION 2.06. Registration of Transfer and Exchange.................... 16 SECTION 2.07. Replacement Junior Subordinated Notes.................... 17 SECTION 2.08. Outstanding Junior Subordinated Notes.................... 17 SECTION 2.09. Temporary Junior Subordinated Notes...................... 18 SECTION 2.10. Cancellation............................................. 18 SECTION 2.11. Defaulted Interest....................................... 18 SECTION 2.12. CUSIP Numbers............................................ 19 SECTION 2.13. Book-Entry Provisions for Global Junior Subordinated Notes................................ 19 SECTION 2.14. Special Transfer Provisions.............................. 20 ARTICLE III REDEMPTION...................................................... 20 SECTION 3.01. Notices to Trustee....................................... 20 SECTION 3.02. Selection................................................ 21 SECTION 3.03. Notice................................................... 21 SECTION 3.04. Effect of Notice of Redemption.......................... 22 SECTION 3.05. Deposit of Redemption Price............................. 22 SECTION 3.06. Junior Subordinated Notes Redeemed in Part.............. 22 SECTION 3.07. Optional Redemption..................................... 22 ARTICLE IV COVENANTS....................................................... 23 SECTION 4.01. Payment of Junior Subordinated Notes.................... 23 SECTION 4.02. Reports................................................. 23 SECTION 4.03. Restricted Payments..................................... 23 SECTION 4.04. Dividend and Other Payment Restrictions Affecting Subsidiaries............................................ 24 SECTION 4.05. Transactions with Affiliates............................ 25 SECTION 4.06. Change of Control....................................... 26 SECTION 4.07. Compliance Certificate.................................. 28 SECTION 4.08. Additional Subsidiary Guarantees........................ 28 ARTICLE V SUCCESSOR COMPANY................................................ 29 SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets of the Company................. 29 SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All Assets of a Guarantor................. 30 ARTICLE VI DEFAULTS AND REMEDIES........................................... 30 SECTION 6.01. Events of Default and Remedies.......................... 30 SECTION 6.02. Acceleration............................................ 32 SECTION 6.03. Other Remedies.......................................... 32 SECTION 6.04. Waiver of Past Defaults................................. 33 SECTION 6.05. Control by Majority..................................... 33 SECTION 6.06. Limitation on Suits..................................... 33 SECTION 6.07. Rights of Holders to Receive Payment.................... 34 SECTION 6.08. Collection Suit by Trustee.............................. 34 SECTION 6.09. Trustee May File Proofs of Claim........................ 34 SECTION 6.10. Priorities.............................................. 34 SECTION 6.11. Undertaking for Costs................................... 35 SECTION 6.12. Waiver of Stay or Extension Laws........................ 35 ARTICLE VII THE TRUSTEE.................................................... 35 SECTION 7.01. Duties of Trustee....................................... 35 SECTION 7.02. Rights of Trustee....................................... 36 SECTION 7.03. Individual Rights of Trustee............................ 37 SECTION 7.04. Trustee's Disclaimer.................................... 37 SECTION 7.05. Notice of Defaults...................................... 37 SECTION 7.06. Reports by Trustee to Holders........................... 38 SECTION 7.07. Compensation and Indemnity.............................. 38 SECTION 7.08. Replacement of Trustee.................................. 39 SECTION 7.09. Successor Trustee by Merger............................. 40 SECTION 7.10. Eligibility; Disqualification........................... 40 SECTION 7.11. Preferential Collection of Claims Against Company....... 40 ARTICLE VIII DISCHARGE OF INDENTURE; DEFEASANCE............................ 41 SECTION 8.01. Legal Defeasance and Covenant Defeasance................ 41 SECTION 8.02. Conditions to Legal or Covenant Defeasance.............. 42 SECTION 8.03. Deposited Money and Government Junior Subordinated Notes to be Held in Trust; Other Miscellaneous Provisions.......................... 43 SECTION 8.04. Repayment to Company.................................... 43 SECTION 8.05. Reinstatement........................................... 43 SECTION 8.06. Satisfaction and Discharge of Indenture................. 44 ARTICLE IX AMENDMENTS...................................................... 45 SECTION 9.01. Without Consent of Holders.............................. 45 SECTION 9.02. With Consent of Holders.................................. 46 SECTION 9.03. Compliance with Trust Indenture Act...................... 47 SECTION 9.04. Revocation and Effect of Consents and Waivers............ 47 SECTION 9.05. Notation on or Exchange of Junior Subordinated Notes..... 47 SECTION 9.06. Trustee To Sign Amendments............................... 47 SECTION 9.07. Payment for Consent...................................... 48 ARTICLE X SUBORDINATION..................................................... 48 SECTION 10.01. Agreement To Subordinate................................ 48 SECTION 10.02. Liquidation, Dissolution, Bankruptcy.................... 48 SECTION 10.03. Default on Senior Debt.................................. 49 SECTION 10.04. Acceleration of Payment of Junior Subordinated Notes.... 49 SECTION 10.05. When Distribution Must Be Paid Over..................... 49 SECTION 10.06. Subrogation............................................. 50 SECTION 10.07. Relative Rights......................................... 50 SECTION 10.08. Subordination May Not Be Impaired by Company............ 50 SECTION 10.09. Rights of Trustee and Paying Agent...................... 50 SECTION 10.10. Distribution or Notice to Representative................ 51 ARTICLE X NOT TO PREVENT EVENTS OF DEFAULT OR LIMIT RIGHT TO ACCELERATE...... 51 SECTION 10.12. Trust Funds Not Subordinated............................ 51 SECTION 10.13. Trustee Entitled To Rely................................ 51 SECTION 10.14. Trustee To Effectuate Subordination..................... 52 SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt........ 52 SECTION 10.16. Reliance by Holders of Senior Debt on Subordination Provisions.............................................. 52 SECTION 10.17. Trustee's Compensation Not Prejudiced.................. 52 ARTICLE XI SUBSIDIARY GUARANTEES........................................... 52 SECTION 11.01. Subsidiary Guarantees.................................. 52 SECTION 11.02. Limitation on Liability................................ 54 SECTION 11.03. Successors and Assigns................................. 54 SECTION 11.04. No Waiver.............................................. 54 SECTION 11.05. Modification........................................... 55 ARTICLE XII SUBORDINATION OF THE SUBSIDIARY GUARANTEES..................... 55 SECTION 12.01. Agreement To Subordinate............................... 55 SECTION 12.02. Liquidation, Dissolution, Bankruptcy................... 55 SECTION 12.03. Default on Guarantor Senior Debt....................... 56 SECTION 12.04. Demand for Payment..................................... 56 SECTION 12.05. When Distribution Must Be Paid Over.................... 56 SECTION 12.06. Subrogation............................................ 57 SECTION 12.07. Relative Rights........................................ 57 SECTION 12.08. Subordination May Not Be Impaired by a Guarantor....... 57 SECTION 12.09. Rights of Trustee and Paying Agent..................... 57 SECTION 12.10. Distribution or Notice to Representative............... 58 SECTION 12.11. Article XII Not To Prevent Events of Default or Limit Right To Accelerate............................................... 58 SECTION 12.12. Trustee Entitled To Rely............................... 58 SECTION 12.13. Trustee To Effectuate Subordination.................... 58 SECTION 12.14. Trustee Not Fiduciary for Holders of Guarantor Senior Debt.............................................................. 59 SECTION 12.15. Reliance by Holders of Guarantor Senior Debt on Subordination Provisions \f C \l.................................. 59 ARTICLE XIII MISCELLANEOUS................................................. 59 SECTION 13.01. Trust Indenture Act Controls........................... 59
SECTION 13.02. Notices................................................ 59 SECTION 13.03. Communication by Holders with Other Holders............ 60 SECTION 13.04. Certificate and Opinion as to Conditions Precedent..... 60 SECTION 13.05. Statements Required in Certificate or Opinion.......... 60 SECTION 13.06. When Junior Subordinated Notes Disregarded............. 61 SECTION 13.07. Rules by Trustee, Paying Agent and Registrar........... 61 SECTION 13.08. Legal Holidays......................................... 61 SECTION 13.09. GOVERNING LAW.......................................... 61 SECTION 13.10. No Recourse Against Others............................. 61 SECTION 13.11. Successors............................................. 62 SECTION 13.12. Multiple Originals..................................... 62 SECTION 13.13. Table of Contents; Headings............................ 62
INDENTURE, dated as of September 30, 1998, among TOKHEIM CORPORATION, an Indiana corporation (the "Company"), TOKHEIM CORPORATION, an Indiana corporation (the "Company"), Management Solutions, Inc., a Colorado corporation, Tokheim Equipment Corporation, a Delaware corporation, Tokheim RPS, LLC, a Delaware corporation, Sunbelt Hose & Petroleum Equipment, Inc., a Georgia corporation, Envirotronic Systems, Inc., an Indiana corporation, Gasboy International, Inc., a Pennsylvania corporation, Tokheim Automation Corporation, a Texas corporation, Tokheim Investment Corp., a Texas corporation,, as guarantors (collectively, the "Initial Guarantors"), and HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation (the "Trustee"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Company's 12% Junior Subordinated Notes due September 28, 2008 (the "Junior Subordinated Notes"). ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE ------------------------------------------ SECTION 1.01. Definitions. "Acquired Indebtedness" means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Subsidiary of the Company or at the time it merges or consolidates with the Company or any of its Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary of the Company or such acquisition, merger or consolidation. "Acquisition" means the acquisition by the Company of the fuel dispenser, systems and services business of Schlumberger. "Additional Junior Subordinated Note" means any Junior Subordinated Note issued in lieu of cash payment of interest accrued on any outstanding Junior Subordinated Note (including on any Additional Junior Subordinated Note) pursuant hereto. "Affiliate" means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person; provided, however, that neither Schlumberger nor any of its Affiliates shall be deemed to be an Affiliate of the Company. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative of the foregoing. "Board of Directors" means, as to any Person, the board of directors of such Person or any duly authorized committee thereof. "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Business Day" means a day other than a Saturday, Sunday or other day on which banking institutions in the State of New York or the City of Chicago, Illinois are authorized or required by law to close. "Capital Stock" means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person and (ii) with respect to any Person that is not a corporation, any and all partnership or other equity interests of such Person. "Capitalized Lease Obligation" means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP. "Cash Equivalents" means (i) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Corporation ("S&P") or Moody's Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-l from Moody's; (iv) certificates of deposit or bankers' acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $250.0 million; (v) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iv) above; and (vi) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (i) through (v) above. "Change of Control" means the occurrence of one or more of the following events: (i) the approval by the holders of Capital Stock of the Company of any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the provisions of the Indenture); (ii) any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act shall become the owner, directly or indirectly, beneficially or 2 of record, of shares representing either more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of the Company or more than 40% of the aggregate issued and outstanding Common Stock of the Company; or (iii) the replacement of a majority of the Board of Directors of the Company over a two-year period from the directors who constituted the Board of Directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Company then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved. "Code" means the Internal Revenue Code of 1986, as amended. "Common Stock" of any Person means any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person's common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock. "Company" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the indenture securities. "Consolidated Net Earnings" means, with respect to any Person, for any period, the aggregate net earnings (or loss) of such Person and its Subsidiaries for such period on a consolidated basis (before preferred stock dividend requirements), determined in accordance with GAAP; provided that there shall be excluded therefrom (a) after-tax gains or losses from Asset Sales or abandonments or reserves relating thereto, (b) after-tax items classified as extraordinary or nonrecurring gains or losses, (c) the net earnings of any Person acquired in a "pooling of interests" transaction accrued prior to the date it becomes a Subsidiary of the referent Person or is merged or consolidated with the referent Person or any Subsidiary of the referent Person, (d) the net earnings (but not loss) of any Subsidiary of the referent Person to the extent that the declaration of dividends or similar distributions by that Subsidiary of that income is restricted by a contract, operation of law or otherwise, (e) the net earnings of any Person, other than a Subsidiary of the referent Person, except to the extent of cash dividends or distributions paid to the referent Person or to a Wholly Owned Subsidiary of the referent Person by such Person, (f) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Earnings accrued at any time following the Issue Date, (g) income or loss attributable to discontinued operations (including operations disposed of during such period whether or not such operations were classified as discontinued), (h) in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person's assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets and (i) all gains or losses from the cumulative effect of any change in accounting principles. "Credit Agreement" means the Credit Agreement among the Company, certain of its Subsidiaries, the lenders party thereto in their capacities as lenders thereunder and The First 3 National Bank of Chicago, as administrative agent, together with the related documents thereto (including any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted under Section 4.03) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement. "Custodian" means the custodian with respect to any Global Junior Subordinated Note (as appointed by the Depository), or any successor entity thereto as provided in Section 2.03. "Default" means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default. "Depository" means, with respect to the Junior Subordinated Notes issuable or issued in whole or in part in global form, the person specified in Section 2.03 as the Depository with respect to the Junior Subordinated Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, "Depository" shall mean or include such successor. "Designated Senior Debt" means (i) Indebtedness under or in respect of the Credit Agreement or the ESOP Credit Agreement and (ii) any other Indebtedness constituting Senior Debt which, at the time of determination, has an aggregate principal amount of at least $25.0 million and is specifically designated in the instrument evidencing such Senior Debt as "Designated Senior Debt" by the Company. "Designated Guarantor Senior Debt" means (i) Indebtedness of a Guarantor under or in respect of the Credit Agreement or the ESOP Credit Agreement and (ii) any other Indebtedness constituting Senior Debt which, at the time of determination, has an aggregate principal amount of at least $25.0 million and is specifically designated in the instrument evidencing such Senior Debt as "Designated Guarantor Senior Debt" by the Guarantor. "Disqualified Capital Stock" means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof on or prior to the final maturity date of the Junior Subordinated Notes. "ESOP Credit Agreement" means that certain credit agreement among the Company, the Tokheim Employee Stock Ownership Plan, NBD Bank, NA., and certain other banks, together with the related documents thereto (including any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and 4 restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted under Section 4.03) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders. "Escrow Agent" means Bankers Trust Company. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto. "Fair market value" means, with respect to any asset or property, the price which could be negotiated in an arms'-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the Board of Directors of the Company acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the Trustee. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of the Issue Date. "Global Junior Subordinated Note" means a Junior Subordinated Note that is in the form of Exhibit A hereto that includes the Global Junior Subordinated Notes Legend therein. "Global Junior Subordinated Notes Legend" means the legend set forth in the first paragraph of Exhibit A. "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including letters of credit and reimbursement agreements in respect thereof), of all or any part of any Indebtedness. "Guarantor Senior Debt" means, the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other Obligations with respect to, any Indebtedness of the Guarantors, whether outstanding on the Issue Date or thereafter created, Incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Junior Subordinated Notes. Without limiting the generality of the foregoing, "Guarantor Senior Debt" shall also include the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the 5 rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other monetary obligations of the Guarantors owing in respect of, (v) the Senior Notes issued on the Issue Date in the amount of $22.5 million (including any Refinacing thereof, the "Senior Notes"), (w) the Senior Subordinated Securities, (x) the Credit Agreement and the ESOP Credit Agreement, including obligations to pay principal and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities, (y) all Interest Swap Obligations and (z) Currency Agreements, in each case whether outstanding on the Issue Date or thereafter Incurred. Notwithstanding the foregoing, "Guarantor Senior Debt" shall not include (i) any Indebtedness of a Guarantor to a Subsidiary of the Guarantor, (ii) Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer or employee of the Guarantor or any Subsidiary of the Guarantor (including amounts owed for compensation), (iii) Indebtedness to trade creditors and other amounts Incurred in connection with obtaining goods, materials or services, (iv) Indebtedness represented by Disqualified Capital Stock, (v) any liability for federal, state, local or other taxes owed or owing by the Guarantors, (vi) Indebtedness Incurred in violation of the provisions of Section 4.03, (vii) Indebtedness which, when Incurred and without respect to any election under Section 1111(b) of Title 11, United States Code, is without recourse to the Company and (viii) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of the Company, other than the Senior Notes. "Holder" or "Junior Subordinated Noteholder" means the Person in whose name a Junior Subordinated Note is registered on the Registrar's books. "Indebtedness" means with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all Capitalized Lease Obligations of such Person, (iv) all indebtedness or other obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all Obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted), (v) all indebtedness for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction, (vi) guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (i) through (v) above and clause (viii) below, (vii) all indebtedness of any other Person of the type referred to in clauses (i) through (vi) which are secured by any lien on any property or asset of such Person, the amount of such Obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the Obligation so secured, (viii) all indebtedness under Currency Agreements and Interest Swap Agreements of such Person and (ix) all Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be 6 determined pursuant any provision hereof, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock. "Indenture" means this Indenture as amended or supplemented from time to time. "Independent Financial Advisor" means a firm (i) which does not, and whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company and (ii) which, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is to be engaged. "Interest Swap Obligations" means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include interest rate swaps, caps, floors, collars and similar agreements. "Investment" means, with respect to any Person, any direct or indirect loan or other extension of credit (including a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person. "Investment" shall exclude extensions of trade credit by the Company and its Subsidiaries on commercially reasonable terms in accordance with normal trade practices of the Company or such Subsidiary, as the case may be. For the purposes of Section 4.04, the amount of any Investment shall be the original cost of such Investment plus the cost of all additional Investments by the Company or any of its Subsidiaries, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment: provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Earnings. "Issue Date" means the date of original issuance of the Junior Subordinated Notes. "Junior Subordinated Notes" means the Company's 12% Junior Subordinated Notes due September 30, 2008 issued pursuant to the Securities Purchase Agreement in partial payment of the Company's obligations under the Purchase Agreement. "Lien" means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest). 7 "Obligations" means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Officer" means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary or the Controller of the Company. "Officers' Certificate" means a certificate signed by two Officers. "Opinion of Counsel" means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "Permitted Investments" means: (i) Investments by the Company or any Subsidiary of the Company in any Person that is or will become immediately after such Investment a Wholly Owned Subsidiary of the Company or that will merge or consolidate into the Company or a Wholly Owned Subsidiary of the Company; (ii) Investments in the Company by any Subsidiary of the Company; provided that any Indebtedness evidencing such Investment is unsecured and subordinated, pursuant to a written agreement and to the same extent that the Junior Subordinated Notes are subordinated to Senior Debt, to the Company's obligations under the Junior Subordinated Notes and this Indenture; (iii) Investments in cash and Cash Equivalents; (iv) loans and advances to employees and officers of the Company and its Subsidiaries in the ordinary course of business for bona fide business purposes; (v) Currency Agreements and Interest Swap Obligations entered into in the ordinary course of the Company's or its Subsidiaries' businesses and otherwise in compliance with this Indenture; (vi) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers; (vii) Investments made by the Company or its Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with the provisions of Section 4.06; (viii) Investments existing on the Issue Date; (ix) Investments in an African Subsidiary in an aggregate amount not to exceed $2.0 million for which the Company is committed on the Issue Date; and (x) additional Investments in an aggregate amount not exceeding $5.0 million. "Person" means an individual, partnership, corporation, unincorporated organization. trust or joint venture, or a governmental agency or political subdivision thereof. "Preferred Stock" of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation. "Purchase Agreement" means the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities, dated as of June 19, 1998, between the Company and Schlumberger, as amended by the letter agreements dated July 21, 1998, July 31, 1998 and August 28, 1998 and by Amendment No. 1 thereto dated September 30, 1998. 8 "Qualified Capital Stock" means any Capital Stock of the Company that is not Disqualified Capital Stock. "Refinance" means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. "Refinanced" and "Refinancing" have correlative meanings. "Refinancing Indebtedness" means any Refinancing by the Company or any Subsidiary of the Company of Indebtedness Incurred in accordance with the provisions of Section 4.03 (other than pursuant to clause (iv), (v), (vi), (vii), (viii), (ix), (xi) or (xvi) of the definition of Permitted Indebtedness), in each case that does not (1) result in an increase in the aggregate principal amount of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium or penalty required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable fees and expenses incurred by the Company in connection with such Refinancing) or (2) create Indebtedness with (A) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that (x) if such Indebtedness being Refinanced is Indebtedness of the Company, then such Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if such Indebtedness being Refinanced is subordinate or junior to the Junior Subordinated Notes, then such Refinancing Indebtedness shall be subordinate to the Junior Subordinated Notes at least to the same extent and in the same manner as the Indebtedness being Refinanced. "Registration Rights Agreement" means the Registration Rights Agreement dated as of September 30, 1998, among the Company, the Initial Guarantors and Schlumberger, as such agreement may be amended, modified, or supplemented from time to time in accordance with the terms thereof. "Representative" means the indenture trustee or other trustee, agent or representative in respect of any Designated Senior Debt; provided that if, and for so long as, any Designated Senior Debt lacks such a representative, then the Representative for such Designated Senior Debt shall at all times constitute the holders of a majority in outstanding principal amount of such Designated Senior Debt in respect of any Designated Senior Debt. "Restricted Securities Legend" means the legend set forth in Exhibit A. "Roll-Over Notes" means any of the Company's Increasing Rate Senior Subordinated Notes due 2007 issued upon the Stated Maturity of the Senior Subordinated Notes pursuant to the provisions of the Securities Purchase Agreement and this Indenture. "Securities Act" means the Securities Act of 1933, as amended, or any successor statute or statutes thereto. 9 "Securities Purchase Agreement" means the Securities Purchase Agreement, dated as of September 30, 1998 between the Company and Schlumberger providing for the issuance by the Company of (i) the Senior Subordinated Securities, (ii) the Junior Subordinated Notes and (iii) the Warrants. "Senior Debt" means, the principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other Obligations with respect to, any Indebtedness of the Company, whether outstanding on the Issue Date or thereafter created, Incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Junior Subordinated Notes. Without limiting the generality of the foregoing, "Senior Debt" shall also include the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other monetary obligations of the Company owing in respect of, (v) the Senior Notes, (w) the Senior Subordinated Securities, (x) the Credit Agreement and the ESOP Credit Agreement, including obligations to pay principal and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities, (y) all Interest Swap Obligations and (z) Currency Agreements, in each case whether outstanding on the Issue Date or thereafter Incurred. Notwithstanding the foregoing, "Senior Debt" shall not include (i) any Indebtedness of the Company to a Subsidiary of the Company, (ii) Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer or employee of the Company or any Subsidiary of the Company (including, without limitation, amounts owed for compensation), (iii) Indebtedness to trade creditors and other amounts Incurred in connection with obtaining goods, materials or services, (iv) Indebtedness represented by Disqualified Capital Stock, (v) any liability for federal, state, local or other taxes owed or owing by the Company, (vi) Indebtedness Incurred in violation of the provisions of Section 4.03, (vii) Indebtedness which, when Incurred and without respect to any election under Section 1111(b) of Title 11, United States Code, is without recourse to the Company and (viii) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of the Company, other than the Senior Notes. "Senior Subordinated Securities" means the Company's Senior Subordinated Securities issued pursuant to the Securities Purchase Agreement in partial payment of the Company's obligations under the Purchase Agreement. "Significant Subsidiary" shall have the meaning set forth in Rule 1.02(v) of Regulation S-X under the Securities Act. "Schlumberger" means Schlumberger Limited, a Netherlands Antilles corporation. "Stated Maturity" means, with respect to any installment of interest or principal on any Junior Subordinated Notes, the date on which such payment of interest or principal was scheduled to be paid pursuant hereto, and shall not include any contingent obligations to repay, 10 redeem or repurchase any such interest or principal prior to the date scheduled for the payment thereof. "Subordinated Indebtedness" means any Indebtedness of the Company or any Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is subordinate or junior in right of payment to the Junior Subordinated Notes or the applicable Subsidiary Guarantee pursuant to written agreement. "Subsidiary," with respect to any Person, means (i) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person or (ii) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person. "Subsidiary Guarantee" shall mean any Guarantee of the Junior Subordinated Notes by any Guarantor pursuant to Article XI. "Subsidiary Guarantors" means any Subsidiary of the Company which Guarantees the Junior Subordinated Notes pursuant to Article XI. "TIA" means the Trust Indenture Act of 1939, as amended and as in effect on the date of this Indenture. "Traits" means accounts receivable sold without recourse. "Transfer Restricted Securities" means Junior Subordinated Notes that bear or are required to bear the Restricted Securities Legend. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means the Chairman of the Board, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Warrants" means the warrants to purchase shares of Common Stock of the Company issued pursuant to the Warrant Agreement and the Securities Purchase Agreement in partial payment of the purchase price under the Purchase Agreement. "Warrant Agreement" means the Warrant Agreement dated as of September 30, 1998 between the Company and Schlumberger. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying 11 (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one- twelfth) which will elapse between such date and the making of such payment. "Wholly Owned Subsidiary" of any Person means any Subsidiary of such Person of which all the outstanding voting securities (other than in the case of a foreign Subsidiary, directors' qualifying shares or an immaterial amount of shares required to be owned by other Persons pursuant to applicable law) are owned by such Person or any Wholly Owned Subsidiary of such Person. SECTION 1.02. Other Definitions.
Term Defined in Section ---------------------------------- ------------------------------------ "Affiliate Transaction"...........................4.07 "Agent Members"...................................2.13(a) "Bankruptcy Law"..................................6.01 "Blockage Period"................................10.03 "Change of Control Offer".........................4.06(c) "Change of Control Payment Date"..................4.06(a) "Covenant Defeasance".............................8.01(c) "CUSIP"...........................................2.12 "Default Notice".................................10.03 "Event of Default"................................6.01 "Guaranteed Obligations".........................11.01 "Guarantor Blockage Period"......................12.03 "Guarantor Default Notice".......................12.03 "Incur"...........................................4.03 "Indemnified Party"...............................7.07 "Junior Subordinated Notes"...................Recitals "Legal Defeasance"................................8.01(b) "Legal Holiday"..................................13.08 "Notice of Default"...............................6.01 "outstanding".....................................8.01(b) "Paying Agent"....................................2.03 "Reference Date"..................................4.04 "Registrar".......................................2.03 "Replacement Assets"..............................4.06(a) "Restricted Payments".............................4.04(a) "Securities Register".............................2.06 "Surviving Entity"................................5.01 "Trustee".........................................8.03
12 SECTION 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, such provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the SEC. "indenture securities" means the Junior Subordinated Notes. "indenture security holder" means a Holder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Company and any other obligor on the Junior Subordinated Notes. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule and not otherwise defined herein have the meanings assigned to them by such definitions. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; (5) words in the singular include the plural and words in the plural include the singular; and (6) "herein", "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. ARTICLE II THE JUNIOR SUBORDINATED NOTES ----------------------------- SECTION 2.01. Form and Dating; Issuance. (a) The Junior Subordinated Notes and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit A, which is hereby incorporated in and expressly made a part of this Indenture, and as otherwise provided in this Article II. The Junior Subordinated Notes may have notations, legends or 13 endorsements required by law, stock exchange rule, agreements to which the Company or any Guarantor is subject, if any, or usage. Each Junior Subordinated Note shall be dated the date of its authentication. The terms of the Junior Subordinated Notes set forth in Exhibit A are part of the terms of this Indenture. The Junior Subordinated Notes shall be issuable only in registered form without coupons of $1,000 and integral multiples thereof, or, in the case of Additional Junior Subordinated Notes, $100 or any integral multiple thereof (or any lesser amount to the extent necessary). (b) The Junior Subordinated Notes are being issued by the Company pursuant to the Securities Purchase Agreement in partial satisfaction of its payment obligations under to the Purchase Agreement. Upon initial issuance, the Junior Subordinated Notes may be represented by certificates registered in the names of the Holders or by one or more Global Junior Subordinated Notes. The aggregate principal amount of any Global Junior Subordinated Note may from time to time be increased or decreased by adjustments made on the records of the Trustee as Custodian. (c) On the Issue Date, the Company will issue, and the Trustee will authenticate in accordance with Section 2.02, the Junior Subordinated Notes in an aggregate principal amount of $40,000,000. SECTION 2.02. Execution and Authentication. One or more Officers of the Company shall sign the Junior Subordinated Notes by manual or facsimile signature. If an Officer whose signature is on a Junior Subordinated Note no longer holds that office at the time the Trustee authenticates the Junior Subordinated Note, the Junior Subordinated Note shall be valid nevertheless. A Junior Subordinated Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Junior Subordinated Note. The signature shall be conclusive evidence that the Junior Subordinated Note has been authenticated under this Indenture. The Trustee shall authenticate and make available for delivery upon a written order of the Company signed by two of its Officers Junior Subordinated Notes for original issue on the date hereof in an aggregate principal amount of $40,000,000. In the case of a written order of the Company relating to the issuance of Additional Junior Subordinated Notes, such written order shall also demonstrate the computation of the principal amount of Additional Junior Subordinated Notes issuable to each Holder. The aggregate principal amount of Junior Subordinated Notes at any time outstanding may not exceed the sum of (i) $40,000,000 plus (ii) the aggregate principal amount of Additional Junior Subordinated Notes issued by the Company pursuant to the terms hereof in respect of interest accrued on outstanding Junior Subordinated Notes (including outstanding Additional Junior Subordinated Notes). The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Junior Subordinated Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer of the Trustee, a copy of which shall be furnished to the 14 Company. Unless limited by the terms of such appointment, an authenticating agent may authenticate Junior Subordinated Notes whenever the Trustee may do so. After any such appointment, each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an office or agency where Junior Subordinated Notes may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Junior Subordinated Notes may be presented for payment (the "Paying Agent"). The Company may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent. The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company may act as Paying Agent, Registrar, co-registrar or transfer agent. The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Junior Subordinated Notes. The Company initially appoints The Depository Trust Company to act as Depository with respect to the Global Junior Subordinated Notes, and the Trustee shall initially be the Junior Subordinated Notes Custodian with respect to the Global Junior Subordinated Notes. The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee, provided that no such removal shall become effective until (1) acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (2) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (1) above. The Registrar or Paying Agent may resign at any time upon not less than three Business Days' prior written notice to the Company; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08. SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due date of the principal and interest on any Junior Subordinated Note, the Company shall deposit with the Paying Agent (or if the Company is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest when so becoming due. The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders of Junior Subordinated Notes or the Trustee all money held by the Paying Agent for the payment of 15 principal of or interest on the Junior Subordinated Notes and shall notify the Trustee in writing of any default by the Company in making any such payment within one Business Day thereof. If the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section 2.04, the Paying Agent shall have no further liability for the money delivered to the Trustee. Any money deposited with any Paying Agent, or then held by the Company in trust for the payment of principal or interest on any Junior Subordinated Note and remaining unclaimed for two years after such principal and interest has become due and payable shall be paid to the Company at its request, or, if then held by the Company, shall be discharged from such trust; and the Holders of Junior Subordinated Notes shall thereafter, as general unsecured creditors, look only to the Company for payment thereof, and all liability of the Paying Agent with respect to such money, and all liability of the Company as trustee thereof, shall thereupon cease. SECTION 2.05. Junior Subordinated Noteholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of Junior Subordinated Notes. If the Trustee is not the Registrar, the Company shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Junior Subordinated Notes. SECTION 2.06. Registration of Transfer and Exchange. The Junior Subordinated Notes shall be issued in registered form only. The Company shall cause to be kept at the principal corporate trust office of the Trustee a register (the "Securities Register") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Junior Subordinated Notes and the registration of transfer of Junior Subordinated Notes entitled to be registered or transferred as herein provided. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Junior Subordinated Notes at the Registrar's or co-registrar's request. The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any registration of transfer or exchange pursuant to this Section 2.06. The Company shall not be required to make, and the Registrar need not register, transfers or exchanges of Junior Subordinated Notes selected for redemption (except, in the case of Junior Subordinated Notes to be redeemed in part, the portion thereof not to be redeemed) or transfers or exchanges of any Junior Subordinated Notes for a period of 15 days before a selection of Junior Subordinated Notes to be redeemed. Prior to the due presentation for registration of transfer of any Junior Subordinated Note, the Company, the Guarantors, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the Person in whose name a Junior Subordinated Note is registered as the absolute owner of such Junior Subordinated Note for the purpose of receiving payment of principal of and accrued and unpaid interest on such Junior Subordinated Note and for all other 16 purposes whatsoever, whether or not such Junior Subordinated Note is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co- registrar shall be affected by notice to the contrary. Any Holder of a Global Junior Subordinated Note shall, by acceptance of such Global Junior Subordinated Note, agree that transfers of beneficial interests in such Global Junior Subordinated Note may be effected only through the Depository, in accordance with the provisions of this Indenture and such Depository's usual procedures. All Junior Subordinated Notes issued upon any registration of transfer or exchange pursuant to this Section 2.06 will evidence the same debt and will be entitled to the same benefits under this Indenture as the Junior Subordinated Notes surrendered upon such registration of transfer or exchange. SECTION 2.07. Replacement Junior Subordinated Notes. If a mutilated Junior Subordinated Note is surrendered to the Registrar or if the Holder of a Junior Subordinated Note claims that the Junior Subordinated Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Junior Subordinated Note if the Holder satisfies any reasonable requirements of the Trustee and the Company including evidence of the destruction, loss or theft of the Junior Subordinated Note. If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss that any of them may suffer if a Junior Subordinated Note is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Junior Subordinated Note, including the payment of a sum sufficient to cover any tax or other governmental charge that may be required. In the event any such mutilated, lost, destroyed or wrongfully taken Junior Subordinated Note has become or is about to become due and payable, the Company in its discretion may pay such Junior Subordinated Note instead of issuing a new Junior Subordinated Note in replacement thereof. Every replacement Junior Subordinated Note is an additional obligation of the Company. The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Junior Subordinated Notes. SECTION 2.08. Outstanding Junior Subordinated Notes. The Junior Subordinated Notes outstanding at any time are all Junior Subordinated Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.08 as not outstanding. A Junior Subordinated Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Junior Subordinated Note. If a Junior Subordinated Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Junior Subordinated Note is held by a protected purchaser (as defined in Article 8 of the Uniform Commercial Code). 17 If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Junior Subordinated Notes (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders of Junior Subordinated Notes on that date pursuant to the terms of this Indenture, then on and after that date such Junior Subordinated Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue. SECTION 2.09. Temporary Junior Subordinated Notes. Until definitive Junior Subordinated Notes and Global Junior Subordinated Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Junior Subordinated Notes. Temporary Junior Subordinated Notes shall be substantially in the form of definitive Junior Subordinated Notes but may have variations that the Company considers appropriate for temporary Junior Subordinated Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Junior Subordinated Notes and deliver them in exchange for temporary Junior Subordinated Notes upon surrender of such temporary Junior Subordinated Notes at the office or agency of the Company, without charge to the Holder. SECTION 2.10. Cancellation. The Company at any time may deliver Junior Subordinated Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Junior Subordinated Notes surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Junior Subordinated Notes surrendered for registration of transfer, exchange, payment or cancellation and deliver canceled Junior Subordinated Notes to the Company pursuant to written direction by an Officer of the Company. The Company may not issue new Junior Subordinated Notes to replace Junior Subordinated Notes that have been redeemed, paid or delivered to the Trustee for cancellation. The Trustee shall not authenticate Junior Subordinated Notes in place of canceled Junior Subordinated Notes other than pursuant to the terms of this Indenture. SECTION 2.11. Defaulted Interest. If the Company defaults in a payment of interest on the Junior Subordinated Notes, the Company shall pay the defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the persons who are Holders of Junior Subordinated Notes on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or cause to be mailed to each Holder of Junior Subordinated Notes a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. The Company may make payment of any defaulted interest in any other lawful manner not inconsistent with the requirements (if applicable) of any securities exchange on which the Junior Subordinated Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this paragraph, such manner of payment shall be deemed practicable by the Trustee. 18 SECTION 2.12. CUSIP Numbers. The Company in issuing the Junior Subordinated Notes may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Junior Subordinated Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Junior Subordinated Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. SECTION 2.13. Book-Entry Provisions for Global Junior Subordinated Notes. If the Junior Subordinated Notes are issued in the form of a Global Junior Subordinated Note, the following provisions shall apply: (a) Each Global Junior Subordinated Note initially shall (i) be registered in the name of the Depository for such Global Junior Subordinated Note or the nominee of such Depository and (ii) be delivered to the Trustee as the initial Custodian for such Depository. Beneficial interests in Global Junior Subordinated Notes may be held indirectly through members of or participants in ("Agent Members") the Depository). Agent Members shall have no rights under this Indenture with respect to any Global Junior Subordinated Note held on their behalf by the Depository, or the Trustee as Custodian, or under such Global Junior Subordinated Note, and the Depository may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Junior Subordinated Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or shall impair, as between the Depository and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Junior Subordinated Note. (b) Transfers of a Global Junior Subordinated Note shall be limited to transfers of such Global Junior Subordinated Note in whole, but not in part, to the Depository, its successors or their respective nominees. Interests of beneficial owners in a Global Junior Subordinated Note may be transferred in accordance with the rules and procedures of the Depository (and Agent Member, if applicable) and the provisions of Section 2.14. The Trustee shall register the transfer of Junior Subordinated Notes to all beneficial owners in exchange for their beneficial interests in a Global Junior Subordinated Note if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Junior Subordinated Note or the Depository ceases to be a clearing agency registered under the Exchange Act, at a time when the Depository is required to be so registered in order to act as Depository, and in each case a successor Depository is not appointed by the Company within 90 days of such notice or, (ii) the Company executes and delivers to the Trustee and Registrar an Officers' Certificate stating that such Global Junior Subordinated Note shall be so exchangeable or (iii) an Event of Default has occurred and is continuing and the Registrar has received a request from the Depository to permit such transfers. 19 SECTION 2.14. Special Transfer Provisions. Unless and until a Transfer Restricted Security is transferred or exchanged under an effective registration statement under the Securities Act, the following provisions shall apply: (a) Upon the transfer, exchange or replacement of Junior Subordinated Notes not bearing the Restricted Securities Legend, the Registrar shall deliver Junior Subordinated Notes that do not bear the Restricted Securities Legend. Upon the transfer, exchange or replacement of Junior Subordinated Notes bearing the Restricted Securities Legend, the Registrar shall deliver only Junior Subordinated Notes that bear the Restricted Securities Legend unless there is delivered to the Registrar an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. (b) By its acceptance of any Junior Subordinated Note bearing the Restricted Securities Legend, each Holder of such a Junior Subordinated Note acknowledges that transfer of such Junior Subordinated Note may be restricted pursuant to the provisions of the Securities Act as set forth in the Restricted Securities Legend and agrees that it shall transfer such Junior Subordinated Note only in a transaction that is exempt from the registration requirements of the Securities Act. ARTICLE III REDEMPTION ---------- SECTION 3.01. Notices to Trustee. If the Company elects to redeem Junior Subordinated Notes pursuant to Section 3.07, it shall notify the Trustee in writing of the redemption date, the principal amount of Junior Subordinated Notes to be redeemed and the paragraph of the Junior Subordinated Notes pursuant to which the redemption will occur. The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 60 days before the redemption date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers' Certificate and an Opinion of Counsel from the Company to the effect that such redemption will comply with the conditions herein. If fewer than all the Junior Subordinated Notes are to be redeemed, the record date relating to such redemption shall be selected by the Company and given to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. SECTION 3.02. Selection. If less than all of the Junior Subordinated Notes are to be redeemed at any time, selection of Junior Subordinated Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Junior Subordinated Notes are listed, or, if the Junior Subordinated Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Junior Subordinated Note of $1,000 or less shall be redeemed in part. If any Junior Subordinated Note is to be redeemed in part only, the notice of redemption 20 that relates to such Junior Subordinated Note shall state the portion of the principal amount thereof to be redeemed. On and after the redemption date, interest ceases to accrue on Junior Subordinated Notes or portions of them called for redemption. SECTION 3.03. Notice. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Junior Subordinated Notes to be redeemed at its registered address. Notices of redemption may not be conditional. The Trustee shall notify the Company promptly of the Junior Subordinated Notes or portions of Junior Subordinated Notes to be redeemed. The notice shall identify the Junior Subordinated Notes to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) the name and address of the Paying Agent; (4) that Junior Subordinated Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (5) if fewer than all the outstanding Junior Subordinated Notes are to be redeemed, the certificate numbers and principal amounts of the particular Junior Subordinated Notes to be redeemed; (6) that, unless the Company defaults in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Junior Subordinated Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (7) the paragraph of the Junior Subordinated Notes pursuant to which the Junior Subordinated Notes called for redemption are being redeemed; (8) the CUSIP number, if any, printed on the Junior Subordinated Notes being redeemed; and (9) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Junior Subordinated Notes. At the Company's request (which may be revoked at any time in writing prior to the time at which the Trustee shall have given such notice to the Holders), the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. In such event, the Company shall provide the Trustee with the information required by this Section 3.03. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed, Junior Subordinated Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such 21 Junior Subordinated Notes shall be paid at the redemption price stated in the notice, plus accrued interest to the redemption date; provided that if the redemption date is after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Holder of the redeemed Junior Subordinated Notes registered on the relevant record date. If mailed in the manner herein, the notice shall be conclusively presumed to have been given whether or not the Holder receives such notice. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on the redemption date, the Company shall deposit with the Paying Agent (or, if the Company is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Junior Subordinated Notes to be redeemed on the redemption date other than Junior Subordinated Notes or portions of Junior Subordinated Notes called for redemption that have been delivered by the Company to the Trustee for cancellation. SECTION 3.06. Junior Subordinated Notes Redeemed in Part. Upon surrender of a Junior Subordinated Note that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company's expense) a new Junior Subordinated Note equal in principal amount to the unredeemed portion of the Junior Subordinated Note surrendered. SECTION 3.07. Optional Redemption. The Junior Subordinated Notes may be redeemed at any time, in whole or in part, at the option of the Company at a redemption price equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date (subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date). ARTICLE IV COVENANTS --------- SECTION 4.01. Payment of Junior Subordinated Notes. The Company shall promptly pay the principal of and interest on the Junior Subordinated Notes on the dates and in the manner provided in the Junior Subordinated Notes and in this Indenture (including the payment of interest on the Junior Subordinated Notes by the delivery of Additional Junior Subordinated Notes as contemplated herein and in the Junior Subordinated Notes). Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent (but only if other than the Company) holds by 10:00 a.m., New York City time, in accordance with this Indenture available funds (or Additional Junior Subordinated Notes in the case of interest) sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders of Junior Subordinated Notes on that date pursuant to the terms of this Indenture. The Company shall pay interest on overdue principal at the rate specified therefor in the Junior Subordinated Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 22 SECTION 4.02. Reports. The Company will deliver to the Trustee, within 15 day after the filing of the same with the Commission, copies of the quarterly and annual reports and of the information, documents and other reports, if any, which the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the Commission, to the extent permitted, and provide the Trustee and Holders with such annual reports and such information, documents and other reports specified in Sections 13 and 15(d) of the Exchange Act. The Company will also comply with the other provisions of TIA (S) 3 14(a). SECTION 4.03. Restricted Payments. The Company will not, and will not cause or permit any of its Subsidiaries to, directly or indirectly, (a) declare or pay any dividend or make any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Company) on or in respect of shares of the Company's Capital Stock, (b) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any warrants, rights or options to purchase or acquire shares of any class of such Capital Stock (other than any warrant issued by the Company in connection with the Acquisition), (c) make any Investment other than Permitted Investments) or (d) repurchase or redeem any Indebtedness junior in right of payment to the Junior Subordinated Notes, or make any cash payments of interest thereon (other than refinancing such junior Indebtedness with debt instruments having similar payment-in-kind and subordination features) (each of the foregoing actions set forth in clauses (a), (b), (c) and (d) being referred to as a "Restricted Payment"), if at the time of such Restricted Payment or immediately after giving effect thereto, (i) a Default or an Event of Default shall have occurred and be continuing, or (ii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than cash, being the Fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company) shall exceed the sum of: (w) 50% of the cumulative Consolidated Net Earnings (or, if cumulative Consolidated Net Earnings shall be a loss, minus 100% of such loss) of the Company earned subsequent to the Issue Date and on or prior to the date the Restricted Payment occurs (the "Reference Date"), treating such period as a single accounting period); plus (x) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company plus (y) 100% of the net cash proceeds from the sale of Investments by the Company (other than Permitted Investments) provided that such Investment was made after the Issue Date; plus (z) without duplication of any amounts included in clause (ii)(x) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock (excluding, in the case of clauses (ii)(x) and (z), any net cash proceeds from a sale of Capital Stock of the Company to the extent utilized as provided in clause (2)(ii) of the next succeeding paragraph). Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do no prohibit: (1) the payment of any dividend within 60 days after the date of declaration of such dividend if such dividend would have been permitted on the date of declaration; or (2) the acquisition of any shares of Capital Stock of the Company, either (i) solely 23 in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of the net cash proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company; or (3) dividends on, and redemptions of, the shares of the Company's preferred stock held by the trust of the Company's retirement savings plan in accordance with the terms thereof on the date of this Indenture; or (4) payments to redeem or repurchase stock or similar rights from management of the Company in connection with the repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate management employees upon the termination of employment, death or disability of any such person; provided that such redemptions or repurchases shall not exceed $1.0 million. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (ii) of the immediately preceding paragraph, amounts expended pursuant to clauses (1) and (4) shall be included in such calculation. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment complies with the Indenture and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company's latest available internal quarterly financial statements. SECTION 4.04. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company will not, and will not cause or permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary of the Company to (a) pay dividends or make any other distributions on or in respect of its Capital Stock; (b) make loans or advances or to pay or guarantee any Indebtedness or other obligation owed to the Company or any other Subsidiary of the Company, provided that the terms of the Credit Agreement may restrict loans or advances from the Company and those of its Subsidiaries that are borrowers under the Credit Agreement to any of the Company's Subsidiaries that are not borrowers under the Credit Agreement or Guarantees by the Company or Subsidiaries of the Company that are borrowers under the Credit Agreement of any Indebtedness or other obligation owed by any of the Company's Subsidiaries that are not borrowers under the Credit Agreement; or (c) transfer any of its property or assets to the Company or any other Subsidiary of the Company, except for such encumbrances or restrictions existing under or by reason of: (1) applicable law; (2) this Indenture; (3) customary non-assignment provisions of any contract or any lease governing a leasehold interest of any Subsidiary of the Company; (4) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired; (5) agreements existing on the Issue Date to the extent and in the manner such agreements are in effect on the Issue Date; (6) the Credit Agreement or the ESOP Credit Agreement; or (7) an agreement governing Indebtedness Incurred to Refinance the Indebtedness issued, assumed or Incurred pursuant to an agreement referred to in clause (2), (4) or (5) above; provided, however, that the provisions relating to such encumbrance or restriction contained in any such Refinancing Indebtedness are no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the 24 provisions relating to such encumbrance or restriction contained in agreements referred to in such clause (2), (4) or (5). SECTION 4.05. Transactions with Affiliates. (a) The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions (including the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate Transactions permitted under Section 4.05(b) and (y) Affiliate Transactions on terms that are no less favorable to the Company or such Subsidiary than those that could reasonably have been obtained in a comparable transaction at such time on an arm's-length basis from a Person that is not an Affiliate of the Company or such Subsidiary. All Affiliate Transactions (and each series of related Affiliate Transactions which are similar or part of a common plan) involving aggregate payments or other property with a fair market value in excess of $1.0 million shall be approved by the Board of Directors of the Company or such Subsidiary, as the case may be, such approval to be evidenced by a Board Resolution stating that such Board of Directors has determined that such transaction complies with the foregoing provisions. If the Company or any Subsidiary of the Company enters into an Affiliate Transaction (or a series of related Affiliate Transactions related to a common plan) that involves aggregate payments or other property with a fair market value of more than $5.0 million, the Company or such Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor and file the same with the Trustee. (b) The restrictions set forth in Section 4.05(a) shall not apply to (i) reasonable fees and compensation paid to. and indemnity provided on behalf of, officers, directors or employees of the Company or any Subsidiary of the Company as determined in good faith by the Company's Board of Directors; (ii) transactions exclusively between or among the Company and any of its Wholly Owned Subsidiaries or exclusively between or among such Wholly Owned Subsidiaries, provided such transactions are not otherwise prohibited by the Indenture; (iii) Restricted Payments permitted by the Indenture; (iv) transactions permitted by, and complying with, the provisions of Article V; (v) transactions with distributors or other purchases or sales of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Indenture which are fair to the Company, in the reasonable determination of the Board of Directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party; (vi) any management agreement as in effect as of the Issue Date or any amendment thereto or any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Issue Date and any similar agreements entered into after the Issue Date; and (vii) intercompany loans from the Company to any of its Subsidiaries; provided such loans are otherwise in compliance with the terms of the Indenture. 25 SECTION 4.06. Change of Control. (a) Upon the occurrence of a Change of Control, each Holder will have the right to require that the Company purchase all or a portion of such Holder's Junior Subordinated Notes pursuant to the offer described below (the "Change of Control Offer"), at a purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest to the date of purchase. (b) Prior to the mailing of the notice referred to below, but in any event within 30 days following any Change of Control, the Company will (i) repay in full all Indebtedness and terminate all commitments under the Credit Agreement and all other Senior Debt the terms of which require repayment upon a Change of Control or offer to repay in full and terminate all commitments under all Indebtedness under the Credit Agreement and all other such Senior Debt and to repay the Indebtedness owed to each lender which has accepted such offer or (ii) obtain the requisite consents under the Credit Agreement and all other Senior Debt to permit the repurchase of the Junior Subordinated Notes as provided below. (c) Within 30 days following the date upon which the Change of Control occurred (the "Change of Control Date"), the Company will send, by first class mail, a notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. The notice to the Holders shall contain all instructions and materials necessary to enable such Holders to tender Junior Subordinated Notes pursuant to the Change of Control Offer. Such notice shall state: (1) that the Change of Control Offer is being made pursuant to this Section 4.08 and that all Junior Subordinated Notes tendered and not withdrawn will be accepted for payment; (2) the purchase price (including the amount of accrued interest) and the purchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law) (the "Change of Control Payment Date"); provided that the Change of Control Payment Date for the Junior Subordinated Notes shall be a date subsequent to any payment dates for the purchase or other repayment of Senior Debt having similar provisions; (3) that any Junior Subordinated Notes not tendered will continue to accrue interest; (4) that, unless the Company defaults in making payment therefor, any Junior Subordinated Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that Holders electing to have a Junior Subordinated Note purchased pursuant to a Change of Control Offer will be required to surrender the Junior Subordinated Note, with the form entitled "Option of Holder to 26 Elect Purchase" on the reverse of the Junior Subordinated Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than five Business Days prior to the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Junior Subordinated Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Junior Subordinated Notes purchased; (7) that Holders whose Junior Subordinated Notes are purchased only in part will be issued new Junior Subordinated Notes in a principal amount equal to the unpurchased portion of the Junior Subordinated Notes surrendered; provided that each Junior Subordinated Note purchased and each new Junior Subordinated Note issued shall be in an original principal amount of $1,000 or integral multiples thereof; and (8) the circumstances and relevant facts regarding such Change of Control. On or before the Change of Control Payment Date, the Company shall (i) accept for payment Junior Subordinated Notes or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the purchase price plus accrued interest, if any, of all Junior Subordinated Notes so tendered and (iii) deliver to the Trustee Junior Subordinated Notes so accepted together with an Officers' Certificate stating the Junior Subordinated Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to the Holders of Junior Subordinated Notes so accepted payment in an amount equal to the purchase price plus accrued interest, if any, and the Trustee shall promptly authenticate and mail to such Holders new Junior Subordinated Notes equal in principal amount to any unpurchased portion of the Junior Subordinated Notes surrendered. Any Junior Subordinated Notes not so accepted shall be promptly mailed by the Company to the Holder thereof. For purposes of this Section 4.08, the Trustee shall act as the Paying Agent. Any amounts remaining after the purchase of Junior Subordinated Notes pursuant to a Change of Control Offer shall be returned by the Trustee to the Company. (d) Neither the Board of Directors of the Company nor the Trustee may waive the provisions of this Section 4.06 relating to a Holder's right to redemption upon a Change of Control. The Company will comply with the requirements of Rule 14e-l under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Junior Subordinated Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 4.06, the Company shall comply with the applicable 27 securities laws and regulations and shall not be deemed to have breached its obligations under the provisions of this Section 4.06 by virtue thereof. SECTION 4.07. Compliance Certificate. The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do have such knowledge, the certificate shall describe the Default, its status and what action the Company is taking or proposes to take with respect thereto. The Company also shall comply with Section 314(a)(4) of the TIA. SECTION 4.08. Additional Subsidiary Guarantees. All current and future Subsidiaries of the Company that Guarantee Indebtedness under the Credit Agreement will be Subsidiary Guarantors in accordance with the terms of this Indenture. Any future Subsidiary that Guarantees Indebtedness under the Credit Agreement shall become a Subsidiary Guarantor and shall execute and deliver to the Trustee a supplemental indenture substantially in the form of Exhibit E pursuant to which such Subsidiary shall Guarantee payment of the Junior Subordinated Notes pursuant to Article XI. ARTICLE V SUCCESSOR COMPANY ----------------- SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All Assets of the Company. (a) The Company will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company's assets (determined on a consolidated basis for the Company and the Company's Subsidiaries) whether as an entirety or substantially as an entirety to any Person unless: (i) either (1) the Company shall be the surviving or continuing corporation or (2) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company and of the Company's Subsidiaries substantially as an entirety (the "Surviving Entity") (x) shall be a corporation organized and validly existing under the laws of the United States or any State thereof or the District of Columbia and (y) shall expressly assume, by supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, the due and punctual payment of the principal of and interest on all of the Junior Subordinated Notes and the performance of every covenant of the Junior Subordinated Notes, the Indenture and the Registration Rights Agreement on the part of the Company to be performed or observed; (ii) immediately after giving effect to such transaction and the assumption contemplated by clause (i)(2)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness Incurred or anticipated to be Incurred in connection with or in respect of 28 such transaction), the Company or such Surviving Entity, as the case may be, shall have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction; (iii) immediately before and immediately after giving effect to such transaction and the assumption contemplated by clause (i)(2)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness Incurred or anticipated to be Incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default shall have occurred or be continuing; and (iv) the Company or the Surviving Entity shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the applicable provisions of the Indenture and that all conditions precedent in the Indenture relating to such transaction have been satisfied. (b) Upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of the Company in accordance with the provisions of Section 5.01(a), in which the Company is not the continuing corporation, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture and the Junior Subordinated Notes with the same effect as if such surviving entity had been named as such. SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All Assets of a Guarantor. No Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person (other than the Company or another Guarantor) unless: (i) the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) assumes all the obligations of such Guarantor under the Junior Subordinated Notes and this Indenture pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists; and (iii) the Guarantor or such Surviving Entity, as the case may be, shall have a Consolidated Net Worth equal to or greater than the Guarantor's or such other Person's Consolidated Net Worth, as the case may be, immediately prior to such transaction. Notwithstanding the foregoing clauses (ii) and (iii) above, (a) any Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to any Subsidiary Guarantor and (b) any Guarantor may merge with an Affiliate incorporated solely for the purpose of reincorporating such Guarantor in another jurisdiction. 29 ARTICLE VI DEFAULTS AND REMEDIES --------------------- SECTION 6.01. Events of Default and Remedies. The following events are "Events of Default": (a) the failure to pay interest on any Junior Subordinated Notes when the same becomes due and payable and such default continues for a period of 30 days (whether or not such payment shall be prohibited by the provisions of Article X); (b) the failure to pay the principal on any Junior Subordinated Notes when such principal becomes due and payable, at maturity, upon redemption or otherwise (including the failure to make a payment to purchase Junior Subordinated Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer), whether or not such payment shall be prohibited by the provisions of Article X; (c) a default in the observance or performance of any other covenant or agreement contained in the Indenture which default continues for a period of 30 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of least 25% of the outstanding principal amount of the Junior Subordinated Notes (except in the case of a default with respect to the provisions of Article V, which will constitute an Event of Default with such notice requirement but without such passage of time requirement); (d) there shall be a default under any Indebtedness of the Company or any Subsidiary, whether such Indebtedness now exists or shall hereinafter be created, if both (A) such default either (1) results from the failure to pay any such Indebtedness at its stated final maturity or (2) relates to an obligation other than the obligation to pay such Indebtedness at its stated final maturity and results in the holder or holders of such Indebtedness causing such Indebtedness to become due prior to its stated final maturity and (B) the amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at stated final maturity or the maturity of which has been so accelerated, aggregates $10.0 million or more at any one time outstanding; (e) one or more judgments in an aggregate amount in excess of $5.0 million (which are not covered by third party insurance as to which the insurer has not disclaimed coverage) shall have been rendered against the Company or any of its Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a period of 60 days after such judgment or judgments become final and non-appealable; or (f) the Company or any Subsidiary that is a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; 30 (C) consents to the appointment of a custodian of it or for any substantial part of its property; (D) makes a general assignment for the benefit of its creditors; or takes any comparable action under any foreign laws relating to insolvency; or (g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company or any Subsidiary that is a Significant Subsidiary in an involuntary case; (B) appoints a custodian of the Company or any Subsidiary that is a Significant Subsidiary or for any substantial part of its property; or (C) orders the winding up or liquidation of the Company or any Subsidiary that is a Significant Subsidiary; or (D) any similar relief is granted under any foreign laws and the order or decree relating thereto remains unstayed and in effect for 60 days. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. The term "Bankruptcy Law" means Title 11, United States Code, or any similar federal or state law for the relief of debtors. For purposes of this Section 6.01, the term "custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. SECTION 6.02. Acceleration. If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Junior Subordinated Notes may declare the principal of and accrued interest on all the Junior Subordinated Notes to be due and payable by notice in writing to the Company and the Trustee specifying the respective Event of Default and that it is a "notice of acceleration" (the "Acceleration Notice"), and the same (i) shall become immediately due and payable or (ii) if there are any amounts outstanding under the Credit Agreement or the ESOP Credit Agreement, shall become immediately due and payable upon the first to occur of an acceleration under the Credit Agreement or the ESOP Credit Agreement or five business days after receipt by the Company and the Representative under the Credit Agreement or the ESOP Credit Agreement of such Acceleration Notice. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Company occurs and is continuing, then all unpaid principal of and accrued and unpaid interest on all of the outstanding Junior Subordinated Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. At any time after a declaration of acceleration with respect to the Junior Subordinated Notes as described in the preceding paragraph, the Holders of a majority in principal amount of Junior Subordinated Notes may rescind and cancel such declaration and its consequences (i) if the rescission would not conflict with any judgment or decree, (ii) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration, (iii) to the extent the payment of such interest is lawful, 31 interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid, (iv) if the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances and (v) in the event of the cure or waiver of an Event of Default of the type described in Section 6.01(f) or (g), the Trustee shall have received an Officers' Certificate and an Opinion of Counsel that such Event of Default has been cured or waived. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Junior Subordinated Notes or to enforce the performance of any provision of the Junior Subordinated Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Junior Subordinated Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of Junior Subordinated Notes in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law. SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the Junior Subordinated Notes then outstanding by written notice to the Trustee may on behalf of the Holders of all of the Junior Subordinated Notes waive any existing Default or Event of Default and its consequences except (i) a continuing Default or Event of Default in the payment of interest on, or the principal of, the Junior Subordinated Notes or (ii) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Junior Subordinated Noteholder affected. When a Default is waived, it is deemed cured and ceases to exist and any Event of Default arising therefrom shall be deemed to have been cured and waived for every purpose under this Indenture, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right. SECTION 6.05. Control by Majority. The Holders of a majority in aggregate principal amount of the outstanding Junior Subordinated Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee by this Indenture. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of other Holders of Junior Subordinated Notes, it being understood that subject to Section 7.01 the Trustee shall have no duty or obligation to determine whether or not such actions or forbearances are unduly prejudicial to such Holders, or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. 32 SECTION 6.06. Limitation on Suits. Except to enforce the right to receive payment of principal or interest when due, a Holder of Junior Subordinated Notes may not pursue any remedy with respect to this Indenture or the Junior Subordinated Notes unless: (1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25% in aggregate principal amount of the Junior Subordinated Notes make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee reasonable security or indemnity against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and (5) the Holders of a majority in aggregate principal amount of the Junior Subordinated Notes do not give the Trustee a direction inconsistent with the request during such 60-day period. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on such Holder's Junior Subordinated Notes, on or after the respective due dates expressed in the Junior Subordinated Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, any Subsidiary or any Guarantor, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. 33 SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article VI, it shall pay out the money or property in the following order: FIRST: to the Trustee for amounts due under Section 7.07; SECOND: to the holders of Senior Debt to the extent required by Article X; THIRD: to Holders for amounts due and unpaid on the Junior Subordinated Notes for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Junior Subordinated Notes for principal and interest, respectively; and FOURTH: to the Company. The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least 15 days before such record date, the Trustee shall mail to each Holder and the Company a notice that states the record date, the payment date and amount to be paid. SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Junior Subordinated Notes. SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company nor any Guarantor (to the extent they may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and each Guarantor (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE VII THE TRUSTEE ----------- SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in 34 their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person's own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (1) this Section 7.01(c) does not limit the effect of Section 7.01(b); (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to subsections (a), (b) and (c) of this Section 7.01. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and to the provisions of the TIA. 35 SECTION 7.02. Rights of Trustee. Subject to Section 7.01: (a) The Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in any such document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee's conduct does not constitute willful misconduct or negligence. (e) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Junior Subordinated Notes at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney. (f) The Trustee shall not be required to give any note, bond or surety in respect of the execution of the trusts and powers under this Indenture. (g) The permissive rights of the Trustee to take any action enumerated in this Indenture shall not be construed as a duty to take such action. SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Junior Subordinated Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co- registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Junior Subordinated Notes and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the issuance of the Junior Subordinated Notes or in the Junior Subordinated Notes other than the Trustee's certificate of authentication. SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing and if it is actually known to the Trustee, the Trustee shall mail to each Holder of Junior Subordinated 36 Notes at the expense of the Company notice of the Default within the earlier of 90 days after it occurs or 30 days after it is known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in payment of principal of or interest on any Junior Subordinated Note, the Trustee may withhold the notice if and so long as a committee of its trust officers in good faith determines that withholding the notice is in the interests of the Holders of the Junior Subordinated Notes. Notwithstanding anything to the contrary expressed in this Indenture, the Trustee shall not be deemed to have knowledge of any Default or Event of Default hereunder, except in the case of an Event of Default under Section 6.01(a) and (b) if the Trustee is acting as the Paying Agent, unless and until a Trust Officer receives written notice thereof at its Corporate Trust Office specified in Section 13.02, from the Company or a Holder that such Default or Event of Default has occurred. SECTION 7.06. Reports by Trustee to Holders. The Trustee shall transmit to the Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the TIA at the times and in the manner provided pursuant thereto. To the extent that any such report is required by the TIA with respect to any 12-month period, such report shall cover the 12- month period ending December 31 and shall be transmitted by the next succeeding March 1. A copy of each report at the time of its mailing to Holders of Junior Subordinated Notes shall be filed with the SEC and each stock exchange (if any) on which the Junior Subordinated Notes are listed. The Company agrees to notify promptly the Trustee whenever the Junior Subordinated Notes become listed on any stock exchange and of any delisting thereof. SECTION 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time such compensation as is agreed to in writing by the Trustee and Company for the Trustee's services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket disbursements, advances and expenses Incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company and each Guarantor, jointly but not severally, shall indemnify the Trustee and its officers, directors, shareholders, agents and employees (each, an "Indemnified Party") for and hold each Indemnified Party harmless against any and all loss, liability or expense (including reasonable attorneys' fees) Incurred by them without negligence or bad faith on their part arising out of or in connection with the acceptance or administration of this Indenture or the Junior Subordinated Notes and the performance of their duties hereunder, including the cost and expense of enforcing this Indenture against the Company (including this Section 7.07), and defending itself against any claim (whether asserted by a Holder or any other person). The Trustee and its officers, directors, shareholders, agents and employees in its capacity as Paying Agent, Registrar, Custodian and agent for service of notice and demands shall have the full benefit of the foregoing indemnity as well as all other benefits, rights and privileges accorded to the Trustee in this Indenture when acting in such other capacity. The Trustee shall notify the Company of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided that any failure 37 so to notify the Company shall not relieve the Company or any Subsidiary Guarantor of its indemnity obligations hereunder. The Company shall defend the claim and the Indemnified Party shall provide reasonable cooperation at the Company's expense in the defense. Such Indemnified Parties may have separate counsel and the Company shall pay the fees and expenses of such counsel; provided that the Company shall not be required to pay such fees and expenses if it assumes such Indemnified Parties' defense and, in such Indemnified Parties' reasonable judgment, there is no conflict of interest between the Company and such parties in connection with such defense. The Company need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an Indemnified Party through such party's own willful misconduct, negligence or bad faith. The Company need not pay any settlement made without its consent (which consent shall not be unreasonably withheld). To secure the Company's payment obligations in this Section 7.07 and all other obligations to the Trustee pursuant to this Indenture, including all fees, expenses and rights to indemnification, the Trustee shall have a lien on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Junior Subordinated Notes. Such lien shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee. The Trustee's right to receive payment of any amounts due under this Indenture shall not be subordinated to any other indebtedness of the Company and the Junior Subordinated Notes shall be subordinate to the Trustee's rights to receive such payment. The Company's payment obligations pursuant to this Section 7.07 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(f) or (g) with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law. SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time by so notifying the Company in writing. The Holders of a majority in principal amount of the Junior Subordinated Notes may remove the Trustee by so notifying the Trustee and the Company in writing and may appoint a successor Trustee. The Company shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged bankrupt or insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal amount of the Junior Subordinated Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the 38 Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of Junior Subordinated Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in aggregate principal amount of the Junior Subordinated Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Holder of Junior Subordinated Notes may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee, provided that such Person shall be qualified and eligible under this Article VII. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Junior Subordinated Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Junior Subordinated Notes so authenticated; and in case at that time any of the Junior Subordinated Notes shall not have been authenticated, any successor to the Trustee may authenticate such Junior Subordinated Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Junior Subordinated Notes or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA (S) 310(b); provided, however, that there shall be excluded from the operation of TIA (S) 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in TIA (S) 310(b)(1) are met. 39 SECTION 7.11. Preferential Collection of Claims Against Company. The Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (S) 311(a) to the extent indicated therein. ARTICLE VIII Discharge of Indenture; Defeasance ---------------------------------- SECTION 8.01. Legal Defeasance and Covenant Defeasance. (a) The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.01(b) or 8.01(c) be applied to all outstanding Junior Subordinated Notes upon compliance with the conditions set forth below in this Article VIII. (b) Upon the Company's exercise under Section 8.01(a) of the option applicable to this Section 8.01(b), the Company and each Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.02, be deemed to have been discharged from their obligations with respect to all outstanding Junior Subordinated Notes and any Subsidiary Guarantee on the date the conditions set forth below are satisfied ("Legal Defeasance"). For this purpose, Legal Defeasance means that the Company and each Guarantor shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Junior Subordinated Notes and any Subsidiary Guarantee, which Junior Subordinated Notes and Subsidiary Guarantees shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.03 and the other Sections of this Indenture referred to in clauses (i) and (ii) below, and to have satisfied all their other obligations under such Junior Subordinated Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of outstanding Junior Subordinated Notes to receive, solely from the trust fund described in Section 8.02, payments in respect of the principal of and interest on such Junior Subordinated Notes when such payments are due, (ii) the Company's obligations with respect to the Junior Subordinated Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 7.07 and 7.08, which shall survive until the Junior Subordinated Notes have been paid in full (thereafter, the Company's obligations in Section 7.07 shall survive), and (iii) this Article VIII. Subject to compliance with this Article VIII, the Company may exercise its option under this Section 8.01(b) notwithstanding the prior exercise of its option under Section 8.01(c). (c) Upon the Company's exercise under Section 8.01(a) of the option applicable to this Section 8.01(c), the Company and each Guarantor shall, subject to the satisfaction of the conditions set forth in Section 8.02, be released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07 and 4.08 and Article V with respect to the outstanding Junior Subordinated Notes on and after the date the conditions set forth below are satisfied ("Covenant Defeasance"), and the Junior Subordinated Notes shall thereafter be deemed not "outstanding" for the purposes 40 of any direction, waiver, consent or declaration of act of Holders (and the consequences of any thereof) in connection with such Sections, but shall continue to be deemed "outstanding" for all the other purposes hereunder. For this purpose, Covenant Defeasance means that, with respect of any term, condition or limitation set forth in any such Section, whether directly or indirectly, by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01, but, except as specified above, the remainder of this Indenture and such Junior Subordinated Notes shall be unaffected thereby. SECTION 8.02. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.01(b) or 8.01(c) to the outstanding Junior Subordinated Notes: In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in U.S. dollars, non-callable U.S. government obligations or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of and interest on the Junior Subordinated Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be; (ii) in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (iii) in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (iv) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (v) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, the Indenture or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (vi) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others; and (vii) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the 41 Covenant Defeasance have been complied with, except that the Opinion of Counsel shall speak only to clauses (ii), (iii) and (v) of this Section 8.02. SECTION 8.03. Deposited Money and Government Junior Subordinated Notes to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.04, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.03, the "Trustee") pursuant to Section 8.02 in respect of the outstanding Junior Subordinated Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Junior Subordinated Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of the Junior Subordinated Notes of all sums due and to become due thereon in respect of principal and interest, but such money need not be segregated from other funds except to the extent required by law. Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or U.S. Government Obligations held by it as provided in Section 8.02 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.02(a)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. SECTION 8.04. Repayment to Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or interest on any Junior Subordinated Note and remaining unclaimed for two years after such principal or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Junior Subordinated Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company, cause to be published once, in The New York Times (national edition) and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 8.05. Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or U.S. Government Obligations in accordance with this Article VIII by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Junior Subordinated Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with this Article VIII; provided, however, that, if the Company or 42 any Guarantor makes any payment of principal of or interest on any Junior Subordinated Note following the reinstatement of its obligations, the Company or any Guarantor, as the case may be, shall be subrogated to the rights of the Holders of such Junior Subordinated Notes to receive such payment from the money held by the Trustee or Paying Agent. SECTION 8.06. Satisfaction and Discharge of Indenture. Upon the request of the Company, this Indenture will be discharged and will cease to be of further effect (except as to surviving rights of registration of transfer or exchange of the Junior Subordinated Notes, as expressly provided for herein or pursuant hereto), the Company and the Guarantors will be discharged from their obligations under the Junior Subordinated Notes and the Subsidiary Guarantees, and the Trustee, at the expense of the Company, will execute proper instruments acknowledging satisfaction and discharge of the Indenture when: (a) either (i) all the Junior Subordinated Notes theretofore authenticated and delivered (other than mutilated, destroyed, lost or stolen Junior Subordinated Notes that have been replaced or paid and Junior Subordinated Notes that have been subject to defeasance under this Article VIII) have been delivered to the Trustee for cancellation or (ii) all Junior Subordinated Notes not theretofore delivered to the Trustee for cancellation (A) have become due and payable, (B) will become due and payable at maturity within one year or (C) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (A), (B) or (C) above, has irrevocably deposited or caused to be deposited with the Trustee funds in trust for such purpose in an amount sufficient to pay and discharge, without the need to reinvest any proceeds thereof, the entire Indebtedness on such Junior Subordinated Notes not theretofore delivered to the Trustee for cancellation, for principal and interest on the Junior Subordinated Notes to the date of such deposit (in the case of Junior Subordinated Notes that have become due and payable) or to the Stated Maturity or redemption date, as the case may be; (b) the Company has paid or caused to be paid all sums payable under the Indenture by the Company; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided in this Indenture relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.07 and, if money shall have been deposited with the Trustee pursuant to clause (a)(ii) of this Section 8.06, the obligations of the Trustee under Section 8.06 and Section 2.04 shall survive. 43 ARTICLE IX Amendments ---------- SECTION 9.01. Without Consent of Holders. From time to time, the Company, the Guarantors and the Trustee, without the consent of the Holders, may amend this Indenture or the Junior Subordinated Notes for the following purposes, so long as such change does not, in the opinion of the Trustee, adversely affect the rights of any of the Holders in any material respect. As to such matters, the Trustee shall be entitled to rely, and shall be protected in relying, upon an Opinion of Counsel: (1) to cure any ambiguity, defect or inconsistency; (2) to provide for uncertificated Junior Subordinated Notes in addition to or in place of certificated Junior Subordinated Notes (provided that the uncertificated Junior Subordinated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Junior Subordinated Notes are described in Section 163(f)(2)(B) of the Code); (3) to provide for the assumption of the Company's or any Guarantor's obligations to Holders of Junior Subordinated Notes in the case of a merger, consolidation or sale of assets; (4) to release any Subsidiary Guarantee in accordance with the provisions of this Indenture; (5) to provide for additional Guarantors; (6) to make any change that would provide any additional rights or benefits to the Holders of Junior Subordinated Notes or that does not adversely affect the legal rights under this Indenture of any such Holder; or (7) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. An amendment under this Section may not make any change that adversely affects the rights under Article X of any holder of Senior Debt then outstanding unless the holders of such Senior Debt (or any group or representative thereof authorized to give a consent) consent to such change. After an amendment under this Section 9.01 becomes effective, the Company shall mail to Holders of Junior Subordinated Notes a notice briefly describing such amendment. The failure to give such notice to all Holders of Junior Subordinated Notes, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.01. 44 SECTION 9.02. With Consent of Holders. The Company, the Guarantors and the Trustee may amend this Indenture or the Junior Subordinated Notes with the written consent of the Holders of at least a majority in principal amount of the Junior Subordinated Notes. However, without the consent of each affected Holder of a Junior Subordinated Note, an amendment may not: (i) reduce the principal amount of Junior Subordinated Notes whose Holders must consent to an amendment; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any Junior Subordinated Notes; (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Junior Subordinated Notes, or change the date on which any Junior Subordinated Notes may be subject to redemption or repurchase, or reduce the redemption or repurchase price therefor; (iv) make any Junior Subordinated Notes payable in money other than that stated in the Junior Subordinated Notes; (v) make any change in provisions of the Indenture protecting the right of each Holder to receive payment of principal of and interest on such Holder's Junior Subordinated Notes on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Junior Subordinated Notes to waive Defaults or Events of Default; (vi) modify or change any provision of the Indenture or the related definitions affecting the subordination or ranking of the Junior Subordinated Notes in a manner which adversely affects the Holders; or (viii) make any change to the Subsidiary Guarantees in any manner that adversely affects the rights of the Holders. In addition, without the consent of Holders of not less than 66% in aggregate principal amount of Junior Subordinated Notes then outstanding, no such amendment, supplement or waiver may amend, change or modify in any material respect the obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control or make and consummate a Net Proceeds Offer with respect to any Asset Sale that has been consummated or modify any of the provisions or definitions with respect thereto. It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. No amendment under this Section 9.02 may make any change that adversely affects the rights under Article X of any holder of Senior Debt then outstanding unless the holders of such 45 Senior Debt (or any group or representative thereof authorized to give a consent) consent to such change. After an amendment under this Section 9.02 becomes effective, the Company shall mail to Holders of Junior Subordinated Notes a notice briefly describing such amendment. The failure to give such notice to all Holders of Junior Subordinated Notes, or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Junior Subordinated Notes shall comply with the TIA as then in effect. SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a Holder of a Junior Subordinated Note shall bind the Holder and every subsequent Holder of that Junior Subordinated Note or portion of the Junior Subordinated Note that evidences the same debt as the consenting Holder's Junior Subordinated Note, even if notation of the consent or waiver is not made on the Junior Subordinated Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Junior Subordinated Note or portion of the Junior Subordinated Note if the Trustee receives written notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Junior Subordinated Noteholder. Except if otherwise specified in such amendment or waiver, an amendment or waiver becomes effective once the requisite number of consents are received by the Company or the Trustee. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders of Junior Subordinated Notes entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. SECTION 9.05. Notation on or Exchange of Junior Subordinated Notes. If an amendment changes the terms of a Junior Subordinated Note, the Trustee may require the Holder of the Junior Subordinated Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Junior Subordinated Note regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Junior Subordinated Note shall issue and the Trustee shall authenticate a new Junior Subordinated Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Junior Subordinated Note shall not affect the validity of such amendment. SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel 46 stating that such amendment is authorized or permitted by this Indenture that such amendment is the legal, valid and binding obligation of the Company and the Guarantors enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03). SECTION 9.07. Payment for Consent. Neither the Company nor any Affiliate of the Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Junior Subordinated Notes unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. ARTICLE X Subordination ------------- SECTION 10.01. Agreement To Subordinate. The Company agrees, and each Junior Subordinated Noteholder by accepting a Junior Subordinated Note agrees, that the Indebtedness evidenced by the Junior Subordinated Notes is subordinated in right of payment, to the extent and in the manner provided in this Article X, to the prior payment in full in cash or Cash Equivalents of all Obligations on Senior Debt, whether outstanding on the Issue Date or thereafter Incurred, and that the subordination is for the benefit of and enforceable by the holders of Senior Debt. All provisions of this Article X shall be subject to Section 10.12. SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any liquidation, dissolution, winding- up, reorganization, assignment for the benefit of creditors or marshaling of assets of the Company or in a bankruptcy, reorganization, insolvency, receivership or other similar proceeding relating to the Company or its property, whether voluntary or involuntary, all Obligations due upon all Senior Debt shall first be paid in full in cash or Cash Equivalents, or such payment duly provided for to the satisfaction of the holders of Senior Debt, by the Company or any of its Subsidiaries before any payment or distribution of any kind or character is made on account of any Obligations on the Junior Subordinated Notes, or for the acquisition by the Company or any of its Subsidiaries of any of the Junior Subordinated Notes for cash or property. If any default occurs and is continuing in the payment when due, whether at maturity, upon any redemption, by declaration or otherwise, of any principal of, interest on, unpaid drawings for letters of credit issued in respect of, or regularly accruing fees with respect to, any Senior Debt, no payment of any kind or character (other than payments by a trust previously established pursuant to the provisions of Article VIII) shall be made by the Company or any of its Subsidiaries with respect to any Obligations on the Junior Subordinated Notes or to acquire any of the Junior Subordinated Notes for cash or property. SECTION 10.03. Default on Senior Debt. In addition, if any other event of default occurs and is continuing with respect to any Designated Senior Debt, as such event of default is 47 defined in the instrument creating or evidencing such Designated Senior Debt, permitting the holders of such Designated Senior Debt then outstanding to accelerate the maturity thereof and if the Representative for the respective issue of Designated Senior Debt gives written notice of the event of default to the Trustee (a "Default Notice"), then, unless and until all events of default have been cured or waived or have ceased to exist or the Trustee receives notice from the Representative for the respective issue of Designated Senior Debt terminating the Blockage Period (as defined below), during the 180 days after the delivery of such Default Notice (the "Blockage Period"), neither the Company nor any of its Subsidiaries shall (x) make any payment of any kind or character (other than payments by a trust previously established pursuant to the provisions of Article VIII) with respect to any Obligations on the Junior Subordinated Notes or (y) acquire any of the Junior Subordinated Notes for cash or property. Notwithstanding anything herein to the contrary, in no event will a Blockage Period extend beyond 180 days from the date of the commencement of the Blockage Period, and only one such Blockage Period may be commenced within any 365 consecutive days. No event of default which existed or was continuing on the date of the commencement of any Blockage Period with respect to the Designated Senior Debt shall be, or be made, the basis for commencement of a second Blockage Period by the Representative of such Designated Senior Debt whether or not within a period of 365 consecutive days, unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants for a period commencing after the date of commencement of such Blockage Period that, in either case, would give rise to an event of default pursuant to any provisions under which an event of default previously existed or was continuing shall constitute a new event of default for this purpose). SECTION 10.04. Acceleration of Payment of Junior Subordinated Notes. If payment of the Junior Subordinated Notes is accelerated because of an Event of Default, the Company shall promptly notify the Representative of the lenders under the Credit Agreement of the acceleration. If any Indebtedness under the Credit Agreement is outstanding, the Company may not make any payment on account of such accelerated Junior Subordinated Notes until five Business Days after such holders of such Indebtedness receive notice of such acceleration and, thereafter, may pay the Junior Subordinated Notes only if this Article X otherwise permits payment at that time. SECTION 10.05. When Distribution Must Be Paid Over. If a distribution is made to Holders of Junior Subordinated Notes that because of this Article X should not have been made to them, the Holders who receive such distribution shall hold it in trust for holders of Senior Debt and pay it over to them as their interests may appear. SECTION 10.06. Subrogation. After all Senior Debt of the Company is paid in full and until the Junior Subordinated Notes are paid in full, Holders of Junior Subordinated Notes shall be subrogated to the rights of holders of Senior Debt of the Company to receive distributions applicable to Senior Debt of the Company. A distribution made under this Article X to holders of Senior Debt of the Company which otherwise would have been made to Holders of Junior Subordinated Notes is not, as between the Company and Holders of Junior Subordinated Notes, a payment by the Company on Senior Debt of the Company. 48 SECTION 10.07. Relative Rights. This Article X defines the relative rights of Holders of Junior Subordinated Notes and holders of Senior Debt of the Company. Nothing in this Indenture shall: (1) impair, as between the Company and the Holders of Junior Subordinated Notes the obligations of the Company, which is absolute and unconditional, to pay principal of and interest on the Junior Subordinated Notes in accordance with their terms; or (2) prevent the Trustee or any Holder of Junior Subordinated Notes from exercising its available remedies upon a Default, subject to the rights of holders of Senior Debt of the Company to receive distributions otherwise payable to Holders of Junior Subordinated Notes. SECTION 10.08. Subordination May Not Be Impaired by Company. No right of any holder of Senior Debt of the Company to enforce the subordination of the Indebtedness evidenced by the Junior Subordinated Notes shall be impaired by any act or failure to act by the Company or by its failure to comply with this Indenture. SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding Section 10.03, the Trustee or Paying Agent may continue to make payments on the Junior Subordinated Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives written notice satisfactory to it that payments may not be made under this Article X. The Company, the Registrar or co- registrar, the Paying Agent, a Representative or a holder of Senior Debt of the Company may give the notice; provided, however, that, if an issue of Senior Debt of the Company has a Representative, only the Representative may give the notice. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a holder of any Senior Debt of the Company (or a Representative of such holder) to establish that such notice has been given by a holder of such Senior Debt of the Company or Representative thereof. The Trustee in its individual or any other capacity may hold Senior Debt of the Company with the same rights it would have if it were not Trustee. The Registrar and co-registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article X with respect to any Senior Debt of the Company which may at any time be held by it, to the same extent as any other holder of Senior Debt of the Company; and nothing in Article VII shall deprive the Trustee of any of its rights as such holder. Nothing in this Article X shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 10.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Senior Debt of the Company, the distribution may be made and the notice given to their Representative (if any). SECTION 10.11. Article X Not To Prevent Events of Default or Limit Right To Accelerate. The failure to make a payment pursuant to the Junior Subordinated Notes by reason of 49 any provision in this Article X shall not be construed as preventing the occurrence of a Default. Nothing in this Article X shall have any effect on the right of the Holders of Junior Subordinated Notes or the Trustee to accelerate the maturity of the Junior Subordinated Notes. SECTION 10.12. Trust Funds Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust under Article VIII by the Trustee for the payment of principal of and interest on the Junior Subordinated Notes shall not be subordinated to the prior payment of any Senior Debt or subject to the restrictions set forth in this Article X, and no Holder of the Junior Subordinated Notes shall be obligated to pay over any such amount to the Company or any holder of Senior Debt of the Company or any other creditor of the Company. SECTION 10.13. Trustee Entitled To Rely. Upon any payment or distribution pursuant to this Article X, the Trustee and the Holders of Junior Subordinated Notes shall be entitled to rely (i) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 10.02 are pending, (ii) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders of Junior Subordinated Notes or (iii) upon the Representative for the holders of Senior Debt of the Company for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt of the Company and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article X. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Senior Debt of the Company to participate in any payment or distribution pursuant to this Article X, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt of the Company held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article X, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article X. SECTION 10.14. Trustee To Effectuate Subordination. Each Holder of a Junior Subordinated Note by accepting such Junior Subordinated Note authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders and the holders of Senior Debt of the Company as provided in this Article X and appoints the Trustee as attorney-in-fact for any and all such purposes. SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt. With respect to the holders of Senior Debt of the Company, the Trustee undertakes to perform or to observe only such of its covenants and obligations as are specifically set forth in this Article X. The Trustee shall not be deemed to owe any fiduciary or other duty to the holders of Senior Debt of the Company and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders of Junior Subordinated Notes or the Company or any other Person, money or assets to 50 which any holders of Senior Debt of the Company shall be entitled by virtue of this Article X or otherwise. SECTION 10.16. Reliance by Holders of Senior Debt on Subordination Provisions. Each Holder by accepting a Junior Subordinated Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Debt of the Company, whether such Senior Debt was created or acquired before or after the issuance of the Junior Subordinated Notes, to acquire and continue to hold, or to continue to hold, such Senior Debt and such holder of Senior Debt shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Debt. SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing in this Article X shall apply to amounts due to the Trustee pursuant to other sections of this Indenture. ARTICLE XI SUBSIDIARY GUARANTEES --------------------- SECTION 11.01. Subsidiary Guarantees. Each Guarantor hereby jointly and severally unconditionally and irrevocably guarantees as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns (a) the full and punctual payment of principal of and interest on the Junior Subordinated Notes when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Company under this Indenture (including obligations to the Trustee) and the Junior Subordinated Notes and (b) the full and punctual performance of all other obligations of the Company whether for expenses, indemnification or otherwise under this Indenture and the Junior Subordinated Notes (all of the foregoing being collectively called the "Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such Guarantor shall remain bound under this Article XI notwithstanding any extension or renewal of any Guaranteed Obligation. Each Guarantor waives presentation to, demand of payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Junior Subordinated Notes or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (a) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Junior Subordinated Notes or any other agreement or otherwise; (b) any extension or renewal of any Guaranteed Obligations; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Junior Subordinated Notes or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (e) the failure of any Holder or Trustee to exercise any right or remedy against 51 any other guarantor of the Guaranteed Obligations; or (f) any change in the ownership of such Guarantor. Each Guarantor further agrees that its Subsidiary Guarantee herein constitutes a Guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Junior Subordinated Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity. Each Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise. In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest, premium, if any, on such Guaranteed Obligations (but only to the extent not prohibited by law) and (iii) all other monetary Guaranteed Obligations of the Company to the Holders and the Trustee. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of any Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition 52 preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article VI, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 11.01. Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees and expenses) Incurred by the Trustee or any Holder in enforcing any rights under this Section. SECTION 11.02. Limitation on Liability. Any term or provision of this Indenture to the contrary notwithstanding, the maximum, aggregate amount of the obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be guaranteed (after giving effect to all its Guarantees of Indebtedness under the Credit Agreement) without rendering this Indenture, as it relates to any Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. SECTION 11.03. Successors and Assigns. This Article XI shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Junior Subordinated Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. SECTION 11.04. No Waiver. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article XI shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article XI at law, in equity, by statute or otherwise. SECTION 11.05. Modification. No modification, amendment or waiver of any provision of this Article XI, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances. ARTICLE XII SUBORDINATION OF THE SUBSIDIARY GUARANTEES ------------------------------------------ SECTION 12.01. Agreement To Subordinate. The Guarantor agrees, and each Junior Subordinated Noteholder by accepting a Junior Subordinated Note agrees, that such Guarantor's obligations under its Subsidiary Guarantee are subordinated in right in right of payment, to the extent and in the manner provided in this Article XII, to the prior payment in full in cash or Cash 53 Equivalents of all Obligations on Guarantor Senior Debt, whether outstanding on the Issue Date or thereafter Incurred, and that the subordination is for the benefit of and enforceable by the holders of Guarantor Senior Debt. All provisions of this Article XII shall be subject to Section 10.12. SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of assets of any Guarantor of any kind or character, whether in cash, property or securities, to creditors upon any liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors or marshaling of assets of any Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other similar proceeding relating to any Guarantor or its property, whether voluntary or involuntary, all Obligations due upon all Guarantor Senior Debt shall first be paid in full in cash or Cash Equivalents, or such payment duly provided for to the satisfaction of the holders of Guarantor Senior Debt, by the Company or any of its Subsidiaries before any payment or distribution of any kind or character is made on account of any Guaranteed Obligations by such Guarantor, or for the acquisition by such Guarantor of any of the Junior Subordinated Notes for cash or property. If any default occurs and is continuing in the payment when due, whether at maturity, upon any redemption, by declaration or otherwise, of any principal of, interest on, unpaid drawings for letters of credit issued in respect of, or regularly accruing fees with respect to, any Guarantor Senior Debt, no payment of any kind or character (other than payments by a trust previously established pursuant to the provisions of Article VIII) shall be made by such Guarantor with respect to any Guaranteed Obligations or to acquire any of the Junior Subordinated Notes for cash or property. SECTION 12.03. Default on Guarantor Senior Debt. In addition, if any other event of default occurs and is continuing with respect to any Designated Guarantor Senior Debt, as such event of default is defined in the instrument creating or evidencing such Designated Guarantor Senior Debt, permitting the holders of such Designated Guarantor Senior Debt then outstanding to accelerate the maturity thereof and if the Representative for the respective issue of Designated Senior Debt gives written notice of the event of default to the Trustee (a "Guarantor Default Notice"), then, unless and until all events of default have been cured or waived or have ceased to exist or the Trustee receives notice from the Representative for the respective issue of Designated Senior Debt terminating the Guarantor Blockage Period (as defined below), during the 180 days after the delivery of such Guarantor Default Notice (the "Guarantor Blockage Period"), such Guarantor shall not (x) make any payment of any kind or character (other than payments by a trust previously established pursuant to the provisions of Article VIII) with respect to any Guaranteed Obligations or (y) acquire any of the Junior Subordinated Notes for cash or property. Notwithstanding anything herein to the contrary, in no event will a Guarantor Blockage Period extend beyond 180 days from the date of the commencement of the Guarantor Blockage Period, and only one such Guarantor Blockage Period may be commenced within any 365 consecutive days. No event of default which existed or was continuing on the date of the commencement of any Guarantor Blockage Period with respect to the Designated Senior Debt of such Guarantor shall be, or be made, the basis for commencement of a second Guarantor Blockage Period by the Representative of such Designated Senior Debt whether or not within a period of 365 consecutive days, unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach 54 of any financial covenants for a period commencing after the date of commencement of such Guarantor Blockage Period that, in either case, would give rise to an event of default pursuant to any provisions under which an event of default previously existed or was continuing shall constitute a new event of default for this purpose). SECTION 12.04. Demand for Payment. If payment of the Junior Subordinated Notes is accelerated because of an Event of Default and a demand for payment is made on a Guarantor pursuant to Article XI, the Trustee shall promptly notify the Company, and the Company shall promptly (and in no event more than five Business Days after receipt of such notice) notify the Representative of the lenders under the Credit Agreement of the acceleration. If any Indebtedness under the Credit Agreement is outstanding, such Guarantor may not pay its Guaranteed Obligations under its Subsidiary Guarantee until five Business Days after the holders of such Indebtedness receive notice of such demand and, thereafter, may pay its Guaranteed Obligations under its Subsidiary Guarantee only if this Article XII otherwise permits payment at that time. SECTION 12.05. When Distribution Must Be Paid Over. If a distribution is made to holders of Junior Subordinated Notes that because of this Article XII should not have been made to them, the Holders who receive the distribution shall hold it in trust for holders of Guarantor Senior Debt of the relevant Guarantor and pay it over to them as their interests may appear. SECTION 12.06. Subrogation. After all Guarantor Senior Debt of a Guarantor is paid in full and until the Holders of Junior Subordinated Notes are paid in full, Holders of Junior Subordinated Notes shall be subrogated to the rights of holders of Guarantor Senior Debt of such Guarantor to receive distributions applicable to Senior Debt of such Guarantor. A distribution made under this Article XII to holders of Guarantor Senior Debt of such Guarantor which otherwise would have been made to Holders is not, as between such Guarantor and Holders of Junior Subordinated Notes, a payment by such Guarantor on Guarantor Senior Debt of such Guarantor. SECTION 12.07. Relative Rights. This Article XII defines the relative rights of Holders of Junior Subordinated Notes and holders of Guarantor Senior Debt. Nothing in this Indenture shall: (1) impair, as between a Guarantor and Holders of Junior Subordinated Notes, the obligation of a Guarantor which is absolute and unconditional, to pay its Obligations under its Subsidiary Guarantee to the extent set forth in Article XI; or (2) prevent the Trustee or any Holder of Junior Subordinated Notes from exercising its available remedies upon a default by a Guarantor under its Obligations under its Subsidiary Guarantee, subject to the rights of holders of Senior Debt of such Guarantor to receive distributions otherwise payable to Holders of Junior Subordinated Notes. SECTION 12.08. Subordination May Not Be Impaired by a Guarantor. No right of any holder of Senior Debt of a Guarantor to enforce the subordination of the Obligations under the 55 Subsidiary Guarantee of such Guarantor shall be impaired by any act or failure to act by such Guarantor or by its failure to comply with this Indenture. SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to make payments on the Junior Subordinated Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives notice satisfactory to it that payments may not be made under this Article XII. A Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative or a holder of Senior Debt of a Guarantor may give the notice; provided, however, that, if an issue of Guarantor Senior Debt has a Representative, only the Representative may give the notice. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a holder of any Guarantor Senior Debt (or a Representative of such holder) to establish that such notice has been given by a holder of such Senior Debt or Representative thereof. The Trustee in its individual or any other capacity may hold Guarantor Senior Debt with the same rights it would have if it were not Trustee. The Registrar and co-registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article XII with respect to any Guarantor Senior Debt which may at any time be held by it, to the same extent as any other holder of Guarantor Senior Debt; and nothing in Article VII shall deprive the Trustee of any of its rights as such holder. Nothing in this Article XII shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 12.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to holders of Guarantor Senior Debt, the distribution may be made and the notice given to their Representative (if any). SECTION 12.11. Article XII Not To Prevent Events of Default or Limit Right To Accelerate. The failure of a Guarantor to make a payment on any of its Obligations under its Subsidiary Guarantee by reason of any provision in this Article XII shall not be construed as preventing the occurrence of a default by such Guarantor under its Subsidiary Guarantee. Nothing in this Article XII shall have any effect on the right of the Holders of Junior Subordinated Notes or the Trustee to make a demand for payment on a Guarantor pursuant to Article XII. SECTION 12.12. Trustee Entitled To Rely. Upon any payment or distribution pursuant to this Article XII, the Trustee and the Holders of Junior Subordinated Notes shall be entitled to rely (i) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 are pending, (ii) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders of Junior Subordinated Notes or (iii) upon the Representatives for the holders of Guarantor Senior Debt for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt of a Guarantor and other Indebtedness of a Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed 56 thereon and all other facts pertinent thereto or to this Article XII. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a holder of Guarantor Senior Debt to participate in any payment or distribution pursuant to this Article XII, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Guarantor Senior Debt of such Guarantor held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article XII, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article XI. SECTION 12.13. Trustee To Effectuate Subordination. Each Holder of Junior Subordinated Notes by accepting a Junior Subordinated Note authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders of Junior Subordinated Notes and the holders of Guarantor Senior Debt of each of the Guarantors as provided in this Article XII and appoints the Trustee as attorney-in-fact for any and all such purposes. SECTION 12.14. Trustee Not Fiduciary for Holders of Guarantor Senior Debt. The Trustee shall not be deemed to owe any fiduciary or other duty to the holders of Guarantor Senior Debt and shall not be liable to any such holders if it shall mistakenly pay over or distribute to Holders of Junior Subordinated Notes or the relevant Guarantor or any other Person, money or assets to which any holders of Guarantor Senior Debt of such Guarantor shall be entitled by virtue of this Article XII or otherwise. SECTION 12.15. Reliance by Holders of Guarantor Senior Debt on Subordination Provisions. Each holder of a Junior Subordinated Note by accepting such Junior Subordinated Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Guarantor Senior Debt, whether such Guarantor Senior Debt was created or acquired before or after the issuance of the Junior Subordinated Notes, to acquire and continue to hold, or to continue to hold, such Guarantor Senior Debt and such holder of Guarantor Senior Debt shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Guarantor Senior Debt. ARTICLE XIII MISCELLANEOUS ------------- SECTION 13.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. SECTION 13.02. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows: 57 if to the Company: Tokheim Corporation 1600 Wabash Avenue Fort Wayne, IN 46801-0360 Attention of: Douglas K. Pinner if to the Trustee: Harris Trust and Savings Bank 311 W. Monroe Street Chicago, Illinois 60606 Attention: Indenture Trustee The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication to the Company or the Trustee shall be deemed to have been given or made as of the date so delivered if personally delivered; and five calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a change of address shall not be deemed to have been given until actually received by the addressee). Any notice or communication mailed to a Holder of Junior Subordinated Notes shall be made in compliance with Section 313(c) of the TIA and mailed to such Holder at such Holder's address as it appears on the Security Register and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Holder of Junior Subordinated Notes or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 13.03. Communication by Holders with Other Holders. Holders of Junior Subordinated Notes may communicate pursuant to TIA (S) 312(b) with other Holders with respect to their rights under this Indenture or the Junior Subordinated Notes. The Company, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of TIA (S) 312(c). SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, at the request of the Trustee the Company shall furnish to the Trustee: (1) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and 58 (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05) stating that, in the opinion of such counsel, all such conditions precedent have been complied with. To the extent applicable, the Company shall comply with the provisions of TIA (S) 314(c)(3). SECTION 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the individual making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with. SECTION 13.06. When Junior Subordinated Notes Disregarded. In determining whether the Holders of the required principal amount of Junior Subordinated Notes have concurred in any direction, waiver or consent, Junior Subordinated Notes owned by the Company or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Junior Subordinated Notes which the Trustee actually knows are so owned shall be so disregarded. SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders of Junior Subordinated Notes. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or a day on which banking institutions are not required to be open in the State of New York. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE SENIOR SUBORDINATED SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN 59 ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. SECTION 13.10. No Recourse Against Others. A director, officer, incorporator, employee, stockholder or Affiliate as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company or any Guarantor under the Junior Subordinated Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Junior Subordinated Note, each Holder waives and releases all such liability. The waiver and release shall be part of the consideration for the issue of the Junior Subordinated Notes. SECTION 13.11. Successors. All agreements of the Company and each Guarantor in this Indenture and the Junior Subordinated Notes shall bind their successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 13.13. Table of Contents; Headings. The table of contents, cross- reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. 60 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. TOKHEIM CORPORATION By: ------------------------------- Name: Title: MANAGEMENT SOLUTIONS, INC. By: ------------------------------- Name: Title: TOKHEIM EQUIPMENT CORPORATION By: ------------------------------- Name: Title: TOKHEIM RPS, LLC By: ------------------------------- Name: Title: ENVIRONTRONIC SYSTEMS, INC. By: ------------------------------- Name: Title: 61 SUNBELT HOSE & PETROLEUM EQUIPMENT INC., By: ------------------------------- Name: Title: GASBOY INTERNATIONAL, INC. By: ------------------------------- Name: Title: TOKHEIM AUTOMATION CORPORATION By: ------------------------------- Name: Title: TOKHEIM INVESTMENT CORP. By: ------------------------------- Name: Title: HARRIS TRUST AND SAVINGS BANK, as Trustee, By: ------------------------------- Name: Title: 62 EX-99.(C)(8) 9 WARRANT TO PURCHASE SHARES OF COMMON STOCK EXHIBIT (c)(8) Dated September , 1998 WARRANT ------- THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK ISSUABLE HEREUNDER HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT REGISTRATION UNDER THE ACT UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION. WARRANT TO PURCHASE UP TO 19.9% OF THE SHARES OF COMMON STOCK OF TOKHEIM CORPORATION (Subject to Adjustment) NO. 1 THIS CERTIFIES THAT, in consideration of the satisfaction of a portion of the purchase price payable by Tokheim Corporation, an Indiana corporation (the "Company"), to Schlumberger Limited, a Netherlands Antilles Corporation ("Schlumberger"), pursuant to the Master Agreement for Purchase and Sale of Shares, Assets and Liabilities dated as of June 19, 1998 between the Company and Schlumberger, as amended by letter agreements dated July 21, 1998, July 31, 1998 and August 28, 1998 and Amendment No. 1 thereto dated September 30, 1998 (as so amended, the "Purchase Agreement"), Schlumberger or its permitted registered assigns (the "Holder"), is entitled, subject to the terms and conditions of this Warrant, at any time or from time to time beginning 120 days after the date hereof (the "Effective Date"), and before 5:00 p.m. Eastern Time on the fifth anniversary of the date hereof (the "Expiration Date"), to purchase from the Company, up to 19.9% of the outstanding shares (the "Warrant Shares") of common stock of the Company (the "Common Stock"), at a price per share of US$0.01 (the "Purchase Price"), subject to the vesting and earlier termination provisions set forth herein. The actual number of Warrant Shares issuable upon exercise of the Warrants will be determined by dividing (i) $20,000,000 by (ii) the weighted average closing price of the Common Stock on the NYSE-Composite Tape for a two- month period beginning one month prior to and ending one month after the date of issuance of this Warrant (the "Issuance Date"). If the number of Warrant Shares so obtained represents less than 19.9% of the number of shares of Common Stock outstanding on the Issuance Date, the Warrants will be exercisable for such number of Warrant Shares. If the number of Warrant Shares so obtained exceeds 19.9% of the number of shares of Common Stock outstanding on the Issuance Date, the actual number of Warrant Shares for which the Warrants may be exercised will be 19.9% of the number of shares of Common Stock outstanding on the Issuance Date. Both the number of Warrant Shares purchasable upon exercise of this Warrant and the Purchase Price are subject to adjustment and change as provided herein. 1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have the following respective meanings: "Fair Market Value" of a share of Common Stock as of a particular date means: (a) If traded on a securities exchange or the Nasdaq National Market, the Fair Market Value shall be deemed to be the weighted average of the closing prices of the Common Stock on such exchange or market over the five business days ending two business days prior to the applicable date of valuation; (b) If actively traded over-the-counter, the Fair Market Value shall be deemed to be the average of the closing bid and asked prices over the 30-day period ending immediately prior to the applicable date of valuation; and (c) If there is no active public market, the Fair Market Value shall be the value as determined in good faith by the Company's Board of Directors. "Registered Holder" means any Holder in whose name this Warrant is registered upon the books and records maintained by the Company. "SEC" means the Securities and Exchange Commission. "Warrant" includes this Warrant and any warrant delivered in substitution or exchange therefor as provided herein. 2. EXERCISE OF WARRANT 2.1. Payment. Subject to compliance with the terms and conditions of this Warrant and applicable securities laws, this Warrant may be exercised, in whole or in part at any time or from time to time on or before the Expiration Date, by surrendering this Warrant at the principal office of the Company together with: (a) the form of Notice of Exercise attached hereto as Exhibit 1 (the "Notice of Exercise") duly executed by the Registered Holder, and (b) payment by: (i) wire transfer in same day funds of an amount equal to the product obtained by multiplying the number of shares of Common Stock being purchased upon such exercise by the then effective Purchase Price (the "Exercise Amount"); (ii) by tendering back to the Company the right to exercise the Warrants represented hereby with respect to the number of shares of Common Stock having an aggregate Fair Market Value, net of the aggregate Purchase Price for such shares, equal to the Exercise Amount; or (iii) with any combination of the foregoing. 2 2.2. Stock Certificates; Fractional Shares. As soon as practicable on or after the exercise date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for the number of whole shares of Common Stock issuable upon such exercise, together with cash in lieu of any fraction of a share equal to such fraction of the current Fair Market Value of one whole share of Common Stock as of such exercise date. No fractional shares or scrip representing fractional shares shall be issued upon an exercise of this Warrant. 2.3. Partial Exercise; Effective Date of Exercise. In case of any partial exercise of this Warrant, the Company shall cancel this Warrant upon surrender hereof and shall execute and deliver a new Warrant of like tenor and date for the balance of the shares of Common Stock purchasable hereunder. This Warrant shall be deemed to have been exercised immediately prior to the close of business on the date of its surrender for exercise as provided above. The person entitled to receive the shares of Common Stock issuable upon exercise of this Warrant shall be treated for all purposes as the holder of record of such shares as of the close of business on the date the Holder is deemed to have exercised this Warrant. 2.4. Hart Scott Rodino. If any filing by the Company under the Hart- Scott-Rodino Antitrust Improvements Act should be required at the time of any exercise of this Warrant by a Holder, in the reasonable opinion of counsel for the Holder, the Company promptly will make any such filing with the appropriate government agency. 3. VALID ISSUANCE: TAXES. All Warrant Shares issued upon the exercise of this Warrant shall be validly issued, fully paid and non-assessable shares of Common Stock, and the Company shall pay all taxes and other governmental charges that may be imposed in respect of the issue or delivery thereof. The Company shall not be required to pay any tax or other charge imposed in connection with any transfer involved in the issuance of any certificate for Warrant Shares in any name other than that of the Holder of this Warrant, and in such case the Company shall not be required to issue or deliver any stock certificate or security until such tax or other charge has been paid, or it has been established to the Company's reasonable satisfaction that no tax or other charge is due. 4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number of Warrant Shares issuable upon exercise of this Warrant (or any shares of stock or other securities or property receivable or issuable upon exercise of this Warrant) and the Purchase Price are subject to adjustment upon occurrence of the following events: 4.1. Adjustment for Stock Splits, Stock Subdivisions or Combinations of Shares. The Purchase Price of this Warrant shall be proportionally decreased and the number of Warrant Shares issuable upon exercise of this Warrant (or any shares of stock or other securities at the time issuable upon exercise of this Warrant) shall be proportionally increased to reflect any stock split or subdivision (whether effected by a split or stock dividend) of the Common Stock. The Purchase Price of this Warrant shall be proportionally increased and the number of Warrant Shares issuable upon exercise of this Warrant (or any shares of stock or other securities at the 3 time issuable upon exercise of this Warrant) shall be proportionally decreased to reflect any combination of the Common Stock. 4.2. No Adjustment for Dividends or Distributions of Stock or Other Securities or Property. No adjustment on account of any cash dividend or other distribution with respect to the Common Stock shall be made to the Purchase Price or the number of Warrant Shares issuable upon exercise of this Warrant. 4.3. Reclassification. If the Company, by reclassification of securities or otherwise, shall change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities that were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Purchase Price therefore shall be appropriately adjusted, all subject to further adjustment as provided in this Section 4. 4.4. Adjustment for Capital Reorganization, Merger or Consolidation. In case of any capital reorganization of the capital stock of the Company (other than a combination, reclassification, exchange or subdivision of shares otherwise provided for herein), or any merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all the assets of the Company then, and in each such case, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the Holder of this Warrant shall thereafter be entitled to receive upon exercise of this Warrant, during the period specified herein and upon payment of the Purchase Price then in effect, the number of shares of stock or other securities or property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the shares deliverable upon exercise of this Warrant would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 4. The foregoing provisions of this Section 4.4 shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of this Warrant. If the per-share consideration payable to the Holder hereof for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company's Board of Directors. In all events, appropriate adjustment (as determined in good faith by the Company's Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. 4.5. Adjustment upon Issuance of Common Stock. If at any time after the date hereof, the Company shall issue or sell any shares of Common Stock (except on exercise of this Warrant) or issue or sell any Convertible Securities, as defined below, for a consideration per 4 share less that its Fair Market Value immediately prior to the time of such sale or issue, then, forthwith upon said issue or sale, the number of Warrant Shares issuable upon exercise of this Warrant shall be increased to such number of Warrant Shares as is determined by multiplying the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to the time of such issue or sale by a fraction, the numerator of which shall be (x) the total number of shares of Common Stock outstanding immediately after such issue or sale, multiplied by (y) the Fair Market Value of a share of Common Stock immediately prior to such issue or sale, and the denominator of which shall be the sum of (A) the number of shares of Common Stock outstanding immediately prior to such issue or sale multiplied by the Fair Market Value of a share of Common Stock immediately prior to such issue or sale plus (B) the consideration received by the Company upon such issue or sale. 4.6. Issuance of Convertible Securities. In case the Company shall issue (whether directly or by assumption in a merger or otherwise) or sell any rights, options or warrants to purchase shares of Common Stock, or securities convertible into shares of Common Stock (all such rights, options, warrants and securities hereinafter referred to as "Convertible Securities"), whether or not the rights to exchange or convert thereunder are immediately exercisable, and the price per share for which Common Stock is issuable upon the conversion or exchange of Convertible Securities (determined as provided below) shall be less than the Fair Market Value determined as of the date of such issue or sale of such Convertible Securities, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall (as of the date of the issue or sale of such Convertible Securities) be deemed to be outstanding and to have been issued for such price per share, provided that (A) no further adjustments of the number of Warrant Shares issuable upon exercise of this Warrant shall be made upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities, and (B) if any such issue or sale of such Convertible Securities is made upon exercise of any rights or warrants to subscribe for or purchase or any option to purchase any such Convertible Securities for which adjustments of the number of Warrant Shares issuable upon exercise of this Warrant have been or are to be made, no further adjustment of the number of Warrant Shares issuable upon exercise of this Warrant shall be made by reason of such issue or sale. The price per share for which Common Stock is issuable upon conversion or exchange of Convertible Securities shall be determined by dividing (1) the total amount received or receivable by the Company as consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (2) the total maximum number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities. 5. OPTIONAL REDEMPTION. This Warrant may be redeemed, in whole or in part, at any time within the 120-day term of the Senior Subordinated Notes (as defined in the Purchase Agreement) by the Company upon payment of $20,000,000 (or if the Warrant is redeemed in part, $20,000,000 multiplied by a fraction, the numerator of which is the number of Warrant Shares for which the portion of the Warrant being redeemed would have been exercisable at such time (without giving effect to any adjustment pursuant to Section 4) and the denominator of which is the original number of Warrant Shares issuable upon exercise of the Warrant) to Schlumberger, provided that as of such date (i) the Senior Subordinated Notes have been paid in 5 full and (ii) a portion of the Junior Subordinated Notes (determined by multiplying the then-outstanding principal amount of Junior Subordinated Notes by a fraction, the numerator of which is the number of Warrant Shares for which the portion of the Warrant being redeemed would have been exercisable at such time (without giving effect to any adjustment pursuant to Section 4) and the denominator of which is the original number of Warrant Shares issuable upon exercise of the Warrant) simultaneously is redeemed. 6. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the Purchase Price, or number or type of Warrant Shares issuable upon exercise of this Warrant, the Chief Financial Officer, Controller or such other officer of the Company designated by the Chief Executive Officer shall compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based, including a statement of the adjusted Purchase Price. The Company shall promptly send (by facsimile and by either first class mail, postage prepaid or overnight delivery) a copy of each such certificate to the Holder. 7. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to the Company of the ownership of and the loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to it, and (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will execute and deliver in lieu thereof a new Warrant of like tenor as the lost, stolen, destroyed or mutilated Warrant. 8. RESERVATION OF COMMON STOCK. The Company hereby covenants that at all times there shall be reserved for issuance and delivery upon exercise of this Warrant such number of shares of Common Stock or other shares of capital stock of the Company as are from time to time issuable upon exercise of this Warrant and, from time to time, will take all steps necessary to amend its Certificate of Incorporation to provide sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant (and shares of its Common Stock for issuance on conversion of such Common Stock). All such shares shall be duly authorized, and when issued upon such exercise, shall be validly issued, fully paid and non- assessable, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights, except encumbrances or restrictions (a) arising under federal or state securities laws or (b) created by or suffered by the Holder. Issuance of this Warrant shall constitute full authority to the Company's officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for Warrant Shares upon the exercise of this Warrant. 9. TRANSFER AND EXCHANGE. Subject to compliance with all applicable securities laws, this Warrant and any rights hereunder may be transferred to the parent, subsidiary or affiliate of the Holder, in whole or in part, on the books of the Company maintained for such purpose at the principal office of the Company referred to above, by the Holder hereof in person, or by duly authorized attorney, upon surrender of this Warrant properly endorsed and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. Upon any permitted partial transfer, the Company will issue and deliver to the Holder a new Warrant or Warrants with respect to the Warrants not so transferred. Each taker and holder of 6 this Warrant, by taking or holding the same, consents and agrees that when this Warrant shall have been so endorsed, the person in possession of this Warrant may be treated by the Company, and all other persons dealing with this Warrant, as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby, any notice to the contrary notwithstanding; provided, however, that until a transfer of this Warrant is duly registered on the books of the Company, the Company may treat the Holder hereof as the owner for all purposes. 10. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees that absent an effective registration statement filed with the SEC under the Securities Act of 1933, as amended (the "1933 Act"), covering the disposition or sale of this Warrant or the Warrant Shares issued or issuable upon exercise hereof, and registration or qualification under applicable state securities laws, such Holder will not sell, transfer, pledge, or hypothecate all or any portion of this Warrant, or the Warrant Shares issued or issuable upon exercise hereof, unless the Company has received an opinion of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such registration or qualification is not required in connection with such disposition to make such disposition consistent with the legend in Section 11. 11. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the Holder hereby represents, warrants and covenants that any Warrant Shares purchased upon exercise of this Warrant or acquired upon conversion thereof shall be acquired for investment only and not with a view to, or for sale in connection with, any distribution thereof; that the Holder has had such opportunity as such Holder has deemed adequate to obtain from representatives of the Company such information as is necessary to permit the Holder to evaluate the merits and risks of its investment in the Company; that the Holder is able to bear the economic risk of holding such shares as may be acquired pursuant to the exercise of this Warrant for an indefinite period; that the Holder understands that the Warrant Shares acquired pursuant to the exercise of this Warrant will not be registered under the 1933 Act (unless otherwise required pursuant to exercise by the Holder of the registration rights, previously granted to the Holder) and will be "restricted securities" within the meaning of Rule 144 under the 1933 Act and that the exemption from registration under Rule 144 will not be available for at least one year from the date of exercise of this Warrant, subject to any SEC amendment to Rule 144 and even then will not be available unless a public market then exists for the stock, adequate information concerning the Company is then available to the public, and other terms and conditions of Rule 144 are complied with; and that all stock certificates representing Warrant Shares issued to the Holder upon exercise of this Warrant or upon conversion of such Warrant Shares may have affixed thereto a legend substantially in the following form (which legend the Company agrees to remove when such restrictions are no longer applicable): THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE 7 AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 12. NO RIGHTS OR LIABILITIES AS STOCKHOLDERS. This Warrant shall not entitle the Holder to any voting rights or other rights as a stockholder of the Company. In the absence of affirmative action by such Holder to purchase Warrant Shares by exercise of this Warrant or upon conversion thereof, no provisions of this Warrant, and no enumeration herein of the rights or privileges of the Holder hereof shall cause such Holder hereof to be a stockholder of the Company for any purpose. 13. HEADINGS. The headings in this Warrant are for purposes of convenience in reference only, and shall not be deemed to constitute a part hereof. 14. GOVERNING LAW. This Warrant shall be construed and enforced in accordance with, and governed by, the laws of the State of New York. 15. NOTICES OF RECORD DATE. In case: (a) the Company shall take a record of the holders of Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities or to receive any other right; or (b) of any consolidation or merger of the Company with or into another corporation, any capital reorganization of the Company, any reclassification of the capital stock of the Company, or any conveyance of all or substantially all of the assets of the Company to another corporation in which holders of the Common Stock are to receive stock, securities or property of another corporation; or (c) of any voluntary dissolution, liquidation or winding-up of the Company; or (d) of any redemption or conversion of all outstanding Common Stock; then, and in each such case, the Company will mail or cause to be mailed to the Holder of this Warrant a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation, winding-up, redemption or conversion is to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock or (such stock or securities as at the time are receivable upon the exercise of this Warrant), shall be entitled to exchange their shares of Common Stock (or such other stock or securities), for securities or other property deliverable upon such 8 reorganization, reclassification, consolidation, merger, conveyance, dissolution, liquidation or winding-up. Such notice shall be delivered at least five days prior to the date therein specified. 16. SEVERABILITY. If any term, provision, covenant or restriction of this Warrant is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 17. COUNTERPARTS. For the convenience of the parties, any number of counterparts of this Warrant may be executed by the parties hereto and each such executed counterpart shall be, and shall be deemed to be, an original instrument. 18. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a Saturday, Sunday or legal holiday, the Expiration Date shall automatically be extended until 5:00 p.m. Eastern Time the next business day. 19. OBTAINING STOCK EXCHANGE LISTINGS. The Company will from time to time take all commercially reasonable action which may be necessary so that the Warrant Shares issuable upon exercise of the Warrant, immediately upon their issuance upon the exercise of the Warrant, will be listed on the principal securities exchanges and markets within the United States of America, if any, on which other shares of Common Stock are then listed. 9 IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the Effective Date. TOKHEIM CORPORATION SCHLUMBERGER LIMITED By: ________________________________ By: ________________________________ ____________________________________ ____________________________________ Printed Name Printed Name ____________________________________ ____________________________________ Title Title 10 EXHIBIT 1 NOTICE OF EXERCISE (To be executed upon exercise of Warrant) TOKHEIM CORPORATION The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate for, and to purchase thereunder, the securities of Tokheim Corporation, as provided for therein, and tenders herewith payment of the exercise price in full in the form of cash or a certified or official bank check in same-day funds in the amount of $____________ for _________ such securities. Please issue a certificate or certificates for such securities in the name of, and pay any cash for any fractional share to (please print name, address and social security number): Name: _____________________________________ Address: _____________________________________ Signature: _____________________________________ Note: The above signature should correspond exactly with the name on the first page of this Warrant or with the name of the assignee appearing in the assignment form below. If said number of shares shall not be all the shares purchasable under this Warrant, a new Warrant Certificate is to be issued in the name of said undersigned for the balance remaining of the shares purchasable hereunder rounded to the next whole number of shares. 11 EXHIBIT 2 ASSIGNMENT (To be executed only upon assignment of this Warrant) For value received, the undersigned hereby sells, assigns and transfers unto ________________________ the within Warrant, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ____________________________ attorney, to transfer this Warrant Certificate on the books of the within-named Company with respect to the number of shares of Common Stock (or other securities) issuable upon exercise hereof set forth below, with full power of substitution in the premises: - -------------------------------------------------------------------------------- Name(s) of Assignee(s) Address # of Warrants - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- And if said number of shares shall not be all the shares issuable upon exercise of this Warrant, a new Warrant Certificate is to be issued in the name of said undersigned for the balance subject to this Warrant. Dated: _______________________________ Signature: _______________________________ Notice: The signature to the foregoing Assignment must correspond to the name as written upon the face of this security in every particular, without alteration or any change whatsoever; signature(s) must be guaranteed by an eligible guarantor institution (banks, stock brokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. 12 EX-99.(C)(9) 10 FORM OF FACE OF ROLL-OVER NOTE. EXHIBIT (c)(9) (Exhibit B to Senior Subordinated Note Indenture) [FORM OF FACE OF ROLL-OVER NOTE] [RESTRICTED SECURITIES LEGEND] THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. TOKHEIM CORPORATION INCREASING RATE ROLL-OVER NOTE DUE 2007 No. ___ CUSIP No. $_________ TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to pay to _______________,or registered assigns, the principal sum of ___________ on January 31, 2007. Interest Payment Dates: January 31, April 30, July 31 and October 31 Record Dates: January 15, April 15, July 15 and October 15 Additional provisions of this security are set forth on the other side of this security. Dated: TOKHEIM CORPORATION, By_________________________________ Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION HARRIS TRUST AND SAVINGS BANK, as Trustee as Trustee, certifies that this is one of the securities referred to in the Senior Indenture By ____________________________ Authorized Signatory [FORM OF REVERSE SIDE OF ROLL-OVER NOTE] Increasing Rate Roll-Over Note due 2007 1. Interest TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to pay interest on the principal amount of this security at the following rates per annum: (i) 12% (the "Base Rate") for the three months ending April 30, 1999; (ii) 12.5% for the three months ending July 31, 1999; (iii) 13.0% for the three months ending October 31, 1999; (iv) 13.5% for the three months ending January 31, 2000; (v) 14.0% for the three months ending April 30, 2000; and (vi) 14.5% thereafter. The Base Rate will be payable in cash, and interest in excess of the Base Rate will be payable by the issuance of Additional Roll-Over Notes having a principal amount equal to the amount of interest not paid in cash on such Interest Payment Date. The Company will pay interest quarterly in arrears, in cash with respect to the Base Rate and in kind with respect to interest in excess of the Base Rate, on January 31, April 30, July 31 and October 31 of each year. Interest on the Roll-Over Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date with respect to the Roll-Over Note; provided, however, that if no interest has been paid on the Company's 12% Senior Subordinated Notes due January 28, 1999, from the date of issuance of the 12% Senior Subordinated Notes due January 28, 1999. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Roll- Over Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 2. Method of Payment The Company will pay interest (except defaulted interest) in respect of the Roll-Over Notes to the Persons who are registered holders of the Roll-Over Notes at the close of business on the January 15, April 15, July 15 and October 15 next preceding the interest payment date even if such securities are canceled after the record date and on or before the interest payment date. Holders must surrender Roll-Over Notes to a Paying Agent to collect principal payments. The Company will pay principal and, with respect to the Base Rate, interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by check payable in such money or by wire transfer of federal funds. 3. Paying Agent and Registrar Initially, Harris Trust and Savings Bank (the "Trustee") will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice to the Holders. The Company or any domestically organized Wholly Owned Restricted Subsidiary may act as Paying Agent, Registrar or co-registrar. 4. Indenture The Company issued the Roll-Over Notes under an Indenture dated as of September 30, 1998 (the "Senior Indenture"), among the Company, the Subsidiary Guarantors and the Trustee. The terms of the Roll-Over Notes include those stated in the Senior Indenture and those made part of the Senior Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Senior Indenture (the "Act"). Terms defined in the Senior Indenture and not defined herein have the meanings ascribed thereto in the Senior Indenture. The Roll-Over Notes are subject to all such terms, and securityholders are referred to the Senior Indenture and the Act for a statement of those terms. The Roll-Over Notes are unsecured senior subordinated obligations of the Company. The aggregate principal amount of Roll-Over Notes at any time outstanding may not exceed the sum of (i) $170,000,000 plus (ii) the aggregate principal amount of Additional Roll-Over Notes issued by the Company pursuant to the terms of the Senior Indenture in respect of interest accrued on outstanding Roll-Over Notes (including outstanding Additional Roll-Over Notes). This security is one of the Roll-Over Notes referred to in the Senior Indenture. The Senior Subordinated Securities include the Senior Subordinated Notes, the Roll- Over Notes and any Exchange Notes issued in exchange for the Roll-Over Notes pursuant to the Senior Indenture. The Senior Subordinated Notes, the Roll-Over Notes and the Exchange Notes are treated as a single class of securities under the Senior Indenture. The Senior Indenture imposes certain limitations on the Incurrence of Indebtedness by the Company and its subsidiaries; the payment of dividends and other payments by the Company and its subsidiaries; Investments; sales of assets of the Company and its subsidiaries; certain transactions with Affiliates; Liens; and consolidations, mergers and transfers of all or substantially all of the Company's or its subsidiaries' assets. In addition, the Senior Indenture prohibits certain restrictions on distributions from subsidiaries. 5. Optional Redemption Subject to the terms of the Senior Indenture, the Roll-Over Notes may be redeemed at any time, in whole or in part, at the option of the Company at a redemption price equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date (subject to the right of holders of the Roll-Over Notes on the relevant record date to receive interest due on the relevant interest payment date). 6. Mandatory Redemption If after the Issue Date the Company or any of its Subsidiaries shall Incur any Indebtedness, other than Indebtedness Incurred under the Credit Agreement, or shall issue any Capital Stock, the Company shall redeem Senior Subordinated Securities in an aggregate principal amount equal to the principal amount of the Indebtedness so Incurred or the total price at which such Capital Stock was sold. The redemption price of the Senior Subordinated Securities so redeemed shall be equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date. 2 7. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Roll-Over Notes to be redeemed at its registered address all in accordance with the Senior Indenture. If less than all of the Roll-Over Notes are to be redeemed at any time, selection of Roll-Over Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Roll-Over Notes are listed, or, if the Roll-Over Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Roll-Over Notes of $1,000 or less shall be redeemed in part. 8. Repurchase at the Option of the Holder Upon a Change of Control, any Holder of Roll-Over Notes will have the right, subject to certain conditions set forth in the Senior Indenture, to cause the Company to repurchase all or any part of the Roll-Over Notes of such Holder at a purchase price equal to 101% of the principal amount of the Roll-Over Notes to be repurchased plus accrued and unpaid interest thereon, (if any) to the date of repurchase as provided in, and subject to the terms of, the Senior Indenture. 9. Subordination The Roll-Over Notes are subordinated to Senior Debt of the Company, as defined in the Senior Indenture. To the extent provided in the Senior Indenture, Senior Debt of the Company must be paid before the Roll-Over Notes may be paid. The Company agrees, and each securityholder by accepting a Roll- Over Note agrees, to the subordination provisions contained in the Senior Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose. 10. Denominations; Transfer; Exchange The Roll-Over Notes are in registered form without coupons. A Holder may transfer or exchange Roll-Over Notes in accordance with the Senior Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Senior Indenture. The Registrar need not register the transfer of or exchange any Roll-Over Notes selected for redemption (except, in the case of a Roll-Over Note to be redeemed in part, the portion of the Roll-Over Note not to be redeemed) or to transfer or exchange any Roll-Over Notes for a period of 15 days prior to a selection of Roll-Over Notes to be redeemed or 15 days before an interest payment date. 11. Persons Deemed Owners The registered Holder of this Roll-Over Note may be treated as the owner of it for all purposes. 3 12. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 13. Discharge and Defeasance Subject to certain conditions set forth in the Senior Indenture, the Company at any time may terminate some or all of its obligations under the Roll- Over Notes and the Senior Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Roll-Over Notes to redemption or maturity, as the case may be. 14. Amendment, Waiver Subject to certain exceptions set forth in the Senior Indenture, from time to time, the Company, the Subsidiary Guarantors and the Trustee, without the consent of the Holders, may amend the Senior Indenture or the Roll-Over Notes for the following purposes, so long as such change does not, in the opinion of the Trustee, adversely affect the rights of any of the Holders in any material respect: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for uncertificated Roll-Over Notes in addition to or in place of certificated Roll- Over Notes (provided that the uncertificated Roll-Over Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Roll-Over Notes are described in Section 163(f)(2)(B) of the Code); (iii) to provide for the assumption of the Company's or any Guarantor's obligations to Holders of Roll-Over Notes in the case of a merger, consolidation or sale of assets; (iv) to release any Subsidiary Guarantee in accordance with the provisions of the Senior Indenture; (v) to provide for additional Guarantors; (vi) to make any change that would provide any additional rights or benefits to the Holders of Roll-Over Notes or that does not adversely affect the legal rights under the Senior Indenture of any such Holder; or (vii) to comply with requirements of the SEC in order to effect or maintain the qualification of the Senior Indenture under the TIA. The Company, the Guarantors and the Trustee may amend the Senior Indenture or the Roll-Over Notes with the written consent of the Holders of at least a majority in principal amount of the Senior Subordinated Securities. However, without the consent of each affected Holder of a Roll-Over Notes, an amendment may not: (i) reduce the principal amount of Roll-Over Notes whose Holders must consent to an amendment; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any Roll-Over Note; (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Roll-Over Note, or change the date on which any Roll-Over Note may be subject to redemption or repurchase, or reduce the redemption or repurchase price therefor; (iv) make any Roll-Over Notes payable in money other than that stated in the Roll-Over Notes; (v) make any change in provisions of the Senior Indenture protecting the right of each Holder to receive payment of principal of and interest on such Holder's Roll-Over Notes on or after the due date 4 thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Roll-Over Notes to waive Defaults or Events of Default; (vi) modify or change any provision of the Senior Indenture or the related definitions affecting the subordination or ranking of the Roll-Over Notes in a manner which adversely affects the Holders; provided, however, that it is understood that any amendment, the purpose of which is to permit the Incurrence of additional Indebtedness under the Indenture shall not be construed as adversely affecting the ranking of the Roll-Over Notes; or (viii) make any change to the Subsidiary Guarantees in any manner that adversely affects the rights of the Holders. 15. Defaults and Remedies Under the Senior Indenture, the following events are "Events of Default": (a) the failure to pay interest on any Roll-Over Note when the same becomes due and payable and such default continues for a period of 30 days (whether or not such payment shall be prohibited by the provisions of Article X); (b) the failure to pay the principal on any Roll-Over Note when such principal becomes due and payable, at maturity, upon redemption or otherwise, whether or not such payment shall be prohibited by the provisions of Article X of the Senior Indenture; (c) a default in the observance or performance of any other covenant or agreement contained in the Senior Indenture, subject to applicable grace periods; (d) there shall be a default under any Indebtedness of the Company or any Subsidiary resulting in acceleration of Indebtedness aggregating $10.0 million or more at any one time outstanding; (e) certain judgments in an aggregate amount in excess of $5.0 million; or (f) certain events of voluntary or involuntary bankruptcy. If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) of the Senior Indenture with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Roll-Over Notes may declare the principal of and accrued interest on all the Roll-Over Notes to be due and payable by notice in writing to the Company and the Trustee, and the same (i) shall become immediately due and payable or (ii) if there are any amounts outstanding under the Credit Agreement or the ESOP Credit Agreement, shall become immediately due and payable upon the first to occur of an acceleration under the Credit Agreement or the ESOP Credit Agreement or five business days after receipt by the Company and the Representative under the Credit Agreement or the ESOP Credit Agreement of such notice of acceleration. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Company occurs and is continuing, then all unpaid principal of and accrued and unpaid interest on all of the outstanding Roll-Over Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. 16. Trustee Dealings with the Company Subject to certain limitations imposed by the Act, the Trustee under the Senior Indenture, in its individual or any other capacity, may become the owner or pledgee of securities and may otherwise deal with and collect obligations owed to it by the Company and may otherwise deal with the Company with the same rights it would have if it were not Trustee. 5 17. No Personal Liability of Directors, Officers, Employees and Stockholders No director, officer, employee, incorporator, stockholder of the Company, as such, will have any liability for any obligations of the Company under the Roll-Over Notes, the Senior Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. 18. Governing Law THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 19. Authentication This security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this security. 20. Abbreviations Customary abbreviations may be used in the name of a securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 21. CUSIP Numbers Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Roll-Over Notes and have directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to securityholders. No representation is made as to the accuracy of such numbers either as printed on the securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any securityholder upon written request and without charge to the securityholder a copy of the Senior Indenture which has in it the text of this security in larger type. Requests may be made to: TOKHEIM CORPORATION 1600 Wabash Avenue Fort Wayne, IN 46801-0360 Attention: Douglas Pinner 6 ASSIGNMENT FORM To assign this security, fill in the form below: I or we assign and transfer this security to ________________________________________________________ (Print or type assignee's name, address and zip code) ________________________________________________________ (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____________________________ ,as agent, to transfer this security on the books of the Company. The agent may substitute another to act for him. Date: ________________ Your Signature: ___________________________ Signature Guarantee:______________________________________________ (Signature must be guaranteed by a participant in a recognized signature guarantee medallion program) ___________________________________________________________________________ Sign exactly as your name appears on the other side of this Security. 7 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this security purchased by the Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, check the box: [_] 4.06 Asset Sale [_] 4.08 Change of Control If you want to elect to have only part of this security purchased by the Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, state the amount: $__________. Date: __________________ Your Signature: _______________________________________ (Sign exactly as your name appears on the other side of the Security) __________________ Tax I.D. number Signature Guarantee:____________________________________________________________ (Signature must be guaranteed by a participant in a recognized signature guarantee medallion program) 8 (Exhibit C to Senior Subordinated Note Indenture) [FORM OF FACE OF EXCHANGE NOTE] TOKHEIM CORPORATION INCREASING RATE ROLL-OVER NOTE DUE 2007 No. ___ CUSIP No. $_________ ______ TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to pay to _______________,or registered assigns, the principal sum of ___________ on January 31, 2007. Interest Payment Dates: January 31, April 30, July 31 and October 31 Record Dates: January 15, April 15, July 15 and October 15 Additional provisions of this security are set forth on the other side of this security. Dated: TOKHEIM CORPORATION, By _______________________ Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION ___________________________ as Trustee, certifies that this is one of the securities referred to in the Senior Indenture, By ___________________________ Authorized Signatory [FORM OF REVERSE SIDE OF EXCHANGE NOTE] Increasing Rate Roll-Over Note due 2007 1. Interest TOKHEIM CORPORATION, an Indiana corporation (the "Company"), promises to pay interest on the principal amount of this security at the following rates per annum: (i) 12% (the "Base Rate") for the three months ending April 30, 1999; (ii) 12.5% for the three months ending July 31, 1999; (iii) 13.0% for the three months ending October 31, 1999; (iv) 13.5% for the three months ending January 31, 2000; (v) 14.0% for the three months ending April 30, 2000; and (vi) 14.5% thereafter. The Base Rate will be payable in cash, and interest in excess of the Base Rate will be payable by the issuance of Additional Exchange Notes having a principal amount equal to the amount of interest not paid in cash on such Interest Payment Date. The Company will pay interest quarterly in arrears, in cash with respect to the Base Rate and in kind with respect to interest in excess of the Base Rate, on January 31, April 30, July 31 and October 31 of each year. Interest on the Exchange Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Issue Date with respect to the Exchange Note; provided, however, that if interest was not timely paid on the Roll-Over Note exchanged for this Exchange Note, interest will accrue from the latest date to which interest has been paid on such Roll-Over Note or Junior subordinated Note, as the case may be. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal at the rate borne by the Exchange Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 2. Method of Payment The Company will pay interest (except defaulted interest) on and in respect of the Exchange Notes to the Persons who are registered holders of the Exchange Notes at the close of business on the January 15, April 15, July 15 and October 15 next preceding the interest payment date even if such securities are canceled after the record date and on or before the interest payment date. Holders must surrender Exchange Notes to a Paying Agent to collect principal payments. The Company will pay principal and, with respect to the Base Rate, interest in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay principal and interest by check payable in such money or by wire transfer of federal funds. 3. Paying Agent and Registrar Initially, Harris Trust and Savings Bank (the "Trustee") will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice to the Holders. The Company or any domestically organized Wholly Owned Restricted Subsidiary may act as Paying Agent, Registrar or co-registrar. 4. Indenture The Company issued the Exchange Notes under an Indenture dated as of September 30, 1998 (the "Senior Indenture"), among the Company, the Initial Guarantors and the Trustee. The terms of the Exchange Notes include those stated in the Senior Indenture and those made part of the Senior Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Senior Indenture (the "Act"). Terms defined in the Senior Indenture and not defined herein have the meanings ascribed thereto in the Senior Indenture. The Exchange Notes are subject to all such terms, and securityholders are referred to the Senior Indenture and the Act for a statement of those terms. The Exchange Notes are unsecured senior subordinated obligations of the Company. The Exchange Notes are unsecured senior subordinated obligations of the Company. The aggregate principal amount of Exchange Notes at any time outstanding may not exceed the sum of (i) $170,000,000 plus (ii) the aggregate principal amount of Additional Exchange Notes issued by the Company pursuant to the terms of the Senior Indenture in respect of interest accrued on outstanding Exchange Notes (including outstanding Additional Exchange Notes). This security is one of the Exchange Notes referred to in the Senior Indenture. The Senior Subordinated Securities include the Senior Subordinated Notes, the Roll-Over Notes and any Exchange Notes issued in exchange for the Roll-Over Notes pursuant to the Senior Indenture. The Senior Subordinated Notes, the Roll-Over Notes and the Exchange Notes are treated as a single class of securities under the Senior Indenture. The Senior Indenture imposes certain limitations on the Incurrence of Indebtedness by the Company and its subsidiaries; the payment of dividends and other payments by the Company and its subsidiaries; Investments; sales of assets of the Company and its subsidiaries; certain transactions with Affiliates; Liens; and consolidations, mergers and transfers of all or substantially all of the Company's or its subsidiaries' assets. In addition, the Senior Indenture prohibits certain restrictions on distributions from subsidiaries. 5. Optional Redemption Subject to the terms of the Senior Indenture, the Exchange Notes may be redeemed at any time, in whole or in part, at the option of the Company at a redemption price equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date (subject to the right of holders of the Exchange Notes on the relevant record date to receive interest due on the relevant interest payment date). 6. Mandatory Redemption If after the Issue Date the Company or any of its Subsidiaries shall Incur any Indebtedness, other than Indebtedness Incurred under the Credit Agreement, or shall issue any Capital Stock, the Company shall redeem Senior Subordinated Securities in an aggregate principal amount equal to the principal amount of the Indebtedness so Incurred or the total price at which such Capital Stock was sold. The redemption price of the Senior Subordinated Securities so redeemed shall be equal to the unpaid principal amount thereof plus accrued interest thereon to the redemption date. 2 7. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Exchange Notes to be redeemed at its registered address all in accordance with the Senior Indenture. If less than all of the Exchange Notes are to be redeemed at any time, selection of Exchange Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Exchange Notes are listed, or, if the Exchange Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided that no Exchange Notes of $1,000 or less shall be redeemed in part. 8. Repurchase at the Option of the Holder Upon a Change of Control, any Holder of Exchange Notes will have the right, subject to certain conditions set forth in the Senior Indenture, to cause the Company to repurchase all or any part of the Exchange Notes of such Holder at a purchase price equal to 101% of the principal amount of the Exchange Notes to be repurchased plus accrued and unpaid interest thereon, (if any) to the date of repurchase as provided in, and subject to the terms of, the Senior Indenture. 9. Subordination The Exchange Notes are subordinated to Senior Debt of the Company, as defined in the Senior Indenture. To the extent provided in the Senior Indenture, Senior Debt of the Company must be paid before the Exchange Notes may be paid. The Company agrees, and each securityholder by accepting a Exchange Note agrees, to the subordination provisions contained in the Senior Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose. 10. Denominations; Transfer; Exchange The Exchange Notes are in registered form without coupons. A Holder may transfer or exchange Exchange Notes in accordance with the Senior Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Senior Indenture. The Registrar need not register the transfer of or exchange any Exchange Notes selected for redemption (except, in the case of a Exchange Note to be redeemed in part, the portion of the Exchange Note not to be redeemed) or to transfer or exchange any Exchange Notes for a period of 15 days prior to a selection of Exchange Notes to be redeemed or 15 days before an interest payment date. 11. Persons Deemed Owners The registered Holder of this Exchange Note may be treated as the owner of it for all purposes. 3 12. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 13. Discharge and Defeasance Subject to certain conditions set forth in the Senior Indenture, the Company at any time may terminate some or all of its obligations under the Exchange Notes and the Senior Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Exchange Notes to redemption or maturity, as the case may be. 14. Amendment, Waiver Subject to certain exceptions set forth in the Senior Indenture, from time to time, the Company, the Subsidiary Guarantors and the Trustee, without the consent of the Holders, may amend the Senior Indenture or the Exchange Notes for the following purposes, so long as such change does not, in the opinion of the Trustee, adversely affect the rights of any of the Holders in any material respect: (i) to cure any ambiguity, defect or inconsistency; (ii) to provide for uncertificated Exchange Notes in addition to or in place of certificated Exchange Notes (provided that the uncertificated Exchange Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Exchange Notes are described in Section 163(f)(2)(B) of the Code); (iii) to provide for the assumption of the Company's or any Guarantor's obligations to Holders of Exchange Notes in the case of a merger, consolidation or sale of assets; (iv) to release any Subsidiary Guarantee in accordance with the provisions of the Senior Indenture; (v) to provide for additional Subsidiary Guarantors; (vi) to make any change that would provide any additional rights or benefits to the Holders of Exchange Notes or that does not adversely affect the legal rights under the Senior Indenture of any such Holder; or (vii) to comply with requirements of the SEC in order to effect or maintain the qualification of the Senior Indenture under the TIA. The Company, the Guarantors and the Trustee may amend the Senior Indenture or the Exchange Notes with the written consent of the Holders of at least a majority in principal amount of the Senior Subordinated Securities. However, without the consent of each affected Holder of a Exchange Notes, an amendment may not: (i) reduce the principal amount of Exchange Notes whose Holders must consent to an amendment; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any Exchange Note; (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Exchange Note, or change the date on which any Exchange Note may be subject to redemption or repurchase, or reduce the redemption or repurchase price therefor; (iv) make any Exchange Notes payable in money other than that stated in the Exchange Notes; (v) make any change in provisions of the Senior Indenture protecting the right of each Holder to receive payment of principal of and interest on such Holder's Exchange Notes on or after the due date thereof or to 4 bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Exchange Notes to waive Defaults or Events of Default; (vi) modify or change any provision of the Senior Indenture or the related definitions affecting the subordination or ranking of the Exchange Notes in a manner which adversely affects the Holders; provided, however, that it is understood that any amendment, the purpose of which is to permit the Incurrence of additional Indebtedness under the Indenture shall not be construed as adversely affecting the ranking of the Exchange Notes; or (viii) make any change to the Subsidiary Guarantees in any manner that adversely affects the rights of the Holders. 15. Defaults and Remedies Under the Senior Indenture, the following events are "Events of Default": (a) the failure to pay interest on any Exchange Note when the same becomes due and payable and such default continues for a period of 30 days (whether or not such payment shall be prohibited by the provisions of Article X); (b) the failure to pay the principal on any Exchange Note when such principal becomes due and payable, at maturity, upon redemption or otherwise, whether or not such payment shall be prohibited by the provisions of Article X of the Senior Indenture; (c) a default in the observance or performance of any other covenant or agreement contained in the Senior Indenture, subject to applicable grace periods; (d) there shall be a default under any Indebtedness of the Company or any Subsidiary resulting in acceleration of Indebtedness aggregating $10.0 million or more at any one time outstanding; (e) certain judgments in an aggregate amount in excess of $5.0 million; or (f) certain events of voluntary or involuntary bankruptcy. If an Event of Default (other than an Event of Default specified in Section 6.01(f) or (g) of the Senior Indenture with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Exchange Notes may declare the principal of and accrued interest on all the Exchange Notes to be due and payable by notice in writing to the Company and the Trustee, and the same (i) shall become immediately due and payable or (ii) if there are any amounts outstanding under the Credit Agreement or the ESOP Credit Agreement, shall become immediately due and payable upon the first to occur of an acceleration under the Credit Agreement or the ESOP Credit Agreement or five business days after receipt by the Company and the Representative under the Credit Agreement or the ESOP Credit Agreement of such notice of acceleration. If an Event of Default specified in Section 6.01(f) or (g) with respect to the Company occurs and is continuing, then all unpaid principal of and accrued and unpaid interest on all of the outstanding Exchange Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. 16. Trustee Dealings with the Company Subject to certain limitations imposed by the Act, the Trustee under the Senior Indenture, in its individual or any other capacity, may become the owner or pledgee of securities and may otherwise deal with and collect obligations owed to it by the Company and may otherwise deal with the Company with the same rights it would have if it were not Trustee. 5 17. No Personal Liability of Directors, Officers, Employees and Stockholders No director, officer, employee, incorporator, stockholder of the Company, as such, will have any liability for any obligations of the Company under the Exchange Notes, the Senior Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. 18. Governing Law THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 19. Authentication This security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this security. 20. Abbreviations Customary abbreviations may be used in the name of a securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 21. CUSIP Numbers Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Exchange Notes and have directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to securityholders. No representation is made as to the accuracy of such numbers either as printed on the securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any securityholder upon written request and without charge to the securityholder a copy of the Senior Indenture which has in it the text of this security in larger type. Requests may be made to: TOKHEIM CORPORATION 1600 Wabash Avenue Fort Wayne, IN 46801-0360 Attention: Douglas Pinner 6 ASSIGNMENT FORM To assign this security, fill in the form below: I or we assign and transfer this security to _________________________________________________________ (Print or type assignee's name, address and zip code) _________________________________________________________ (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____________________________ , as agent, to transfer this security on the books of the Company. The agent may substitute another to act for him. Date: ________________ Your Signature: _____________________ Signature Guarantee: _______________________________________________ (Signature must be guaranteed by a participant in a recognized signature guarantee medallion program) _____________________________________________________________________________ Sign exactly as your name appears on the other side of this Security. 7 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this security purchased by the Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, check the box: [_] 4.06 Asset Sale [_] 4.08 Change of Control If you want to elect to have only part of this security purchased by the Company pursuant to Section 4.06 or 4.08 of the Senior Indenture, state the amount: $__________. Date: __________________ Your Signature: _______________________________________ (Sign exactly as your name appears on the other side of the Security) __________________ Tax I.D. number Signature Guarantee: ___________________________________________________________ (Signature must be guaranteed by a participant in a recognized signature guarantee medallion program) 8 EX-99.(C)(10) 11 REGISTRATION RIGHTS AGREEMENT EXHIBIT (c)(10) TOKHEIM CORPORATION REGISTRATION RIGHTS AGREEMENT ----------------------------- September 30, 1998 SCHLUMBERGER LIMITED 277 Park Avenue New York, New York 10172-0266 Ladies and Gentlemen: Tokheim Corporation, an Indiana corporation (the "Company"), proposes to issue and sell to you ("Schlumberger"), upon the terms set forth in a purchase agreement of even date herewith (the "Purchase Agreement"), (i) US$40,000,000 aggregate principal amount of its 12% Junior Subordinated Notes due 2008 (the "Junior Subordinated Notes"), (ii) US$170,000,000 aggregate principal amount of its 12% Senior Subordinated Notes due January 28, 1999 (the "Senior Subordinated Notes") and (iii) warrants exercisable for shares (the "Warrant Shares") representing up to 19.9% of the outstanding common stock (the "Common Stock") of the Company. In the event that the Company is unable to repay the Senior Subordinated Notes at their stated maturity, the Senior Subordinated Notes will be exchanged , subject to certain conditions, for Increasing Rate Senior Subordinated Notes due 2007 (the "Roll-Over Notes", and together with the Junior Subordinated Notes and the Senior Subordinated Notes, the "Notes"). The Senior Subordinated Notes and the Roll-Over Notes will be issued pursuant to an Indenture to be dated as of September 30, 1998 (the "Senior Indenture") between the Company and Harris Trust and Savings Bank, as trustee (the "Senior Trustee"). The Junior Subordinated Notes will be issued pursuant to an Indenture to be dated as of September 30, 1998 (the "Junior Indenture") between the Company and Harris Trust and Savings Bank, as trustee (the "Junior Trustee"). Capitalized terms used but not specifically defined herein are defined in the Purchase Agreement. As an inducement to Schlumberger to enter into the Purchase Agreement, the Company agrees with Schlumberger, for the benefit of the holders of the Notes and the Common Stock, including Schlumberger (the "Holders"), as follows: 1. Registered Exchange Offer. The Company shall prepare and, not later than 90 days after the exchange of any Senior Subordinated Notes for Roll-Over Notes (the "Conversion Date"), shall file with the Commission a registration statement (the "Exchange Offer Registration Statement") on an appropriate form under the Securities Act with respect to a proposed offer (the "Exchange Offer") to the Holders of Roll-Over Notes to issue and deliver to such Holders, in exchange for the Roll-Over Notes, a like aggregate principal amount of debt securities of the Company (the "Exchange Notes") identical in all material respects to the Roll-Over Notes, except for the transfer restrictions relating to the Roll-Over Notes. The Company shall use its best efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act within 150 days after the Conversion Date and shall keep the Exchange Offer Registration Statement effective for not less than 20 days (or longer, if required by applicable law) after the date on which notice of the Exchange Offer is mailed to the Holders of Roll-Over Notes (such period being called the "Exchange Offer Registration Period"). The Company shall use its best efforts to consummate the Exchange Offer within 195 days after the Conversion Date. The Exchange Notes will be issued under the Senior Indenture. Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder of Roll-Over Notes electing to exchange Roll-Over Notes for Exchange Notes (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, that such Holder acquires the Exchange Notes in the ordinary course of such Holder's business and that such Holder has no arrangements with any person to participate in the distribution of the Exchange Notes) to trade such Exchange Notes from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States. The Company acknowledges that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, (i) each Holder of Roll-Over Notes that is a broker-dealer electing to exchange Roll-Over Notes, acquired for its own account as a result of market-making activities or other trading activities, for Exchange Notes (an "Exchanging Dealer"), is required to deliver a prospectus containing the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section, and in Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Notes received by such Exchanging Dealer pursuant to the Exchange Offer. In connection with the Exchange Offer, the Company shall: (a) mail to each Holder of Roll-Over Notes a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (b) keep the Exchange Offer open for not less than 20 days after the date notice thereof is mailed to the Holders of the Roll-Over Notes (or longer if required by applicable law); (c) utilize the services of a Depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York; (d) permit Holders of Roll-Over Notes to withdraw tendered Roll-Over Notes at any time prior to the close of business, New York time, on the last business day on which the Exchange Offer shall remain open; and (e) otherwise comply in all respects with all applicable laws. As soon as practicable after the close of the Exchange Offer, the Company shall: 2 (a) accept for exchange all Roll-Over Notes tendered and not validly withdrawn pursuant to the Exchange Offer; (b) deliver to the Senior Trustee for cancellation all Roll-Over Notes so accepted for exchange; and (c) cause the Senior Trustee or the Exchange Notes Trustee, as the case may be, promptly to authenticate and deliver to each Holder of Roll- Over Notes, Exchange Notes equal in principal amount to the Roll-Over Notes of such Holder so accepted for exchange. Interest on each Exchange Notes issued pursuant to the Exchange Offer will accrue from the last interest payment date on which interest was paid on the Roll-Over Notes surrendered in exchange therefor or, if no interest has been paid on the Roll-Over Notes, from the date of original issue of the Roll-Over Notes. The Company will require each Holder of Roll-Over Notes participating in the Exchange Offer to represent to the Company that at the time of the consummation of the Exchange Offer (i) any Exchange Notes received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understandings with any person to participate in the distribution of the Roll-Over Notes or the Exchange Notes within the meaning of the Securities Act and (iii) such Holder is not an affiliate of the Company within the meaning of the Securities Act. Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto comply in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading. 2. Shelf Registration. If, because of any change in law or applicable interpretations thereof by the Commission's staff, the Company determines that it is not permitted to effect the Exchange Offer as contemplated by Section 1, or if for any other reason the Exchange Offer is not consummated within 195 days after the Conversion Date, or Holders of Roll-Over Notes so request with respect to Roll-Over Notes not eligible to be exchanged for Exchange Notes in an Exchange Offer and held by them following consummation of the Exchange Offer or if any Holder of Roll-Over Notes (other than an Exchanging Dealer) is not eligible to participate in the Exchange Offer or, in the case of any Holder of Roll-Over Notes that participates in the Exchange Offer (other than an Exchanging Dealer), does not receive freely tradable Exchange Notes in exchange for tendered Roll-Over Notes or if the Company so elects, the following provisions shall apply: 3 (a) The Company shall as promptly as practicable file with the Commission and thereafter shall use its best efforts to cause to be declared effective a registration statement on an appropriate form under the Securities Act relating to the offer and sale of the Roll-Over Notes by the Holders of Roll-Over Notes from time to time in accordance with the methods of distribution elected by such Holders and set forth in such registration statement (hereafter, a "Shelf Registration Statement" and, together with any Exchange Offer Registration Statement, a "Registration Statement"). (b) The Company shall use its best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus forming part thereof to be usable by Holders of Roll-Over Notes for a period of three years from the date the Shelf Registration Statement is declared effective by the Commission or such shorter period that will terminate when all the Roll-Over Notes covered by the Shelf Registration Statement have been sold pursuant to the Registration Statement (in any such case, such period being called the "Shelf Registration Period"). The Company shall be deemed not to have used its best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Roll-Over Notes covered thereby not being able to offer and sell such Roll-Over Notes during that period, unless (i) such action is required by applicable law, or (ii) such action is taken by the Company in good faith and for valid business reasons (not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of assets, so long as the Company promptly thereafter complies with the requirements of Section 6(i) hereof, if applicable. (c) Notwithstanding any other provisions hereof, the Company will ensure that (i) any Shelf Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Shelf Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 3. Registration on Request. (a) For the period beginning 121 days after thedate hereof and ending onthe second anniversary hereof, upon the written request of the Holders of a majority of the Warrants or the Holders of a majority of the Junior Subordinated Notes or the Warrant Shares (collectively, the "Demand Registrable Securities", and together with the Roll-Over Notes, the "Securities") requesting that the Company effect the registration under the Securities Act of all or part of such Holders' respective Demand Registrable Securities, the Company shall promptly give written notice of such requested registration to all Holders of such Demand Registrable Securities, and thereupon the Company shall promptly use commercially reasonable efforts to effect the registration under the Securities Act of 4 (i) the Demand Registrable Securities which the Company has been so requested to register by such Holders, and (ii) all other Demand Registrable Securities which the Company has been requested to register by the Holders thereof by written request given to the Company within 30 days after the giving of such written notice by the Company, all to the extent requisite to permit the disposition of the Demand Registrable Securities so to be registered. All registrations requested pursuant to this Section 3(a) are referred to herein as "Demand Registrations." Notwithstanding the foregoing, if the Company shall be engaged in non-public discussions regarding a material transaction that, in the judgment of the Company is not ripe for disclosure but that would be required to be disclosed in any such registration, the Company may defer complying with the provisions hereof for a period of 90 days following receipt of any written request hereunder. (b) The holders of Demand Registrable Securities will be entitled to request one registration in which the Company will pay all Registration Expenses. Such registration shall be underwritten. (c) Whenever the Company shall effect a registration pursuant to this Section 3 in connection with an offering by one or more Holders of Demand Registrable Securities, subject to the provisions of Section 3(f), securities other than Demand Registrable Securities may be included among the securities covered by such registration. (d) A Demand Registration pursuant to this Section 3 shall not be deemed to have been effected (i) unless a registration statement with respect thereto has become effective, (ii) if after it has become effective, such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason, or (iii) if the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such registration are not satisfied, other than by reason of some act or omission by the Holders requesting such registration. A requested Demand Registration under this Section 3 may be rescinded by written notice to the Company by the Holders requesting such registration prior to filing of the registration statement and such rescinded registration shall not count as a registration statement initiated pursuant to this Section 3. (e) With respect to any registration pursuant to this Section 3, the Company may include in such registration any other securities; provided, however, that in the event the registration is for a registered public offering involving an underwriting, if the underwriter (or the managing underwriter on behalf of the underwriters) advises the Company that the inclusion of all Demand Registrable Securities and other securities proposed to be included in such registration would interfere with the successful marketing (including pricing) of all such securities, then the number of Demand Registrable Securities shall be given first priority with respect to the marketing of such securities. 5 (f) Notwithstanding any other provision of this Section 3, at any time or from time to time, if the Company effects the registration of less than 90% of all of the Demand Registrable Securities requested to be registered pursuant to Section 3(a) and Section 3(b), the Holders of a majority of the Demand Registrable Securities shall be entitled to request an additional registration pursuant to Section 3(a) and Section 3(b), as the case may be. Any such registration shall be requested, effected and in all other respects in accordance with the terms of Section 3(a), and the Company will pay all Registration Expenses in connection with any such registration. 4. Piggyback Registration. (a) If, during the period beginning 121 days after the date hereof and ending on the second anniversary of the date hereof, the Company at any time proposes to register any of its securities under the Securities Act (other than registrations (i) on Form S-4, Form S-8, or any successor forms thereto, or (ii) pursuant to Section 3), whether or not for sale for its own account, and the registration form to be used may be used for the registration of Demand Registrable Securities (a "Piggyback Registration"), the Company will at each such time give prompt written notice to all Holders of Demand Registrable Securities of its intention to do so and of such Holders' rights under this Section 4. Upon the written request of any such Holder made within 30 days after the receipt of any such notice (which request shall specify the Demand Registrable Securities intended to be disposed of by such Holder), the Company will use its commercially reasonable efforts to effect the registration under the Securities Act of all Demand Registrable Securities which the Company has been so requested to register by the Holders thereof on the same terms and conditions as the securities otherwise being sold in such registration, to the extent requisite to permit the disposition of the Demand Registrable Securities so to be registered. The Holders of the Demand Registrable Securities will pay all Registration Expenses in connection with each registration of Demand Registrable Securities requested pursuant to this Section 4. (b) If (i) a registration pursuant to this Section 4 involves an underwritten offering of the securities so being registered, whether or not for sale for the account of the Company, to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction, (ii) the Holders of Demand Registrable Securities request any Demand Registrable Securities to be included in such underwritten offering pursuant to this Section 4 and (iii) the managing underwriter of such underwritten offering shall inform the Company in writing of its belief that the number of securities requested to be included in such registration exceeds the number which can be sold in (or during the time of) such offering without adversely affecting the price to be received thereon, then the Company will include in such registration, to the extent of the number which the Company is so advised can be sold in (or during the time of) such offering, (x) first, all securities proposed by the Company to be sold for its own account or all securities (other than Demand Registrable Securities) proposed by the Company to be sold for the account of the holders thereof, as the case may be, (y) second, such Demand Registrable Securities requested to be included in such registration pro rata on the basis of the number of shares of such Demand Registrable Securities so proposed to be sold and so requested to be included, and (z) third, other securities requested to be included in such registration. 6 (c) If the Company has previously filed a registration statement with respect to Demand Registrable Securities pursuant to Section 3 or this Section 4, and if such previous registration has not been withdrawn or abandoned, the Company will not file or cause to be effected any other registration of any of its equity securities or securities convertible or exchangeable into or exercisable for its equity securities under the Securities Act (except on Form S-8 or any successor form), whether on its own behalf or at the request of any holder or holders of such securities, until a period of at least three months has elapsed from the effective date of such previous registration. 5. Registration Procedures. To the extent applicable, in connection with any Registration Statement, the following provisions shall apply: (a) The Company shall advise the Holders of Securities, and, if requested by any such Holder, confirm such advice in writing (which advice pursuant to clauses (ii) through (v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made): (i) when such Registration Statement and any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the Commission for amendments or supplements to such Registration Statement or the prospectus included therein or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of any of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) of the happening of any event that requires the making of any changes in such Registration Statement or the prospectus so that, as of such date, the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (b) The Company will make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of any Registration Statement at the earliest possible time. (c) The Company will furnish to each Holder of Securities included within the coverage of any Registration Statement, without charge, at least one copy of such Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits (including those incorporated by reference). 7 (d) The Company will deliver to each Holder of Securities included within the coverage of any Registration Statement, without charge, as many copies of the prospectus (including each preliminary prospectus) included in such Registration Statement and any amendment or supplement thereto as such Holder may reasonably request; and the Company consents to the use of the prospectus, or any amendment or supplement thereto by each of the selling Holders of Securities in connection with the offering and sale of any Securities covered by the prospectus or any amendment or supplement thereto. (e) The Company will furnish to each Exchanging Dealer that so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if such Exchanging Dealer so requests in writing, all exhibits (including those incorporated by reference). (f) The Company will, during any Registration Period, as applicable, promptly deliver to each Exchanging Dealer or underwriter, as applicable, without charge, as many copies of the prospectus included in such Registration Statement and any amendment or supplement thereto as such Exchanging Dealer or underwriter, as applicable, may reasonably request; and the Company consents to the use of the prospectus or any amendment or supplement thereto by any such Exchanging Dealer or underwriter, as applicable, as aforesaid. (g) Prior to any public offering of Securities pursuant to any Registration Statement, the Company will use its reasonable best efforts to register or qualify or cooperate with the Holders of Securities included therein and their respective counsel in connection with the registration or qualification of such securities for offer and sale under the securities or blue sky laws of such jurisdictions as any such Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject. (h) The Company will cooperate with the Holders of Securities to facilitate the timely preparation and delivery of certificates representing Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as Holders may request prior to sales of Securities pursuant to such Registration Statement. (i) Upon the occurrence of any event contemplated by clauses (a)(ii) through (v) above during the period for which the Company is required to maintain an effective Registration Statement, the Company will promptly prepare a post-effective amendment to the Registration Statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to purchasers of the Securities, the prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 8 (j) Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for such Securities, and provide the applicable trustee with printed certificates for such Securities, in a form eligible for deposit with The Depository Trust Company. (k) The Company will comply with all applicable rules and regulations of the Commission and will make generally available to its security holders as soon as practicable after the effective date of the applicable Registration Statement an earnings statement satisfying the provisions of Section 11(a) of the Securities Act. (l) The Company will cause any Indenture, as the case may be, to be qualified under the Trust Indenture Act as required by applicable law in a timely manner. (m) The Company may require each Holder of Securities to be sold pursuant to any Registration Statement to furnish to the Company such information regarding the Holder and the distribution of such Securities as the Company may from time to time reasonably require for inclusion in such Registration Statement, and the Company may exclude from such registration the Securities of any Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request. (n) The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as Holders of a majority in aggregate principal amount of such Securities being sold or the managing underwriters (if any) shall reasonably request in order to facilitate the disposition of Securities pursuant to any Registration Statement. (o) In the case of any Registration Statement, the Company shall (i) make reasonably available for inspection by a representative of, and Special Counsel (as defined in Section 7) acting for, the Holders, and any underwriter participating in any disposition pursuant to any Registration Statement, all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company's officers, directors and employees to supply all relevant information reasonably requested by such representative, counsel or any such underwriter (an "Inspector") in connection with any such Registration Statement, subject to executing a confidentiality undertaking in customary form with respect to confidential and/or proprietary information of the Company. (p) In the case of any Registration Statement, the Company, if requested by Holders of a majority in aggregate principal amount, their Special Counsel, or the managing underwriters (if any) in connection with any Registration Statement, shall use its best efforts to cause (w) its counsel to deliver an opinion relating to such Registration Statement and such Securities, in customary form, (x) its officers to execute and deliver all customary documents and certificates requested by Holders of a majority in aggregate principal amount, their Special Counsel, or the managing underwriters (if any) and (y) its independent public accountants to provide a comfort letter in customary form, subject to receipt of appropriate documentation as contemplated, and only if permitted by Statement of Auditing Standards No. 72. 9 (q) The Company will use its best efforts to cause any Securities covered by a Registration Statement, as applicable, to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal amount of the Securities covered by such Registration Statement or the managing underwriters, if any. (r) The Company will use its best efforts to cause the Securities relating to such Registration Statement to be listed on each securities exchange, if any, on which securities issued by the Company are then listed, if so requested by Holders of a majority in aggregate principal amount of the Securities covered by such Registration Statement or the managing underwriters, if any. (s) In the case of any Registration Statement, each Holder of Securities agrees by acquisition of such Securities that, upon receipt of any notice of the Company pursuant to Section 6(a)(ii) through (v), such Holder will discontinue disposition of such Securities covered by such Registration Statement until such Holder's receipt of copies of the supplemental or amended Prospectus contemplated by Section 6(i), or until advised in writing (the "Advice") by the Company that the use of the applicable prospectus may be resumed. If the Company shall give any notice under Section 6(a)(ii) through (v) during the period that the Company is required to maintain an effective Shelf Registration Statement (the "Effectiveness Period"), such Effectiveness Period shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each seller of Securities covered by such Registration Statement shall have received (x) the copies of the supplemental or amended prospectus contemplated by Section 6(i) (if an amended or supplemental prospectus is required) or (y) the Advice (if no amended or supplemental prospectus is required). 6. Registration Expenses. The Company will bear all expenses incurred in connection with the performance of its obligations under Sections l, 2, 3 (provided however, that, subject to the terms of Section 3, the Company shall only bear the expenses for one Demand Registration initiated pursuant to Section 3) and 5 and will reimburse the Holders for the reasonable fees and disbursements of one firm of attorneys (in addition to local counsel) chosen by the Holders of a majority in aggregate principal amount of the Securities (the "Special Counsel") acting for the Holders in connection therewith. The Holders' of Securities shall be required to bear all expenses incurred as a result of their exercise of Piggyback Rights pursuant to Section 4. 7. Indemnification. (a) In connection with any Registration Statement or any prospectus delivery, the Company shall indemnify and hold harmless each Holder and each person, if any, who controls such Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming part thereof or the omission or alleged omission therefrom of a material fact necessary in order to make 10 the statements therein, in the light of the circumstances under which they were made, not misleading; and (ii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by the indemnified party), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental or regulatory agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission. provided, however, that the foregoing indemnity shall not apply to any loss, liability, claim, damage and expense arising from any untrue statement or alleged untrue statement of a material fact relating to the Holder and furnished by the Holder to the Company in connection with such Registration Statement. (b) In connection with any Registration Statement, each Holder agrees to indemnify and hold harmless the Company, its directors, officers, agents and employees and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and the directors, officers, agents and employees of such controlling persons against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 8(a), as incurred, arising out of or based upon any untrue statements or omissions, or alleged untrue statements or omissions, made in such Registration Statement (or any amendment or supplement thereto) in reliance on and in conformity with written information furnished to the Company by such Holder expressly for use in the Registration Statement (or in such amendment or supplement); provided, however, that no such Holder shall be liable for any indemnity claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Securities pursuant to such Registration Statement. (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any claim or action commenced against it in respect of which indemnity may be sought hereunder, provided, that failure to so notify an indemnifying party shall not relieve such indemnifying party from any obligation that it may have pursuant to this Section except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure and, provided further that the failure to notify the indemnifying party shall not relieve it from any liability that it may have to an indemnified party otherwise than on account of this indemnity agreement. If any such claim or action shall be brought against an indemnified party, the indemnified party shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 8 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof (other than reasonable costs of investigation); provided, however, that an 11 indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each indemnified party, as a condition of the indemnity agreements contained in Sections 8(a) and 8(b), shall use all reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment, of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. (d) If a claim by an indemnified party for indemnification under this Section 8 is found unenforceable in a final judgment by a court of competent jurisdiction (not subject to further appeal or review) even though the express provisions hereof provide for indemnification in such case, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified party in connection with the actions, statements or omissions that resulted in such losses as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any losses shall be deemed to include, subject to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation that 12 does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 8, an indemnifying party that is a Holder of Securities shall not be required to contribute any amount in excess of the amount by which the total price at which the securities sold by such indemnifying party and distributed to the public were offered to the public exceeds the amount of any damages that such indemnifying party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to any contribution from any person who was not guilty of such fraudulent misrepresentation. 8. Rules 144 and 144A. The Company shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Securities, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A. The Company covenants that it will take such further action as any Holder of Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)). Upon the request of any Holder of Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 9 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 9. Underwritten Registrations. If any of the Securities covered by any registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of such Securities included in such offering, subject to the consent of the Company (which shall not be unreasonably withheld or delayed). No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 10. Miscellaneous. (a) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority in aggregate principal amount of the Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of the Holders of Securities whose Securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate principal amount of the Securities being sold by such Holders pursuant to such Registration Statement. 13 (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telex, telecopier, or air courier guaranteeing overnight delivery: (1) if to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section 11(b), which address initially is Schlumberger Limited, 277 Park Avenue, New York, New York 10172-0266; and (2) if to the Company, initially at Tokheim Corporation, 10501 Corporation Drive, Ft. Wayne, Indiana 46845, USA. All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; one business day after being delivered to a next-day air courier; five business days after being deposited in the mail; when answered back, if faxed; and when receipt is acknowledged by the recipient's telecopier machine, if telecopied. (c) Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns. (d) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (e) Headings. The headings in this agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (f) Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL AFFECT 14 THE RIGHT OF ANY HOLDER OF A TRANSFER RESTRICTED SECURITY TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION. (g) Remedies. In the event of a breach by the Company, or by a Holder of Securities, of any of their obligations under this Agreement, each Holder of Securities or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder of Securities Notes agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, such seeker of specific performance shall waive the defense that a remedy at law would be adequate. (h) No Inconsistent Agreements. The Company has not, nor shall the Company on or after the date of this Agreement, enter into any agreement that is inconsistent with the rights granted to the Holders of Securities in this Agreement or otherwise conflicts with the provisions hereof. The Company has not previously entered into any agreement granting any registration rights with respect to any of its debt securities to any person which has not been fulfilled. Without limiting the generality of the foregoing, without the written consent of the Holders of a majority in aggregate principal amount of the then outstanding Securities, the Company shall not grant to any person the right to request the Company to register any securities of the Company under the Securities Act unless the rights so granted are subject in all respects to the prior rights of the Holders of Securities set forth herein, and are not otherwise in conflict or inconsistent with the provisions of this Agreement. (i) No Piggyback on Registrations. None of the Company nor any of their respective security holders (other than the Holders of Securities in such capacity) shall have the right to include any securities of the Company in any registration which is initiated to comply with Section 1 or 2 of this Agreement. (j) Severability. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 15 Please confirm that the foregoing correctly sets forth the agreement between the Company and Schlumberger. Very truly yours, TOKHEIM CORPORATION By: -------------------------------- Name: Title: Agreed to and Accepted by: SCHLUMBERGER LIMITED By: -------------------------------- Name: Title: ANNEX A Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Roll-Over Notes where such Roll-Over Notes were acquired by such broker-dealer as a result of market- making activities or other trading activities. The Company has agreed that, for a period of 90 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." ANNEX B Each broker-dealer that receives Exchange Notes for its own account in exchange for Roll-Over Notes, where such Roll-Over Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See "Plan of Distribution." ANNEX C PLAN OF DISTRIBUTION Each broker-dealer that receives Exchange Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Roll-Over Notes where such Roll-Over Notes were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 90 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until , 199 , all dealers effecting transactions in the Exchange Notes may be required to deliver a prospectus./1/ The Company will not receive any proceeds from any sale of Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such Exchange Notes. Any broker- dealer that resells Exchange Notes that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Roll-Over Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 90 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Roll-Over Notes) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Roll-Over Notes (including any broker- dealers) against certain liabilities, including liabilities under the Securities Act. - ------------------ /1/ In addition, the legend required by Item 502(e) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus. ANNEX D [_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ______________________________________ Address: ______________________________________ ______________________________________ If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Roll-Over Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. EX-99.(C)(11) 12 NOTE PURCHASE AGREEMENT EXHIBIT (c)(11) SENIOR NOTES NOTE PURCHASE AGREEMENT dated as of September 30, 1998 among TOKHEIM CORPORATION, THE SUBSIDIARIES and THE PURCHASERS LISTED HEREIN Annex I - Commitments Annex II - Addresses Exhibit A - Form of Note Exhibit B - RESERVED Exhibit C-1 - Opinion of Norman L. Roelke, General Counsel of the Company Exhibit C-2 - Opinion of Skadden, Arps, Slate, Meagher & Flom, LLP, Special Counsel to the Company and the Subsidiaries Exhibit D - Company Certificate Exhibit E - Assignment Agreement
TABLE OF CONTENTS -----------------
Page ---- ARTICLE I DEFINITIONS...................................................................................... 1 SECTION 1.1. Definitions................................................................... 1 ARTICLE II PURCHASE AND SALE OF NOTES....................................................................... 19 SECTION 2.1. Authorization of Notes........................................................ 19 SECTION 2.2. Commitments to Purchase....................................................... 19 SECTION 2.3. Purchases..................................................................... 19 SECTION 2.4. Interest...................................................................... 19 SECTION 2.5. Change of Office; Replacement of Purchasers................................... 20 SECTION 2.6. Fees.......................................................................... 20 SECTION 2.7. Method and Place of Payment................................................... 20 SECTION 2.8. Net Payments.................................................................. 21 ARTICLE III CONDITIONS PRECEDENT............................................................................. 22 SECTION 3.1. Effective Date................................................................ 22 ARTICLE IV REPRESENTATIONS AND WARRANTIES................................................................... 24 ARTICLE V COVENANTS........................................................................................ 24 SECTION 5.1. Furnishing of Information; Compliance Certificates............................ 24 SECTION 5.2. Insurance..................................................................... 25 SECTION 5.3. Compliance with Statutes, etc................................................. 25 SECTION 5.4. Limitation on Asset Sales..................................................... 25 SECTION 5.5. Limitation on Incurrence of Additional Indebtedness........................... 27 SECTION 5.6. Limitation on Restricted Payments............................................. 27 SECTION 5.7 Limitation on Liens........................................................... 28 SECTION 5.8. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.. 28 Subsidiaries................................................................. 28
(i)
Page ---- SECTION 5.9. Limitation on Transactions with Affiliates................................... 29 SECTION 5.10. Limitation Preferred Stock of Subsidiaries................................... 30 SECTION 5.11. Change of Control............................................................ 30 SECTION 5.12. Prohibition on Incurrence of Senior Subordinated Debt........................ 31 SECTION 5.13. Merger, Consolidation and Sale of Assets..................................... 31 SECTION 5.14. Ratings...................................................................... 32 ARTICLE VI EVENTS OF DEFAULT................................................................................ 32 SECTION 6.1. Payments...................................................................... 32 SECTION 6.2. Representations, etc.......................................................... 33 SECTION 6.3. Covenants..................................................................... 33 SECTION 6.4. Default Under Other Agreements................................................ 33 SECTION 6.5. Bankruptcy or Insolvency...................................................... 33 SECTION 6.6. Judgments..................................................................... 34 ARTICLE VII THE PAYING AGENT................................................................................. 34 SECTION 7.1. Appointment................................................................... 34 SECTION 7.2. Nature of Duties.............................................................. 34 SECTION 7.3. Lack of Reliance on the Paying Agent.......................................... 35 SECTION 7.4. Certain Rights of the Paying Agent............................................ 35 SECTION 7.5. Reliance...................................................................... 35 SECTION 7.6. Indemnification............................................................... 35 SECTION 7.7. The Paying Agent in Its Individual Capacities................................. 37 SECTION 7.8. Holders....................................................................... 37 SECTION 7.9. Resignation by the Paying Agent............................................... 37 ARTICLE VIII DISCHARGE OF OBLIGATIONS UNDER NOTES............................................................. 38 SECTION 8.1. Discharge Of Liability On Notes; Defeasance................................... 38 SECTION 8.2. Conditions To Defeasance...................................................... 38 SECTION 8.3. Application of Trust Money.................................................... 40 SECTION 8.4. Repayment to the Company...................................................... 40 SECTION 8.5. Indemnity For Government Obligations.......................................... 40 SECTION 8.6. Reinstatement................................................................. 40 ARTICLE IX REGISTRATION RIGHTS.............................................................................. 41 SECTION 9.1. Piggy-Back Registration....................................................... 41 SECTION 9.2. Reduction of Offering......................................................... 42
(ii)
Page ---- SECTION 9.3. Demand Registration........................................................... 43 ARTICLE X SUBSIDIARY GUARANTEE OF NOTES.................................................................... 44 SECTION 10.1. Subsidiary Guarantee......................................................... 44 SECTION 10.2. Execution and Delivery of Subsidiary Guarantee............................... 45 SECTION 10.3. Subsidiary Guarantee Unconditional, etc...................................... 45 SECTION 10.4. Limitation of Subsidiary's Liability......................................... 46 SECTION 10.5. Contribution................................................................. 46 SECTION 10.6. Release...................................................................... 46 SECTION 10.7. Additional Subsidiaries...................................................... 47 SECTION 10.8. Successors and Assigns....................................................... 47 SECTION 10.9. Waiver of Stay, Extension or Usury Laws...................................... 47 ARTICLE XI SUBORDINATION.................................................................................... 48 SECTION 11.1. Notes Subordinated to Senior Debt............................................ 48 SECTION 11.2. No Payment on Notes in Certain Circumstances................................. 48 SECTION 11.3. Notes Subordinated to Prior Payment of All Senior Debt on Dissolution, Liquidation or Reorganization of Company................................. 49 SECTION 11.4. Holders To Be Subrogated to Rights of Holders of Senior Debt................. 50 SECTION 11.5. Obligations of the Company Unconditional..................................... 51 SECTION 11.6. Paying Agent Entitled To Assume Payments Not Prohibited in Absence of Notice................................................................... 51 SECTION 11.7. Application by Paying Agent of Monies Deposited With It...................... 51 SECTION 11.8. Subordination Rights Not Impaired by Acts or Omissions of Company or Holders of Senior Debt................................................... 52 SECTION 11.9. Holders Authorize Paying Agent To Effectuate Subordination of Notes.......... 52 SECTION 11.10. Right of Paying Agent To Hold Senior Debt.................................... 52 SECTION 11.11. Article XI Not To Prevent Events of Default.................................. 52 SECTION 11.12. No Fiduciary Duty Created to Holders of Senior Debt.......................... 53 SECTION 11.13. Subordination of Subsidiary Guarantees....................................... 53 ARTICLE XII REDEMPTION....................................................................................... 53 SECTION 12.1. Notices to Paying Agent...................................................... 53 SECTION 12.2. Selection of Notes to be Redeemed............................................ 53 SECTION 12.3. Notice of Redemption......................................................... 54 SECTION 12.4. Effect of Notice of Redemption............................................... 55 SECTION 12.5 Deposit of Redemption Price.................................................. 55 SECTION 12.6. Notes Redeemed in Part....................................................... 55
(iii)
Page ---- SECTION 12.7. Optional Redemption.......................................................... 55 SECTION 12.8. Mandatory Redemption......................................................... 56 ARTICLE XIII MISCELLANEOUS.................................................................................... 56 SECTION 13.1. Payment of Expenses, etc..................................................... 56 SECTION 13.2. Right of Setoff.............................................................. 56 SECTION 13.3. Notices...................................................................... 57 SECTION 13.4. Benefit of Agreement......................................................... 57 SECTION 13.5. No Waiver; Remedies Cumulative............................................... 58 SECTION 13.6. Payments Pro Rata............................................................ 58 SECTION 13.7. Calculations; Computations................................................... 59 SECTION 13.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial....... 59 SECTION 13.9 Counterparts................................................................. 60 SECTION 13.10. Effectiveness................................................................ 60 SECTION 13.11. Headings Descriptive......................................................... 60 SECTION 13.12. Amendment or Waiver.......................................................... 60 SECTION 13.13. Survival..................................................................... 61 SECTION 13.14. Confidentiality.............................................................. 61 SECTION 13.15. Register..................................................................... 61 SECTION 13.16. Consolidation of Notes....................................................... 61 SECTION 13.17. Replacement of Notes......................................................... 61
(iv) NOTE PURCHASE AGREEMENT ----------------------- This NOTE PURCHASE AGREEMENT (the "Agreement") dated as of September 30, 1998, is made by and among Tokheim Corporation, a corporation organized under the laws of the State of Indiana (the "Company"), the Subsidiaries party hereto, and the Purchasers party hereto (in the event that there is only one Purchaser party hereto, references to Purchasers in the plural shall be deemed to be in the singular). In consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties agree as follows: ARTICLE I DEFINITIONS ----------- SECTION 1.1. Definitions. As used in this Agreement, and unless the ----------- context requires a different meaning, the following terms have the meanings indicated: "Acquired Indebtedness" means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Subsidiary of the Company or at the time it merges or consolidates with the Company or any of its Subsidiaries or assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary of the Company or such acquisition, merger or consolidation. "Acquisition" means the acquisition by the Company of the fuel dispenser, systems and services business of Schlumberger. "Affiliate" means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. The term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting Notes, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative of the foregoing. "Applicable Call Premium" means, as of a particular date, the number set forth opposite such date in the table below.
REDEMPTION DATE PREMIUM 10/01/98 - 12/31/98 1.00000 01/01/99 - 03/31/99 1.02000 04/01/99 - 06/30/99 1.04000 07/01/99 - 09/30/99 1.06000
10/01/99 - 09/30/03 1.07250 10/01/03 - 09/30/04 1.03625 10/01/04 - Maturity 1.00000
"Applicable Interest Rate" means as of a particular date, the rate set forth opposite such date below:
DATE RATE through 11/30/98 12.50% 12/01/98 - 02/28/99 13.00% 03/01/99 - 05/31/99 13.50% 06/01/99 - 08/31/99 14.00% 09/01/99 - Maturity 14.50%
"Asset Acquisition" means (a) an Investment by the Company or any Subsidiary of the Company in any other Person pursuant to which such Person shall become a Subsidiary of the Company or any, Subsidiary of the Company, or shall be merged with or into the Company or any Subsidiary of the Company, or (b) the acquisition by the Company or any Subsidiary of the Company of the assets of any Person (other than a Subsidiary of the Company) which constitute all or substantially all of the assets of such Person or comprises any division or line of business of such Person. "Adjusted Net Assets" of a Subsidiary at any date shall mean the lesser of (x) the amount by which the fair value of the property of such Subsidiary exceeds the total amount of liabilities, including, without limitation, the probable liability of such Subsidiary with respect to its contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under the Subsidiary Guarantees, of such Subsidiary at such date and (y) the amount by which the present fair salable value of the assets of such Subsidiary at such date exceeds the amount that will be required to pay the probable liability of such Subsidiary on its debts (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date and after giving effect to any collection from any Subsidiary by such Subsidiary in respect of the obligations of such Subsidiary under the Subsidiary Guarantees), excluding debt in respect of the Subsidiary Guarantees, as they become absolute and matured. "Asset Sale" means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by the Company or any of its Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Company or Wholly Owned Subsidiary of the Company of (a) any Capital Stock of any Subsidiary of the Company or (b) any other property or assets of the Company or any Subsidiary of the Company other than in the ordinary course of business; provided, however, that Asset Sales shall not include (i) a transaction or series of related transactions for which the Company or its Subsidiaries receive aggregate consideration of less than $500,000 (ii) sales of accounts receivable that the Company has classified as uncollectable; (iii) sales or other dispositions of Cash Equivalents; (iv) the sale of the stock of the Subsidiary of Tokheim Sofitam Applications, S.A. to which Tokheim Sofitam Applications S.A. has contributed its bulk meter business; and (v) the sale, lease, conveyance, disposition or other transfer (w) of all or substantially all of the assets of the Company as permitted under Section 5.13, (x) pursuant to any foreclosure of assets or other remedy provided by applicable law to a creditor of the Company or 2 any Subsidiary of the Company with a Lien on such assets, which Lien is otherwise permitted under this Agreement; provided that such foreclosure or other remedy is conducted in a commercially reasonable manner or in accordance with any bankruptcy law, (y) involving only Cash Equivalents or inventory in the ordinary course of business or obsolete equipment in the ordinary course of business consistent with past practices of the Company or (z) involving only the lease or sublease of any real or personal property in the ordinary course of business. "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or state law for the relief of debtors. "Board of Directors" means, as to any Person, the board of directors of such Person or any duly authorized committee thereof. "Board Resolution" means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Paying Agent. "Bridge Notes" means the $170,000,000 of senior subordinated notes issued by the Company to Schlumberger (or an Affiliate thereof) as part of the consideration for the Acquisition, as well as any refinancing thereof and any pay-in-kind notes paid thereon. "Capitalized Lease Obligation" means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP. "Capital Stock" means (i) with respect to any Person that is a corporation, any and all shares, interests participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person and (ii) with respect to any Person that is not a corporation, any and all partnership or other equity interests of such Person. "Cash Equivalents" means (i) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor's Corporation ("S&P) or Moody's Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of deposit or bankers' acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or any state thereof or the 3 District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $250.0 million; (v) repurchase obligations with a term of not more than seven days for underlying Notes of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iv) above; and (vi) investments in money market funds which invest substantially all their assets in Notes of the types described in clauses (i) through (v) above. "Change of Control" means the occurrence of one or more of the following events: (i) the approval by the holders of Capital Stock of the Company of any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the provisions of this Agreement); (ii) any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act shall become the owner, directly or indirectly, beneficially or of record, of shares representing either more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of the Company or more than 40% of the aggregate issued and outstanding Common Stock of the Company; or (iii) the replacement of a majority of the Board of Directors of the Company over a two-year period from the directors who constituted the Board of Directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Company then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved. "Common Stock" of any Person means any and all shares, interests or other participations in and other equivalents (however designated and whether voting or non-voting) of such Person's common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock. "Consolidated EBITDA" means, with respect to any Person, for any period, the sum (without duplication) of (i) Consolidated Net Earnings and (ii) to the extent Consolidated Net Earnings has been reduced thereby, (A) all income taxes of such Person and its Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary, unusual or nonrecurring gains or losses or taxes attributable to sales or dispositions outside the ordinary course of business or other transactions the effect of which has been excluded from Consolidated Net Earnings), (B) Consolidated Interest Expense and (C) Consolidated Non-cash Charges less any non-cash items increasing Consolidated Net Earnings for such period, all as determined on a consolidated basis for such Person and its Subsidiaries in accordance with GAAP. "Consolidated Fixed Charge Coverage Ratio" means, with respect to any Person, the ratio of Consolidated EBITDA of such Person during the four most recent full fiscal quarters for which financial information is available (the "Four Quarter Period") ending on or prior to the date of the transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period. In addition to and without limitation of the foregoing, for purposes of this definition, "Consolidated EBlTDA" and "Consolidated Fixed Charges" shall be calculated after giving effect on a pro forma basis for the period of such calculation to (i) the incurrence or 4 repayment of any Indebtedness of such Person or any of its Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital or revolving credit facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period and (ii) any Asset Sales or Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Subsidiaries (including any Person who becomes a Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Indebtedness and also including any Consolidated EBITDA (provided that such Consolidated EBITDA shall be included only to the extent includable pursuant to the definition of "Consolidated Net Earnings") attributable to the assets which are the subject of the Asset Acquisition or Asset Sale during the Four Quarter Period) occurring, during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or Asset Acquisition (including the incurrence, assumption or liability for any such Acquired Indebtedness) occurred on the first day of the Four Quarter Period. If such Person or any of its Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Subsidiary of such Person had directly incurred or otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating, "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; (2) if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Four Quarter Period; and (3) notwithstanding clause (1) above, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements. "Consolidated Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of (i) Consolidated Interest Expense, plus (ii) the product of (x) the amount of all dividend payments on any series of Preferred Stock of such Person and its Subsidiaries (other than dividends paid in Qualified Capital Stock of the Company or dividends to the extent payable to the Company or its Subsidiaries) paid, accrued or scheduled to be paid or accrued during such period times (other than in the case of Preferred Stock of such Person and its Subsidiaries for which the dividends are tax deductible for federal income tax purposes) (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated federal, state and local tax rate of such Person, expressed as a decimal. 5 "Consolidated Interest Expense" means, with respect to any Person for any period, the sum of, without duplication: (i) the aggregate of the interest expense of such Person and its Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including without limitation, (a) any amortization of debt discount (but excluding the amortization of debt issuance costs), (b) the net costs under Interest Swap Obligations, (c) all capitalized interest and (d) the interest portion of any deferred payment obligation: and (ii) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP. "Consolidated Net Earnings" means, with respect to any Person, for any period, the aggregate net earnings (or loss) of such Person and its Subsidiaries for such period on a consolidated basis (before preferred stock dividend requirements), determined in accordance with GAAP; provided that there shall be excluded therefrom (a) after-tax gains or losses from Asset Sales or abandonments or reserves relating thereto, (b) after-tax items classified as extraordinary or nonrecurring gains or losses, (c) the net earnings of any Person acquired in a "pooling of interests" transaction accrued prior to the date it becomes a Subsidiary of the referent Person or is merged or consolidated with the referent Person or any Subsidiary of the referent Person, (d) the net earnings (but not loss) of any Subsidiary of the referent Person to the extent that the declaration of dividends or similar distributions by that Subsidiary of that income is restricted by a contract, operation of law or otherwise, (e) the net earnings of any Person, other than a Subsidiary of the referent Person, except to the extent of cash dividends or distributions paid to the referent Person or to a Wholly Owned Subsidiary of the referent Person by such Person, (f) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Earnings accrued at any time following the Issue Date, (g) income or loss attributable to discontinued operations (including without limitation, operations disposed of during such period whether or not such operations were classified as discontinued), (h) in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person's assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets and (i) all gains or losses from the cumulative effect of any change in accounting principles. "Consolidated Net Worth" of any Person means the consolidated shareholders' equity of such Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to Disqualified Capital Stock of such Person. "Consolidated Non-cash Charges" means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Subsidiaries reducing Consolidated Net Earnings of such Person and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges constituting an extraordinary item or loss or any such charge which requires an accrual of or a reserve relating to possible cash charges or expenditures for any future or past period). "Credit Agreement" means the Credit Agreement among the Company, certain of its Subsidiaries, the lenders party thereto in their capacities as lenders thereunder and NBD Bank, N.A., as administrative agent, together with the related documents thereto (including, without 6 limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted under Section 5.5)) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders. "Credit Documents" means this Agreement and the Notes. "Credit Parties" means the Company and each U.S. Subsidiary of the Company. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement. "Custodian" means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law. "Default" means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default. "Designated Senior Debt" means (i) Indebtedness under or in respect of the Credit Agreement or the ESOP Credit Agreement and (ii) any other Indebtedness constituting Senior Debt which, at the time of determination, has an aggregate principal amount of at least $25.0 million and is specifically designated in the instrument evidencing such Senior Debt as "Designated Senior Debt" by the Company. "Disqualified Capital Stock" means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof on or prior to the final maturity date of the Notes. "ESOP Credit Agreement" means that certain credit agreement among the Company, the Tokheim Employee Stock Ownership Plan, NBD Bank, N.A., and certain other banks, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder (provided that such increase in borrowings is permitted under Section 5.5)) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders. "Exchange Act" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto. 7 "Fair market value" means, with respect to any asset or property, the price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the Board of Directors of the Company acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the Paying Agent. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of the Issue Date. "Holder" means the Person in whose name a Note is registered. "Indebtedness" means with respect to any Person, without duplication, (i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all Capitalized Lease Obligations of such Person, (iv) all indebtedness or other obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all Obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business that are not overdue by 90 days or more or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted), (v) all indebtedness for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction, (vi) guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (i) through (v) above and clause (viii) below, (vii) all indebtedness of any other Person of the type referred to in clauses (i) through (vi) which are secured by any lien on any property or asset of such Person, the amount of such Obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the Obligation so secured, (viii) all indebtedness under Currency Agreements and Interest Swap Agreements of such Person and (ix) all Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Agreement, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock. "Independent Financial Advisor" means a firm (i) which does not, and whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company and (ii) which, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is to be engaged. 8 "Interest Payment Date" has the meaning ascribed to it in Section 2.4(c). "Interest Swap Obligations" means the obligations of any Person pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps, floors, collars and similar agreements. "Investment" means, with respect to any Person, any direct or indirect loan or other extension of credit (including, without limitation, a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person. "Investment" shall exclude extensions of trade credit by the Company and its Subsidiaries on commercially reasonable terms in accordance with normal trade practices of the Company or such Subsidiary, as the case may be. For the purposes of Section 5.6, the amount of any Investment shall be the original cost of such Investment plus the cost of all additional Investments by the Company or any of its Subsidiaries, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment, reduced by the payment of dividends or distributions in connection with such Investment or any other amounts received in respect of such Investment; provided that no such payment of dividends or distributions or receipt of any such other amounts shall reduce the amount of any Investment if such payment of dividends or distributions or receipt of any such amounts would be included in Consolidated Net Earnings. "Issue Date" means the date of original issuance of the Notes. "Junior Subordinated Seller PIK Notes" means the $40,000,000 (initial face amount) of junior subordinated notes issued by the Company to Schlumberger (or an Affiliate thereof) as part of the consideration for the Acquisition, as well as any Refinancing thereof. "Lien" means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest). "Material Adverse Effect" means a material adverse effect on (i) the business, property, condition (financial or otherwise) or results of operations or prospects of (a) the Company, (b) the Company and its domestic Subsidiaries taken as a whole, or (c) the non-domestic Subsidiaries including those Subsidiaries acquired pursuant to the Acquisition, taken as a whole, (ii) the ability of any of the Credit Parties to perform their obligations under the Credit Documents, or (iii) the validity or enforceability of any of the Credit Documents or the rights or remedies of the Paying Agent or the Purchasers. "Maturity" means October 1, 2005. 9 "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Subsidiaries from such Asset Sale net of (a) reasonable out-of-pocket expenses and fees relating to such Asset Sale (including, without limitation, legal, accounting, brokerage and, investment banking fees and sales commissions), (b) taxes paid or payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements, (c) repayment of Indebtedness that is required to be repaid in connection with such Asset Sale and (d) appropriate amounts to be provided by the Company or any Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale. "Obligations" means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Office" means the office of the Paying Agent at 175 Water Street, New York, NY 10038 or such other office as the Paying Agent may designate in writing. "Officer" means, with respect to a particular Person, the Chairman of the Board, the Vice-Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of such Person. "Officers' Certificate" means a certificate signed by two Officers of the Person delivering such certificate at least one of whom shall be the pruincipal executive, accounting or financial officer of such Person. "Opinion of Counsel" means a written opinion, in form and substance reasonably satisfactory to the Paying Agent, from legal counsel who is reasonably acceptable to the Paying Agent. "Paying Agent" means the Paying Agent named in Section 7.1 hereof or any successor in such capacity. "Permitted Indebtedness" means, without duplication, each of the following: (i) Indebtedness under the Notes and this Agreement; (ii) Indebtedness incurred pursuant to the Credit Agreement and the ESOP Credit Agreement in an aggregate principal amount at any time outstanding not to exceed (A) $7.62 million with respect to the Indebtedness under the ESOP Credit Agreement, less the amount of all mandatory principal payments, if any (excluding any such payments to the 10 extent refinanced at the time of payment under a replaced ESOP Credit Agreement) and (B) $250,000,000 in the aggregate with respect to Indebtedness under the Credit Agreement, reduced by any required permanent repayments, if any (which are accompanied by a corresponding permanent commitment reduction), thereunder; (iii) Other Indebtedness of the Company and its Subsidiaries outstanding on or about the Issue Date (after giving effect to the Acquisition and related refinancing), including, without limitation, bank overdraft facilities and any indebtedness with respect to the 11- 1/2% Notes not repurchased, reduced by the amount of any scheduled amortization payments or mandatory prepayments when actually paid or permanent reductions thereon; (iv) Interest Swap Obligations of the Company covering Indebtedness of the Company or any of its Subsidiaries and Interest Swap Obligations of any Subsidiary of the Company covering Indebtedness of such Subsidiary; provided, however, that (x) such Interest Swap Obligations are designed to protect the Company and its Subsidiaries from fluctuations in interest rates on Indebtedness incurred in accordance with this Agreement (and are used for bona fide hedging, and not speculative, purposes); and (y) the notional principal amount of such Interest Swap Obligation does not exceed the principal amount of the Indebtedness to which such Interest Swap Obligation relates at the time entered into; or (z) are required under the terms of the Credit Agreement; (v) Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements (i) are designed to protect against fluctuations in currency value (and are used for bona fide hedging, and not speculative, purposes) and (ii) do not increase the Indebtedness of the Company and its Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; or (iii) are required under the terms of the Credit Agreement; (vi) Indebtedness of a Wholly Owned Subsidiary of the Company to the Company or to a Wholly Owned Subsidiary of the Company for so long as such Indebtedness is held by the Company or a Wholly Owned Subsidiary of the Company, in each case subject to no Lien held by a Person other than the Company or a Wholly Owned Subsidiary of the Company other than a Lien required under the Credit Agreement; provided that if as of any date any Person other than the Company or a Wholly Owned Subsidiary of the Company owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer of such Indebtedness; (vii) Indebtedness of the Company to a Wholly Owned Subsidiary of the Company for so long as such Indebtedness is held by a Wholly Owned Subsidiary of the Company, in each case subject to no Lien other than a Lien required under the Credit Agreement; provided that (a) any Indebtedness of the Company to any Wholly Owned Subsidiary of the Company is unsecured and subordinated, pursuant to a written agreement, to the Company's obligations under this Agreement and the Notes and (b) if as of any date any Person other than a Wholly Owned Subsidiary of the Company owns or holds any such 11 Indebtedness or any Person holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the Company; (viii) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within ten business days of incurrence; (ix) Indebtedness of the Company or any of its Subsidiaries represented by letters of credit for the account of the Company or such Subsidiary, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business; (x) Refinancing Indebtedness; (xi) Indebtedness incurred by the Company or any Subsidiary of the Company in connection with the purchase or improvement of property (real or personal) or equipment or other capital expenditures in the ordinary course of business or consisting of Capitalized Lease Obligations, provided that (i) at the time of the incurrence thereof, such Indebtedness, together with any other Indebtedness incurred during the most recently completed four fiscal quarter period in reliance upon this clause (xi) does not exceed, in the aggregate, 3% of the net sales of the Company and the Subsidiaries during the most recently completed four fiscal quarter period on a consolidated basis (calculated on a pro forma basis if the date of incurrence is prior to the end of the fourth fiscal quarter following the Issue Date) and (ii) such Indebtedness, together with all then outstanding Indebtedness incurred in reliance upon this clause (xi) does not exceed, in the aggregate, 3% of the aggregate net sales of the Company and its Subsidiaries during the most recently completed twelve fiscal quarter period on a consolidated basis (calculated on a pro forma basis if the date of incurrence is prior to the end of the twelfth fiscal quarter following the Issue Date); (xii) Indebtedness arising from agreements of the Company or a Subsidiary of the Company providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and the Subsidiary in connection with such disposition; (xiii) Obligations in respect of performance bonds and completion guarantees provided by the Company or any Subsidiary of the Company in the ordinary course of business; 12 (xiv) Guarantees by the Company or a Subsidiary of the Company of Indebtedness incurred by the Company or a Subsidiary of the Company so long as the incurrence of such Indebtedness by the Company or any such Subsidiary of the Company is otherwise permitted by the terms of this Agreement; (xv) Junior Subordinated Seller PIK Notes; (xvi) Indebtedness incurred by the Company or any Subsidiary of the Company in exchange for the use of Traits as collateral made in the ordinary course of business to financial institutions which Indebtedness has a value of no less than 90% of face value of such Traits; (xvii) Indebtedness of the Company or a Subsidiary of the Company to a Subsidiary of the Company that is not a Wholly Owned Subsidiary in the aggregate principal amount not to exceed at any one time $10.0 million; provided that if as of any date any Person other than a Subsidiary of the Company that is not a Wholly Owned Subsidiary owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer of such Indebtedness; (xviii) Bridge Notes; (xix) Indebtedness from bank overdraft facilities not to exceed $15,000,000 at any time; and (xx) $10.0 million of other indebtedness of the Company or any of its Subsidiaries (which amount may, but need not, be incurred in whole or in part under the Credit Agreement). "Permitted Investments" means (i) Investments by the Company or any Subsidiary of the Company in any Person that is or will become immediately after such Investment a Wholly Owned Subsidiary of the Company or that will merge or consolidate into the Company or a Wholly Owned Subsidiary of the Company; (ii) Investments in the Company by any Subsidiary of the Company; provided that any Indebtedness evidencing such Investment is unsecured and subordinated, pursuant to a written agreement and to the same extent that the Notes are subordinated to Senior Debt, to the Company's obligations under the Notes and this Agreement; (iii) Investments in cash and Cash Equivalents; (iv) loans and advances to employees and officers of the Company and its Subsidiaries in the ordinary course of business for bona fide business purposes or to purchase shares of the Company's Capital Stock; (v) Currency Agreements and Interest Swap Obligations entered into in the ordinary course of the Company's or its Subsidiaries' businesses and otherwise in compliance with this Agreement or as required under the terms of the Credit Agreement; (vi) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers; (vii) Investments made by the Company or its Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with the "Limitation on Asset Sales" covenant; (viii) Investments existing on or about the Issue Date; (ix) Investments in an African Subsidiary in an aggregate amount not to exceed $2.0 million for which the Company is committed on the Issue Date; and (x) additional Investments in an aggregate amount not exceeding $5.0 million. 13 "Permitted Liens" means the following types of Liens: (i) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Company or its Subsidiaries shall have set aside on its books such reserves as may be required pursuant to GAAP; (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent for a period of more than 60 days or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof; (iii) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security; (iv) Liens securing letters of credit issued in the ordinary course of business consistent with past practice in connection with the items referred to in clause (iii), or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (v) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired; (vi) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the ordinary conduct of the business of the Company or any of its Subsidiaries; (vii) any interest or title of a lessor under any Capitalized Lease Obligation, provided that such Liens do not extend to any property or assets which is not leased property subject to such Capitalized Lease Obligation; (viii) purchase money Liens to finance property or assets of the Company or any Subsidiary of the Company acquired in the ordinary course of business; provided, however, that (A) the related purchase money Indebtedness shall not exceed the cost of such property or assets and shall not be secured by any property or assets of the Company or any Subsidiary of the Company other than the property and assets so acquired and (B) the Lien securing such Indebtedness shall be created within 90 days of such acquisition; (ix) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; 14 (x) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof; (xi) Liens encumbering deposits made to secure obligations arising from statutory. regulatory, contractual, or warranty requirements of the Company or any of its Subsidiaries, including rights of offset and set-off; (xii) Liens securing Interest Swap Obligations which Interest Swap Obligations relate to Indebtedness that is otherwise permitted under this Agreement; (xiii) Liens securing Indebtedness under Currency Agreements; (xiv) Liens securing Acquired Indebtedness incurred in accordance with Section 5.5; provided that (A) such Liens secured such Acquired Indebtedness at the time of and prior to the incurrence of such Acquired Indebtedness by the Company or a Subsidiary of the Company and were not granted in connection with, or in anticipation of, the incurrence of such Acquired Indebtedness by the Company or a Subsidiary of the Company and (B) such Liens do not extend to or cover any property or assets of the Company or of any of its Subsidiaries other than the property or assets that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Company or a Subsidiary of the Company and are no more favorable to the lienholders than those securing the Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Company or a Subsidiary of the Company; (xv) Leases or subleases granted to others not interfering in any material respect with the business of the Company or any of its Subsidiaries; (xvi) Any interest or title of a lessor in the property subject to any lease, whether characterized as capitalized or operating other than any such interest or title resulting from or arising out of a default by the Company or any of its Subsidiaries of its obligations under such lease; (xvii) Liens arising from filing UCC financing statements for precautionary purposes in connection with true leases of personal property that are otherwise permitted under this Agreement and under which the Company or any of its Subsidiaries is lessee; (xviii) Liens placed on Traits used as collateral in exchange for loans provided to the Company or its Subsidiaries; and (xix) Liens in favor of the Paying Agent and any substantially equivalent Lien granted to any trustee or similar institution under any indenture governing Indebtedness permitted to be Incurred or outstanding under this Agreement. "Person" means an individual, partnership, corporation, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof. 15 "Preferred Stock" of any Person means any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation. "Qualified Capital Stock" means any Capital Stock of the Company that is not Disqualified Capital Stock. "Refinance" means, in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. "Refinanced" and "Refinancing" shall have correlative meanings. "Refinancing Indebtedness" means any Refinancing by the Company or any Subsidiary of the Company of Indebtedness incurred in accordance with Section 5.5 (other than pursuant to clause (iv), (v), (vi), (vii), (viii), (ix), (xi) or (xvi) of the definition of Permitted Indebtedness), in each case that does not (1) result in an increase in the aggregate principal amount of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium or penalty required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable fees and expenses incurred by the Company in connection with such Refinancing) or (2) create Indebtedness with (A) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced or (B) a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that (x) if such Indebtedness being Refinanced is Indebtedness of the Company, then such Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if such Indebtedness being Refinanced is subordinate or junior to the Notes, then such Refinancing Indebtedness shall be subordinate to the Notes at least to the same extent and in the same manner as the Indebtedness being Refinanced. "Registrable Securities" means the Notes. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a registration statement with respect to such securities shall have been declared effective under the Securities Act and such securities shall have been disposed of pursuant to such registration statement, (ii) such securities have been sold to the public pursuant to Rule 144 (or any similar provision then in force, but not Rule 144A) under the Securities Act, (iii) such securities shall have been otherwise transferred by such holder and new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company or its transfer agent and subsequent disposition of such securities shall not require registration or qualification under the Securities Act or any similar state law then in force or (iv) such securities shall have ceased to be outstanding. "Representative" means the indenture trustee or other trustee, agent or representative in respect of any Designated Senior Debt; provided that if, and for so long as. any Designated Senior Debt lacks such a representative, then the Representative for such Designated Senior Debt shall at all times constitute the holders of a majority in outstanding principal amount of such Designated Senior Debt in respect of any Designated Senior Debt. 16 "Required Holders" means Holders of a majority in aggregate principal amount of the Notes outstanding at a given time. "Revolving Credit Facility" means one or more revolving credit facilities under the Credit Agreement. "Sale and Leaseback Transaction" means any direct or indirect arrangement with any Person or to which any such Person is a party, providing for the leasing to the Company or a Subsidiary of any property, whether owned by the Company or any Subsidiary at the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or such Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such Property. "Schlumberger" means Schlumberger Limited, a corporation organized under the laws of Netherlands Antilles. "Senior Debt" means the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other monetary obligations of the Company owing in respect of, (x) the Credit Agreement (up to a maximum aggregate principal amount of $250,000,000) and the ESOP Credit Agreement, including, without limitation, obligations to pay principal and interest reimbursement obligations under letters of credit, fees, expenses and indemnities, (y) all Interest Swap Obligations and (z) Currency Agreements, in each case whether outstanding on the Issue Date or thereafter incurred. Notwithstanding the foregoing, "Senior Debt" shall not include (i) any Indebtedness of the Company to a Subsidiary of the Company, (ii) Indebtedness to, or guaranteed on behalf of, any shareholder, director, officer or employee of the Company or any Subsidiary of the Company (including, without limitation, amounts owed for compensation), (iii) Indebtedness to trade creditors and other amounts incurred in connection with obtaining goods. materials or services, (iv) Indebtedness represented by Disqualified Capital Stock, (v) any liability for federal, state, local or other taxes owed or owing by the Company, (vi) Indebtedness incurred in violation of Section 5.5, (vii) Indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11 of the United States Code, is without recourse to the Company, (viii) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of the Company, (ix) the Bridge Notes, and (x) the Junior Subordinated Seller PIK Notes. With respect to a Subsidiary, Senior Debt shall include such Subsidiary's Obligations in respect of any guarantee of the Company's Obligations under the Credit Agreement. "Significant Subsidiary" shall have the meaning set forth in Rule 1.02(v) of Regulation S-X under the Securities Act. "Subsidiary," with respect to any Person, means (i) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by 17 such Person or (ii) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person. "Subsidiary Guarantee" means the Guarantee of the Notes by a U.S. Subsidiary. "Total Commitment" means the sum of the Commitments. "Traits" means "traites" (within the meaning of French law), accounts receivable sold without recourse or invoices. "U.S. Subsidiary" means Management Solutions, Inc., a Colorado corporation, Tokheim Equipment Corporation, a Delaware corporation, Tokheim RPS, LLC, a Delaware limited liability company, Sunbelt Hose & Petroleum Equipment, Inc., a Georgia corporation, Envirotronic Systems, Inc., an Indiana corporation, Gasboy International, Inc., a Pennsylvania corporation, Tokheim Automation Corporation, a Texas corporation, and Tokheim Investment Corp., a Texas corporation. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment. "Wholly Owned Subsidiary" of any Person means any Subsidiary of such Person of which all the outstanding voting securities (other than in the case of a foreign Subsidiary, directors' qualifying shares or an immaterial amount of shares required to be owned by other Persons pursuant to applicable law) are owned by such Person or any Wholly Owned Subsidiary of such Person. 18 ARTICLE II PURCHASE AND SALE OF NOTES -------------------------- SECTION 2.1. Authorization of Notes. The Company will authorize the ---------------------- issue and sale of US$22,500,000 aggregate principal amount of its Senior Notes due October 1, 2005 (the "Notes") in substantially the form of Exhibit A with blanks appropriately completed in conformity therewith. Each U.S. Subsidiary of the Company shall guarantee the Company's obligations under the Notes. SECTION 2.2. Commitments to Purchase. The Company agrees to sell and ----------------------- subject to the terms and conditions set forth herein, each of the Purchasers agrees, severally but not jointly, to purchase, on the Effective Date (the "Drawdown Date") for a purchase price equal to 100% of the principal amount of the Notes so purchased Notes in a principal amount equal to its commitment as set forth on Annex I hereto (each, a "Commitment"). SECTION 2.3. Purchases. (a) Each Purchaser shall, not later than 12:00 --------- Noon (New York time) on the Drawdown Date, deliver by wire transfer to the Paying Agent at its Office in US Dollars and in immediately available funds an amount equal to the purchase price of the Notes being purchased by such Purchaser from the Company, and the Paying Agent will promptly make available to the Company, by depositing to its account at the Office, the aggregate of the amounts so made available by all Purchasers in the type of funds received, net of any Placement Fee or Funding Fee payable by the Company under Section 2.6. It is understood that no Purchaser shall be responsible for any default by any other Purchaser in its obligation to purchase Notes hereunder and that each Purchaser shall be obligated to purchase Notes provided to be purchased by it hereunder, regardless of the failure of any other Purchaser to fulfill its commitments hereunder. (b) On the Drawdown Date, the Company shall deliver to the Paying Agent for each Purchaser, against payment of the purchase price therefor as provided in Section 2.3(a), the Notes purchased by such Purchaser on such date. SECTION 2.4. Interest. (a) The unpaid principal amount of each Note -------- shall bear interest on each day until Maturity (whether by acceleration or otherwise) at a rate per annum equal to the Applicable Interest Rate. (b) All overdue principal and, to the extent permitted by law, overdue interest in respect of each Note and any other overdue amount payable hereunder shall bear interest at a rate per annum equal to the Applicable Interest Rate plus 2.0%. (c) Interest shall be payable quarterly in arrears on each January 1, April 1, July 1 and October 1, commencing January 1, 1999 and on any prepayment or conversion of such Note (on the amount prepaid or converted), at Maturity (whether by acceleration or otherwise) (each, an "Interest Payment Date") and, after such Maturity, on demand. 19 SECTION 2.5. Change of Office; Replacement of Purchasers. (a) Each ------------------------------------------- Purchaser agrees that, upon the occurrence of any event giving rise to the operation of Section 2.8 with respect to such Purchaser, it will, if requested by the Company, use reasonable efforts (subject to overall policy considerations of such Purchaser) to designate another lending office for any Notes affected by such event, provided that such designation is made on such terms that such Purchaser and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of any such Section. Nothing in this Section 2.5 shall affect or postpone any of the obligations of the Company or the right of any Purchaser provided in Section 2.8. (b) (x) Upon the occurrence of any event giving rise to the operation of Section 2.8 with respect to any Purchaser which results in such Purchaser charging to the Company increased costs in excess of those being charged generally by the Purchasers and/or (y) if a Purchaser is in default of its obligations hereunder to purchase any Note, the Company shall have the right, if no Event of Default then exists, to replace such Purchaser (the "Replaced Purchaser") with one or more other Eligible Transferee or Transferees (collectively, the "Replacement Purchaser") reasonably acceptable to the Paying Agent, provided that (i) at the time of any replacement pursuant to this Section 2.5(b), the Replacement Purchaser shall enter into one or more Assignment Agreements pursuant to Section 13.4(b) (and with all fees payable pursuant to said Section 13.4(b) to be paid by the Replacement Purchaser) pursuant to which the Replacement Purchaser shall acquire all of the outstanding Notes of the Replaced Purchaser and, in connection therewith, shall pay to the Replaced Purchaser in respect thereof an amount equal to the principal of, and all accrued interest on, all outstanding Notes of the Replaced Purchaser, and (ii) all obligations of the Company owing to the Replaced Purchaser (other than those specifically described in clause (i) above (x) in respect of which the assignment purchase price has been, or is concurrently being, paid or expressly omitted or (y) with respect to which a Purchaser is in default as described in clause (y) above) shall be paid in full to such Replaced Purchaser concurrently with such replacement. Upon the execution of the respective Assignment Agreements, the payment of amounts referred to in clauses (i) and (ii) above and delivery to the Replacement Purchaser of the appropriate Note or Notes executed by the Company, the Replacement Purchaser shall become a Purchaser hereunder and the Replaced Purchaser shall cease to constitute a Purchaser hereunder, except with respect to indemnification provisions applicable to the Replaced Purchaser under this Agreement, which shall survive as to such Replaced Purchaser. SECTION 2.6. Fees. The Company agrees to pay to Gleacher NatWest Inc. a fee ---- (the "Placement Fee") on the Effective Date equal to $500,000. The Company agrees to pay to the Purchasers a fee (the "Funding Fee") on the Effective Date equal to $2,250,000. SECTION 2.7. Method and Place of Payment. Except as otherwise specifically --------------------------- provided herein, all payments under this Agreement shall be made to the Paying Agent for the ratable (based on its pro rata share) account of the Purchasers --- ---- entitled thereto, not later than 1:00 P.M. (New York time) on the date when due and shall be made in immediately available funds and in US dollars at the Office, it being understood that written notice by the Company to the Paying Agent to make a payment from the funds in the Company's account at the Office shall constitute the making of such payment to the extent of such funds held in such account. Any payments under the Notes or this Agreement which are made later than 1:00 P.M. (New York time) shall be 20 deemed to have been made on the next succeeding Business Day. Whenever any payment to be made hereunder shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable during such extension at the applicable rate in effect immediately prior to such extension. SECTION 2.8. Net Payments. (a) All payments made by a Credit Party ------------ hereunder or under any Note will be made without setoff, counterclaim or other defense. All such payments will be made free and clear of, and without deduction or withholding for, any present or future taxes, levies, duties, fees, assessments or other governmental charges of whatever nature imposed, levied, collected or assessed ("Taxes") by or on behalf of taxing authority in any jurisdiction in which the Company or any Subsidiary is organized or engaged in business for tax purposes ("Relevant Jurisdictions"), unless the respective Credit Party is required to withhold or deduct Taxes by law or by the interpretation or administration thereof. If a Credit Party is required to withhold or deduct or is otherwise required to pay any amount for or on account of Taxes imposed by a taxing authority in any Relevant Jurisdiction, from or in respect of any payment made under or with respect to this Agreement or the Notes, such Credit Party will pay such additional amounts ("Additional Amounts") as may be necessary so that the net amount received by each Purchaser (including Additional Amounts) after such withholding or deduction or other payment of Taxes will not be less than the amount such Purchaser would have received if such Taxes has not been withheld or deducted or paid; provided that no Additional Amounts will be payable with respect to a payment made to a Purchaser with respect to any Tax: (i) which would not have been imposed, payable or due but for the existence of any present or former connection between the Purchaser and Relevant Jurisdictions, as the case may be, other than the mere holding of the Notes; (ii) that is an estate, inheritance, gift, sales or similar tax, assessment or governmental charge (iii) that is imposed or withheld by reason of the failure of the Purchaser to comply with a reasonable request of the Company, addressed to the Purchaser to provide reasonable information concerning the nationality, residence or identity of the Purchaser, which is required or imposed by a statute, treaty, regulation or administrative practice of the taxing jurisdiction as a precondition to exemption from all or part of such tax, assessment or governmental charge; or (iv) if the beneficial owner of, or person ultimately entitled to obtain an interest in, such Notes had been the holder of the Notes and would not be entitled to the payment of Additional Amounts. (b) The respective Credit Party will also (i) make such withholding or deduction and (ii) remit the full amount deducted or withheld to the relevant authority in accordance with applicable law. The respective Credit Party will make reasonable efforts to obtain certified copies of tax receipts evidencing the payment of any Taxes so deducted or withheld from each taxing authority imposing such Taxes. The respective Credit Party will furnish to the Purchasers, within 60 days after the date the payment of Taxes so deducted or withheld is due pursuant to applicable law, either certified copies of tax receipts evidencing such payment by the respective Credit Party or, if such receipts are not obtainable, other evidence of such payments by the respective Credit Party reasonably satisfactory to the respective Purchasers. (c) In addition, the respective Credit Party will indemnify and hold harmless each Purchaser (subject to the exclusions set forth in Section 2.8(a) (i), (ii) (iii) or (iv) and will, upon 21 written request of each Purchaser (subject to the exclusions set forth in Section 2.8(a) (i), (ii), (iii) or (iv)), and provided that reasonable supporting documentation is provided, reimburse each Purchaser for the amount of any taxes levied or imposed by any Relevant Jurisdiction and paid by such Purchaser as a result of payments made under or with respect to this Agreement and/or the Notes. Any payment pursuant to this Section 2.8(c) shall be an Additional Amount. (d) At least 30 days prior to each date on which any payment under or with respect to this Agreement or the Notes is due and payable, if the Company will be obligated to pay Additional Amounts with respect to such payment, the Company will deliver to the Paying Agent a certificate stating the fact that such Additional Amounts will be payable and the amounts so payable and will set forth such other information necessary to enable the Paying Agent to pay such Additional Amounts to the Purchaser on the payment date. ARTICLE III CONDITIONS PRECEDENT -------------------- SECTION 3.1. Effective Date. This Agreement shall become effective on the -------------- date (the "Effective Date") on which all of the following conditions have first been satisfied: (A) Execution. This Agreement shall have been executed by the Credit --------- Parties and the Purchasers as provided in Section 13.10. (B) Opinions of Counsel. The Paying Agent shall have received opinions, ------------------- addressed to the Paying Agent and each of the Purchasers and dated the Effective Date, from (i) Norman L. Roelke, general counsel to the Credit Parties, covering the matters set forth in Exhibit C-1 and (ii) Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to the Credit Parties, covering the matters set forth in Exhibit C-2, each of which opinions shall be in form and substance satisfactory to the Paying Agent. (C) Proceedings. The Paying Agent shall have received from each Credit ----------- Party a certificate, dated the Effective Date, signed by a Director or Board Secretary of such Credit Party substantially in the form of Exhibit D with appropriate insertions and deletions, together with (x) copies of the Certificate of Incorporation and By-laws (or analogous organizational documents) of such Credit Party, (y) the resolutions of such Credit Party referred to in such certificate and all of the foregoing (including such Certificate of Incorporation and By-laws) shall be reasonably satisfactory to the Paying Agent and (z) a statement that all of the applicable conditions set forth in Sections 3.1 and 3.2(b) have been satisfied as of such date. (D) Documentation. All company and legal proceedings and all instruments ------------- and agreements delivered in connection with the transactions contemplated by this Agreement and the other Credit Documents shall be reasonably satisfactory in form and substance to the Paying Agent , and the Paying Agent shall have received all information and copies of all certificates, documents and papers, including any records of company proceedings and governmental approvals, if any, which the Paying Agent may have reasonably requested in connection therewith, 22 such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities. (E) No Adverse Change. Since May 31, 1998, nothing shall have occurred with ----------------- respect to the Credit Parties which would reasonably be expected to have a material adverse effect on the rights or remedies of the Purchasers or on the ability of the Credit Parties to perform their obligations to the Purchasers or which would reasonably be expected to have a Material Adverse Effect. (F) Approvals. All governmental and third party approvals necessary to --------- complete the transactions contemplated by this Agreement shall have been obtained and remain in effect, without any action being taken by any competent authority which restrains or prevents the transactions contemplated herein or in the other Documents or imposes, in the reasonable judgment of the Required Holders, materially adverse conditions upon the consummation of such transactions. (G) Consummation of Acquisition. The Acquisition shall have been --------------------------- consummated. Each of the Acquisition Documents shall have been duly authorized, executed and delivered by each of the parties thereto and shall be in full force and effect, and the Company shall have delivered to the Paying Agent and each Purchaser copies of each of the Acquisition Documents, certified as being true and correct as of the Effective Date. (H) Funding. The financings under the Credit Agreement, the ESOP Credit ------- Agreement, the Bridge Notes and the Junior Subordinated Seller PIK Notes shall each have consummated on terms reasonably satisfactory to the Paying Agent. (I) Consent Letter. The Paying Agent shall have received a letter from CT -------------- Corporation System, reasonably satisfactory to the Paying Agent and dated the Effective Date, indicating its consent to its appointment by the Credit Parties as their agent to receive service of process. (J) Placement Fee. The Placement Fee shall have been received by Gleacher ------------- NatWest Inc. (K) Funding Fee. The Funding Fee shall have been received by the ----------- Purchasers. All of the certificates, legal opinions and other documents and papers referred to in Section 3.1, unless otherwise specified, shall be delivered to the Paying Agent at the office of its counsel for the account of each of the Purchasers and, in sufficient counterparts for each of the Purchasers and shall be reasonably satisfactory in form and substance to the Paying Agent. 23 ARTICLE IV REPRESENTATIONS AND WARRANTIES ------------------------------ Reference is hereby made to the Credit Agreement. Each and every representation and warranty made therein for the benefit of the lenders thereunder is hereby incorporated by reference into this Agreement for all purposes, and the Company and each U.S. Subsidiary hereby jointly and severally make each such representation and warranty for the express benefit of the Purchasers and any subsequent Holders of the Notes; provided, that references in such representations and warranties in the Credit Agreement to the Loan Documents, as defined therein, shall be deemed for purposes of this Article IV to be references to the Credit Documents. ARTICLE V COVENANTS --------- So long as this Agreement is in effect until all Notes, together with interest, and all other Obligations (other than those not then owed) incurred hereunder are paid in full: SECTION 5.1. Furnishing of Information; Compliance Certificates. (a)(i) -------------------------------------------------- So long as any Person owns Notes having an aggregate principal amount of at least US$1,000,000 (each a "Designated Purchaser"), the Company (at its own expense) shall furnish to each such Designated Purchaser within 15 days after it files them with the Commission copies of the quarterly and annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) to be filed pursuant to Section 13 or 15(d) of the Exchange Act (without regard to whether the Company is subject to the requirements of such Section 13 or 15(d) of the Exchange Act), and the Company hereby covenants to make all such filings with the Commission to the extent required by law. (ii) At their own expense, the Company and each Subsidiary, as applicable, shall cause an annual report if furnished by it to stockholders generally and each quarterly or other financial report if furnished by it to stockholders generally to be mailed to each Designated Purchaser. (b)(i) Each of the Company and the Subsidiaries shall deliver to each Designated Purchaser, within 90 days after the end of each fiscal year, an officers' certificate signed by its principal executive officer, principal financial officer or principal accounting officer stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing officers with a view to determining whether each has kept, observed, performed and fulfilled its Obligations under this Agreement and further stating, as to each such officer signing such certificate, that to the best of his or her knowledge each has kept, observed, performed and fulfilled each and every covenant contained in this Agreement and is not in default in the performance or observance of any of the terms, provisions and conditions of this Agreement (or, if a Default or Event of Default shall have occurred, 24 describing all such Defaults or Events of Default of which he or she may have knowledge and what action each is taking or proposes to take with respect thereto). (ii) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to this Section 5.1 shall be accompanied by a written statement of (x) the Company's independent public accountants (who shall be a firm of established international reputation) that in making the examination necessary for certification of such financial statements nothing has come to their attention which would lead them to believe that the Company has violated any provisions of Article V or that a Default or Event of Default has occurred pursuant to Article VI insofar as they relate to accounting matters or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation and (y) if any Subsidiary's financial statements are not prepared on a consolidated basis with the Company's, such Subsidiary's independent public accountants (who shall be a firm of established international reputation) that in making the examination necessary for certification of such financial statements nothing has come to their attention which would lead them to believe that any of the Subsidiaries is in Default under this Agreement or, if any such Default has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (iii) The Company shall, so long as any of the Notes are outstanding, deliver to each Designated Purchaser, forthwith upon any officer becoming aware of (i) any Default or Event of Default or (ii) any event of default under any other Indebtedness, an officers' certificate specifying such Default, Event of Default or event of default and what action the Company is taking or proposes to take with respect thereto. SECTION 5.2. Insurance. Each Credit Party will at all times maintain in --------- full force and effect insurance in such amounts, covering such risks and liabilities and with such deductibles or self-insured retentions as are in accordance with normal industry practice. SECTION 5.3. Compliance with Statutes, etc. Each Credit Party will comply ------------------------------ with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies in respect of the conduct of its business and the ownership of its property other than those the non- compliance with which would not reasonably be expected to have a Material Adverse Effect. SECTION 5.4. Limitation on Asset Sales. (a) The Company will not, and ------------------------- will not permit any of its Subsidiaries to, consummate an Asset Sale unless (i) the Company or the applicable Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of (as determined in good faith by the Company's Board of Directors), (ii) with respect to Asset Sales by the Company or any Wholly Owned Subsidiary of the Company, at least 80% of the consideration received by the Company or such Subsidiary, as the case may be, from such Asset Sale shall be in the form of cash or Cash Equivalents and is received at the time of such disposition and (iii) upon the consummation of an Asset Sale, the Company shall apply, or cause such Subsidiary to apply, the 25 Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof (A) to prepay any Senior Debt or Indebtedness of any Subsidiary of the Company, (B) to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties or assets that will be used in the business of the Company and its Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets") or (C) a combination of prepayment and investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the next preceding sentence (each a "Net Proceeds Offer Amount") shall be applied by the Company or such Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 45 days following the applicable Net Proceeds Offer Trigger Date, from all Holders on a pro rata basis, that amount of Notes equal to the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $5.0 million resulting from one or more Asset Sales (at which time. the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $5.0 million, shall be applied as required pursuant to Section 5.4(a)). (b) Notwithstanding Section 5.4(a), the Company and its Subsidiaries will be permitted to consummate an Asset Sale without complying with Section 5.4(a) to the extent (i) at least 80% of the consideration for such Asset Sale constitutes Replacement Assets and the remainder is in cash or Cash Equivalents and (ii) such Asset Sale is for fair market value; provided that any consideration not constituting Replacement Assets received by the Company or any of its Subsidiaries in connection with any Asset Sale permitted to be consummated under this Section 5.4(b) shall constitute Net Cash Proceeds subject to the provisions of Section 5.4(a). (c) Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the Paying Agent, and shall comply with the procedures set forth in this Agreement. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of $1,000 in exchange for cash. To the extent Holders properly tender Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law. (d) The Company will comply with the requirements of Rule l4e-1 under the Exchange Act and any other Securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any Securities laws or regulations conflict with this Section 5.4, the Company shall comply with the applicable Securities laws and regulations and shall not be deemed to have breached its obligations under this Section 5.4. 26 SECTION 5.5. Limitation on Incurrence of Additional Indebtedness. The --------------------------------------------------- Company will not and will not permit any of its Subsidiaries to, directly or indirectly create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively incur) any Indebtedness (other than Permitted Indebtedness); provided, however, that if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness the Company may incur Indebtedness (including, without limitation, Acquired Indebtedness) and Subsidiaries of the Company may incur Acquired Indebtedness, in each case if on the date of the incurrence of such Indebtedness, after giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.00 to 1.00 if incurred on or prior to the second anniversary of the Issue Date or greater than 2.25 to 1.00 if incurred thereafter. SECTION 5.6. Limitation on Restricted Payments. (a) The Company will not, --------------------------------- and will not cause or permit any of its Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Company) on or in respect of shares of the Company's Capital Stock (ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any warrants, rights or options to purchase or acquire shares of any class of such Capital Stock (other than any warrant issued by the Company in connection with the Acquisition), (iii) make any Investment (other than Permitted Investments) or (iv) repurchase or redeem the Junior Subordinated Seller PIK Notes, or make any cash payments of interest thereon (other than refinancing the Junior Subordinated Seller PIK Notes with debt instruments having similar payment-in- kind and subordination features) (each of the foregoing actions set forth in clauses (i), (ii), (iii) and (iv) being referred to as a "Restricted Payment"), if at the time of such Restricted Payment or immediately after giving effect thereto, (A) a Default or an Event of Default shall have occurred and be continuing or (B) the Company is not able to incur at least $1.00 of additional Indebtedness under Section 5.5 or (C) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined reasonably and in good faith by the Board of Directors of the Company) shall exceed the sum of: (w) 50% of the cumulative Consolidated Net Earnings (or if cumulative Consolidated Net Earnings shall be a loss, minus 100% of such loss) of the Company earned subsequent to the Issue Date and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period); plus (x) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company plus (y) 100% of the net cash proceeds from the sale of Investments by the Company (other than Permitted Investments) provided that such Investment was made after the Issue Date; plus (z) without duplication of any amounts included in clause (C)(x) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock (excluding, in the case of clauses (C)(x) and (z), any net cash proceeds from a Public Equity Offering to the extent used to redeem the Notes or utilized as provided in Section 5.6(b)(2)(ii). (b) Notwithstanding the foregoing, the provisions set forth in Section 5.6(a) do not prohibit: (1) the payment of any dividend within 60 days after the date of declaration of such 27 dividend if the dividend would have been permitted on the date of declaration; or (2) the acquisition of any shares of Capital Stock of the Company, either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the application of the net cash proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company (excluding, in the case of Section 5.6(b)(2)(ii), any net cash proceeds from a Public Equity Offering to the extent used to redeem the Notes), or (3) dividends on, and redemptions of, the shares of the Company's preferred stock held by the trust of the Company's retirement savings plan in accordance with the terms thereof on the date of this Agreement; or (4) payments to redeem or repurchase stock or similar rights from management of the Company in connection with the repurchase provisions under employee stock option or stock purchase agreements or other agreements to compensate management employees upon the termination of employment, death or disability of any such person; provided that such redemptions or repurchases shall not exceed $1.0 million. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with Section 5.6(a)(iii), amounts expended pursuant to Section 5.6(b)(1) and (4) shall be included in such calculation. (c) Not later than the date of making any Restricted Payment, the Company shall deliver to the Paying Agent an officers' certificate stating that such Restricted Payment complies with this Agreement and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company's latest available internal quarterly financial statements. SECTION 5.7 Limitation on Liens. The Company will not, and will not cause ------------------- or permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens of any kind against or upon any property or assets of the Company or any of its Subsidiaries whether owned on the Issue Date or acquired after the Issue Date, or any proceeds therefrom, or assign or otherwise convey any right to receive income or profits therefrom unless (i) in the case of Liens securing Indebtedness that is expressly subordinate or junior in right of payment to the Notes, the Notes are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens and (ii) in all other cases, the Notes are equally and ratably secured, except for (A) Liens existing as of the Issue Date to the extent and in the manner such Liens are in effect on the Issue Date; (B) Liens securing Senior Debt; (C) Liens securing the Notes; (D) Liens of the Company or a Wholly Owned Subsidiary of the Company on assets of any Subsidiary of the Company; (E) Liens securing Refinancing Indebtedness which is incurred to Refinance any Indebtedness which has been secured by a Lien permitted under this Agreement and which has been incurred in accordance with the provisions of this Agreement; provided. however, that such Liens (x) are no less favorable to the Holders and are not more favorable to the lienholders with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced and (y) do not extend to or cover any property or assets of the Company or any of its Subsidiaries not securing the Indebtedness so Refinanced; and (F) Permitted Liens. SECTION 5.8. Limitation on Dividend and Other Payment Restrictions ----------------------------------------------------- Affecting Subsidiaries. The Company will not, and will not cause or permit any - ---------------------- of its Subsidiaries to, directly or indirectly. create or otherwise cause or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary of the Company to (i) pay dividends or make any other distributions on or in respect of its Capital Stock; (ii) make loans or advances or 28 to pay or guarantee any Indebtedness or other obligation owed to the Company or any other Subsidiary of the Company, provided that the terms of the Credit Agreement may restrict (a) loans or advances from the Company and those of its Subsidiaries that are borrowers thereunder to any of the Company's Subsidiaries that are not borrowers thereunder or (b) guarantees by the Company or Subsidiaries of the Company that are borrowers thereunder of any Indebtedness or other Obligation owed by any of the Company's Subsidiaries that are not borrowers thereunder; or (iii) transfer any of its property or assets to the Company or any other Subsidiary of the Company, except for such encumbrances or restrictions existing under or by reason of (1) applicable law; (2) this Agreement; (3) customary non-assignment provisions of any contract or any lease governing a leasehold interest of any Subsidiary of the Company; (4) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired; (5) agreements existing on the Issue Date to the extent and in the manner such agreements are in effect on the Issue Date; (6) the Credit Agreement or the ESOP Credit Agreement; or (7) an agreement governing Indebtedness incurred to Refinance the Indebtedness issued, assumed or incurred pursuant to an agreement referred to in clause (2), (4) or (5) above; provided, however, that the provisions relating to such encumbrance or restriction contained in any such Refinancing Indebtedness are no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clause (2), (4) or (5). SECTION 5.9. Limitation on Transactions with Affiliates. (a) The ------------------------------------------ Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates (each an "Affiliate Transaction"), other than (x) Affiliate Transactions permitted under Section 5.9(b) and (y) Affiliate Transactions on terms that are no less favorable to the Company or such Subsidiary than those that could reasonably have been obtained in a comparable transaction at such time on an arm's-length basis from a Person that is not an Affiliate of the Company or such Subsidiary. All Affiliate Transactions (and each series of related Affiliate Transactions which are similar or part of a common plan) involving aggregate payments or other property with a fair market value in excess of $1.0 million shall be approved by the Board of Directors of the Company or such Subsidiary, as the case may be, such approval to be evidenced by a Board Resolution stating that such Board of Directors has determined that such transaction complies with the foregoing provisions. If the Company or any Subsidiary of the Company enters into an Affiliate Transaction (or a series of related Affiliate Transactions related to a common plan) after the Issue Date that involves aggregate payments or other property with a fair market value of more than $5.0 million, the Company or such Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor and file the same with the Paying Agent. (b) The restrictions set forth in Section 5.9(a) shall not apply to: (i) reasonable fees and compensation paid to, and indemnity provided on behalf of, officers, directors or 29 employees of the Company or any Subsidiary of the Company as determined in good faith by the Company's Board of Directors; (ii) transactions exclusively between or among the Company and any of its Wholly Owned Subsidiaries or exclusively between or among such Wholly Owned Subsidiaries, provided such transactions are not otherwise prohibited by this Agreement; (iii) Restricted Payments permitted by this Agreement; (iv) transactions permitted by, and complying with, the provisions of Section 5.13; (v) transactions with distributors or other purchases or sales of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement which are fair to the Company, in the reasonable determination of the Board of Directors of the Company or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party; (vi) any management agreement as in effect as of the Issue Date or any amendment thereto or any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Issue Date and any similar agreements entered into after the Issue Date; and (vii) intercompany loans or capital contributions from the Company or any Subsidiary to any of the Company's Subsidiaries; provided such loans are otherwise in compliance with the terms of this Agreement. SECTION 5.10. Limitation Preferred Stock of Subsidiaries. The ------------------------------------------ Company shall not permit any of its Subsidiaries to issue any Preferred Stock (other than to the Company or to a Wholly Owned Subsidiary of the Company) or permit any Person (other than the Company or a Wholly Owned Subsidiary of the Company) to own any Preferred Stock of any Subsidiary. SECTION 5.11. Change of Control. (a) Upon the occurrence of any of ----------------- a Change of Control, each Holder will have the right to require the Company to repurchase all or any part of such Holder's Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date) (such applicable purchase price being thereafter referred to as the "Change of Control Purchase Price"): (b) Within 30 days following any Change of Control, unless the Company has mailed a redemption notice with respect to all the outstanding Notes in connection with such Change of Control, the Company shall mail a notice to each Holder with a copy to the Paying Agent stating: (i) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder's Notes at a purchase price in cash equal to the Change of Control Purchase Price (subject to the right of Holders of record on a Record Date to receive interest on the relevant Interest Payment Date); (ii) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the "Change of Control Payment Date"); and (iii) the procedures determined by the Company, consistent with this Agreement, that a Holder must follow in order to have its Notes purchased. 30 (c) Holders electing to have a Note repurchased will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Company at the address specified in the notice at least 10 Business Days prior to the Change of Control Payment Date. Holders will be entitled to withdraw their election if the Paying Agent or the Company receives not later than three Business Days prior to the Change of Control Payment Date a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for repurchase by the Holder and a statement that such Holder is withdrawing his election to have such Note purchased. (d) On the Change of Control Payment Date, the Company will, to the extent lawful, (i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (iii) deliver or cause to be delivered to the Paying Agent the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent will promptly mail to each Holder so tendered the Change of Control Payment for such Notes, and the Paying Agent will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. Unless the Company defaults in the payment for any Notes properly tendered pursuant to the Change of Control Offer, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date. (e) The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 5.11. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Agreement, the Company will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Agreement by virtue thereof. SECTION 5.12. Prohibition on Incurrence of Senior Subordinated Debt. ----------------------------------------------------- The Company shall not incur or suffer to exist any indebtedness that is senior in right of payment to the Notes and subordinate in right of payment to any other Indebtedness of the Company. SECTION 5.13. Merger, Consolidation and Sale of Assets. (a) The ---------------------------------------- Company will not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company's assets (determined on a consolidated basis for the Company and the Company's Subsidiaries) whether as an entirety or substantially as an entirety to any Person unless: (i) either (1) the Company shall be the surviving or continuing corporation or (2) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company and of the Company's Subsidiaries substantially as an entirety (the "Surviving Entity") (x) shall be a corporation organized and 31 validly existing under the laws of the United States or any State thereof or the District of Columbia and (y) shall expressly assume, by a supplement hereto (in form and substance satisfactory to the Paying Agent), executed and delivered to the Paying Agent, the due and punctual payment of the principal of, and premium, if any, and interest on all of the Notes and the performance of every covenant of the Notes and this Agreement on the part of the Company to be performed or observed; (ii) immediately after giving effect to such transaction and the assumption contemplated by Section 5.13(i)(2)(y) (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Company or such Surviving Entity, as the case may be, shall have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction; (iii) immediately before and immediately after giving effect to such transaction and the assumption contemplated by Section 5.13(i)(2)(y) (including, without limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default shall have occurred or be continuing; and (iv) the Company or the Surviving Entity shall have delivered to the Paying Agent an Officers' Certificate and an opinion of counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a supplement to this Agreement is required in connection with such transaction, such supplement complies with the applicable provisions of this Agreement and that all conditions precedent in this Agreement relating to such transaction have been satisfied. (b) The Surviving Entity will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Agreement, but, in the case of a lease of all or substantially all its assets, the Company will not be released from the obligation to pay the principal of and interest on the Notes. (c) Notwithstanding any other provision of this Agreement, any Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Company or any other Wholly Owned Subsidiary. SECTION 5.14. Ratings. The Company agrees to use its best efforts to ------- obtain a rating of the Notes from both Moody's and S&P not later than the date that is six months after the date of this Agreement. ARTICLE VI EVENTS OF DEFAULT ----------------- Upon the occurrence of any of the following specified events (each, an "Event of Default"): SECTION 6.1. Payments. The Company shall (i) default in the payment -------- when due of any principal of the Notes or (ii) default, and such default shall continue for 30 or more days, in the payment when due of any interest (including any Additional Amount) on the Notes or any other amounts owing hereunder or under any other Credit Document; or 32 SECTION 6.2. Representations, etc. Any representation, warranty or --------------------- statement made by any Credit Party herein or in any other Credit Document or in any statement or certificate delivered or required to be delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or SECTION 6.3. Covenants. Any Credit Party shall (a) default in the due --------- performance or observance by it of any covenant contained in Article V and such default shall continue for a period of at least 30 days after notice to the defaulting party by the Paying Agent or Purchasers holding at least 25% of the outstanding principal of the Notes or (b) default in the due performance or observance by it of any other term, covenant or agreement (other than those referred to in Section 6.1 or 6.2 or clauses (a) and (b) of this Section 6.3) contained in this Agreement and such default shall continue unremedied for a period of at least 60 days after notice to the defaulting party by the Paying Agent or Purchasers holding at least 25% of the outstanding principal of the Notes; or SECTION 6.4. Default Under Other Agreements. There shall be a default ------------------------------ under the Credit Agreement which either (1) results from the failure to pay Obligations due under the Credit Agreement at its final stated maturity, or (2) relates to an Obligation other than an Obligation described in the previous clause (1) as a result of which, the lenders under the Credit Agreement cause the Obligations under the Credit Agreement to be due prior to its final stated maturity; or there shall be a default or event of default (not waived or cured within any applicable grace period) under any Indebtedness of the Company (including specifically, without limitation, the Bridge Notes and the Junior Subordinated Seller PIK Notes) or any other Credit Party, whether such Indebtedness now exists or shall hereafter be created, if the aggregate amount of such Indebtedness exceeds US$10,000,000 (or its equivalent) at any one time; or SECTION 6.5. Bankruptcy or Insolvency. (a) The Company or any of ------------------------ its Subsidiaries pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a general assignment for the benefit of its creditors, (E) consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it, or (F) takes any corporate action to authorize or effect any of the foregoing; (b) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 33 (A) is for relief against the Company or any of its Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or any of its Subsidiaries or for all or substantially all of the property of the Company or any of its Subsidiaries, or (C) orders the liquidation of the Company or any of its Subsidiaries, and the order or decree remains unstayed and in effect for 60 consecutive days; or SECTION 6.6. Judgments. Any judgment or decree for the payment of --------- money in excess of US$5,000,000 (to the extent not covered by insurance) is rendered against any Credit Party and such judgment or decree shall remain undischarged or unstayed for a period of at least 60 days after such judgment becomes final and non- appealable; then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Paying Agent shall, upon the written request of the Required Holders, by written notice to the Credit Parties, take any or all of the following actions, without prejudice to the rights of any Purchaser to enforce its claims against any Credit Party (provided that, if an Event of Default specified in Section 6.5 shall occur with respect to the Company, the result which would occur upon the giving of written notice by the Paying Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon the Commitment of each Purchaser shall forthwith terminate immediately without any other notice of any kind; and (ii) declare the principal of and any accrued interest in respect of Notes and all obligations owing hereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Company. ARTICLE VII THE PAYING AGENT ---------------- SECTION 7.1. Appointment. The Purchasers hereby designate National ----------- Westminster Bank Plc as Paying Agent to act as specified herein. Each Purchaser hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Paying Agent to take such action on its behalf under the provisions of this Agreement, and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Paying Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Paying Agent may perform any of its duties hereunder by or through its officers, directors, agents, employees or affiliates. SECTION 7.2. Nature of Duties. The Paying Agent shall not have any ---------------- duties or responsibilities except those expressly set forth in this Agreement. Neither the Paying Agent nor any of its respective officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by their gross negligence or willful misconduct. The duties 34 of the Paying Agent shall be mechanical and administrative in nature; the Paying Agent shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Purchaser or the holder of any Note; and nothing in this Agreement or any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon the Paying Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein. SECTION 7.3. Lack of Reliance on the Paying Agent. Independently and ------------------------------------ without reliance upon the Paying Agent, each Purchaser and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the Project and of the financial condition and affairs of the Credit Parties in connection with the acquisition of Notes and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of the Project and of the Credit Parties and, except as expressly provided in this Agreement, the Paying Agent shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Purchaser or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the acquisition of Notes or at any time or times thereafter. The Paying Agent shall not be responsible to any Purchaser or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of any Credit Party or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or the financial condition of the Project and/or any Credit Party or the existence or possible existence of any Default or Event of Default. SECTION 7.4. Certain Rights of the Paying Agent. If the Paying Agent ---------------------------------- shall request instructions from the Required Holders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Paying Agent shall be entitled to refrain from such act or taking such action unless and until the Paying Agent shall have received instructions from the Required Holders; and the Paying Agent shall not incur liability to any Person by reason of so refraining. Without limiting the foregoing, neither any Purchaser nor the holder of any Note shall have any right of action whatsoever against the Paying Agent as a result of the Paying Agent acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Holders. SECTION 7.5. Reliance. The Paying Agent shall be entitled to rely, -------- and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype, facsimile or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the Paying Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Paying Agent. SECTION 7.6. Indemnification. (a) The Company and the each of the --------------- Subsidiaries, jointly and severally, shall pay to the Paying Agent from time to time reasonable 35 compensation for its acceptance of this Agreement, including extraordinary services such as default administration. The Paying Agent's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company and each of the Subsidiaries, jointly and severally, shall reimburse the Paying Agent upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Paying Agent's agents and counsel. (b) The Company and each of the Subsidiaries, jointly and severally, shall indemnify the Paying Agent against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Agreement, including the costs and expenses of enforcing this Agreements against the Company (including this Section 7.6) and defending itself against any claim (whether asserted by the Company, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except as set forth below in subparagraph (d). The Paying Agent shall notify the Company and each of the Subsidiaries promptly of any claim for which it may seek indemnity. Failure by the Paying Agent to so notify the Company or any Subsidiary shall not relieve the Company or any of the Subsidiaries of their Obligations hereunder. The Paying Agent may have separate counsel and the Company and each of the Subsidiaries, jointly and severally, shall pay the reasonable fees and expenses of such counsel. Neither the Company nor any Subsidiary need pay for any settlement made without its consent, which consent shall not be unreasonably withheld. (c) The obligations of the Company and each of the Subsidiaries under this Section 7.6 shall survive the resignation or removal of the Paying Agent and the satisfaction and discharge or termination of this Agreement. (d) Notwithstanding subparagraphs (a) or (b) above, neither the Company nor any Subsidiary need reimburse any expense or indemnify against any loss or liability incurred by the Paying Agent through its own gross negligence, bad faith or willful misconduct. (e) To secure the Company's and each Subsidiary's payment obligations in this Section, the Paying Agent shall have a Lien on all money or property held or collected by the Paying Agent, except that held in trust to pay principal, premium, if any, and interest on particular Notes. This Section 7.6 and such Lien shall survive the resignation or removal of the Paying Agent and the satisfaction and discharge of this Agreement. (f) When the Paying Agent incurs expenses or renders services after an Event of Default specified in Section 6.6 occurs, the expenses and the compensation for such services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. (g) To the extent the Paying Agent is not reimbursed and indemnified by the Company pursuant to this Section 7.6, each Purchaser will reimburse and indemnify the Paying Agent, in proportion to its respective Notes, for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of 36 whatsoever kind or nature which may be imposed on, asserted against or incurred by the Paying Agent in performing its duties hereunder or under any other Credit Document, in any way relating to or arising out of this Agreement or any other Credit Document provided that no Purchaser shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Paying Agent. SECTION 7.7. The Paying Agent in Its Individual Capacities. With --------------------------------------------- respect to its obligation, if any, to purchase or hold Notes under this Agreement, the Paying Agent shall have the rights and powers specified herein for a "Purchaser" and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term "Purchasers", "Required Holders", "holders of Notes" or any similar term shall, unless the context clearly otherwise indicates, include the Paying Agent in its individual capacity. The Paying Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, trust or other business with the Company or any Affiliate thereof as if it were not performing the duties specified herein, and may accept fees and other consideration from any Credit Party for services in connection with this Agreement and otherwise without having to account for the same to the Purchasers. SECTION 7.8. Holders. The Paying Agent shall deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Paying Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or indorsee, as the case may be, of such Note or any Note or Notes issued in exchange therefor. SECTION 7.9. Resignation by the Paying Agent. (a) The Paying Agent ------------------------------- may resign from the performance of all its functions and duties hereunder at any time by giving 15 Business Days' prior written notice to the Credit Parties and the Purchasers. Such resignation shall take effect upon the appointment of a successor Paying Agent pursuant to clauses (b) and (c) below or as otherwise provided below. (b) Upon any such notice of resignation, the Purchasers shall appoint a successor Paying Agent hereunder. (c) If a successor Paying Agent shall not have been so appointed within such 15 Business Day period, the Paying Agent, with the consent of the Company, shall then appoint a successor Paying Agent who shall serve as Paying Agent hereunder or thereunder until such time, if any, as the Purchasers appoint a successor Paying Agent as provided above. (d) If no successor Paying Agent has been appointed pursuant to clause (b) or (c) above by the 20th Business Day after the date such notice of resignation was given by the Paying Agent, the Paying Agent's resignation shall become effective and the Required Holders shall thereafter perform all the duties of the Paying Agent hereunder until such time, if any, as the Purchasers appoint a successor Paying Agent as provided above. 37 ARTICLE VIII DISCHARGE OF OBLIGATIONS UNDER NOTES ------------------------------------ SECTION 8.1. Discharge Of Liability On Notes; Defeasance. ------------------------------------------- (a) When (i) the Company delivers to the Paying Agent all outstanding Notes (other than Notes replaced pursuant to Section 13.17 hereof) canceled or for cancellation or (ii) all outstanding Notes have become due and payable and the Company irrevocably deposits with the Paying Agent funds sufficient to pay at maturity all outstanding Notes, including interest thereon (other than Notes replaced pursuant to Section 13.17 hereof), and if in either case the Company pays all other sums payable hereunder by the Company, then this Agreement shall, subject to Sections 8.1(e) and 8.6 hereof, cease to be of further effect. The Paying Agent shall acknowledge satisfaction and discharge of this Agreement on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel reasonably acceptable to the Paying Agent and at the cost and expense of the Company. (b) Subject to Sections 8.1(e), 8.2 and 8.6 hereof, the Company at any time may terminate (i) all its obligations under the Notes and this Agreement ("legal defeasance option") or (ii) all obligations under Sections 5.1, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10 and 5.13(a)(iii), ("covenant defeasance option"). The Company may exercise its legal defeasance option notwithstanding their prior exercise of its covenant defeasance option. (c) If the Company exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default. If the Company exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in Section 6.2 or 6.3 as well as 6.5 (but only with respect to Subsidiaries) or because of the failure of the Company or the Subsidiaries to comply with Sections 5.13(iii). (d) Upon satisfaction of the conditions set forth herein and Section 8.2 and upon request of the Company, the Paying Agent shall acknowledge in writing the discharge of those obligations that the Company terminate. (e) Notwithstanding Section 8.1(a) and (b), the Company's obligations in Sections 7.6, 8.1(d), 8.4, 8.5 and 8.6 and Article XIII hereof shall survive until the Notes have been paid in full. Thereafter, the Company's obligations in Sections 7.6, 8.4 and 8.5 hereof shall survive. SECTION 8.2. Conditions To Defeasance. ------------------------ (a) The Company may exercise its legal defeasance option or its covenant defeasance option only if: (i) the Company irrevocably deposits in trust with the Paying Agent money or U.S. Government Obligations in amounts (including interest, but without consideration of any reinvestment of such interest) and maturities sufficient, but in the case of the legal 38 defeasance option only, not more than such amounts (in each case as certified by a nationally recognized firm of independent public accountants), to pay and discharge at their Maturity (or such earlier redemption date as the Company shall have specified to the Paying Agent) the principal of, premium, if any, interest on all outstanding Notes to maturity or redemption, as the case may be, and to pay all of the sums payable by it hereunder; provided, that the Paying Agent shall have been irrevocably instructed to apply such money or the proceeds of such U.S. Government Obligations to the payment of said principal, premium, if any, and interest with respect to the Notes; (ii) in the case of the legal defeasance option only, 123 days pass after the deposit is made and during the 123 day period no Default or Event of Default specified in Section 6.5 hereof with respect to the Company or any Subsidiary occurs which is continuing at the end of the period; (iii) no Default or Event of Default has occurred and is continuing on the date of such deposit and after giving effect thereto; (iv) the deposit does not constitute a default constitute a default under any ohter agreement binding on the Company ; (v) the Company delivers to the Paying Agent an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940, as amended; (vi) in the case of the legal defeasance option, the Company shall have delivered to the Paying Agent an Opinion of Counsel stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of this Agreement there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for U.S. Federal income tax purposes as a result of such defeasance and will be subject to U.S. Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; (vii) in the case of the covenant defeasance option, the Company shall have delivered to the Paying Agent an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and (viii) the Company delivers to the Paying Agent an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes as contemplated by this Article 8 have been complied with, except that such Opinion of Counsel shall only be required to cover the matters set forth in clauses (iv) and (v) and either (vi) or (vii) as applicable. 39 (b) In order to have money available on a payment date to pay principal, premium, if any, or interest on the Notes, the U.S. Government Obligations deposited pursuant to preceding clause (a) shall be payable as to principal or interest at least one Business Day before such payment date in such amounts as shall provide the necessary money. U.S. Government Obligations shall not be callable at the issuer's option. (c) Before or after a deposit, the Company may make arrangements satisfactory to the Paying Agent for the redemption of Notes at a future date in accordance with Article XII hereof. SECTION 8.3. Application of Trust Money. --------------------------- The Paying Agent shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article VIII. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Agreement to the payment of principal, premium, if any, and interest on the Notes. SECTION 8.4. Repayment to the Company. ------------------------- (a) The Paying Agent shall promptly pay to the Company upon written request any excess money or Notes held by them at any time; provided, however, that the Paying Agent shall not pay any such excess to the Company unless the amount remaining on deposit with the Paying Agent, after giving effect to such transfer are sufficient to pay principal, premium, if any, and interest on the outstanding Notes, which amount shall be certified to the Paying Agent by independent public accountants. (b) The Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal, premium, if any, or interest that remains unclaimed for two years after the date upon which such payment shall have become due; provided, however, that the Company shall have either caused notice of such payment to be mailed to each Holder entitled thereto no less than 30 days prior to such repayment or within such period shall have published such notice in a financial newspaper of widespread circulation published in the City of New York. After payment to the Company, Holders entitled to the money must look to the Company and the Subsidiaries for payment as general creditors unless an applicable abandoned property law designates another Person, and all liability of the Paying Agent with respect to such money shall cease. SECTION 8.5. Indemnity For Government Obligations. ------------------------------------- The Company and the Subsidiaries, jointly and severally, shall pay and shall indemnify the Paying Agent against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations. SECTION 8.6. Reinstatement. -------------- 40 If the Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's and each of the Subsidiary's Obligations under this Agreement and the Notes and the Subsidiary Guarantees shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided, however, that if the Company or any Subsidiary has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its Obligations, the Company or any of the Subsidiaries, as the case may be, shall be subrogated to the rights of the Holders to receive such payment from the money or U.S. Government Obligations held by the Paying Agent. ARTICLE IX REGISTRATION RIGHTS ------------------- SECTION 9.1. Piggy-Back Registration. ----------------------- If at any time the Company proposes to file a Registration Statement under the Securities Act with respect to an offering by the Company for the account of any of the respective Holders of any class of its securities (other than a Registration Statement on Form S-8 (or any substitute form that may be adopted by the SEC), then the Company shall give written notice of such proposed filing to the Holders of Registrable Securities as soon as practicable (but in no event less than 20 Business Days before the anticipated filing date), and such notice shall offer such holders the opportunity to register such amount of Registrable Securities as each such holder may request (which request shall specify the Registrable Securities intended to be disposed of by such Holder and the intended method of distribution thereof) (a "Piggy-Back Registration"). In the case of any underwritten offering, the Company shall use its best efforts to cause the managing underwriter or underwriters of such proposed underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration to be included on the same terms and conditions as any similar securities of any other Holder included therein and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method of distribution thereof. Any Holder shall have the right to withdraw its request for inclusion of its Registrable Securities in any registration statement pursuant to this Section by giving written notice to the Company of its request to withdraw prior to the time such Registration Statement is declared or becomes effective. The Company may withdraw a Piggy-Back Registration at any time prior to the time it is declared or becomes effective; provided that the Company shall give prompt notice thereof to participating holders. The Company will pay all Registration Expenses in connection with each registration of Registrable Securities requested pursuant to this Section, and each participating holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such participating holder's Registrable Securities pursuant to a registration statement effected pursuant to this Section. 41 No failure to effect a registration under this Section and to complete the sale of Notes in connection therewith shall relieve the Company of any other obligation under this Agreement. SECTION 9.2. Reduction of Offering. --------------------- (a) (i) If the managing underwriter or underwriters of any underwritten offering described in Section 9.1 have informed, in writing, the Company or holders of the Registrable Securities requesting inclusion in such offering that it is their opinion that the total number of shares which the Company, the participating holders and any other Persons desiring to participate in such registration intend to include in such offering is such as to materially and adversely affect the success of such offering, including the price at which such Notes can be sold, then the number of shares to be offered for the account of the participating holders and all such other Persons (other than the Company) participating in such registration shall be reduced or limited pro rata in proportion to the respective number of shares requested to be registered to the extent necessary to reduce the total number of shares requested to be included in such offering to the number of shares, if any, recommended by such managing underwriters; provided, however, that if such offering is effected for the account of any Holder or the Company other than the participating holders, pursuant to the demand registration rights of any such Holder, then the number of shares to be offered for the account of the Company (if any) and the participating holders (but not such Holders who have exercised their demand registration rights) shall be reduced or limited pro rata in proportion to the respective number of shares requested to be registered to the extent necessary to reduce the total number of shares requested to be included in such offering to the number of sh ares, if any, recommended by such managing underwriters. (ii) If the managing underwriter or underwriters of any underwritten offering described in Section 9.1 notify the participating Holders requesting inclusion of Registrable Securities in such offering, that the kind of Notes that the participating Holders, the Company and any other Persons desiring to participate in such registration intend to include in such offering is such as to materially and adversely affect the success of such offering, (x) the Registrable Securities to be included in such offering shall be reduced as described in clause (i) above or (y) if a reduction in the Registrable Securities pursuant to clause (i) above would, in the judgment of the managing underwriter or underwriters, be insufficient to substantially eliminate the adverse effect that inclusion of the Registrable Securities requested to be included would have on such offering, such Registrable Securities will be excluded from such offering. (b) If, as a result of the proration provisions of this Section 9.2, any participating holder shall not be entitled to include all Registrable Securities in a Piggy-Back Registration that such participating holder has requested to be included, such Selling Holder may elect to withdraw his request to include Registrable Securities in such registration (a "Withdrawal Election"); provided, however, that a Withdrawal Election shall be irrevocable -------- ------- and, after making a Withdrawal Election, a participating holder shall no longer have any right to include Registrable Securities in the registration as to which such Withdrawal Election was made. 42 SECTION 9.3. Demand Registration. ------------------- (a) From and after the date that is six months after the date of this Agreement, a majority of the Holders of Registrable Securities (the "Majority Noteholders") may request in writing that the Company effect the registration under the Securities Act of all or part of the Registrable Securities owned by the Majority Noteholders. Upon receipt of such written request, and subject to the limitations set forth herein, the Company will file with the U.S. Securities and Exchange Commission as promptly as practicable, and use its reasonable best efforts to cause to become effective, a registration statement on Form S-1, S-2 or S-3 under the Securities Act registering the offering and sale of the Registrable Securities which the Company has been so requested to register, all to the extent necessary to permit the disposition (in accordance with the intended method thereof as set forth in such written request) of the Registrable Securities so to be registered; provided, that the Company shall not be -------- obligated to file a registration statement relating to any registration request under this Section 9.3 with respect to more than one registration under this Section 9.3(a). (b) The Company shall be entitled to postpone for a reasonable period of time (not to exceed 60 days (or, in the case of clause (A) below, 60 days after effectiveness of the proposed registration statement), which may not thereafter be extended) the filing of any registration statement otherwise required to be prepared and filed by it pursuant to this Section 9.3(b) if, at the time it receives a request for such registration, (A) the Company is conducting or has taken definitive steps to conduct an offering of any class of its securities and the Company is advised in writing by the investment banker, managing underwriter or financial advisor engaged by the Company to advise the Company thereon that such offering would be affected materially and adversely by the registration so demanded, (B) the Company is in possession of material information that has not been disclosed to the public and the Board of Directors of the Company, in the reasonable exercise of its discretion, has determined that it is advisable not to disclose such information in the registration statement, or (C) the Board of Directors of the Company shall determine in good faith that such offering will materially interfere with a pending or contemplated merger, sale of assets, recapitalization or other similar corporate action of the Company, and in each such case the Company shall have furnished to Majority Noteholders an Officers' Certificate confirming the applicability of clause (A), (B), or (C), as the case may be. After such period of postponement the Company shall effect such registration as promptly as practicable without further request from the Holders of Notes, unless such request has been withdrawn by the Majority Noteholders. (c) It is agreed and understood that the right conferred by this Section 9.3 may be exercised only once. 43 ARTICLE X SUBSIDIARY GUARANTEE OF NOTES ----------------------------- SECTION 10.1. Subsidiary Guarantee. -------------------- (a) Each U.S. Subsidiary, by its execution and delivery of this Agreement, and each Subsidiary organized under the laws of the United States or a State thereof created or acquired after the date hereof (which shall thereafter be deemed to be a U.S. Subsidiary for all purposes hereunder), by its execution and delivery of a supplement to this agreement agreeing to be bound by the terms hereof, jointly and severally irrevocably and unconditionally guarantees, as a primary obligor and not a surety, to each Holder of a Note and its successors and assigns, irrespective of the validity and enforceability of this Agreement, the Notes or the Obligations of the Company hereunder or thereunder, (i) the due and punctual payment of the principal, premium, if any, interest (including post-petition interest in any proceeding under any Bankruptcy Law whether or not an allowed claim in such proceeding) on overdue principal, premium, if any, and interest, if lawful on such Note, and (ii) all other monetary Obligations payable by the Company under this Agreement (including under Section 7.6 hereof) and the Notes (all of the foregoing being hereinafter collectively called the "Guaranteed Obligations"), when and as the same shall become due and payable, whether by acceleration thereof, call for redemption or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), in accordance with the terms of any such Note and of this Agreement, subject, however, in the case of (i) and (ii) above, to the limitations set forth in Section 10.4 hereof. Each Subsidiary hereby agrees that its Obligations hereunder shall be absolute and unconditional, irrespective of, and shall be unaffected by, any failure to enforce the provisions of any such Note or this Agreement, any waiver, modification or indulgence granted to the Company with respect thereto, the recovery of any judgment against the Company, any action to enforce the same, by the Holders or the Paying Agent, the recovery of any judgment against the Company, any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each U.S Subsidiary hereby waives diligence, presentment, filing of claims with a court in the event of a merger or bankruptcy of the Company, any right to require a proceeding first against the Company, the benefit of discussion, protest or notice with respect to any such Note or the Indebtedness evidenced thereby and all demands whatsoever, and covenants that its Subsidiary Guarantee shall not be discharged as to any such Note except by payment in full of the principal thereof, premium, if any, and all accrued interest thereon. (b) Each U.S. Subsidiary further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Paying Agent to any Note held for payment of the Guaranteed Obligations. (c) Each U.S. Subsidiary agrees that it shall not be entitled to, and hereby irrevocably waives, any right of subrogation in relation to the Holders or the Paying Agent in respect of any Guaranteed Obligations. Each Subsidiary further agrees that, as between such Subsidiary, on the one hand, and the Holders and the Paying Agent, on the other hand, (x) the 44 maturity of the Guaranteed Obligations may be accelerated as provided in Article VI for the purposes of such Subsidiary's Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations, and (y) in the event of any Declaration of Acceleration of such Guaranteed Obligations as provided in Article VI hereof, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Subsidiary for the purpose of this Article X. (d) Each Subsidiary also agrees to pay any and all costs and expenses (including reasonable attorneys' fees) incurred by the Paying Agent or any Holder in enforcing any rights under this Article X. SECTION 10.2. Execution and Delivery of Subsidiary Guarantee. ---------------------------------------------- (a) [Reserved] (b) This Agreement shall be executed on behalf of each U.S. Subsidiary, by manual or facsimile signature, and such execution by a Subsidiary shall fully evidence such Subsidiary's Subsidiary Guarantee. (c) The delivery of any Note by the Paying Agent, shall constitute due delivery of the Subsidiary Guarantee set forth in this Agreement on behalf of each Subsidiary. SECTION 10.3. Subsidiary Guarantee Unconditional, etc. --------------------------------------- Upon failure of payment when due of any Guaranteed Obligation for whatever reason, each U.S. Subsidiary will be obligated to pay the same immediately. Each Subsidiary hereby agrees that its obligations hereunder shall be continuing, absolute and unconditional, irrespective of: the recovery of any judgment against the Company or any Subsidiary; any extension, renewal, settlement, compromise, waiver or release in respect of any obligation of the Company under this Agreement or any Note, by operation of law or otherwise; any modification or amendment of or supplement to this Agreement or any Note; any change in the corporate existence, structure or ownership of the Company, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting the Company or any of their assets or any resulting release or discharge of any obligation of the Company contained in this Agreement or any Note; the existence of any claim, set-off or other rights which any Subsidiary may have at any time against the Company, the Paying Agent, any Holder or any other Person, whether in connection herewith or any unrelated transactions; provided, that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim; any invalidity or unenforceability relating to or against the Company for any reason of this Agreement or any Note, or any provision of applicable law or regulation purporting to prohibit the payment by the Company of the principal, premium, if any, or interest on any Note or any other Guaranteed Obligation; or any other act or omission to act or delay of any kind by the Company, the Paying Agent, any Holder or any other Person or any other circumstance whatsoever which might, but for the provisions of this Section 10.3, constitute a legal or equitable discharge of the Subsidiaries' obligations hereunder. Each U.S. Subsidiary hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against 45 the Company, protest, notice and all demand whatsoever and covenants that this Subsidiary Guarantee will not be discharged except by the complete performance of the obligations contained in the Notes, this Agreement and in this Article X. Each U.S. Subsidiary's obligations hereunder shall remain in full force and effect until this Agreement shall have terminated and the principal of and interest on the Notes and all other Guaranteed Obligations shall have been paid in full. If at any time any payment of the principal of or interest on any Note or any other payment in respect of any Guaranteed Obligation is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Company or otherwise, each Subsidiary's obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time, and this Article X, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Subsidiary irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder to be subrogated to the rights of the payee against the Company with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Company in respect thereof. SECTION 10.4. Limitation of Subsidiary's Liability. ------------------------------------ Each U.S. Subsidiary, and by its acceptance of a Note each Holder, hereby confirms that it is the intention of all such parties that the guarantee by such Subsidiary pursuant to its Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, Federal and state fraudulent conveyance laws or other legal principles. To effectuate the foregoing intention, the Holders and each Subsidiary hereby irrevocably agree that the obligations of such Subsidiary under the Subsidiary Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Subsidiary and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary in respect of the obligations of such other Subsidiary under its Subsidiary Guarantee or pursuant to Section 10.5 hereof, result in the obligations of such Subsidiary under the Subsidiary Guarantee not constituting such fraudulent transfer or conveyance under federal or state law. ` SECTION 10.5. Contribution. ------------ In order to provide for just and equitable contribution among the U.S. Subsidiaries, the U.S. Subsidiaries agree, inter se, that in the event any payment or distribution is made by any U.S. Subsidiary (a "Funding Subsidiary") under the Subsidiary Guarantee, such Funding Subsidiary shall be entitled to a contribution from all other Subsidiaries in a pro rata amount based on the Adjusted Net Assets of each U.S. Subsidiary (including the Funding Subsidiary) for all payments, damages and expenses incurred by that Funding Subsidiary in discharging the Company's obligations with respect to the Notes or any other Subsidiary's obligations with respect to the Subsidiary Guarantee. SECTION 10.6. Release. ------- Upon the sale or disposition of all of the Equity Interests of a U.S. Subsidiary to a Person which is not the Company or a U.S. Subsidiary of the Company, which is otherwise in compliance with this Agreement, such Subsidiary shall be deemed released from all its obligations under this Agreement without any further action required on the part of the Paying Agent or any 46 Holder; provided, however, that any such termination shall occur if and only to the extent that all Obligations of each U.S. Subsidiary under all of its guarantees of, and under all of its pledges of assets or other security interests which secure, Indebtedness of the Company and the other Subsidiaries shall also terminate upon such release, sale or transfer; provided further, that without limiting the foregoing, any proceeds received by the Company or any Subsidiary of the Company from such transaction shall be applied as provided in Section 5.4. The Paying Agent shall execute an appropriate instrument prepared by the Company evidencing such release upon receipt of a request by the Company accompanied by an Officers' Certificate certifying as to the compliance with this Section 10.6. Any U.S. Subsidiary not so released remains liable for the full amount of principal, premium, if any, and interest on the Notes as provided in this Article X. SECTION 10.7. Additional Subsidiaries. ----------------------- Any Person that was not a U.S. Subsidiary on the date of this Agreement may become a Subsidiary by executing and delivering to the Paying Agent (a) a supplement hereto in form and substance satisfactory to the Paying Agent, which subjects such Person to the provisions of this Agreement as a Subsidiary guarantor and (b) an Opinion of Counsel to the effect that such supplemental indenture has been duly authorized and executed by such Person and constitutes the legal, valid, binding and enforceable obligation of such Person (subject to such customary exceptions concerning creditors' rights and equitable principles as may be acceptable to the Paying Agent in its discretion). The Subsidiary Guarantee of each Person described in this Section 10.7 shall apply to all Notes theretofore executed and delivered, notwithstanding any failure of such Notes to contain a notation of such Subsidiary Guarantee thereon. SECTION 10.8. Successors and Assigns. ---------------------- This Article X shall be binding upon each U.S. Subsidiary and its successors and assigns and shall inure to the benefit of the successors and assigns of the Paying Agent and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Paying Agent, the rights and privileges conferred upon that party in this Agreement and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Agreement. SECTION 10.9. Waiver of Stay, Extension or Usury Laws. --------------------------------------- Each U.S. Subsidiary covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive each such Subsidiary from performing its Subsidiary Guarantee as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Agreement; and (to the extent that it may lawfully do so) each such Subsidiary hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Paying Agent, but will suffer and permit the execution of every such power as though no such law had been enacted. 47 ARTICLE XI SUBORDINATION ------------- SECTION 11.1. Notes Subordinated to Senior Debt. The Company and the --------------------------------- Subsidiaries, each for itself and its successors, and each Holder, by its acceptance of Notes, agrees that, notwithstanding anything to the contrary in Sections 6.1 and 6.2 hereof, the payment of the principal of, interest on or any other amounts due on the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article XI, to the prior payment in full of all Senior Debt of the Company. Each Holder by its acceptance of the Notes authorizes and directs the Paying Agent on its behalf to take such action as may be necessary or appropriate to effectuate, as between the holders of Senior Debt and such Holder, the subordination provided in this Article XI. The expressions "prior payment in full," "payment in full" and "paid in full" and any other similar term or phrase when used in this Article XI with respect to Senior Debt shall mean the payment in full of such Senior Debt in cash or provision for such payment in cash or otherwise in a manner satisfactory to the holders of the Senior Debt. This Article XI shall constitute a continuing offer to all persons who, in reliance upon such provisions, become holders of, or continue to hold, Senior Debt, and such provisions are made for the benefit of the holders of Senior Debt, and such holders are made obligees hereunder and they and/or each of them may enforce such provisions to the extent and in the manner provided herein. SECTION 11.2. No Payment on Notes in Certain Circumstances. (a) No direct -------------------------------------------- or indirect payment (in cash, property, securities, by set-off or otherwise) shall be made or agreed to be made on account of the principal of, premium (if any) or interest on the Notes, or in respect of any redemption, retirement, defeasance, purchase or other acquisition of any of the Notes, or in respect of any Subsidiary Guarantee, and no Holder of any Note shall be entitled to receive any such payment (any of the foregoing payments or actions being referred to in this Section 11.2 as a "Payment"), on or after the occurrence of any default in the payment of principal or interest then due and payable in respect of any Senior Debt (either at maturity, upon redemption, by acceleration or otherwise), unless and until such default has been waived or cured or all amounts then due and payable for principal of and interest on all Senior Debt shall have been paid in full or provision therefor in cash, in cash equivalents, or in accordance with the terms of such Senior Debt and the agreements, if any, under which such Senior Debt was issued or created, shall have been made. (b) The Company may not make any Payment if: (i) a default or event of default under any agreement governing Senior Debt (other than a default or event of default relating to payment of principal or interest, either at maturity, upon redemption, by declaration or otherwise) has occurred and is continuing that 48 permits the holders of such Senior Debt to accelerate its maturity (whether or not such acceleration has occurred); and (ii) the Company or the Paying Agent receives a notice of such default or event of default from (A) the holders of a majority of the outstanding principal amount of such Senior Debt or (B) the trustee or agent, if any, representing the holders in respect of such Senior Debt; provided, however, that only one such notice shall be given effect within any period of 360 consecutive days; provided, further, that no more than one notice may be given with respect to any continuing default or event of default. Notwithstanding the provisions of this Section 11.2(b), the Company may make Payments on the Notes when: (1) all defaults and events of default referred to in such notice are cured or waived; or (2) 179 days pass after such notice is given, with respect to such defaults and/or events of default so long as this Article XI (including, without limitation, Section 11.2(a)) otherwise permits a Payment at that time. (c) In the event that notwithstanding the provisions of this Section 11.2 the Company shall make any Payment to the Paying Agent or any Holder of the Notes on account of the principal of or interest on the Notes after receiving notice (as aforesaid) of the happening of a default or event of default on Senior Debt, then, unless and until such default or event of default shall have been cured or waived or shall have ceased to exist either due to the passage of time as aforesaid in Section 11.2(b)(ii)(2) or otherwise, such payment (subject to the provisions of Sections 11.6 and 11.7) shall be held by the Paying Agent or such Holder, in trust for the benefit of, and subject to Sections 11.6 and 11.7, shall be paid forthwith over and delivered to, the holders of Senior Debt (pro rata as to each of such holders on the basis of the respective amounts of Senior Debt then in default held by them), as their respective interests may appear, for application to the payment of all Senior Debt remaining unpaid to the extent necessary to pay all Senior Debt in full in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. The Company shall give prompt written notice to the Paying Agent of any default in the payment of principal of or interest on any Senior Debt or a default which results in the acceleration of such Senior Debt under the Credit Facility or under any agreement pursuant to which Senior Debt has been issued. SECTION 11.3. Notes Subordinated to Prior Payment of All Senior Debt on --------------------------------------------------------- Dissolution, Liquidation or Reorganization of Company. Upon any distribution or - ----------------------------------------------------- payment of assets or securities of the Company upon any dissolution, winding up, liquidation or reorganization of the Company of any kind or character (whether voluntary or involuntary, in 49 bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or otherwise): (a) the holders of all Senior Debt shall first be entitled to receive payment in full (or to have such payment duly provided for) of the principal thereof and interest due thereon and other amounts due in connection therewith before the Holders are entitled to receive any payment or distribution of any assets (other than Capital Stock of the Company) on account of the principal of or interest on the Notes; (b) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or Notes, to which the Holders or the Paying Agent on behalf of the Holders would be entitled except for the provisions of this Article XI, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Notes, shall be paid by the liquidating trustee or agent or other person making such payment or distribution directly to the holders of Senior Debt, (pro rata as to each such holder or trustee on the basis of the respective amounts of unpaid Senior Debt held or represented by each), to the extent necessary to make payment in full of all Senior Debt remaining unpaid except that Holders of the Notes shall be entitled to receive Notes that are subordinated to Senior Debt to at least the same degree as the Notes; and (c) in the event that notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or Notes, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other Indebtedness of the Company being subordinated to the payment of the Notes, shall be received by the Paying Agent or the Holders or any Paying Agent (or, if the Company is acting as its own Paying Agent, money for any such payment or distribution shall be segregated or held in trust) on account of principal of or interest on the Notes before all Senior Debt is paid in full, such payment or distribution (subject to the provisions of Sections 11.6 and 11.7) shall be received and held in trust for and shall be paid forthwith over and delivered to the holders of the Senior Debt remaining unpaid or unprovided for (pro rata as to each of such holders on the basis of the respective amounts of Senior Debt held by them), for application to the payment of such Senior Debt until all such Senior Debt shall have been paid in full, after giving effect to any concurrent payment or distribution or provision thereof or to or for the holders of such Senior Debt, except that Holders of the Notes shall be entitled to receive Notes that are subordinated to Senior Debt to at least the same extent as the Notes. The Company shall give prompt written notice to the Paying Agent of any dissolution, winding up, liquidation or reorganization of the Company or any assignment for the benefit of the Company's creditors. SECTION 11.4. Holders To Be Subrogated to Rights of Holders of Senior Debt. ------------------------------------------------------------ Subject to the payment in full of all Senior Debt pursuant to this Article XI, the Holders of Notes shall be subrogated equally and ratably to the rights of the holders of Senior Debt to receive payments or distributions of assets of the Company applicable to the Senior Debt until all amounts owing on the Notes shall be paid in full, and for the purpose of such subrogation no such 50 payments or distributions to the holders of Senior Debt by or on behalf of the Company or by or on behalf of the Holders by virtue of this Article XI which otherwise would have been made to the Holders shall, as among the Company, its creditors other than holders of the Senior Debt and the Holders, be deemed to be payment by the Company to or on account of the Senior Debt, it being understood that the provisions of this Article XI are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Debt, on the other hand. SECTION 11.5. Obligations of the Company Unconditional. Nothing contained ---------------------------------------- in this Article XI or elsewhere in this Agreement or in any Note is intended to or shall impair, as among the Company, its creditors other than holders of the Senior Debt and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders the principal amount of and other interest (including, to the extent lawful, any interest on overdue installments of interest) on the Notes as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of Senior Debt, nor shall anything herein or therein prevent the Paying Agent or any Holders from exercising, all remedies otherwise permitted by applicable law upon Default under this Agreement, subject to the rights, if any, under this Article XI of the holders of Senior Debt in respect of cash, property or Notes of the Company received upon the exercise of any such remedy. Upon any distribution of assets of the Company referred to in this Article XI, the Paying Agent, subject to the provisions of Sections 7.1 and 7.2, and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding up, liquidation, reorganization or similar proceedings are pending, or a certificate of the liquidating trustee or agent or other person making any distribution to the Paying Agent or to the Holders, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article XI. SECTION 11.6. Paying Agent Entitled To Assume Payments Not Prohibited in ---------------------------------------------------------- Absence of Notice. The Paying Agent shall not at any time be charged with - ----------------- knowledge of the existence of any facts which would prohibit the making of any payment to or by the Paying Agent or the taking of any other action under this Article XI by the Paying Agent unless and until the Paying Agent shall have received written notice thereof from the Company or from one or more holders of Senior Debt or from the trustee or agent, if any, under the Senior Debt and, prior to the receipt of any such written notice, the Paying Agent, subject to the provisions of Sections 7.1 and 7.2, shall be entitled in all respects conclusively to assume that no such facts exist. SECTION 11.7. Application by Paying Agent of Monies Deposited With It. ------------------------------------------------------- Subject to Article 8, any deposit of monies by the Company with the Paying Agent (whether or not in trust) for the payment of the principal of or interest on any Notes shall be subject to the provisions of Sections 11.1, 11.2, 11.3 and 11.4, except that, prior to the date on which by the terms of this Agreement any such monies may become payable for any purpose (including, without limitation, the payment of either the principal of or the other interest on any Note), the Paying Agent shall not have received with respect to such monies the notice provided for in Section 11.6, then the Paying Agent shall have full power and authority to receive such monies and to apply the same to 51 the purpose for which they were received. This Section shall be construed solely for the benefit of the Paying Agent and nothing herein shall be construed to relieve any Holders from the duties imposed upon them under Section 11.3(c) with respect to monies received in violation of the provisions of this Article XI. SECTION 11.8. Subordination Rights Not Impaired by Acts or Omissions of --------------------------------------------------------- Company or Holders of Senior Debt. No right of any present or future holders of - --------------------------------- any Senior Debt to enforce subordination as provided herein shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms of this Agreement, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. The holders of Senior Debt may extend, renew, modify or amend the terms of the Senior Debt or any Note therefor and release, sell or exchange such Note and otherwise deal freely with the Company, all without affecting the liabilities and obligations of the parties to this Agreement or the Holders. No provision in any supplemental indenture which modifies this Article XI or otherwise affects the superior position of the holders of the Senior Debt shall be effective against the holders of the Senior Debt who have not consented thereto. SECTION 11.9. Holders Authorize Paying Agent To Effectuate Subordination of ------------------------------------------------------------- Notes. Each Holder by its acceptance of Notes authorizes and expressly directs - ----- the Paying Agent on its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article XI and to protect the rights of the Holders pursuant to this Agreement and appoints the Paying Agent its attorney-in-fact for such purpose, including, in the event of any dissolution, winding up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency, receivership, reorganization or similar proceedings or upon an assignment for the benefit of creditors or any other similar remedy or otherwise) tending towards liquidation of the business and assets of the Company, the immediate filing of a claim for the unpaid balance of its Notes in the form required in said proceedings and causing said claim to be approved. If the Paying Agent does not file a proper claim or proof of debt in the form required in such proceeding prior to 30 days before the expiration of the time to file such claim or claims, then the holders of Senior Debt are hereby authorized to file an appropriate claim for and on behalf of the Holders. In the event of any such proceeding, until the Senior Debt is paid in full in accordance with Section 11.3 (or adequate provision made for such payment), without the consent of the holders of a majority in aggregate principal amount outstanding of Senior Debt, no Holder shall waive, settle or compromise any such claim or claims relating to the Notes that such Holder now or hereafter may have against the Company. SECTION 11.10. Right of Paying Agent To Hold Senior Debt. The Paying ----------------------------------------- Agent, in its individual capacity, shall be entitled to all of the rights set forth in this Article XI in respect of any Senior Debt at any time held by either of them to the same extent as any other holder of Senior Debt, and nothing in this Agreement shall be construed to deprive the Paying Agent of any of its rights as such holder. SECTION 11.11. Article XI Not To Prevent Events of Default. The failure to ------------------------------------------- make a payment on account of principal of or other interest (including any interest on overdue installments of interest and defaulted interest) on the Notes by reason of any provision of this 52 Article XI shall not be construed as preventing the occurrence of an Event of Default under Section 6.1. Nothing contained in this Article XI shall limited the right of the Paying Agent or the Holders to take any action to accelerate the maturity of the Notes pursuant to Section 6.2 or to pursue any rights or remedies hereunder or under applicable law, subject to the rights, if any, under this Article XI of the holders, from time to time, of Senior Debt. SECTION 11.12. No Fiduciary Duty Created to Holders of Senior Debt. The --------------------------------------------------- Paying Agent shall not be deemed to owe any fiduciary duty to the holders of Senior Debt by virtue of the provisions of this Article XI, and shall not be liable to any such holders (other than for its willful misconduct or gross negligence) if it shall pay over to deliver to the Holders or the Company or any other person, money or assets in compliance with the terms of this Agreement. SECTION 11.13. Subordination of Subsidiary Guarantees. The Obligations of -------------------------------------- the Subsidiaries under their respective Subsidiary Guarantees shall be subordinated in the same manner and to the same extent, mutatis mutandis, as the ---------------- Obligations of the Company under the Notes as provided in this Article XI; provided, however, that with respect to a Subsidiary, "Senior Debt" shall be deemed to include only such Subsidiary's Obligations under that Subsidiary's guarantees of the Company's Obligations under the Credit Agreement. ARTICLE XII REDEMPTION ---------- SECTION 12.1. Notices to Paying Agent. ----------------------- (a) If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 12.7 hereof, they shall furnish to the Paying Agent, at least 45 days (unless a shorter period is acceptable to the Paying Agent) but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the Section of this Agreement pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price and accrued and unpaid interest and (v) whether they request the Paying Agent to give notice of such redemption. (b) If the Company is required to make an offer to purchase Notes pursuant to the provisions of Section 5.11 hereof, they shall each furnish to the Paying Agent at least 30 days but not more than 60 days before a purchase date, an Officers' Certificate setting forth (i) the Section of this Agreement pursuant to which the offer to purchase shall occur, (ii) the proposed purchase date, (iii) the maximum principal amount of Notes to be purchased, (iv) the purchase price and accrued and unpaid interest, and (v) further setting forth a statement to the effect that (a) the Company or one of its Subsidiaries has effected an Asset Disposition and the conditions set forth in Section 5.4 have been satisfied or (b) a Change of Control has occurred and the conditions set forth in Section 5.11 have been satisfied, as applicable. SECTION 12.2. Selection of Notes to be Redeemed. --------------------------------- (a) If less than all of the Notes are to be redeemed, the Paying Agent shall select the Notes to be redeemed among the Noteholders on a pro rata basis or in accordance with any other 53 method the Paying Agent considers fair and appropriate (and in such manner as complies with applicable legal and stock exchange requirements, if any), unless such method is otherwise prohibited. In the event of partial redemption, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Paying Agent from the outstanding Notes not previously called for redemption. (b) The Paying Agent shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes may be redeemed in part in multiples of $1,000 principal amount only. Except as provided in the preceding sentence, provisions of this Agreement that apply to Notes called for redemption also apply to portions of Notes called for redemption. SECTION 12.3. Notice of Redemption. -------------------- (a) At least 30 days before a redemption date, the Company shall mail or cause to be mailed a notice of redemption by first class mail, postage prepaid to each Holder whose Notes are to be redeemed at the last address for such Holder then shown on the Note Register. The notice shall identify the Notes to be redeemed and shall state: (i) the redemption date; (ii) the redemption price; (iii) if any Note is being redeemed in part only, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued; (iv) the name and address of the Paying Agent; (v) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (vi) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; (vii) the paragraph of the Notes and/or Section of this Agreement pursuant to which the Notes called for redemption are being redeemed; and (viii) if fewer than all the Notes are to be redeemed, the identification of the particular Notes (or portion thereof) to be redeemed, as well as the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption. 54 (b) At the Company's request, the Paying Agent shall give the notice of redemption in the Company's names and at the Company's expense; provided, however, that the Company shall have delivered to the Paying Agent at least 45 days (unless a shorter period is acceptable to the Paying Agent) prior to the proposed redemption date an Officers' Certificate requesting that the Paying Agent give such notice and setting forth the information to be stated in such notice as provided in the preceding Section 12.3(a). SECTION 12.4. Effect of Notice of Redemption. ------------------------------ Once notice of redemption is mailed in accordance with Section 12.3 hereof, Notes called for redemption become due and payable on the redemption date at the redemption price plus accrued and unpaid interest, if any. SECTION 12.5 Deposit of Redemption Price. --------------------------- (a) Prior to 10:00 a.m., New York City time, on the redemption date, the Company shall deposit with the Paying Agent (other than the Company or any of its Subsidiaries) money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date. The Paying Agent shall promptly return to the Company any money deposited with the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed. (b) If the Company complies with the provisions of Section 12.5(a), on and after the redemption date, interest ceases to accrue on the Notes or the portions of Notes called for redemption whether or not such Notes are presented for payment, and the only remaining right of the Holders of such Notes shall be to receive payment of the redemption price upon surrender to Paying Agent if the Notes are redeemed. If a Note is redeemed on or after a Record Date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such Record Date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with Section 12.5(a), interest shall be paid on the unpaid principal, from the redemption date until such principal is paid and, to the extent lawful, on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Article II hereof. SECTION 12.6. Notes Redeemed in Part. ---------------------- Upon surrender of a Note that is redeemed in part, the Company shall issue a new Note equal in principal amount to the unredeemed portion of the Note surrendered. SECTION 12.7. Optional Redemption. ------------------- The Notes will be redeemable, at the Company's option, in whole or in part, at any time upon not less than 30 nor more than 60 days' prior notice mailed by first-class mail to each Holder's registered address, a price equal to the principal amount of the Notes to be redeemed multiplied by the Applicable Call Premium, plus accrued and unpaid interest to the redemption 55 date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date)(such amount (the "Applicable Redemption Price"). SECTION 12.8. Mandatory Redemption. -------------------- In the event that at any time after the date hereof (i) the amount of Indebtedness that may be incurred under the Credit Agreement or any Refinancing thereof at any time exceeds US$250,000,000, (ii) the Company or any of its Subsidiaries issue any debt securities, or (iii) the Company or any of its Subsidiaries issue any equity securities, whether publicly or privately, part or all of the consideration for which is cash or Cash Equivalents, the Company must promptly redeem all of the outstanding Notes at the then Applicable Redemption Price. ARTICLE XIII MISCELLANEOUS ------------- SECTION 13.1. Payment of Expenses, etc. The Company agrees to: (i) ------------------------- whether or not the transactions herein contemplated are consummated, pay all reasonable out-of-pocket costs and expenses of the Paying Agent in connection with the negotiation, preparation, execution and delivery of this Agreement and any amendment, waiver or consent relating thereto (including, without limitation, the reasonable fees and disbursements of White & Case LLP) and of the Paying Agent and each of the Purchasers in connection with the enforcement of the Credit Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees and disbursements of counsel for the Paying Agent and for each of the Purchasers; (ii) pay and hold each of the Purchasers harmless from and against any and all present and future stamp, documentary, registration, issuance, sales and use and other similar taxes with respect to the foregoing matters or any other Credit Documents and save each of the Purchasers harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Purchaser) to pay such taxes; and (iii) indemnify each Purchaser, its officers, directors, employees, representatives and agents from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of, any investigation, litigation or other proceeding (whether or not a party thereto) related to the entering into and/or performance of any Credit Document or the use of the proceeds of any Note or the consummation of any transactions contemplated in any Credit Document and in each case including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation, litigation or other proceeding (but excluding any such losses, liabilities, claims, damages or expenses to the extent incurred (A) by reason of the gross negligence or willful misconduct of the Person to be indemnified and (B) in connection with any investigation, litigation or other proceeding between or solely among the Paying Agent and the Purchasers). SECTION 13.2. Right of Setoff. In addition to any rights now or hereafter --------------- granted under applicable law or otherwise, and not by way of limitation of any such rights, if an Event of Default then exists, each Purchaser is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to a Credit Party or to any other Person, 56 any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by such Purchaser (including, without limitation, by branches and agencies of such Purchaser wherever located) to or for the credit or the account of a Credit Party against and on account of the obligations and liabilities of a Credit Party to such Purchaser under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations purchased by such Purchaser pursuant to Section 13.6(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Purchaser shall have made any demand hereunder and although said obligations, liabilities or claims, or any of them, shall be contingent or unmatured. SECTION 13.3. Notices. Except as otherwise expressly provided herein, all ------- notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier, facsimile or cable communication) and mailed, telegraphed, telexed, telecopied, faxed, cabled or delivered, if to a Credit Party, at the address specified opposite its signature below; if to any Purchaser, at its address specified for such Purchaser on Annex II hereto; or, at such other address as shall be designated by any party in a written notice to the other parties hereto. All such notices and communications shall be mailed, telecopied, or sent by overnight courier, and shall be effective when received. SECTION 13.4. Benefit of Agreement. (a) This Agreement shall be binding -------------------- upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto provided that none of the Credit Parties may assign or transfer any of its rights or obligations hereunder without the prior written consent of the Purchasers. Each Purchaser may at any time grant participations in any of its rights hereunder or under any of the Notes to another financial institution provided that in the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant's rights against such Purchaser in respect of such participation to be those set forth in the agreement executed by such Purchaser in favor of the participant relating thereto) and all amounts payable by the Company hereunder shall be determined as if such Purchaser had not sold such participation, except that the participant shall be entitled to the benefits of Section 2.8 of this Agreement to the extent that such Purchaser would be entitled to such benefits if the participation had not been entered into or sold, and, provided further; that no Purchaser shall transfer, grant or assign any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the final scheduled maturity of any Note in which such participant is participating (it being understood that any waiver of any prepayment shall not constitute an extension of such final scheduled maturity), or reduce the rate or extend the time of payment of interest thereon (except in connection with a waiver of the applicability of any post-default increase in interest rates), or reduce the principal amount thereof, or increase such participant's participating interest in any Commitment over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment, or a mandatory prepayment, shall not constitute a change in the terms of any Commitment), (ii) release all or substantially all of the Collateral or (iii) consent to the assignment or transfer by any Credit Party of any of its rights and obligations under this Agreement or any other Credit Document. 57 (b) Notwithstanding the foregoing, any Purchaser may assign all or a portion of its outstanding Notes and its rights and obligations hereunder to one or more Persons who shall, from and after the effective date of such assignment be deemed to be "Purchasers" hereunder. No assignment pursuant to the immediately preceding sentence shall, to the extent such assignment represents an assignment to an institution other than one or more Purchasers hereunder, be in an aggregate amount less than US$5,000,000 unless all of Notes of the assigning Purchaser are so assigned. If any Purchaser so sells or assigns all or a part of its rights hereunder or under the Notes, any reference in this Agreement or the Notes to such assigning Purchaser shall thereafter refer to such Purchaser and to the respective assignee to the extent of their respective interests and the respective assignee shall have, to the extent of such assignment (unless otherwise provided therein), the same obligations, rights and benefits as it would if it were such assigning Purchaser. Each assignment pursuant to this Section 13.4(b) shall be effected by the assigning Purchaser and the assignee Purchaser executing an Assignment Agreement. At the time of any such assignment, the Company will issue new Notes to the respective assignee and to the assigning Purchaser. Neither of the Credit Parties shall be responsible for the payment of any expense in connection with any such assignment. (c) Notwithstanding any other provisions of this Section 13.4, no transfer or assignment of the interests or obligations of any Purchaser hereunder or any grant of participation therein shall be permitted if such transfer, assignment or grant would require the Company to file a registration statement with the Commission. (d) Each Purchaser initially party to this Agreement hereby represents, and each Person that became a Purchaser pursuant to an assignment permitted by this Section 13.4 will, upon its becoming party to this Agreement, represent that it is an Eligible Transferee which makes loans, and/or acquire promissory notes, in the ordinary course of its business and that it will acquire Notes for its own account in the ordinary course of such business provided that subject to the preceding clauses (a) and (b), the disposition of any promissory notes or other evidences of or interests in Indebtedness held by such Purchaser shall at all times be within its exclusive control. SECTION 13.5. No Waiver; Remedies Cumulative. No failure or delay on the ------------------------------ part of any Purchaser in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between any Credit Party and any Purchaser shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which any Purchaser would otherwise have. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Purchasers to any other or further action in any circumstances without notice or demand. SECTION 13.6. Payments Pro Rata. (a) The Paying Agent agrees that ----------------- promptly after its receipt of each payment from or on behalf of any Credit Party in respect of any of their obligations hereunder, it shall distribute such payment to the Purchasers (other than any Purchaser 58 that has expressly waived its right to receive its pro rata share thereof) pro --- ---- --- rata based upon their respective shares, if any, of the obligations with respect - ---- to which such payment was received. (b) Each of the Purchasers agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon Note, by the exercise of the right of setoff or banker's lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise) which is applicable to the payment of any of the Obligations, of a sum which with respect to the related sum or sums received by other Purchasers is in a greater proportion than the total of such Obligation then owed and due to such Purchaser bears to the total of such Obligation then owed and due to all of the Purchasers immediately prior to such receipt, then such Purchaser receiving such excess payment shall purchase for cash without recourse or warranty from the other Purchasers an interest in the respective Obligations in such amount as shall result in a proportional participation by all of the Purchasers in such amount provided that if all or any portion of such excess amount is thereafter recovered from such Purchaser, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. SECTION 13.7. Calculations; Computations. (a) The financial statements to -------------------------- be furnished to the Purchasers pursuant hereto shall be made and prepared in accordance with GAAP consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Company to the Purchasers). (b) All computations of interest hereunder shall be made on the basis of a 360-day year composed of twelve 30-day months. SECTION 13.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of ----------------------------------------------------------- Jury Trial. (a) This Agreement and the rights and obligations of the parties - ---------- hereunder shall be construed in accordance with and be governed by the law of the State of New York. Any legal action or proceeding with respect to this Agreement may be brought in the courts of the State of New York sitting in the Borough of Manhattan or of the United States for the Southern District of New York, and, by execution and delivery of this Agreement, each Credit Party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Credit Party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Credit Party, at its address for notices pursuant to Section 13.3, such service to become effective 30 days after such mailing. Each Credit Party hereby irrevocably designates, appoints and empowers CT Corporation System, with offices on the date hereof located at 1633 Broadway, New York, New York 10019, as its agent for service of process in respect of any such action or proceeding. Nothing herein shall affect the right of the Paying Agent or any Purchaser to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any Credit Party in any other jurisdiction. (b) Each Credit Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Agreement, the Notes or any other Credit Document brought in the 59 courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum. (c) Each of the parties to this Agreement hereby irrevocably waives all right to a trial by jury in any action, proceeding or counterclaim arising out of or relating to this Agreement, the other Credit Documents or the transactions contemplated hereby or thereby. SECTION 13.9. Counterparts. This Agreement may be executed in any number ------------ of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Company and the Paying Agent. SECTION 13.10. Effectiveness. This Agreement shall become fully executed ------------- when each Credit Party and each of the Purchasers shall have signed a copy hereof (whether the same or different copies) and shall have delivered the same to the Paying Agent at its Office or, in the case of the Purchasers, shall have given to the Paying Agent telephonic (confirmed in writing), written, telex or facsimile transmission notice (actually received) at such Office that the same has been signed and mailed to it. SECTION 13.11. Headings Descriptive. The headings of the several sections -------------------- and subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. SECTION 13.12. Amendment or Waiver. (a) Neither this Agreement nor any ------------------- Note nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the Credit Parties and the Required Holders, provided that no such change, waiver, discharge or termination shall, without the consent of each Purchaser directly affected thereby, (i) extend the Maturity (it being understood that any waiver of any prepayment shall not constitute any such extension), or reduce the rate or extend the time of payment of interest (other than as a result of waiving the applicability of any post-default increase in interest rates) thereon, or reduce the principal amount thereof, or increase the Commitment of any Purchaser over the amount thereof then in effect , (ii) amend, modify or waive any provision of this Section 13.12, (iii) reduce the percentage specified in, or otherwise modify, the definition of Required Holders, or (iv) consent to the assignment or transfer by either Credit Party of any of its rights and obligations under this Agreement; provided further, that no such change, waiver, discharge or termination shall, without the consent of the Paying Agent amend any provision of Article 7 affecting the Paying Agent. (b) Notwithstanding Section 13.12(a) of this Agreement, the Company, the Guarantor and the Paying Agent may amend or supplement this Agreement without the consent of any Purchaser to cure any ambiguity, omission, defect or inconsistency; provided, that such amendment or supplement does not adversely affect the rights of any Purchaser in any respect. 60 SECTION 13.13. Survival. All indemnities set forth herein shall survive -------- the execution and delivery of this Agreement and the making and repayment of the Notes. SECTION 13.14. Confidentiality. Subject to Section 13.4, the Purchasers --------------- shall hold all non-public information obtained pursuant to the requirements of this Agreement which has been identified as such by the Company in accordance with its customary procedure for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure to its affiliates, employees, auditors, advisors, or counsel or as reasonably required by any bona fide transferee or participant in ---- ---- connection with the contemplated transfer of any Notes or participation therein (so long as such transferee or participant agrees to be bound by the provisions of this Section 13.14) or as required or requested by any governmental agency or representative thereof or pursuant to legal process, provided that, unless specifically prohibited by applicable law or court order, each Purchaser shall notify the Company of any request by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition of such Purchaser by such governmental agency) for disclosure of any such non-public information prior to disclosure of such information, and provided further, that in no event shall any Purchaser be obligated or required to return any materials furnished by the Company. SECTION 13.15. Register. The Company hereby designates the Paying Agent to -------- serve as its agent, solely for purposes of this Section 13.15, to maintain a register (the "Register") on which it will record the Commitment from time to time of each of the Purchasers, the Notes acquired by each of the Purchasers and each repayment in respect of the principal amount of the Notes of each Purchaser. Failure to make any such recordation, or any error in such recordation, shall not affect the Company's obligations in respect of such Notes. With respect to any Purchaser, the transfer of the Commitment of such Purchaser and the rights to the principal of, and interest on, any Note shall not be effective until such transfer is recorded on the Register maintained and prior to such recordation all amounts owing to the transferor with respect to such Commitment and Notes shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments and Notes shall be recorded by the Paying Agent on the Register only upon the acceptance by the Paying Agent of a properly executed and delivered Assignment Agreement pursuant to Section 13.4(b). The Company agrees to indemnify the Paying Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Paying Agent in performing its duties under this Section 13.15 other than those resulting from the Paying Agent's willful misconduct or gross negligence. The Paying Agent will provide a duplicate original copy of the Register, as updated from time to time, to the Company for use by the Company at its principal office. SECTION 13.16. Consolidation of Notes. After the Drawdown Date, any ---------------------- Purchaser can request that the Company issue to it, and the Company will so issue, upon surrender of all Notes held by such Purchaser, a replacement Note in the aggregate principal of the Notes so surrendered. SECTION 13.17. Replacement of Notes. (a) If any mutilated Note is -------------------- surrendered to the Company, or the Company receives evidence to its satisfaction of the 61 destruction, loss or theft of any Note, the Company shall issue a replacement Note. If required by the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Company to protect the Company and the Subsidiaries Guarantors from any loss which any of them may suffer if a Note is replaced. The Company may charge a Holder for reasonable out-of-pocket expenses in replacing a Note. (b) Every replacement Note is an obligation of the Company and each of the Subsidiaries. 62 IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written. NATIONAL WESTMINSTER BANK PLC By:_____________________________ Name: Title: TOKHEIM CORPORATION By:_____________________________ Name: Title: SUBSIDIARY GUARANTORS TOKHEIM EQUIPMENT CORPORATION By:_____________________________ Name: Title: TOKHEIM RPS, LLC By:_____________________________ Name: Title: MANAGEMENT SOLUTIONS, INC. By:_____________________________ Name: Title: SUNBELT HOSE & PETROLEUM EQUIPMENT, INC. By:_____________________________ Name: Title: ENVIROTRONIC SYSTEMS, INC. By:_____________________________ Name: Title: GASBOY INTERNATIONAL, INC. By:_____________________________ Name: Title: TOKHEIM AUTOMATION CORPORATION By:_____________________________ Name: Title: TOKHEIM INVESTMENT CORP. By:_____________________________ Name: Title: ANNEX I ------- COMMITMENTS ----------- PURCHASER COMMITMENT National Westminster Bank plc $22,500,000 ANNEX II -------- EX-99.(C)(12) 13 CREDIT AGREEMENT EXHIBIT (c)(12) EXECUTION COPY ________________________________________________________________________________ AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 30, 1998 among TOKHEIM CORPORATION, THE BORROWING SUBSIDIARIES, THE LENDERS and NBD BANK, N.A., as Administrative Agent and CREDIT LYONNAIS as Documentation and Collateral Agent GLEACHER NATWEST INC. and BANKERS TRUST COMPANY as Co-Syndication Agents ________________________________________________________________________________ TABLE OF CONTENTS ARTICLE I: DEFINITIONS...........................................................................................1 1.1. Definitions.....................................................................................1 1.2. Accounting Terms and Determinations............................................................28 1.3. References to Subsidiaries.....................................................................28 1.4. Rounding and Other Consequential Changes.......................................................29 ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES.........................................................29 2.1. The Revolving Loan, Swing Loan and Term Loan Facilities........................................29 2.1.1. Revolving Loans........................................................................29 2.1.2 Swing Loans.............................................................................30 2.1.3. Term Loans..............................................................................32 2.1.4. Alternate Currency Loans.......................................................................34 2.2. Types and Interest Periods.....................................................................36 2.2.1. Types of Advances.....................................................................36 2.2.2. Method of Selecting Types and Interest Periods for New Advances.......................37 2.2.3. Conversion and Continuation of Outstanding Advances...................................37 2.3. Applicable Margin..............................................................................38 2.4. Fees...........................................................................................40 2.4.1. Commitment Fee.........................................................................40 2.4.2. Agent Fees.............................................................................40 2.4.3. Prepayment Fee.........................................................................41 2.5. General Facility Terms.........................................................................41 2.5.1. Method of Borrowing...................................................................41 2.5.2. Minimum Amount of Each Advance........................................................42 2.5.3. Prepayments...........................................................................42 2.5.4. Interest Rates; Interest Periods......................................................45 2.5.5. Default Rate..........................................................................46 2.5.6. Interest Payment Dates; Interest Basis................................................46 2.5.7. Method of Payment.....................................................................46 2.5.8. Notes; Telephonic Notices.............................................................47 2.5.9. Notification of Advances, Interest Rates and Prepayments..............................48 2.5.10. Non-Receipt of Funds by the Agent.....................................................48 2.5.11. Termination or Reduction in the Aggregate Revolving Loan Commitment..................48 2.5.12. Market Disruption.....................................................................49 2.5.13. Lending Installations.................................................................49 2.5.14. Borrowing Subsidiaries................................................................49 2.5.15. Withholding Tax Exemption.............................................................50 2.5.16. Judgment Currency.....................................................................51 2.5.17 Overall Effective Rate; Limitation on German Borrowing Subsidiaries' Obligations.......52 2.6. Letter of Credit Facility..........................................................................52
Section Page - ------- ---- 2.6.1. Letters of Credit.....................................................................52 2.6.2. Letter of Credit Participation........................................................53 2.6.3. Reimbursement Obligation...............................................................53 2.6.4. Cash Collateral........................................................................54 2.6.5. Letter of Credit Fees.................................................................54 2.6.6. Indemnification; Exoneration...........................................................55 2.7. Termination Date..................................................................................56 ARTICLE III: CHANGE IN CIRCUMSTANCES............................................................................56 3.1. Taxes.............................................................................................56 3.1.1. Payments to be Free and Clear..........................................................56 3.1.2. Grossing-up of Payments................................................................57 3.1.3. Certification of Withholding Tax Exemption.............................................57 3.2. Increased Costs................................................................................58 3.3. Changes in Capital Adequacy Regulations........................................................59 3.4. Availability of Types of Advances..............................................................60 3.5. Funding Indemnification........................................................................60 3.6. Mitigation of Additional Costs or Adverse Circumstances........................................60 3.7. Lender Statements; Survival of Indemnity.......................................................61 ARTICLE IV: CONDITIONS PRECEDENT................................................................................61 4.1. Initial Advance................................................................................61 4.2. Initial Advance to Each New Borrowing Subsidiary...............................................65 4.3. Each Advance and Letter of Credit..............................................................67 ARTICLE V: REPRESENTATIONS AND WARRANTIES.......................................................................67 5.1. Corporate Existence and Standing...............................................................67 5.2. Authorization and Validity. ...................................................................68 5.3. No Conflict; Government Consent................................................................68 5.4. Financial Statements...........................................................................68 5.5. Material Adverse Change........................................................................68 5.6. Taxes..........................................................................................69 5.7. Litigation.....................................................................................69 5.8. Subsidiaries...................................................................................69 5.9. ERISA..........................................................................................69 5.10. Full Disclosure................................................................................70 5.11. Assets and Properties..........................................................................71 5.12. Patents and Trademarks.........................................................................71 5.13. No Defaults....................................................................................71 5.14. Investment Company Act. .......................................................................71
Section Page - ------- ---- 5.15. Compliance with Environmental Laws. ...........................................................71 5.16. Regulations T, U and X.........................................................................72 5.17. Filing.........................................................................................72 5.18. No Immunity....................................................................................72 5.19. Contingent Obligations.........................................................................72 5.20. Foreign Employee Benefit Matters...............................................................72 5.21. French Withholding.............................................................................73 5.22 Year 2000 Issues...............................................................................73 ARTICLE V-A: REPRESENTATIONS AND WARRANTIES OF ADDITIONAL FRENCH BORROWING SUBSIDIARIES.........................73 5A.1. Corporate Existence and Standing...............................................................74 5A.2. Authorization and Validity.....................................................................74 5A.3. No Conflict; Government Consent................................................................74 5A.4. Filing.........................................................................................74 5A.5. No Immunity....................................................................................75 ARTICLE V-B: REPRESENTATIONS AND WARRANTIES OFEACH DUTCH BORROWING SUBSIDIARY...................................75 5B.1. Corporate Existence and Standing...............................................................75 5B.2. Authorization and Validity.....................................................................75 5B.3. No Conflict; Government Consent................................................................75 5B.4. Filing.........................................................................................76 5B.5. No Immunity....................................................................................76 ARTICLE V-C: REPRESENTATIONS AND WARRANTIES OF EACH GERMAN BORROWING SUBSIDIARY.................................77 5C.1. Corporate Existence and Standing...............................................................77 5C.2. Authorization and Validity.....................................................................77 5C.3. No Conflict; Government Consent................................................................77 5C.4. Filing.........................................................................................77 5C.5. No Immunity....................................................................................78 ARTICLE V-D: REPRESENTATIONS AND WARRANTIES OFEACH UK BORROWING SUBSIDIARY......................................78 5D.1. Corporate Existence and Standing...............................................................78 5D.2. Authorization and Validity.....................................................................78
Section Page - ------- ---- 5D.3. No Conflict; Government Consent................................................................79 5D.4. Filing.........................................................................................79 5D.5. No Immunity....................................................................................79 ARTICLE VI: COVENANTS...........................................................................................80 6.1. Financial Reporting............................................................................80 6.2. Use of Proceeds................................................................................81 6.3. Notice of Default..............................................................................81 6.4. Corporate Existence............................................................................81 6.5. Taxes..........................................................................................82 6.6. Insurance......................................................................................82 6.7. Compliance with Laws...........................................................................82 6.8. Inspection.....................................................................................82 6.9. Sale of Assets.................................................................................82 6.10. Liens. ........................................................................................83 6.11. Rentals........................................................................................85 6.12. Consolidated Net Worth.........................................................................85 6.13. Dividends......................................................................................85 6.14 Additional Guarantors/Pledge of Capital Stock..................................................85 6.15 Sale and Leaseback Transactions or other Off Balance Sheet Liabilities.........................87 6.16 Merger and Consolidation.......................................................................87 6.17 Investments and Acquisitions...................................................................87 6.18 Indebtedness...................................................................................88 6.19 ERISA..........................................................................................89 6.20 Affiliates.....................................................................................90 6.21 Conduct of Business............................................................................91 6.22 Rate Hedging Obligations.......................................................................91 6.23 Leverage Ratio.................................................................................91 6.24 Interest Expense Coverage Ratio................................................................92 6.25 Fixed Charge Coverage Ratio....................................................................92 6.26 Foreign Employee Benefit Compliance............................................................92 6.27 Subordinated Indebtedness......................................................................93 6.28 Payments and Prepayments.......................................................................93 6.29 ERISA..........................................................................................93 6.30 Year 2000 Issues...............................................................................94 6.31 FIRREA.........................................................................................94 6.32 Environmental Reports..........................................................................94 6.33 Interest Rate Agreements.......................................................................94 6.34. Minimum EBITDA.................................................................................95
Section Page - ------- ---- ARTICLE VII: DEFAULTS...........................................................................................95 ARTICLE VIII: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES....................................................97 8.1. Acceleration...................................................................................97 8.2. Amendments.....................................................................................98 8.3. Preservation of Rights.........................................................................99 ARTICLE IX: GUARANTY............................................................................................99 9.1. Guaranty.......................................................................................99 9.2. Waivers.......................................................................................100 9.3. Guaranty Absolute.............................................................................100 9.4. Acceleration..................................................................................101 9.5. Marshaling; Reinstatement.....................................................................101 9.6. Termination Date..............................................................................101 ARTICLE X: GENERAL PROVISIONS..................................................................................102 10.1. Governmental Regulation.......................................................................102 10.2. Taxes. .......................................................................................102 10.3. Headings......................................................................................102 10.4. Entire Agreement..............................................................................102 10.5. Several Obligations...........................................................................102 10.6. Expenses; Indemnification.....................................................................102 10.7. Numbers of Documents..........................................................................103 10.8. Severability of Provisions....................................................................103 10.9. Nonliability of Lenders. .....................................................................103 10.10. CHOICE OF LAW.................................................................................103 10.11 CONSENT TO JURISDICTION. ....................................................................104 10.12. Confidentiality...............................................................................104 10.13. Performance of Obligations....................................................................104 10.14. English Language..............................................................................105 10.15 Alternate Currency Addenda Binding on Each Lender; Provisions Regarding Alternate Currency Agents....................................................................105 ARTICLE XI: THE AGENT..........................................................................................105 11.1. Appointment...................................................................................105 11.2. Powers........................................................................................106 11.3. General Immunity..............................................................................106 11.4. No Responsibility for Loans, Collateral, Recitals, etc........................................106 11.5. Action on Instructions of Lenders.............................................................106 11.6. Employment of Agents and Counsel..............................................................107
Section Page - ------- ---- 11.7. Reliance on Documents; Counsel................................................................107 11.8. Agent's Reimbursement and Indemnification.....................................................107 11.9. Rights as a Lender and Issuing Lender.........................................................107 11.10. Lender Credit Decision........................................................................108 11.11. Successor Agent...............................................................................108 11.12 Collateral Documents..........................................................................108 11.13 Agent as Joint Creditor.......................................................................108 ARTICLE XII: SETOFF; RATABLE PAYMENTS..........................................................................109 12.1. Setoff........................................................................................109 12.2. Ratable Payments..............................................................................109 12.3 Application of Payments.......................................................................109 ARTICLE XIII: BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS................................................111 13.1. Successors and Assigns........................................................................111 13.2. Participations................................................................................111 13.2.1. Permitted Participants; Effect. .....................................................111 13.2.2. Voting Rights. ......................................................................111 13.2.3. Benefit of Setoff....................................................................112 13.3. Assignments...................................................................................112 13.3.1. Permitted Assignments................................................................112 13.3.2. Effect; Effective Date...............................................................112 13.4. Dissemination of Information..................................................................113 13.5. Tax Treatment. ...............................................................................113 ARTICLE XIV: NOTICES...........................................................................................113 14.1. Giving Notice. ...............................................................................113 14.2. Change of Address. ...........................................................................113 ARTICLE XV: COUNTERPARTS.......................................................................................113
SCHEDULES AND EXHIBITS ---------------------- EXHIBITS - -------- Exhibit A -- Form of Assumption Letter Exhibit B -- Form of Assignment Agreement Exhibit C -- Form of Borrowing Base Certificate Exhibit D -- [Reserved] Exhibit E -- Opinion (U.S. law) Exhibit F-1 -- Opinion (French law) Exhibit F-2 -- Opinion (Dutch law) Exhibit F-3 -- Opinion (German law) Exhibit F-4 -- Opinion (Scottish law) Exhibit G -- List of Closing Documents Exhibit H -- Opinion for New Borrowing Subsidiaries Exhibit I -- Compliance Certificate Exhibit J-1 -- Form of Alternate Currency Addendum for Deutsche Marks Exhibit K -- Notice of Disbursement of Alternate Currency Loan Exhibit L -- Notice of Receipt of Alternate Currency Loan Payment SCHEDULES - --------- Schedule I -- Lenders, Eurocurrency Payment Offices, Commitments, Maximum Swing Loan Obligations Schedule II -- Lending Installations Schedule 1.1.1 -- Existing Letters of Credit Schedule 1.1.2 -- Borrowing Subsidiaries Schedule 5.4 -- Financial Statements Schedule 5.8 -- Subsidiaries Schedule 5.9 -- ERISA Matters Schedule 5.11 -- Assets and Properties Schedule 6.10 -- Liens Schedule 6.17 -- Existing Investments Schedule 6.19 -- Existing Indebtedness AMENDED AND RESTATED CREDIT AGREEMENT This Amended and Restated Credit Agreement (this "AGREEMENT"), dated as of September 30, 1998, is among Tokheim Corporation, an Indiana Corporation, (the "COMPANY"), any Borrowing Subsidiaries which are now or may hereafter become a party hereto from time to time, the Lenders, and NBD Bank, N.A., as Administrative Agent, to amend and restate the Original Credit Agreement which is hereby amended and restated in its entirety. The parties hereto agree as follows: ARTICLE I: DEFINITIONS ----------- 1.1. DEFINITIONS. ----------- As used in this Agreement: "ACQUIRED SUBSIDIARIES" means each of the Subsidiaries of the Company acquired in connection with the Schlumberger Acquisition. "ACQUISITION" means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Company or any Subsidiary (a) acquires any going business or all or substantially all of the assets of any firm, corporation or division thereof, whether through purchase of assets, merger or otherwise, or (b) directly or indirectly acquires (in one transaction or in a series of transactions) at least 25% (in number of votes) of the Capital Stock of a corporation, partnership, or limited liability company which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency). "ACQUISITION AGREEMENT" means that certain Master Agreement For Purchase And Sale Of Shares, Assets And Liabilities, dated as of June 19, 1998, by and among the Company, for itself and on behalf of all of its subsidiaries, and Schlumberger, as amended, restated, or otherwise modified from time to time. "ADDITIONAL JUNIOR SECURITY" shall have the meaning set forth in Section ------- 4.1(b)(xii). - ----------- "ADVANCE" means a borrowing hereunder consisting of the aggregate amount of the several Loans (other than Swing Loans) made by some or all of the Lenders to the Borrowers of the same Type and, in the case of Eurocurrency Advances, denominated in the same currency and for the same Interest Period. "AFFILIATE" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise. "AGENT" means NBD Bank, N.A. in its capacity as contractual representative for the Lenders, the Issuing Lenders and the Swing Loan Lenders pursuant to Article XI, and not in its individual capacity as a Lender, Swing Loan Lender or - ---------- Issuing Lender, and any successor Agent appointed pursuant to Article XI. ---------- "AGENTS" means each of the Agent, the Collateral Agent and the Co- Syndication Agents. "AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate of the Revolving Loan Commitments of all the Lenders, as may be reduced from time to time pursuant to the terms hereof. The initial Aggregate Revolving Loan Commitment is One Hundred Twenty Million and 00/100 Dollars ($120,000,000). "AGGREGATE TERM LOAN COMMITMENT" means the aggregate of the Term Loan Commitments of all the Lenders. The Aggregate Term Loan Commitment is One Hundred Twenty Million and 00/100 Dollars ($120,000,000.00). "AGREED CURRENCY" shall mean (i) Dollars, (ii) only so long as such currencies remain Eligible Currencies, French Francs, Dutch Guilders and Sterling, (iii) upon and after the Euro Implementation date, the Euro only for so long as the Euro is and remains an Eligible Currency, and (iv) and any other currency which is freely available and convertible into Dollars in which deposits are customarily offered to banks in the London interbank market, which the applicable Borrower requests the Agent to include as an Agreed Currency hereunder and which is acceptable to each Lender; provided that the Agent shall promptly notify each Lender of each such request and each Lender shall be deemed to have agreed to each such request if its objection thereto has not been received by the Agent within five Business Days from the date of such notification by the Agent to such Lender. "AGREEMENT" means this Amended and Restated Credit Agreement, as it may be amended, modified, supplemented or restated and in effect from time to time. "ALTERNATE BASE RATE" means the sum of (a) the greater of (x) the Prime Rate or (y) the Federal Funds Effective Rate plus .50% per annum plus (b) the ---- ---- percentage indicated as the Applicable Margin in connection with Alternate Base Rate Loans. "ALTERNATE BASE RATE ADVANCE" means an Advance which bears interest at the Alternate Base Rate. "ALTERNATE BASE RATE LOAN" means a Loan which bears interest at the Alternate Base Rate. 2 "ALTERNATE CURRENCY" shall mean (i) only so long as such currency remains an Eligible Currency, Deutsche Marks, French Francs and (ii) any other Eligible Currency, which the applicable Borrower requests the Agent to include as an Alternate Currency hereunder and which is acceptable to one hundred percent (100%) of the applicable Alternate Currency Banks and with respect to which an Alternate Currency Addendum has been executed among one of the Borrowers, one or more Alternate Currency Banks and, if applicable, an Alternate Currency Agent in connection therewith. "ALTERNATE CURRENCY ADDENDUM" means an addendum (i) substantially in the form of Exhibit J-1 and Exhibit J-2, (ii) or, in the case of any addendum ----------- ----------- relating to a currency other than Deutsche Marks or French Francs, in such form as shall be approved by the Agent, in each case entered into among one of the Borrowers, one or more Alternate Currency Banks and, if applicable, an Alternate Currency Agent. "ALTERNATE CURRENCY AGENT" means one or more entities (which may be the Agent or its local affiliates), satisfactory to the Agent, as specified in the applicable Alternate Currency Addendum. "ALTERNATE CURRENCY BANK" means any Lender (or any Affiliate, branch or agency thereof) party to an Alternate Currency Addendum. If any agency or Affiliate of a Lender shall be a party to an Alternate Currency Addendum, such agency or Affiliate shall, to the extent of any commitment extended and any Loans made by it, have all the rights of such Lender hereunder; provided, -------- however, that such Lender shall to the exclusion of such agency or Affiliate, - ------- continue to have all the voting rights vested in it by the terms hereof. "ALTERNATE CURRENCY BORROWING" means any borrowing consisting of a Loan made in an Alternate Currency. "ALTERNATE CURRENCY COMMITMENT" means, for each Alternate Currency Bank for each Alternate Currency, the obligation of such Alternate Currency Bank to make Alternate Currency Loans not exceeding the Dollar Amount set forth in the applicable Alternate Currency Addendum, as such amount may be modified from time to time pursuant to the terms of this Agreement and the applicable Alternate Currency Addendum. "ALTERNATE CURRENCY INTEREST PERIOD" means, with respect to any Alternate Currency Loan, the Interest Period as set forth on the applicable Alternate Currency Addendum. "ALTERNATE CURRENCY LOAN" means any Loan denominated in an Alternate Currency made by one or more of the Alternate Currency Banks to a Borrower pursuant to Section 2.1.4 and an Alternate Currency Addendum. ------------- "ALTERNATE CURRENCY NOTE" means a promissory note of any Borrower, in favor of the applicable Alternate Currency Lenders evidencing the obligation of such Borrower to repay 3 Alternate Currency Loans, as amended or modified from time to time and together with any promissory note or notes issued in exchange or replacement therefor. "ALTERNATE CURRENCY PERCENTAGE" means, with respect to any Alternate Currency Bank for any particular Alternate Currency, the percentage obtained by dividing (A) such Alternate Currency Bank's Alternate Currency Commitment at such time as set forth in the applicable Alternate Currency Addendum by (B) the aggregate of the Alternate Currency Commitments at such time of all Alternate Currency Banks with respect to such Alternate Currency as set forth in the applicable Alternate Currency Addendum. "APPLICABLE LETTER OF CREDIT FEE RATE" means a per annum rate equal to the Applicable Margin in respect of Revolving Loans that are Eurocurrency Loans, as determined from time to time pursuant to Section 2.3. ----------- "APPLICABLE MARGIN" means, at any date of determination thereof with respect to any Advance, the commitment fees payable pursuant to Section 2.4 and ----------- Letter of Credit fees, the respective rates per annum for such Advance, commitment fees and Letter of Credit fees calculated in accordance with the terms of Section 2.3, or, in the case of any Alternate Currency Loan, as set ----------- forth on the applicable Alternate Currency Addendum. "APPLICABLE PERCENTAGE" means, for any Lender, such Lender's Revolving Loan Percentage or Term Loan Percentage, as applicable. "APPROXIMATE EQUIVALENT AMOUNT" of any currency with respect to any amount of Dollars shall mean the Equivalent Amount of such currency with respect to such amount of Dollars at such date (i) if such currency is Deutsche Marks, French Francs, Dutch Guilders or Sterling, rounded up to the nearest 100,000 of such currency and (ii) if such currency is any other Agreed Currency, rounded up to the nearest amount of such currency as determined by the Agent from time to time. "ARRANGER" means First Chicago Capital Markets, Inc. "ARTICLE" means an article of this Agreement unless another document is specifically referenced. "ASSET SALE" means, with respect to any Person, the sale, lease, conveyance, disposition or other transfer by such Person of any of its assets (including by way of a sale-leaseback transaction and including the sale or other transfer of any of the Equity Interests of any Subsidiary of such Person) other than (i) the sale of Inventory in the ordinary course of business and (ii) the sale or other disposition of any obsolete or worn-out property disposed of in the ordinary course of business. 4 "ASSUMPTION LETTER" means a letter of a Subsidiary of the Company addressed to the Lenders in substantially the form of Exhibit A hereto pursuant to which --------- such Subsidiary agrees to become a "BORROWING SUBSIDIARY" and agrees to be bound by the terms and conditions hereof. "BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of ERISA (other than a Multiemployer Plan) subject to Title IV of ERISA in respect of which the Company or any ERISA Affiliate is an "employer" as defined in Section 3(5) of ERISA or with respect to which the Company or any ERISA Affiliate has any potential liability. "BORROWER" means, as applicable, the Company, the Subsidiaries listed on Schedule 1.1.2 and any other Borrowing Subsidiary, together with their - -------------- respective successors and assigns. "BORROWING BASE" means, as of any date of calculation, an amount, as set forth on the most current Borrowing Base Certificate delivered to the Agent, for the Company and its Consolidated Subsidiaries equal to: (i) seventy-five percent (75%) of the Gross Amount of Receivables; plus (ii) fifty percent (50%) ---- of the Gross Amount of Inventory owned by the Company and its Consolidated Subsidiaries, minus (iii) the aggregate amount of trade payables owed to ----- creditors of the Subsidiaries of the Company that have not granted Liens on such Subsidiaries' Receivables. "BORROWING BASE CERTIFICATE" means a certificate, in substantially the form of Exhibit C attached hereto and made a part hereof, setting forth the Borrowing --------- Base and the component calculations thereof. "BORROWING DATE" means a date on which an Advance or a Swing Loan is made hereunder. "BORROWING NOTICE" means a notice as provided in Section 2.1.1(ii), Section ----------------- ------- 2.1.2(ii), or Section 2.1.3(ii). - --------- ----------------- "BORROWING SUBSIDIARY" means each of the Subsidiaries listed on Schedule -------- 1.1.2 and any other domestic Subsidiary, Dutch Borrowing Subsidiary, French - ----- Borrowing Subsidiary, German Borrowing Subsidiary, or UK Borrowing Subsidiary duly designated by the Company pursuant to Section 2.5.14 hereof to request -------------- Advances hereunder, which Subsidiary shall have delivered to the Agent an Assumption Letter in accordance with Section 2.5.14 and such other documents, -------------- instruments and agreements as may be required pursuant to the terms of this Agreement. "BUSINESS DAY" means (i) with respect to any borrowing, payment or rate selection of or any currency conversion with respect to Eurocurrency Advances, a day other than Saturday or Sunday on which banks are open for business in Indianapolis, Indiana and New York, New York, on which dealings in Dollars are carried on in the London interbank market and, where funds are to be paid or made available in a currency other than Dollars (other than in Euro), on which commercial banks are open for domestic and international business (including dealings in deposits in such currency) in both London and the place where such funds are to be paid or made available, (ii) with respect to any borrowing, payment, or rate selection of Revolving Loans denominated in 5 Euro, a day (other than a Saturday or Sunday) on which a suitable clearing system for the Euro is open for business as determined by the Agent, and (iii) for all other purposes, a day other than Saturday or Sunday on which banks are open for business in Indianapolis, Indiana and New York, New York. "CAPITAL EXPENDITURES" means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with U. S. GAAP, excluding (i) expenditures of insurance proceeds to rebuild or replace any asset after a casualty loss, (ii) leasehold improvement expenditures for which the Company or a Subsidiary is reimbursed within a reasonable period of time by the lessor and (iii) expenditures of proceeds received in connection with any condemnation or eminent domain proceeding to replace any asset taken from the Company or a Subsidiary in such proceeding. "CAPITAL STOCK" means the equity securities of a corporation or societe anonyme, the voting partnership interests of a partnership and the voting membership interests of a limited liability company. "CAPITALIZED LEASE" means any lease the obligation for Rentals with respect to which is required to be capitalized on a balance sheet of the lessee in accordance with U.S. GAAP. "CASH EQUIVALENTS" means (i) marketable direct obligations issued or unconditionally guaranteed by the governments of the United States, France, England, Germany or The Netherlands and backed by the full faith and credit of such government; (ii) domestic, Deutsche Marks, French Francs, Dutch Guilders and Sterling and Eurocurrency certificates of deposit and time deposits, bankers' acceptances and floating rate certificates of deposit issued by any commercial bank organized under the laws of the United States of America, any state thereof or the District of Columbia, Germany, France, The Netherlands or England, or its branches or agencies; (iii) shares of money market, mutual or similar funds having assets in excess of $100,000,000 or the equivalent amount in Deutsche Marks, French Francs, Dutch Guilders or Sterling and the investments of which are limited to investment grade securities (i.e., securities rated at least Baa by Moody's or at least BBB by S&P); (iv) commercial paper of United States of America, German, French, Dutch, or English banks and bank holding companies and their subsidiaries and United States of America, German, French, Dutch and English finance, commercial, industrial or utility companies which, at the time of acquisition, are rated A-1 (or better) by S&P or P-1 (or better) by Moody's; and (v) at the reasonable discretion of the Agent or the Required Lenders, short term obligations, deposits, certificates, bankers' acceptances, shares or commercial paper denominated in currency other than Dollars, Deutsche Marks, French Francs, Dutch Guilders or Sterling which are easily transferrable into cash; provided that the maturities of all such Cash Equivalents shall not -------- exceed 365 days. "CHANGE IN CONTROL" means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and 6 Exchange Commission under the Securities Exchange Act of 1934) of 25% or more of the outstanding shares of voting stock of the Company. "CODE" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. "COLLATERAL" means all property and interests in property now owned or hereafter acquired by the Company or any of its Subsidiaries upon which a security interest, lien or mortgage is granted to the Agent, for the benefit of the Holders of Secured Obligations, or to the Agent, for the benefit of the Lenders, whether under the Security Agreement, under the Collateral Documents or under any of the other Loan Documents. "COLLATERAL AGENT" means Credit Lyonnais, in its capacity as contractual representative of the Lenders, the Issuing Lenders, and the Swing Loan Lenders pursuant to Article XI, and not in its individual capacity as a Lender, Swing ---------- Loan Lender or Issuing Lender, and any successor Collateral Agent appointed pursuant to Article XI. ---------- "COLLATERAL DOCUMENTS" means all agreements, instruments and documents executed in connection with this Agreement, including, without limitation the Security Agreement, Trademark Security Agreement, Patent Security Agreement, Subsidiary Guaranty, the Subsidiary Security Agreement, the Pledge Agreements, the Mortgages, the Tokheim Sofitam Charge, the Tokheim Sofitam Receivables Assignment, Tokheim Sofitam Pledge Agreement and the Contribution Agreement, together with all agreements and documents referred to therein or contemplated thereby for the purpose of securing or guaranteeing the Obligations. "COMMITMENT" means, for each Lender, collectively, such Lender's Revolving Loan Commitment and/or Term Loan Commitment. "COMPANY" means Tokheim Corporation, an Indiana corporation, and its successors and assigns, including a debtor-in-possession on behalf of the Company. "COMPANY PLEDGE AGREEMENTS" means each of (i) that certain Amended and Restated Pledge Agreement dated as of September 30, 1998 executed by the Company in favor of the Agent for the benefit of the Holders of Secured Obligations and (ii) that certain Share Pledge Agreement dated as of September 30, 1998 executed by the Company in favor of the Agent for the benefit of the Holders of Secured Obligations, in each case, as amended, restated or otherwise modified from time to time. "COMPANY'S STATUS" is defined in Section 2.3. ----------- "CONSOLIDATED NET INCOME" means for any period the amount of net income (or deficit) of the Company and its Consolidated Subsidiaries for such period, determined on a consolidated basis in accordance with U.S. GAAP, excluding any net income (or net loss) of a Consolidated 7 Subsidiary for any period during which it was not a Consolidated Subsidiary, or any net income (or net loss) of any business, properties or assets acquired (by way of merger, consolidation, purchase or otherwise) by the Company or any Consolidated Subsidiary for any period prior to the date of acquisition thereof. "CONSOLIDATED NET WORTH" means, at any date as of which the same is to be determined, the consolidated stockholders' equity of the Company and its Consolidated Subsidiaries, determined in accordance with U.S. GAAP (excluding the Company's minimum funding liability under ERISA with respect to Plans maintained by the Company and excluding foreign currency translation adjustments). "CONSOLIDATED SUBSIDIARY" means, at any date as of which the same is to be determined, any Subsidiary or other entity the accounts of which would be consolidated with those of the Company in its consolidated financial statements if such statements were prepared as of such date in accordance with U.S. GAAP. "CONTRIBUTION AGREEMENT" means the Amended and Restated Contribution Agreement dated as of September 30, 1998 by and among the Company and the Guarantor Subsidiaries, as amended, restated, supplemented or otherwise modified from time to time. "CONTROLLED GROUP" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Company or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code. "CONVERSION/CONTINUATION NOTICE" is defined in Section 2.2.3. ------------- "DEFAULT" means an event described in Article VII. ----------- "DEUTSCHE MARKS" means the lawful currency of the Federal Republic of Germany. "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the later of (i) the Revolving Loan Termination Date and (ii) the Term Loan Termination Date. "DOL" means the United States Department of Labor and any successor department or agency. "DOLLAR AMOUNT" of any currency at any date shall mean (i) the amount of such currency if such currency is Dollars or (ii) the Equivalent Amount of Dollars if such currency is any currency other than Dollars, calculated on the basis of the arithmetical mean of the buy and sell spot rates of 8 exchange of the Agent for such currency on the London market at 11:00 a.m., London time, two Business Days prior to the date on which such amount is to be determined. "DOLLARS" and "$" shall mean lawful money of the United States of America. "DUTCH BORROWING SUBSIDIARIES" means (i) each of the Subsidiaries listed on Schedule 1.1.2 and identified as "Dutch Borrowing Subsidiaries" thereon and (ii) - -------------- each other Wholly-Owned Subsidiary of the Company organized under the laws of The Netherlands and added as a Borrowing Subsidiary pursuant to the terms of Section 2.5.14 of this Agreement, and, in each case, their permitted successors - -------------- and assigns, including a debtor-in-possession on behalf of such Dutch Borrowing Subsidiary. "EBITDA" means, for any period, on a consolidated basis for the Company and its Consolidated Subsidiaries, the sum of: (i) Consolidated Net Income; plus ---- (ii) the portion of consolidated net income attributable to minority interests in the Company's Consolidated Subsidiaries not included in the calculation of Consolidated Net Income; plus (iii) to the extent deducted in determining ---- Consolidated Net Income, income taxes paid or accrued; minus (iv) extraordinary ----- gains; plus (v) extraordinary losses; plus (vi) Interest Expense; plus (vii) ---- ---- ---- depreciation; plus (viii) non-cash amortization expense, including, without ---- limitation, amortization of goodwill and other intangible assets; minus (ix) ----- interest income; plus (x) any non-recurring expenses related to the ---- reorganization, restructuring and rationalization of the Company and its Subsidiaries (including the businesses purchased pursuant to the Sofitam Acquisition and the Schlumberger Acquisition, and Management Solutions, Inc.) which are charged to operating expenses when and as charged during the first four fiscal quarters following the Effective Date up to an aggregate amount not to exceed $25,000,000 as confirmed by independent certified public accountants in accordance with the terms of Section 6.1(i). -------------- "EFFECTIVE DATE" means the date of this Agreement. "ELIGIBLE CURRENCY" means any currency other than Dollars with respect to which the Agent has not given notice in accordance with Section 2.5.12 and that -------------- is readily available, freely traded, in which deposits are customarily offered to banks in the London interbank market, convertible into Dollars in the international interbank market and as to which an Equivalent Amount may be readily calculated. "EQUITY INTERESTS" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock); provided, however, that -------- ------- Equity Interests will not include any Incentive Arrangements or obligations or payments thereunder. "EQUIVALENT AMOUNT" of any currency with respect to any amount of Dollars at any date shall mean the equivalent in such currency of such amount of Dollars, calculated on the basis of the 9 arithmetical mean of the buy and sell spot rates of exchange of the Agent for such other currency at 11:00 a.m., London time, two Business Days prior to the date on which such amount is to be determined (i) if such currency is Sterling, Deutsche Marks, Dutch Guilders, or French Francs, rounded up to the nearest 100,000 of such currency and (ii) if such currency is any other Agreed Currency or Alternate Currency, rounded up to the nearest amount of such currency as determined by the Agent from time to time or agreed to by the applicable Alternate Currency Agent. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor statute. "ERISA AFFILIATE" means any (i) corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Internal Revenue Code) as the Company, (ii) partnership or other trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the Internal Revenue Code) with the Company, and (iii) member of the same affiliated service group (within the meaning of Section 414(m) of the Internal Revenue Code) as the Company, any corporation described in clause (i) above or any partnership or trade or business described in clause ---------- ------ (ii) above. - ---- "ESOP AGREEMENTS" means (a) the Assignment Agreements dated as of September 30, 1998 among Credit Lyonnais, Chicago Branch, Harris Trust and Savings Bank and Bank of America National Trust and Savings Association, as assignors and NBD Bank, N.A. as Agent for the ESOP Lenders, (b) Fourth Amendment to Loan and Guarantee Agreement dated as of September 30, 1998 among Tokheim, Fort Wayne National Bank as successor to Summit Bank as trustee for Retirement Savings Plan for Employees of Tokheim Corporation and Subsidiaries and NBD Bank, N.A. as Agent for the ESOP Lenders and (c) Fourth Amendment to Loan and Guarantee Agreement among Tokheim, Fort Wayne National Bank as successor to Norwest Bank Fort Wayne, N.A. f/k/a Lincoln National Bank & Trust Company as trustee for Retirement Savings Plan for Employees of Tokheim Corporation and Subsidiaries and NBD Bank, N.A. as Agent for the ESOP Lenders. "ESOP GUARANTY OBLIGATIONS" means the obligations of the Company as guarantor pursuant to the ESOP Loan Agreements. "ESOP LENDERS" means, upon consummation of the ESOP Agreements, the lenders under the ESOP Loan Agreements in the amounts set forth opposite such lenders' names under the heading "ESOP Lenders" on Schedule I hereof. ---------- "ESOP LOAN AGREEMENTS" means the Loan and Guarantee Agreements pursuant to which the ESOP Loans were made. "ESOP LOANS" means those loans made pursuant to loan agreements amended pursuant to the ESOP Agreements. "EURO" means the euro referred to in the Council Regulation (EC) No. 1103/97 dated 17 June 1997 passed by the Council of the European Union, or, if different, the then lawful currency 10 of the member states of the European Union that participate in the third stage of the Economic and Monetary Union. "EURO IMPLEMENTATION DATE" means the first date (currently expected to be January 1, 1999) on which the Euro becomes the currency of some or all of the member states of the European Union. "EUROCURRENCY ADVANCE" means an Advance which bears interest at a Eurocurrency Rate requested by the applicable Borrower pursuant to Section 2.2. ----------- "EUROCURRENCY LOAN" means a Loan which bears interest at a Eurocurrency Rate requested by the applicable Borrower pursuant to Section 2.2. ----------- "EUROCURRENCY PAYMENT OFFICE" of the Agent or any Swing Loan Lender, as applicable, shall mean, for each of the Agreed Currencies, the office, branch or affiliate of the Agent or such Swing Loan Lender, as applicable, specified as the "EUROCURRENCY PAYMENT OFFICE" for such currency in Schedule I hereto or such ---------- other office, branch, affiliate or correspondent bank of the Agent or such Swing Loan Lender as it may from time to time specify to the Company and each Lender as its Eurocurrency Payment Office. "EUROCURRENCY RATE" means, with respect to a Eurocurrency Advance for the relevant Interest Period, the sum of (a) the Eurocurrency Base Rate plus (b) the ---- percentage indicated as the Applicable Margin in connection with Eurocurrency Loans. "EUROCURRENCY BASE RATE" means, with respect to any Eurocurrency Advance for any specified Interest Period, either (i) the rate of interest per annum equal to the rate for deposits in the applicable Agreed Currency of such Eurocurrency Advance with a maturity approximately equal to such Interest Period which appears on Telerate Page 3740 or Telerate Page 3750, as applicable, or, if there is more than one such rate, the average of such rates rounded to the nearest 1/100 of 1%, as of 11 a.m. (London time) two Business Days prior to the first day of such Interest Period or (ii) if no such rate of interest appears on Telerate Page 3740 or Telerate Page 3750, as applicable, for any specified Interest Period, the rate at which deposits in the applicable Agreed Currency are offered by the Agent to first-class banks in the London interbank market at approximately 11 a.m. (London time) two Business Days prior to the first day of such Interest Period, in the approximate amount of the Applicable Percentage of the Agent (in its capacity as a Lender) of such Eurocurrency Advance and having a maturity approximately equal to such Interest Period. The terms "Telerate Page 3740" and "Telerate Page 3750" mean the display designated as "Page 3740" and "Page 3750", as applicable, on the Associated Press-Dow Jones Telerate Service (or such other page as may replace Page 3740 or Page 3750, as applicable, on the Associated Press-Dow Jones Telerate Service or such other service as may be nominated by the British Bankers' Association as the information vendor for the purpose of displaying British Bankers' Association interest rate settlement rates for the relevant Agreed Currency). Any Eurocurrency Base Rate determined on the basis of the rate displayed on Telerate Page 3740 or Telerate Page 3750 in accordance with the foregoing provisions 11 of this subparagraph shall be subject to corrections, if any, made in such rate and displayed by the Associated Press-Dow Jones Telerate Service within one hour of the time when such rate is first displayed by such service. "EXCESS CASH FLOW" means an amount equal to the Company's and its Subsidiaries' consolidated (i) EBITDA for such period, minus (ii) income taxes ----- paid in cash for such period, minus (iii) Capital Expenditures paid in cash ----- during such period, minus (iv) Interest Expense for such period, minus (v) any ----- ----- payments of the principal portion of the Term Loans and of the principal portion of all other Indebtedness of the Company and its Subsidiaries during such period, minus (vi) the increase (or plus the decrease) in working capital during ----- ---- such period, in each case as calculated in accordance with U.S. GAAP, minus ----- (vii) the decrease during such period in the reserve account created in connection with each of the Schlumberger Acquisition and the Sofitam Acquisition, minus, without duplication of any of the foregoing, (viii) any non- ----- recurring cash expenses related to the reorganization, restructuring and rationalization of the Company and its Subsidiaries (including the businesses purchased pursuant to the Schlumberger Acquisition) which are charged to operating expenses when and as charged, minus (ix) any non-recurring cash ----- charges related to the acquisition, reorganization, restructuring and rationalization of Management Solutions, Inc. when and as charged, minus (x) ----- extraordinary losses other than non-cash extraordinary losses. "EXISTING LETTERS OF CREDIT" means those letters of credit issued for the account of the Company and listed on Schedule 1.1.1. -------------- "FAIR MARKET VALUE" means, with respect to any asset, the value of the consideration obtainable in a sale of such asset in the open market, assuming a sale by a willing seller to a willing purchaser dealing at arm's length and arranged in an orderly manner over a reasonable period of time, each having reasonable knowledge of the nature and characteristics of such asset, neither being under any compulsion to act, determined (i) in good faith by the board of directors of the Company or (ii) in an appraisal of such asset, provided that -------- such appraisal was performed relatively contemporaneously with such sale by an independent third party appraiser and the basic assumptions underlying such appraisal have not materially changed since the date thereof. "FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating interest rate per annum equal for each day during such period to (i) the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the preceding Business Day) by the Federal Reserve Bank of New York; or (ii) if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Indianapolis time) for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by the Agent. "FEE LETTERS" is defined in Section 2.4.2. ------------- 12 "FINANCIAL OFFICER" means the Executive Vice President and Chief Financial Officer, the Corporate Treasurer or such other officer of the Company as may be designated by the Company from time to time. "FINANCING" means, with respect to any Person, the issuance or sale by such Person of any Equity Interests of such Person (other than any such issuances or sales to the Company or a Subsidiary of the Company by a Subsidiary of the Company) or any Indebtedness consisting of debt securities of such Person (other than issuances of Indebtedness permitted pursuant to Section 6.18). ------------ "FIRREA" means the Financial Institutions Reform, Recovery, and Enforcement Act of 1983, as amended, modified or supplemented from time to time. "FIXED CHARGE COVERAGE RATIO" means the ratio of: (i) the sum, without duplication, of the amounts of (a) EBITDA, minus (b) Capital Expenditures to ----- (ii) the sum, without duplication of the amounts of (a) Interest Expense, plus ---- (b) scheduled amortization of the principal portion of all Indebtedness of the Company and its Subsidiaries during such period, plus (c) any cash payments with ---- respect to income taxes of the Company and its Consolidated Subsidiaries, plus ---- (d) all payments consisting of dividends, redemptions, repurchases, acquisitions or other retirements of the Company's Capital Stock (excluding (to avoid duplication) dividends used to fund payments included in clauses (ii)(a) and (b) --------------- --- above required to be paid on the Capital Stock owned by the Company's Employee Stock Ownership Plan and, after the ESOP Loans are repaid, excluding dividends used to fund the Company's obligations to the Company's Employee Stock Ownership Plan, to the extent previously deducted in determining Consolidated Net Income), plus (e) any minimum funding requirement for any Plan that provides for defined - ---- benefits. In each case, the Fixed Charge Coverage Ratio shall be determined as of the last day of each fiscal quarter for the four-quarter period ending such day (provided, however, for the first four of such calculations made after the date of this Agreement, such calculations shall be done based upon the period commencing with the Effective Date and ending with the quarterly period then ended). "FOREIGN EMPLOYEE BENEFIT PLAN" means any employee benefit plan as defined in Section 3(3) of ERISA which is maintained or contributed to for the benefit of the employees of the Company, any of its Subsidiaries or any members of its Controlled Group and is not covered by ERISA pursuant to ERISA Section 4(b)(4). "FOREIGN PENSION PLAN" means any employee benefit plan as described in Section 3(3) of ERISA which (i) is maintained or contributed to for the benefit of employees of the Company, any of its Subsidiaries or any of its ERISA Affiliates, (ii) is not covered by ERISA pursuant to Section 4(b)(4) of ERISA, and (iii) under applicable local law, is required to be funded through a trust or other funding vehicle. "FRENCH BORROWING SUBSIDIARIES" means (i) the Subsidiaries listed on Schedule 1.1.2 and identified as "French Borrowing Subsidiaries" thereon and - -------------- (ii) each other Wholly-Owned 13 Subsidiary of the Company organized under the laws of the Republic of France and added as a Borrowing Subsidiary pursuant to the terms of Section 2.5.14 of this -------------- Agreement, and, in each case, their permitted successors and assigns, including a debtor-in-possession on behalf of such French Borrowing Subsidiary. "FRENCH FRANCS" means the lawful currency of the Republic of France. "FRENCH LENDING INSTALLATIONS" shall mean the Lending Installations identified as the French Lending Installations on Schedule II and which are ----------- acting as Lenders with respect to Loans to the French Borrowing Subsidiaries. "FRENCH LOAN DOCUMENTS" means the Notes executed by Tokheim Sofitam, the Tokheim Sofitam Charge, the Tokheim Sofitam Receivables Assignment and the Tokheim Sofitam Pledge Agreement. "GASBOY" means Gasboy International, Inc., a Pennsylvania corporation, together with its successors and assigns. "GASBOY PLEDGE AGREEMENT" means that certain Amended and Restated Pledge Agreement dated as of September 30, 1998 executed by Gasboy International, Inc. in favor of the Agent for the benefit of the Holders of Secured Obligations, as amended, restated or otherwise modified from time to time. "GERMAN BORROWING SUBSIDIARIES" means (i) the Subsidiaries listed on Schedule 1.1.2 and identified as "German Borrowing Subsidiaries" thereon and - -------------- (ii) each other Wholly-Owned Subsidiary of the Company organized under the laws of Germany and added as a Borrowing Subsidiary pursuant to the terms of Section ------- 2.5.14 of this Agreement, and, in each case, their permitted successors and - ------ assigns, including a debtor-in-possession on behalf of such German Borrowing Subsidiary. "GROSS AMOUNT OF INVENTORY" means Inventory of the Borrowers and their Consolidated Subsidiaries, valued at the lower of cost determined on a first-in- first-out basis (determined in accordance with U.S. GAAP, consistently applied) or market value less such reserves as the Agent elects to establish in accordance with its reasonable credit judgment (which credit judgment shall be exercised in a manner that is not arbitrary or capricious). "GROSS AMOUNT OF RECEIVABLES" means the outstanding face amount of Receivables of the Borrowers and their Consolidated Subsidiaries, determined in accordance with U.S. GAAP, consistently applied, less such reserves as the Agent elects to establish in accordance with its reasonable credit judgment (which credit judgment shall be exercised in a manner that is not arbitrary or capricious). 14 "GROSS NEGLIGENCE" means either recklessness or actions taken or omitted with conscious indifference to or the complete disregard of consequences. Gross Negligence does not mean the absence of ordinary care or diligence, or an inadvertent act or inadvertent failure to act. If the term "gross negligence" is used with respect to the Agent or any Lender, Issuing Lender or Swing Loan Lender or any indemnitee in any of the other Loan Documents, it shall have the meaning set forth herein. "GUARANTEED OBLIGATIONS" is defined in Section 9.1. ----------- "GUARANTOR SUBSIDIARY" means a domestic Subsidiary of the Company party to the Subsidiary Security Agreement. "GUARANTY" of any Person means any agreement by which such person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes liable upon, the obligation of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person or otherwise assures any creditor of such other Person against loss, and shall include, without limitation, the contingent liability of such Person under or in relation to any Letter of Credit and disclosed support agreements, but shall exclude endorsements for collection or deposit in the ordinary course of business. "HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured Obligations from time to time and shall include their respective successors, transferees and assigns. "INCENTIVE ARRANGEMENTS" means any stock appreciation rights, "phantom" stock plans, employment agreements, non-competition agreements, subscription and stockholders agreements and other incentive and bonus plans and similar arrangements made in connection with the retention of executives, directors, officers or employees of the Company and its Subsidiaries. "INDEBTEDNESS" means, with respect to any Person, without duplication, such Person's (i) obligations for borrowed money calculated in accordance with U.S. GAAP with overdraft liabilities netted against cash and Cash Equivalents, (ii) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person's business payable on terms customary in the trade), (iii) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other instruments, (v) the principal component of obligations pursuant to Capitalized Leases, and (vi) obligations for which such person is obligated pursuant to a Guaranty of obligations of the type described in clauses (i) through (v) above. The amount ----------- --- of any such Guaranty shall be deemed to be an amount equal to the determinable amount of the primary obligation in respect of which such Guaranty is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith. 15 "INTEREST EXPENSE" means, for any period, the total gross interest expense of the Company and its Consolidated Subsidiaries, whether paid or accrued (including the interest component of Capitalized Leases), but excluding interest expense not payable in cash (including amortization of discount), all as determined in conformity with U.S. GAAP. "INTEREST EXPENSE COVERAGE RATIO" means the ratio of (i) EBITDA to (ii) Interest Expense. In each case, the Interest Expense Coverage Ratio shall be determined as of the last day of each fiscal quarter for the four-quarter period ending such day (provided, however, for the first four of such calculations made after the date of this Agreement, such calculations shall be done based upon the period commencing with the Effective Date and ending with the quarterly period then ended). "INTEREST PERIOD" means, (i) any Alternate Currency Interest Period or (ii) with respect to a Eurocurrency Advance or a Eurocurrency Loan, a period of one, two, three or six months commencing on a Business Day selected by the applicable Borrower pursuant to this Agreement; provided, however, notwithstanding anything -------- ------- in this Agreement to the contrary and only at the Agent's sole option, for the period from the Effective Date to the earlier of (y) the date that is 90 days after the Effective Date and (z) the date upon which the Arranger confirms that the loan syndication process has been complete (the "SYNDICATION PERIOD"), "Interest Period" means, with respect to a Eurocurrency Loan, a period of seven (7) days, provided that during such period all Interest Periods shall end on the same day. Other than during the Syndication Period, such Interest Period shall end on (but exclude) the day which corresponds numerically to such date of commencement one, two, three or six months thereafter, provided, however, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided, however, that if said next succeeding Business Day falls in a new month, such Interest Period shall end on the immediately preceding Business Day. "INTEREST RATE AGREEMENTS" is defined in Section 6.22. ------------ "INVENTORY" shall mean any and all goods, including, without limitation, goods in transit, wheresoever located, whether now owned or hereafter acquired by the Company or any of its Subsidiaries, which are held for sale or lease, furnished under any contract of service or held as raw materials, work in process or supplies, and all materials used or consumed in the business of the Company or any of its Subsidiaries, and shall include all right, title and interest of the Company or any of its Subsidiaries in any property the sale or other disposition of which has given rise to Receivables and which has been returned to or repossessed or stopped in transit by the Company or any of its Subsidiaries. "INVESTMENT" means, with respect to any Person, (i) any purchase or other acquisition by that Person of stock, partnership interest, limited liability company membership interest, notes, 16 debentures or other securities, or of a beneficial interest in stock, partnership interest, limited liability company membership interest, notes, debentures or other securities, issued by any other Person, (ii) any purchase by that Person of all or substantially all of the assets of a business conducted by another Person, and (iii) any loan, advance (other than deposits with financial institutions available for withdrawal on demand, prepaid expenses, accounts receivable, advances to employees and similar items made or incurred in the ordinary course of business) or capital contribution by that Person to any other Person, including all Indebtedness to such Person arising from a sale of property by such Person other than in the ordinary course of its business. "IRS" means the Internal Revenue Service and any Person succeeding to the functions thereof. "ISSUING LENDER" is defined in Section 2.6.1. ------------- "L/C DRAFT" means a draft drawn on any Issuing Lender pursuant to any of the Letters of Credit. "L/C INTEREST" has the meaning specified in Section 2.6.2. ------------- "L/C OBLIGATIONS" means an amount equal to the sum (without duplication) of (i) the aggregate of the amount then available for drawing under each of the Letters of Credit, (ii) the face amounts of all outstanding L/C Drafts corresponding to the Letters of Credit, which L/C Drafts have been accepted by the applicable Issuing Lender and (iii) the aggregate outstanding amount of Reimbursement Obligations at such time. "LENDERS" means the financial institutions listed on the signature pages of this Agreement and their respective successors and assigns including, without limitation, any Lender which becomes party to this Agreement pursuant to Section ------- 13.3. - ---- "LENDING INSTALLATION" means any office, branch, subsidiary or affiliate of any Lender or the Agent. "LETTER OF CREDIT" means any of the Existing Letters of Credit or any standby letter of credit issued pursuant to Section 2.6 hereof. ----------- "LETTER OF CREDIT FEE" is defined in Section 2.6.5. ------------- "LEVEL I STATUS" is defined in Section 2.3. ----------- "LEVEL II STATUS" is defined in Section 2.3. ----------- "LEVEL III STATUS" is defined in Section 2.3. ----------- 17 "LEVEL IV STATUS" is defined in Section 2.3. ----------- "LEVEL V STATUS" is defined in Section 2.3. ----------- "LEVEL VI STATUS" is defined in Section 2.3. ----------- "LEVERAGE RATIO" means the ratio of (i) the sum of (w) Indebtedness of the Company and its Consolidated Subsidiaries (including letters of credit and guaranties) on a consolidated basis, minus (x) the aggregate outstanding ----- principal amount of the Seller Junior Subordinated Note, minus (y) the portion ----- of any notes issued by the Company or any of its Subsidiaries in lieu of the cash payment of interest, in each case as of the date of determination to (ii) EBITDA. The Leverage Ratio shall be calculated, in each case, determined as of the last day of each fiscal quarter beginning with the fiscal quarter ending February 28, 1999 based upon (A) for Indebtedness, as of the last day of each such fiscal quarter; and (B) for EBITDA, the actual amount for the four-quarter period ending on such day; provided, however, that for the first three of such -------- ------- fiscal quarters, the computation of EBITDA will be calculated on an annualized year-to-date basis for the period commencing with the Effective Date through the end of such fiscal quarter using the following formula: (x) for the first such fiscal quarter, EBITDA shall be multiplied by a factor of four (4); (y) for the second such fiscal quarter, EBITDA for two quarters shall be multiplied by a factor of two (2); and (z) for the third such fiscal quarter, EBITDA for the three quarters shall be multiplied by a factor of one and one-third (1.333). "LIEN" means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement). "LOAN" means, (i) with respect to a Lender, such Lender's portion, if any, of any Advance, (ii) with respect to a Swing Loan Lender, such Swing Loan Lender's Swing Loans, (iii) with respect to any Alternate Currency Lender, such Alternate Currency Lender's Alternate Currency Loan, and (iv) collectively, with respect to all Lenders, all Term Loans, Revolving Loans, Swing Loans and Alternate Currency Loans. "LOAN DOCUMENTS" means this Agreement, the Notes, the Collateral Documents, the French Loan Documents, the Assumption Letters, all Alternate Currency Addenda, the applications, reimbursement agreements, the other instruments and agreements related to the Letters of Credit and L/C Interests, and the Collateral Documents. "MATERIAL ADVERSE CHANGE" means any change in the business, Property, condition (financial or otherwise) or results of operations or prospects of (i) the Company , (ii) the Company and its domestic Subsidiaries taken as a whole or (iii) the non-domestic Subsidiaries including those Subsidiaries acquired pursuant to the Schlumberger Acquisition taken as a whole, in each case, which could reasonably be expected to have a Material Adverse Effect. 18 "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the business, Property, condition (financial or otherwise) or results of operations or prospects of (a) the Company, (b) the Company and its domestic Subsidiaries taken as a whole, or (c) the non-domestic Subsidiaries including those Subsidiaries acquired pursuant to the Schlumberger Acquisition, taken as a whole (ii) the ability of any of the Borrowers to perform their obligations under the Loan Documents, or (iii) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Agent, the Lenders, the Issuing Lenders or the Swing Loan Lenders thereunder. "MATERIAL SUBSIDIARY" means, at any time, any Subsidiary which as of such time has assets in excess of $10,000,000. "MAXIMUM REVOLVING CREDIT AMOUNT" means, at any particular time, the lesser of (A) the Aggregate Revolving Loan Commitment at such time minus $25,000,000 until the Tokheim Sofitam Charge, the Tokheim Sofitam Pledge Agreement and the Tokheim Sofitam Receivable Assignment have been duly executed and delivered to the Agent, and registered in accordance with French law, together with opinions of French counsel acceptable to the Agent, and (B) the Borrowing Base at such time minus $25,000,000 until the Tokheim Sofitam Charge, the Tokheim Sofitam Pledge Agreement and the Tokheim Sofitam Receivable Assignment have been duly executed and delivered to the Agent, and registered in accordance with French law, together with opinions of French counsel acceptable to the Agent. "MOODY'S" means Moody's Investors Service, Inc. or any rating agency which is generally recognized as a successor thereto. "MORTGAGES" means those amended and restated mortgages dated as of September 30, 1998 executed by the Company with respect to its owned real estate in Allen County, Steuben County and Daviess County, Indiana Montgomery County, Pennsylvania, and Bonham, Texas, each as amended, restated or otherwise modified from time to time. "MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section 4001(a)(3) of ERISA subject to Title IV of ERISA and which is contributed to by either the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate has potential liability. "NATIONAL CURRENCY UNIT" means the unit of currency (other than a Euro unit) of each member state of the European Union that participates in the third stage of Economic and Monetary Union. "NET CASH PROCEEDS" means, with respect to any Asset Sale or Financing by any Person, (a) cash (freely convertible into Dollars) received by such Person or any Subsidiary of such Person from such Asset Sale (including cash received as consideration for the assumption or incurrence of liabilities incurred in connection with or in anticipation of such Asset Sale) or Financing, after (i) provision for all income or other taxes measured by or resulting from such Asset Sale or Financing, 19 (ii) payment of all brokerage commissions and other fees and expenses related to such Asset Sale or Financing, (iii) all amounts used to repay Indebtedness secured by a Lien on any asset disposed of in such Asset Sale or which is or may be required (by the express terms of the instrument governing such Indebtedness) to be repaid in connection with such Asset Sale (including payments made to obtain or avoid the need for the consent of any holder of such Indebtedness), and (iv) deduction of appropriate amounts to be provided by such Person or a Subsidiary of such Person as a reserve, in accordance with U.S. GAAP, against any liabilities associated with the assets sold or disposed of in such Asset Sale and retained by such Person or a Subsidiary of such Person after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with the assets sold or disposed of in such Asset Sale; and (b) cash payments in respect of any other consideration received by such Person or any Subsidiary of such Person from such Asset Sale or Financing upon receipt of such cash payments by such Person or such Subsidiary. "NEW CURRENCY" is defined in Section 2.5.7. ------------- "NON-DOMESTIC BORROWING SUBSIDIARIES" means all Borrowing Subsidiaries of the Company other than domestic Borrowing Subsidiaries. "NOTE" means any Revolving Note, Swing Loan Note, Term Note or any Note issued to evidence the Alternate Currency Loans. "NOTE PLEDGE AGREEMENTS" means each of (i) that certain Amended and Restated Note Pledge Agreement dated as of September 30, 1998 executed by the Company in favor of the Agent for the benefit of the Holders of Secured Obligations and (ii) that certain Note Pledge Agreement dated as of September 30, 1998 executed by Tokheim RPS, LLC in favor of the Agent for the benefit of the Holders of Secured Obligations, as amended, restated or otherwise modified from time to time. "NOTICE OF ASSIGNMENT" is defined in Section 13.3.2. -------------- "OBLIGATIONS" means all Loans, Advances, debts, liabilities, obligations, covenants and duties owing by the Company or any of its Subsidiaries to the Agent, any Lender, any Issuing Lender, any Swing Loan Lender, any Affiliate of the Agent, any Lender, any Issuing Lender or any Swing Loan Lender, or any indemnitee, of any kind or nature, present or future, arising under this Agreement, the Notes, the Letters of Credit, the ESOP Guaranty Obligations, the Collateral Documents, any other Loan Document, whether or not evidenced by any note, guaranty or other instrument, whether or not for the payment of money, whether arising by reason of an extension of credit, loan, guaranty, indemnification, or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term includes, without limitation, all interest charges, expenses, fees, attorneys' fees and disbursements, paralegals' fees, and any other sum chargeable to the Company or any of its Subsidiaries under this Agreement or any other Loan Document. 20 "OFF BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase obligation or liability of such Person or any of its Subsidiaries with respect to accounts or notes receivable sold by such Person or any of its Subsidiaries, (b) any liability under any Sale and Leaseback Transactions which do not create a liability on the consolidated balance sheet of such Person (c) any liability under any financing lease or so-called "synthetic" lease transaction, or (d) any obligations arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheets of such Person and its Subsidiaries excluding leases that are not Capitalized Leases. "OPTION AGREEMENT" means the Option Agreement dated as of May 7, 1996 by and between the Company and Sofitam. "ORIGINAL CREDIT AGREEMENT" means that certain Credit Agreement, dated September 3, 1996, by and among the Borrowers, the financial institutions parties thereto as lenders and the Agent, as amended to but not including the date hereof. "ORIGINAL CURRENCY" is defined in Section 2.5.7. ------------- "PBGC" means the Pension Benefit Guaranty Corporation or any Person succeeding to the function thereof. "PAYMENT DATE" means the last Business Day of each calendar quarter. "PERCENTAGE" means, with respect to any Lender, (i) at any time prior to the Effective Date, the percentage obtained by dividing (A) such Lender's Commitments at such time (in each case, as adjusted from time to time in accordance with the provisions of this Agreement) by (B) the sum of the Aggregate Term Loan Commitment and the Aggregate Revolving Loan Commitment at such time and (ii) at any time after the Effective Date, the percentage obtained by dividing (A) the sum of such Lender's Term Loans and Revolving Loan Commitment (excluding, to avoid duplication, the Revolving Loan Commitment of any French Lending Installation that is an affiliate of such Lender) at such time (in each case, as adjusted from time to time in accordance with the provisions of this Agreement) by (B) the sum of the aggregate amount of all of the Term Loans and the Aggregate Revolving Loan Commitment at such time; provided, however, if all of the Commitments are terminated pursuant to the - -------- ------- terms of this Agreement, then "Percentage" means the percentage obtained by dividing (i) the sum of (a) such Lender's Term Loans and Revolving Loans, plus ---- (b) such Lender's share of the obligation to purchase participations in Swing Line Loans and Alternate Currency Loans, plus (c) such Lender's share of the ---- obligation to purchase participations in Letters of Credit by (ii) the sum of (a) the aggregate amount of all Term Loans, Revolving Loans plus (b) the ---- aggregate Dollar Amount of all Swing Line Loans and Alternate Currency Loans, plus (c) the aggregate outstanding amount of all Letters of Credit. - ---- "PERMITTED INDEBTEDNESS" means the ESOP Loans and the Permitted Subordinated Debt. 21 "PERMITTED LIEN" means a Lien permitted pursuant to Section 6.10. ------------ "PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal, exchange, refinancing or extension of any Indebtedness permitted by this Agreement that (i) does not exceed the aggregate principal amount (plus accrued interest and any applicable premium and associated fees and expenses) of the Indebtedness being replaced, renewed, refinanced or extended, (ii) does not have a Weighted Average Life to Maturity at the time of such replacement, renewal, refinancing or extension that is less than the Weighted Average Life to Maturity of the Indebtedness being replaced, renewed, refinanced or extended, and (iii) does not contain terms (including, without limitation, terms relating to security, amortization, interest rate, premiums, fees, subordination, blockage, standstills, covenants, event of default and remedies) less favorable in any case to the Company, any Borrowing Subsidiary, the Agent, the Lenders or the ESOP Lenders than those applicable to the Indebtedness being replaced, renewed, refinanced or extended. "PERMITTED SUBORDINATED DEBT" means Indebtedness evidenced by the Seller Subordinated Notes and Permitted Refinancing Indebtedness in respect thereof. "PERSON" means any corporation, limited liability company, natural person, firm, joint venture, partnership, trust, unincorporated organization, enterprise, government or any department or agency of any government. "PLAN" means any employee benefit plan defined in Section 3(3) of ERISA in respect of which the Company or any ERISA Affiliate is an "employer" as defined in Section 3(5) of ERISA or with respect to which the Company or any ERISA Affiliate has any potential liability. "PLEDGE AGREEMENTS" means the Company Pledge Agreements, the Note Pledge Agreements, the TIC Pledge Agreements, the Gasboy Pledge Agreement, and the Tokheim Sofitam Pledge Agreement. "PRIME RATE" means, on any day, the highest "prime rate" of interest quoted by The Wall Street Journal as the "base rate on corporate loans at large U.S. ----------------------- money center commercial banks" on such day or, if The Wall Street Journal is not ----------------------- published on such day, the then most recent day of publication); provided, -------- however, that in the event that The Wall Street Journal ceases quoting a "prime - ------- ----------------------- rate" of the type described, "Prime Rate" means, on any day, the highest per annum rate of interest then most recently quoted as the "Bank Prime Loan" rate for "This week" in Statistical Release H.15 (519) published from time to time by the Federal Reserve Board or any successor publication of the Board of Governors of the Federal Reserve System. "PROPERTY" of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person. "PURCHASERS" is defined in Section 13.3.1. -------------- 22 "QUALIFYING BANK" means: (a) in the case of a Lender which is not a Purchaser, a "bank" as defined in section 840A of the Income and Corporation Taxes Act 1988 of the United Kingdom which, at the time when the interest is paid, is within the charge to United Kingdom corporation tax as respects interest receivable by it under or pursuant to this Agreement; and (b) in the case of a Purchaser, a person who, at the time when the interest is paid, is within the charge to United Kingdom corporation tax as respects interest receivable by it under or pursuant to this Agreement. "RATE HEDGING OBLIGATIONS" of a Person means any and all net obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all agreements, devices or arrangements designed to protect at least one of the parties thereto from the fluctuations of interest rates, exchange rates or forward rates applicable to such party's assets, liabilities or exchange transactions, including, but not limited to, dollar-denominated or cross- currency interest rate exchange agreements, forward currency exchange agreements, interest rate cap or collar protection agreements, forward rate currency or interest rate options, puts and warrants, or any similar derivative transactions and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any of the foregoing. "RECEIVABLE(S)" means and includes all of the Company's and its Subsidiaries' presently existing and hereafter arising or acquired accounts, accounts receivable, and all present and future rights of the Company and its Subsidiaries to payment for goods sold or leased or for services rendered (except those evidenced by instruments or chattel paper), whether or not they have been earned by performance, and all rights in any merchandise or goods which any of the same may represent, and all rights, title, security and guaranties with respect to each of the foregoing, including, without limitation, any right of stoppage in transit. "REGULATION D" means Regulation D of the Board of Governors of the Federal Reserve System from time to time in effect and shall include any successor or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System. "REGULATION T" means Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by and to brokers and dealers of Securities for the purpose of purchasing or carrying margin stock (as defined therein). "REGULATIONS U AND X" means Regulations U and X of the Board of Governors of the Federal Reserve System from time to time in effect and shall include any successor or other 23 regulations or official interpretations of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System. "REIMBURSEMENT OBLIGATION" is defined in Section 2.6.3. ------------- "RENTALS" means and includes all fixed rents (including as such all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the property) payable by the Company or a Subsidiary, as lessee or sublessee under a lease of real or personal property which is not a Capitalized Lease, but shall be exclusive of any amounts required to be paid by the Company or a Subsidiary (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges. Fixed rents under any so-called, "percentage leases" shall be computed solely on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues. "REPORTABLE EVENT" means any of the events described in Section 4043 of ERISA for which the 30-day notice requirement has been waived by regulation (other than events described in ERISA (S)4043(c)(1) or (5)). "REQUEST FOR A NEW ALTERNATE CURRENCY FACILITY" shall have the meaning ascribed thereto in Section 2.1.4(ii). ----------------- "REQUIRED LENDERS" means Lenders having, in the aggregate, Percentages greater than fifty percent (50%); provided, however, that in the event any of -------- ------- the Lenders shall have failed to fund its Revolving Loan Percentage of any Revolving Loan requested by any Borrower, any participation in any Letter of Credit, any participation in any Alternate Currency Loan pursuant to Section ------- 2.1.4(v), or any refunding of or participation in any Swing Loan which such - -------- Lenders are obligated to fund under the terms of this Agreement and any such failure has not been cured, then for so long as such failure continues, "REQUIRED LENDERS" means Lenders (excluding all Lenders whose failure to fund their respective Revolving Loan Percentages of such Revolving Loans or purchase such participation has not been cured) whose Percentages exceed fifty percent (50%) of the aggregate Percentages of such non-defaulting Lenders; provided, -------- further, however, that, if the Commitments have been terminated pursuant to the - ------- ------- terms of this Agreement, "REQUIRED LENDERS" means Lenders (without regard to such Lenders' performance of their respective obligations hereunder) whose aggregate ratable shares (stated as a percentage) of the aggregate outstanding principal balance of all Loans and L/C Obligations are greater than fifty percent (50%). "REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount by which the Maximum Revolving Credit Amount at such time exceeds the Revolving Credit Obligations at such time. "REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of (i) the Dollar Amount of the aggregate unpaid principal balance of the Revolving Loans at such time, plus (ii) the ---- 24 Dollar Amount of the outstanding principal amount of the Swing Loan Obligations at such time, plus (iii) the Dollar Amount of the L/C Obligations at such time ---- plus (iv) the Dollar Amount of the outstanding principal amount of the Alternate Currency Loans at such time. "REVOLVING LOAN" is defined in Section 2.1.1. ------------- "REVOLVING LOAN COMMITMENT" means, for each Lender, the obligation of the Lender to make Revolving Loans to the Borrowers, to purchase participations in Letters of Credit and to participate in Swing Loans and Alternate Currency Loans pursuant to Section 2.1.4 not exceeding the amount set forth opposite the name ------------- of such Lender under the heading "Revolving Loan Commitment" on Schedule I ---------- hereof or as set forth in an applicable Assignment Agreement in the form of Exhibit B hereto received by the Agent under the terms of Section 13.3, as such - --------- ------------ amount may be modified from time to time pursuant to the terms of this Agreement or to give effect to any applicable assignment and acceptance. "REVOLVING LOAN PERCENTAGE" means, with respect to any Lender, the percentage obtained by dividing (A) the then aggregate amount of such Lender's Revolving Loan Commitment (as adjusted from time to time in accordance with the provisions of this Agreement) by (B) the Aggregate Revolving Loan Commitment at such time; provided, however, if all of the Commitments are terminated pursuant -------- ------- to the terms of this Agreement, then "Revolving Loan Percentage" means the percentage obtained by dividing (i) the sum of (a) the Dollar Amount of such Lender's Revolving Loans, plus (b) such Lender's share of the obligation to ---- purchase participations in Swing Line Loans and Alternate Currency Loans, plus ---- (c) such Lender's share of the obligation to purchase participations in Letters of Credit by (ii) the sum of (a) the aggregate Dollar Amount of all Revolving Loans, plus (b) the aggregate Dollar Amount of all Swing Loans and Alternate ---- Currency Loans, plus (c) the aggregate outstanding Dollar Amount of all Letters ---- of Credit. "REVOLVING LOAN TERMINATION DATE" means September 30, 2004. "REVOLVING NOTES" means the Amended and Restated Revolving Notes executed by the Company, the Subsidiaries listed on Schedule 1.1.2, and any other -------------- Borrowing Subsidiaries, in favor of the Lenders evidencing the Revolving Loans and the Revolving Loan Commitment, including any amendment, restatement, modification, renewal or replacement of such Revolving Note. "S&P" means Standard and Poor's Ratings Group, a division of The McGraw- Hill Companies, Inc., or any rating agency which is generally recognized as a successor thereto. "SALE AND LEASEBACK TRANSACTION" means any sale or other transfer of Property by any Person with intent to lease such Property as lessee pursuant to a Capitalized Lease . "SCHLUMBERGER" means Schlumberger Limited, a corporation organized under the laws of the Netherlands Antilles. 25 "SCHLUMBERGER ACQUISITION" means the Acquisition of the fuel dispenser, manufacturing, sales and service business units of Schlumberger by the Company or its Subsidiaries pursuant to the Acquisition Agreement. "SECTION" means a numbered section of this Agreement, unless another document is specifically referenced. "SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all Rate Hedging Obligations, if any, payable by the Company or any of its Subsidiaries to one or more of the Lenders or an Affiliate of a Lender. "SECURITY" shall have the same meaning as in Section 2(1) of the Securities Act of 1933, as amended. "SECURITY AGREEMENT" means the Amended and Restated Security Agreement dated as of September 30, 1998 by and between the Company and the Agent. "SELLER EQUITY INTERESTS" means the Warrants exercisable for shares of the common stock of Tokheim issued by Tokheim to Schlumberger Limited in payment of a portion not less than $20,000,000 of the purchase price for the Schlumberger Acquisition and any other Equity Interests issued to Schlumberger Limited or any other Person by Tokheim in payment of, or to finance payment of, a portion of the purchase price for the Schlumberger Acquisition. "SELLER JUNIOR SUBORDINATED NOTE" means that certain Junior Subordinated Note in the original principal amount of not less than $40,000,000 and any additional principal amount accruing from the payment of interest, originally issued to Schlumberger Limited by Tokheim in payment of a portion of not less than $40,000,000 of the purchase price for the Schlumberger Acquisition as amended, restated or otherwise modified from time to time to time in accordance with Section 6.27. ------------ "SELLER SENIOR SUBORDINATED NOTE" means that certain Senior Subordinated Note in the original principal amount of not less than $170,000,000 and any additional principal amount accruing from the payment of interest, originally issued to Schlumberger Limited by Tokheim in payment of a portion of not less than $170,000,000 of the purchase price for the Schlumberger Acquisition as amended, restated or otherwise modified from time to time to time in accordance with Section 6.27. ------------ "SELLER SUBORDINATED NOTES" means the Seller Senior Subordinated Note, the Seller Junior Subordinated Note and any other subordinated note issued to Schlumberger Limited or any other Person by Tokheim in payment of, or to finance payment of, a portion of the purchase price for the Schlumberger Acquisition in each case as amended, restated or otherwise modified from time to time in accordance with Section 6.27 and shall include the Roll-Over Notes (as defined ------------ in the Seller Senior Subordinated Notes). 26 "SENIOR LEVERAGE RATIO" means the ratio of (i) the sum of (w) Indebtedness of the Company and its Consolidated Subsidiaries (including letters of credit and guaranties) on a consolidated basis, minus (x) the aggregate outstanding ----- principal amount of the Seller Subordinated Notes and any subordinated notes issued as Permitted Refinancing Indebtedness, minus (y) the portion of any notes ----- issued by the Company or any of its Subsidiaries in lieu of the cash payment of interest, in each case as of the date of determination to (ii) EBITDA. The Senior Leverage Ratio shall be calculated, in each case, determined as of the last day of each fiscal quarter beginning with the fiscal quarter ending February 28, 1999 based upon (A) for Indebtedness, as of the last day of each such fiscal quarter; and (B) for EBITDA, the actual amount for the four-quarter period ending on such day; provided, however, that for the first three of such -------- ------- fiscal quarters, the computation of EBITDA will be calculated on an annualized year-to-date basis for the period commencing with the Effective Date through the end of such fiscal quarter using the following formula: (x) for the first such fiscal quarter, EBITDA shall be multiplied by a factor of four (4); (y) for the second such fiscal quarter, EBITDA for two quarters shall be multiplied by a factor of two (2); and (z) for the third such fiscal quarter, EBITDA for the three quarters shall be multiplied by a factor of one and one-third (1.333). "SINGLE EMPLOYER PLAN" means a Plan maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group. "SOFITAM" means Sofitam S.A., a societe anonyme organized under the laws of the Republic of France and its successors and permitted assigns. "SOFITAM ACQUISITION" means the Acquisition of certain subsidiaries of Sofitam by the Company or its Subsidiaries pursuant to the Option Agreement. "STERLING" means the lawful currency of England. "SUBJECT COUNTRY" is defined in Section 5.17. ------------ "SUBSIDIARY" of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, limited liability company, association, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. Unless otherwise expressly provided, all references herein to a "SUBSIDIARY" shall mean a Subsidiary of the Company. "SUBSIDIARY GUARANTY" means the Amended and Restated Guaranty executed by each of the direct and indirect Wholly-Owned domestic Subsidiaries of the Company in favor of the Agent for the benefit of the Lenders and the Holders of Secured Obligations dated as of September 30, 1998, as amended, restated or otherwise modified from time to time. 27 "SUBSIDIARY SECURITY AGREEMENT" means the Amended and Restated Subsidiary Security Agreement executed by each of the direct and indirect Wholly-Owned domestic Subsidiaries of the Company in favor of the Agent for the benefit of the Lenders and the Holders of Secured Obligations dated as of September 30, 1998, as amended, restated or otherwise modified from time to time. "SUBSTANTIAL PORTION" means, with respect to the Property of the Company and its Subsidiaries, Property which represents more than 10% of the consolidated assets of the Company and its Subsidiaries as would be shown in the consolidated financial statements of the Company and its Subsidiaries as at the beginning of the twelve-month period ending with the month in which such determination is made. "SWING LOAN" is defined in Section 2.1.2(i). ---------------- "SWING LOAN LENDER" means, with respect to Swing Loans made in Dollars, NBD Bank, N.A., or one of its affiliates and with respect to Swing Loans made in specified Agreed Currencies, a bank to be agreed upon by the Company, the Agent and the Swing Loan Lender. "SWING LOAN NOTES" means promissory notes duly executed by each of the Borrowers, and payable to the order of each of the Swing Loan Lenders in the amount set forth opposite the name of such Swing Loan Lender under the heading "Maximum Swing Loan Obligation" on Schedule I, including any amendment, ---------- restatement, modification, renewal or replacement of such Swing Loan Note. "SWING LOAN OBLIGATIONS" means, at any time, the outstanding Obligations in connection with the Swing Loans. "TERMINATION DATE" means the earlier of (i) the Revolving Loan Termination Date and (ii) the date the Loans are accelerated in accordance with this Agreement. "TERMINATION EVENT" means (i) a Reportable Event with respect to any Benefit Plan; (ii) the withdrawal of the Company or any ERISA Affiliate from a Benefit Plan during a plan year in which the Company or such ERISA Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the cessation of operations which results in the termination of employment of 20% of Benefit Plan participants who are employees of the Company or any ERISA Affiliate; (iii) the imposition of an obligation on the Company or any ERISA Affiliate under Section 4041 of ERISA to provide affected parties written notice of intent to terminate a Benefit Plan in a distress termination described in Section 4041(c) of ERISA; (iv) the institution by the PBGC or any similar foreign governmental authority of proceedings to terminate a Benefit Plan or a Foreign Pension Plan; (v) any event or condition which might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan; (vi) a foreign governmental authority shall appoint or institute proceedings to appoint a trustee to administer any 28 Foreign Pension Plan; or (vii) the partial or complete withdrawal of the Company or any ERISA Affiliate from a Multiemployer Plan or a Foreign Pension Plan. "TERM LOAN" is defined in Section 2.1.3(i) hereof. ---------------- "TERM LOAN COMMITMENT" means, for each Lender, the obligation of such Lender to make its Term Loan pursuant to the terms and conditions of this Agreement, and which shall not exceed the principal amount set forth on Exhibit ------- A to this Agreement opposite its name thereon under the heading "Term Loan - - Commitment", as such amount may be modified from time to time pursuant to the terms hereof. "TERM LOAN LENDER" means any Lender with a Term Loan Commitment. "TERM LOAN PERCENTAGE" means, with respect to any Lender, (i) at any time prior to the Effective Date, the percentage obtained by dividing (A) such Lender's Term Loan Commitment by (B) the aggregate Term Loan Commitment for all Lenders at such time and (ii) at any time after the Effective Date, the percentage obtained by dividing (A) the sum of such Lender's Term Loans at such time by (B) the sum of the aggregate amount of all of the Term Loans at such time. "TERM LOAN TERMINATION DATE" means September 30, 2004. "TERM NOTE" means a promissory note duly executed by the Company and payable to the order of a Lender in the amount of its Term Loan Commitment, including any amendment, restatement, modification, renewal or replacement of such Term Note. "TIC" means Tokheim Investment Corp., a Texas corporation, and its successors and assigns. "TIC PLEDGE AGREEMENTS" means each of (i) that certain Amended and Restated Pledge Agreement dated as of September 30, 1998 executed by TIC in favor of the Agent for the benefit of the Holders of Secured Obligations, (ii) that certain Shares Account Pledge Agreement dated as of September 30, 1998 executed by TIC in favor of the Agent for the benefit of the Holders of Secured Obligations, and (iii) that certain Deed of Pledge of Registered Shares In A Private Company with Limited Liability dated as of September 30, 1998 executed by TIC in favor of the Agent for the benefit of the Holders of Secured Obligations, and (iv) that certain Deed of Pledge dated as of September 30, 1998 executed by TIC in favor of the Agent for the benefit of the Holders of Secured Obligations, in each case, as amended, restated or otherwise modified from time to time. "TOKHEIM BV" means Beroc Investments, a corporation organized under the laws of The Kingdom of the Netherlands. 29 "TOKHEIM LIMITED" means Tokheim Sofitam UK Limited, a corporation organized under Scottish law. "TOKHEIM SOFITAM" means Tokheim Sofitam Applications S.A., a societe anonyme organized pursuant to the laws of the Republic of France. "TOKHEIM SOFITAM CHARGE" means that certain Agreement for Charge over the going concern of Tokheim Sofitam executed by Tokheim Sofitam in favor of the Agent for the benefit of the Holders of Secured Obligations, as amended, restated or otherwise modified from time to time. "TOKHEIM SOFITAM PLEDGE AGREEMENT" means that certain Pledge Agreement executed by Tokheim Sofitam S.A. in favor of the Agent for the benefit of the Holders of Secured Obligations, as amended, restated or otherwise modified from time to time. "TOKHEIM SOFITAM RECEIVABLE ASSIGNMENT" means that certain Master Assignment for trade receivables of Tokheim Sofitam executed by Tokheim Sofitam in favor of the Agent for the benefit of the Holders of Secured Obligations, as amended, restated or otherwise modified from time to time. "TYPE" means, with respect to any Loan or Advance, its nature as an Alternate Base Rate Advance or Loan or Eurocurrency Advance or Loan. "UK BORROWING SUBSIDIARIES" means (i) the Subsidiaries listed on Schedule -------- 1.1.2 and identified as "UK Borrowing Subsidiaries" thereon and (ii) each other - ----- Wholly-Owned Subsidiary of the Company organized under the laws of England or Scotland and added as a Borrowing Subsidiary pursuant to the terms of Section ------- 2.5.14 of this Agreement, and, in each case, their permitted successors and - ------ assigns, including a debtor-in-possession on behalf of such UK Borrowing Subsidiary. "UNFUNDED LIABILITIES" means the amount (if any) by which the present value of all currently accrued vested nonforfeitable benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined on an ongoing Plan basis as set forth in the then most recent actuarial valuation for such Plans. "UNMATURED DEFAULT" means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default. "U.S. GAAP" means accounting principles generally accepted in the United States of America as recommended by the Financial Accounting Standards Board as in effect as of the Effective Date. "WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any Indebtedness at any date, the number of years obtained by dividing (i) the sum of the products obtained by multiplying 30 (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one- twelfth) that will elapse between such date and the making of such payment, by (ii) the then outstanding principal amount of such Indebtedness. "WHOLLY-OWNED," when used in connection with any Subsidiary, means (i) any Subsidiary all of the outstanding voting securities of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited liability company, association, joint venture or similar business organization 100% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. "YEAR 2000 ISSUES" means, with respect to any Person, anticipated costs, problems and uncertainties associated with the inability of certain computer applications and imbedded systems to effectively handle data, including dates, on and after January 1, 2000, as it affects the business, operations, and financial condition of such Person, and such Person's customers, suppliers and vendors. The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. 1.2. Accounting Terms and Determinations. Unless otherwise specified ----------------------------------- herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with U.S. GAAP. Unless otherwise set forth in this Agreement, all financial covenant calculations (and the components thereof) shall be calculated after the elimination of minority interests in Consolidated Subsidiaries which are not Wholly-Owned Subsidiaries. 1.3. References to Subsidiaries. Unless otherwise specified herein, all -------------------------- references to the Subsidiaries herein shall include the French Borrowing Subsidiaries, the Dutch Borrowing Subsidiaries, the German Borrowing Subsidiaries, the UK Borrowing Subsidiaries and each of their Subsidiaries. 31 1.4. Rounding and Other Consequential Changes. Without prejudice to any ---------------------------------------- method of conversion or rounding prescribed by any legislative measures of the Council of the European Union, each reference in this Agreement to a fixed amount or to fixed amounts in a National Currency Unit to be paid to or by the Agent shall be replaced by a reference to such comparable and convenient fixed amount or fixed amounts in the Euro as the Agent may from time to time specify unless such National Currency Unit remains available and the applicable Borrower and the Agent agree to use such National Currency Unit instead of the Euro. ARTICLE II: THE TERM LOAN AND REVOLVING LOAN FACILITIES ------------------------------------------- 2.1. The Revolving Loan, Swing Loan and Term Loan Facilities. ------------------------------------------------------- 2.1.1. Revolving Loans. (i) Upon the satisfaction of the applicable --------------- conditions precedent set forth in Sections 4.1, 4.2 and 4.3, from and including ------------ --- --- the date of this Agreement and prior to the Termination Date, each Lender severally and not jointly agrees, on the terms and conditions set forth in this Agreement (including, without limitation, the terms and conditions of Section ------- 2.5.11 and Section 8.1 relating to the reduction, suspension or termination of - ------ ----------- the Aggregate Revolving Loan Commitment), to make revolving loans (each individually, a "REVOLVING LOAN" and, collectively, the "REVOLVING LOANS") in Dollars, or, after the Agent has concluded that the syndication process has been completed with Lenders that can lend the Agreed Currencies or the Revolving Loan restructured to provide a tranche to be provided by Lenders that can provide the Agreed Currencies, one or more other Agreed Currencies to the applicable Borrower from time to time in a Dollar Amount not to exceed such Lender's Revolving Loan Percentage of Revolving Credit Availability at such time; provided, that each Revolving Loan made on or after the Euro Implementation Date - -------- shall be made in the Euro if such Revolving Loan would, but for this provision, be capable of being made in either the Euro or the National Currency Unit requested by the applicable Borrower unless otherwise consented to by the Agent. Nothing herein shall obligate any Lender other than the Swing Loan Lenders to make Swing Loans. Subject to the terms of this Agreement (including, without limitation, the terms and conditions of Section 2.5.11 and 8.1 relating to the -------------- --- reduction, suspension or termination of the Aggregate Revolving Loan Commitment), a Borrower may borrow, repay and reborrow Revolving Loans at any time prior to the Termination Date. The Revolving Loans made on the Effective Date or on or before the third (3d) Business Day thereafter shall initially be Alternate Base Rate Loans and thereafter may be continued as Alternate Base Rate Loans or converted into Eurocurrency Loans in the manner provided in Section ------- 2.2.3. Unless earlier terminated in accordance with the terms and conditions of - ----- this Agreement, the Revolving Loan Commitments of the Lenders to lend hereunder shall expire on the Termination Date. The proceeds of all Revolving Loans made under this Section 2.1.1 shall be used first to repay principal of and accrued ------------- and unpaid interest on any outstanding Swing Loans advanced to any Borrower, and thereafter in accordance with the terms of Section 6.2. All outstanding ----------- Revolving Loans shall be paid in full by the applicable Borrower on the Termination Date. 32 (ii) Borrowing Notice. When the applicable Borrower desires to borrow ---------------- under this Section 2.1.1, a Financial Officer shall deliver to the Agent a ------------- Borrowing Notice, signed by it, specifying that the Borrower is requesting a Revolving Loan pursuant to this Section 2.1.1. Any Borrowing Notice given ------------- pursuant to this Section 2.1.1 shall be irrevocable. ------------- (iii) Maximum Revolving Credit Amount. At no time shall the Revolving ------------------------------ Credit Obligations exceed the Maximum Revolving Credit Amount. (iv) Making of Revolving Loans. Promptly after receipt of the Borrowing ------------------------- Notice under Section 2.1.1(ii) in respect of Revolving Loans, the Agent shall ----------------- notify each Lender with a Revolving Loan Commitment greater than zero by telex or telecopy, or other similar form of transmission, of the proposed Advance. Each Lender with a Revolving Loan Percentage greater than zero shall make available its Revolving Loan in accordance with the terms of Section 2.5.1. The ------------- Agent will make the funds so received from the Lenders available to the applicable Borrower in accordance with the terms of Section 2.5.1 and shall ------------- disburse such proceeds in accordance with the Company's disbursement instructions set forth in such Borrowing Notice. The failure of any Lender to deposit the amount described above with the Agent on the applicable Borrowing Date shall not relieve any other Lender of its obligations hereunder to make its Revolving Loan on such Borrowing Date. 2.1.2 Swing Loans. (i) Subject to the terms and conditions set forth in ----------- this Agreement, the Swing Loan Lenders shall make loans (the "Swing Loans") to the Company in Dollars or to any of the Non-Domestic Borrowing Subsidiaries in French Francs or such other currencies that the Swing Loan Lenders have agreed in writing to provide such Borrowing Subsidiary, from time to time prior to the Termination Date, up to an aggregate principal amount at any one time outstanding which shall not exceed the least of (i) $10,000,000 for all Swing Loans by all Swing Loan Lenders, (ii) the amount by which the Maximum Revolving Credit Amount at such time exceeds the Revolving Credit Obligations at such time and (iii) as to each Swing Loan Lender, the amount set forth opposite the name of such Lender under the heading "Maximum Swing Loan Obligation" on Schedule I. All Swing Loans shall be subject to all the terms and conditions applicable to Revolving Loans, except that (x) each Swing Loan shall be in a minimum amount of $500,000 or the Approximate Equivalent Amount of an Agreed Currency and integral multiples of $100,000 or the Approximate Equivalent Amount of an Agreed Currency in excess of that amount and (y) all interest on the Swing Loans made by a Swing Loan Lender shall be payable to the Agent for the account of such Swing Loan Lender. The Swing Loan Lenders shall not make any Swing Loan in the period commencing on the first Business Day after receipt of written notice from any Lender (I) that one or more of the applicable conditions precedent contained in Article IV will not on such date be satisfied until such Lender confirms that - ---------- such condition precedent has been met, or (II) that a Default or Unmatured Default has occurred, and ending when such Default or Unmatured Default no longer exists and the Swing Loan Lenders shall not otherwise be required to determine that, or take notice whether, (x) the applicable conditions precedent set forth in Article IV hereof have been satisfied or (y) a Default or Unmatured ---------- Default has occurred and is continuing. In no event shall the number of Swing Loans made in Dollars outstanding at any time be greater than three. In no 33 event shall the number of Swing Loans made in an Agreed Currency outstanding at any time be greater than three. (ii) Borrowing Notice. When a Borrower desires to borrow under this ---------------- Section 2.1.2, a Financial Officer shall deliver to the applicable Swing Loan - ------------- Lender and the Agent a Borrowing Notice, signed by it, no later than 1:00 p.m. (Indianapolis time) if such Swing Loan is to be denominated in Dollars and no later than 12:00 noon local time in the city of the applicable Swing Loan Lender's applicable Eurocurrency Payment Office three (3) Business Days' prior to the Borrowing Date if such Swing Loan is to be denominated in an Agreed Currency on the applicable Borrowing Date which Borrowing Notice shall indicate that the Borrower is requesting a Swing Loan pursuant to this Section 2.1.2. ------------- Such Borrowing Notice shall specify (i) the date of the proposed Swing Loan (which shall be a Business Day, and with respect to Swing Loans denominated in Dollars may be the same Business Day as the date of such Borrowing Notice and with respect to Swing Loans denominated in the applicable Agreed Currency will be three Business Days' following the date of such Borrowing Notice, or such shorter period as may be agreed to by the applicable Swing Loan Lender), (ii) the amount of the proposed Swing Loan, (iii) the Swing Loan Lender or Swing Loan Lenders requested to make such Swing Loan and (iv) instructions for the disbursement of the proceeds of the proposed Swing Loan. Any Borrowing Notice given pursuant to this Section 2.1.2 ------------- shall be irrevocable. (iii) Making of Swing Loans. If a Swing Loan is to be denominated in --------------------- Dollars, the applicable Swing Loan Lender shall promptly deposit the amount of the Swing Loan requested by the applicable Borrower from it with the Agent in immediately available funds on the date of the proposed Swing Loan applicable thereto. Subject to the fulfillment of the applicable conditions precedent set forth in Article IV, the Agent will promptly make the proceeds of such amounts ---------- received by it available to the applicable Borrower at the Agent's office in Indianapolis, Indiana. If such Swing Loan is denominated in an Agreed Currency, the applicable Swing Loan Lender shall notify the Agent of the Borrower's request and, subject to the fulfillment of the applicable conditions precedent set forth in Article IV, deposit the amount of the Swing Loan requested in such ---------- account as the applicable Borrower shall designate in the Swing Loan Lender's Eurocurrency Payment Office, provided, however, that with respect to any Swing Loan to be made available to any of the Borrowing Subsidiaries, such funds shall be made available by the applicable Swing Loan Lender's Lending Installation. Subject to the terms of this Agreement (including, without limitation, the terms and conditions of Section 2.5.11 and Section 8.1 relating to the reduction, -------------- ----------- suspension or termination of the Aggregate Revolving Loan Commitment), the Borrowers may borrow, repay and reborrow Swing Loans at any time prior to the Termination Date. Unless earlier terminated in accordance with the terms and conditions of this Agreement, the obligations of the Swing Loan Lenders to make Swing Loans hereunder shall expire on the Termination Date. (iv) Repayment of Swing Loans. The applicable Borrower shall repay each ------------------------ Swing Loan on the earlier to occur of (a) the date that is the Termination Date and (b) the date that is five (5) days after the making of such Swing Loan and if, for any reason the Dollar Amount of the Swing 34 Loans exceed $10,000,000 in the aggregate, the applicable Borrowers or the Company on behalf of such Borrowers shall immediately make a repayment of the Swing Loans (allocated to all of the outstanding Swing Loans in the order of their maturity beginning with the Swing Loan which has been outstanding longest) such that the aggregate Dollar Amount of the Swing Loans does not exceed $10,000,000; provided, however, that nothing in this Section 2.1.2 shall be -------- ------- ------------- construed as limiting or modifying the obligation of any Borrower to repay any or all of the outstanding Swing Loans at any earlier time in accordance with the terms of this Agreement. Outstanding Swing Loans may be repaid from the proceeds of Loans or from the proceeds of Swing Loans. Any repayment of the Swing Loans shall be accompanied by accrued interest thereon and shall be in the minimum Dollar Amount of $250,000 and increments of $50,000 in excess thereof. If a Borrower at any time fails to repay a Swing Loan on the applicable date when due, such Borrower shall be deemed to have elected to borrow an Alternate Base Rate Advance consisting of Revolving Loans from the Lenders, as of such due date equal in amount to the unpaid amount of the Swing Loans, and interest thereon, due on such due date. Such Advance shall be made (notwithstanding the minimum amount of Advances as provided in Section 2.5.2) as of such due date, ------------- automatically, without further notice and without any requirement to satisfy the conditions precedent otherwise applicable to an Alternate Base Rate Advance if such Borrower shall have failed to make such payment to the Agent for the account of the applicable Swing Loan Lender prior to such time. The proceeds of any such Alternate Base Rate Advance shall be used to repay the Swing Loans and interest thereon. If, for any reason, a Borrower fails to repay a Swing Loan on the applicable due date and, for any reason, the Lenders with a Revolving Loan Percentage greater than zero are unable to make or have no obligation to make an Advance, then such Swing Loans shall bear interest from and after such day, until paid in full, at the interest rate then applicable to Alternate Base Rate Advances. (v) Participation in Swing Loans. Immediately upon the making of each ---------------------------- Swing Loan, each Lender with a Revolving Loan Percentage greater than zero shall be deemed to have automatically, irrevocably and unconditionally purchased and received from the applicable Swing Loan Lender an undivided interest and participation in and to such Swing Loan and the obligations of Borrower in respect thereof in an amount equal to the amount of such Swing Loan multiplied by such Lender's Revolving Loan Percentage. The Agent will notify each Lender promptly if any Borrower fails to pay the Agent for the account of the applicable Swing Loan Lender amounts required to be paid by it under this Section 2.1.2 with respect to any Swing Loan and each Lender with a Revolving - ------------- Loan Percentage greater than zero shall promptly and unconditionally pay to the Agent for the account of the applicable Swing Loan Lender, in immediately available funds an amount equal to such Lender's percentage (as described above) of the amount due from the Borrower with respect thereto (without duplication as to amounts funded as Revolving Loans under clause (d) used to repay such Swing ---------- Loans). The obligation of each Lender to pay the Agent for the account of the Swing Loan Lenders under this Section 2.1.2 shall be unconditional, continuing, ------------- irrevocable and absolute. In the event that any Lender fails to make payment to the Agent of any amount due under this Section 2.1.2, the Agent shall be ------------- entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Lender hereunder until the Agent on behalf of the Swing Loan Lenders receives such payment from such Lender or such obligation is otherwise fully 35 satisfied; provided, however, that nothing contained in this sentence shall -------- ------- relieve such Lender of its obligation to reimburse the Agent such amount in accordance with this Section 2.1.2. If any amount required to paid under ------------- this Section is not in fact made available to the Agent for remittance to the Swing Loan Lenders as described above by any Lender, such Swing Loan Lenders shall be entitled to recover such amount on demand from such Lender, together with accrued interest thereon from the date of demand therefor on any Business Day until the date such amount is paid to the Agent by such Lender, for one (1) Business Day at the Federal Funds Effective Rate and thereafter at the interest rate applicable to such Swing Loans. The failure of any Lender to pay such amount to the Agent shall not relieve any other Lender of its obligation to make the payment to be made by it. Upon the purchase by each Lender of a participation in any Swing Loans pursuant to this Section 2.1.2, such Lender ------------- shall be deemed to have made an Alternate Base Rate Loan under Section 2.1.2 in ------------- the amount of such participation, and such Swing Loans shall be deemed to have been repaid in such amount. 2.1.3. Term Loans. (i) Amount of Term Loans. Subject to the terms and ---------- -------------------- conditions set forth in this Agreement, each Term Loan Lender on the Effective Date severally and not jointly agrees to make on the Effective Date, a term loan, in Dollars to the Company and/or Gasboy in an aggregate amount equal to such Lender's Term Loan Commitment (each individually, a "TERM LOAN" and, collectively, the "TERM LOANS"). All Term Loans shall be made by the Term Loan Lenders on the Effective Date simultaneously and proportionately to their respective Term Loan Percentages, it being understood that no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Term Loan hereunder nor shall the Term Loan Commitment of any Lender be increased or decreased as a result of any such failure. (ii) Borrowing Notice. Each of the Company and Gasboy shall deliver to ---------------- the Agent a Borrowing Notice, signed by it, on the Effective Date. Such Borrowing Notice shall specify (a) the aggregate amount of the Term Loans being requested by each of the Company and Gasboy and (b) instructions for the disbursement of the proceeds of such Term Loans. The Term Loans shall initially be Alternate Base Rate Loans and thereafter may be continued as Alternate Base Rate Loans or converted into Eurocurrency Loans in the manner provided in Section 2.2.3 and subject to the other conditions and limitations therein set - ------------- forth and set forth in this Article II. Any Borrowing Notice given pursuant to ---------- this Section 2.1.3(ii) shall be irrevocable. ----------------- (iii) Making of Term Loans. Promptly after receipt of the Borrowing -------------------- Notice under Section 2.1.3(ii) in respect of the Term Loans, the Agent shall ----------------- notify each Lender by telex or telecopy, or other similar form of transmission, of the proposed Advance. Each Lender shall deposit an amount equal to its Term Loan Percentage of the Term Loans with the Agent at its office in Indianapolis, Indiana, in immediately available funds, on the Effective Date, as specified in the Borrowing Notice. Subject to the fulfillment of the conditions precedent set forth in Sections 4.1 and 4.2, as applicable, the Agent shall make the ------------ --- proceeds of such amounts received by it available to the Company or Gasboy, as applicable, at the Agent's office in Indianapolis, Indiana on the Effective Date and shall disburse such proceeds in accordance with the Company's and/or Gasboy's disbursement instructions set forth in such Borrowing Notice. The failure of any Lender to deposit 36 the amount described above with the Agent on the Effective Date shall not relieve any other Lender of its obligations hereunder to make its Term Loan on the Effective Date. (iv) Repayment of the Term Loans. The Term Loans shall be repaid in --------------------------- twenty-two (22) installments, payable on the last Business Day of each fiscal quarter of the Company, commencing on November 30, 1998 and continuing thereafter as prescribed below until the Term Loan Termination Date, and the Term Loans shall be permanently reduced by the amount of each installment on the date payment thereof is made hereunder. The principal amount of the installments may be paid by either Tokheim or Gasboy at their discretion provided that each of the installments shall be in the aggregate amounts set forth below:
TERM LOAN INSTALLMENT DATE INSTALLMENT AMOUNT ---------------- ------------------ February 28, 2000 $ 1,875,000 May 31, 2000 $ 1,875,000 August 31, 2000 $ 1,875,000 November 30, 2000 $ 1,875,000 February 28, 2001 $ 2,500,000 May 31, 2001 $ 2,500,000 August 31, 2001 $ 2,500,000 November 30, 2001 $ 2,500,000 February 28, 2002 $ 3,125,000 May 31, 2002 $ 3,125,000 August 31, 2002 $ 3,125,000 November 30, 2002 $ 3,125,000 February 28, 2003 $ 3,750,000 May 31, 2003 $ 3,750,000 August 31, 2003 $ 3,750,000 November, 30, 2003 $ 3,750,000 February 29, 2004 $37,500,000 Term Loan Termination Date $37,500,000
Notwithstanding the foregoing, the final installment shall be in the amount of the then outstanding principal balance of the Term Loans. In addition, the then outstanding principal balance of the Term Loans, if any, shall be due and payable on the Term Loan Termination Date. No installment of any Term Loan shall be reborrowed once repaid. 37 (v) In addition to the scheduled payments on the Term Loans, the Company and Gasboy, as applicable, (a) may make the voluntary prepayments described in Section 2.5.3(A) for credit against the scheduled payments on the Term Loans - ---------------- pursuant to Section 2.5.3(B) and (b) shall make the mandatory prepayments ---------------- prescribed in Section 2.5.3(B) for credit against the scheduled payments on the ---------------- Term Loans pursuant to Section 2.5.3(B). ---------------- 2.1.4. Alternate Currency Loans. ------------------------ (i) Upon the satisfaction of the conditions precedent set forth in Sections 4.1, 4.2 and 4.3 hereof and set forth in the applicable Alternate - ------------ --- --- Currency Addendum, from and including the later of the date of this Agreement and the date of execution of the applicable Alternate Currency Addendum and prior to the Termination Date (unless an earlier termination date shall be specified in the applicable Alternate Currency Addendum), each applicable Alternate Currency Bank agrees, on the terms and conditions set forth in this Agreement and in the applicable Alternate Currency Addendum, to make Alternate Currency Loans under such Alternate Currency Addendum to the applicable Borrower party to such Alternate Currency Addendum from time to time in the applicable Alternate Currency, in an amount not to exceed each such Alternate Currency Bank's applicable Alternate Currency Commitment; provided, however, at no time -------- ------- shall the Dollar Amount of the outstanding principal amount of the Alternate Currency Loans for all Alternate Currencies exceed $80,000,000 other than as a result of currency fluctuations and then only to the extent permitted in Section ------- 2.5.3.(B)(i)(d); provided, further, at no time shall the Dollar Amount of the - --------------- Alternate Currency Loans for any specific Alternate Currency exceed the maximum amount specified as the maximum amount for such Alternate Currency in the applicable Alternate Currency Addendum other than as a result of currency fluctuations and then only to the extent permitted in Section 2.5.3.(B)(i)(d). ----------------------- Each Alternate Currency Loan under this Section 2.1.4. shall consist of ------------- Alternate Currency Loans made by each applicable Alternate Currency Bank ratably in proportion to such Alternate Currency Bank's respective Alternate Currency Percentage. Subject to the terms of this Agreement and the applicable Alternate Currency Addendum, the applicable Borrowers may borrow, repay and reborrow Alternate Currency Loans at any time prior to the Termination Date (unless an earlier termination date shall be specified in the applicable Alternate Currency Addendum). On the Termination Date (unless an earlier termination date shall be specified in the applicable Alternate Currency Addendum), the outstanding principal balance of the Alternate Currency Loans shall be paid in full by the applicable Borrower and prior to the Termination Date (unless an earlier termination date shall be specified in the applicable Alternate Currency Addendum) prepayments of the Alternate Currency Loans shall be made by the applicable Borrower if and to the extent required in Section 2.5.3.(B). ----------------- (ii) Borrowing Notice. When the applicable Borrower desires to borrow ---------------- under this Section 2.1.4., a Financial Officer shall deliver to the applicable ------------- Alternate Currency Agent a Borrowing Notice, signed by it, specifying that the Borrower is requesting an Alternate Currency Loan pursuant to this Section ------- 2.1.4. Any Borrowing Notice given pursuant to this Section 2.1.4. shall be - ----- ------------- irrevocable. 38 (iii) Additional Alternate Currency Commitments. The Company may, by ----------------------------------------- written notice to the Agent request the establishment of additional Alternate Currency Commitments in additional Alternate Currencies other than Deutsche Marks, provided the Dollar Amount of the aggregate amount of all of the Alternate Currency Commitments does not exceed $80,000,000 ("Request for a New ----------------- Alternate Currency Facility"). The Agent will promptly forward to the Lenders - --------------------------- any Request for a New Alternate Currency Facility received from the Company; provided each Lender shall be deemed not to have agreed to such request unless - -------- its written consent thereto has been received by the Agent within ten (10) Business Days from the date of such notification by the Agent to such Lender. In the event that sufficient Lenders consent to such Request for a New Alternate Currency Facility, upon execution of the applicable Alternate Currency Addendum and the other documents, instruments and agreements required pursuant to this Agreement and such Alternate Currency Addendum, the Alternate Currency Loans with respect thereto may be made. (iv) Termination. Except as otherwise required by applicable law, in ----------- no event shall the Alternate Currency Agent or Alternate Currency Banks have the right to accelerate the Alternate Currency Loans outstanding under any Alternate Currency Addendum or to terminate their commitments (if any) thereunder to make Alternate Currency Loans prior to the stated termination date in respect thereof, except that such Alternate Currency Agent and Alternate Currency Banks shall, in each case, have such rights upon an acceleration of the Loans and a termination of the Revolving Loan Commitments pursuant to Article VIII. ------------ (v) Statements. Each Alternate Currency Agent shall furnish to the ---------- Agent and the applicable Alternate Currency Banks, not less frequently than monthly, and at any other time at the reasonable request of the Agent, a statement setting forth the outstanding Alternate Currency Loans made and repaid during the period since the last such report under such Alternate Currency Addendum. (vi) Risk Participation. Immediately and automatically upon the ------------------ occurrence of an Event of Default under Section 7.2, 7.7 or 7.8, each Lender ----------- --- --- shall be deemed to have unconditionally and irrevocably purchased from each Alternate Currency Bank, without recourse or warranty, an undivided interest in and participation in each Alternate Currency Loan ratably in accordance with such Bank's Revolving Loan Percentage of the amount of such Loan, and immediately and automatically all Alternate Currency Loans shall be converted to and redenominated in Dollars equal to the Dollar Amount of each such Alternate Currency Loan determined as of the date of such conversion; provided, that to -------- the extent such conversion shall occur other than at the end of an Interest Period, the applicable Borrower shall pay to the Agent for the account of the applicable Alternate Currency Lenders, all losses and costs related thereto in accordance with Section 3.5. Each of the Lenders shall pay to the applicable ----------- Alternate Currency Bank not later than two (2) Business Days following a request for payment from such Alternate Currency Bank, in Dollars, an amount equal to the undivided interest in and participation in the Alternate Currency Loan purchased by such Lender pursuant to this Section 2.1.4(vi). In the event that ----------------- any Lender fails to make payment to the applicable Alternate Currency Bank of any amount due under this Section 2.1.4(vi), the Agent shall be entitled to ----------------- receive, retain and apply against such obligation the 39 principal and interest otherwise payable to such Lender hereunder until the Agent receives from such Lender an amount sufficient to discharge such Lender's payment obligation as prescribed in this Section 2.1.4(vi) together with ----------------- interest thereon at the Federal Funds Effective Rate for each day during the period commencing on the date of demand by the Agent and ending on the date such obligation is fully satisfied. The Agent will promptly remit all payments received as provided above to the applicable Alternate Currency Bank. (vii) Other Provisions Applicable to Alternate Currency Loans. The ------------------------------------------------------- specification of payment of Alternate Currency Loans in the related Alternate Currency at a specific place pursuant to this Agreement is of the essence. Such Alternate Currency shall be the currency of account and payment of such Loans under this Agreement and the Notes. Notwithstanding anything in this Agreement, the obligation of the applicable Borrower in respect of such Loans shall not be discharged by an amount paid in any other currency or at another place, whether pursuant to a judgment or otherwise, to the extent the amount so paid, on prompt conversion into the applicable Alternate Currency and transfer to such Lender under normal banking procedure, does not yield the amount of such Alternate Currency due under this Agreement and the Notes. In the event that any payment, whether pursuant to a judgment or otherwise, upon conversion and transfer, does not result in payment of the amount of such Alternate Currency due under this Agreement and the Notes, such Lender shall have an independent cause of action against the Borrowers for the currency deficit. 2.2. Types and Interest Periods. -------------------------- 2.2.1. Types of Advances. The Revolving Loans and the Term Loans may be ----------------- Alternate Base Rate Loans or Eurocurrency Loans, or a combination thereof, selected by the applicable Borrower in accordance with Sections 2.2.2 and 2.2.3. -------------- ----- The Swing Loans shall be Alternate Base Rate Loans. Notwithstanding anything herein to the contrary, without the Agent's consent, no Borrower may select a Eurocurrency Rate with an Interest Period greater than seven (7) days until the earlier of (i) the completion of the syndication of the facilities hereunder (as determined by the Arranger) and (ii) ninety (90) days following the initial funding hereunder; provided, that, in any event, such Borrower agrees to pay any -------- breakage costs as prescribed in Section 3.5 with respect to Loans assigned in ----------- connection with such syndication on a date which is not the last day of an applicable Interest Period. 2.2.2. Method of Selecting Types and Interest Periods for New Advances. --------------------------------------------------------------- The applicable Borrower shall select the Type of Advance and, in the case of each Alternate Currency Loan and Eurocurrency Advance, the Interest Period applicable to each Advance from time to time. The applicable Borrower shall give the Agent or applicable Alternate Currency Agent irrevocable notice (a "Borrowing Notice"), or, if such Borrower is a Borrowing Subsidiary, the Company may on behalf of such Borrowing Subsidiary give a Borrowing Notice, not later than 11:00 a.m. (Indianapolis time) (x) on the Borrowing Date of each Alternate Base Rate Advance, (y) three Business Days before the Borrowing Date for each Eurocurrency Advance in Dollars or each Alternate Base Rate Advance in an Agreed Currency other than Dollars, and (z) four Business Days 40 before the Borrowing Date for each Eurocurrency Advance in an Agreed Currency other than Dollars and each Alternate Currency Loan (or such other period as may be specified in the applicable Alternate Currency Addendum), provided that there shall be no more than twelve (12) Interest Periods in effect with respect to all of the Loans at any time. A Borrowing Notice shall specify: (i) the Borrowing Date, which shall be a Business Day, of such Advance; (ii) the aggregate amount and the currency of such Advance, provided, that, if any Advance made (or to be made) on or after -------- the Euro Implementation Date would, but for this provision, be capable of being made either in the Euro or in the applicable National Currency Unit requested by the applicable Borrower, such Advance shall be made in the Euro; (iii) in the case of Term Loans or Revolving Loans, the Type of Advance selected and in respect of all Loans, the currency thereof; (iv) whether such borrowing is pursuant to a Term Loan, Revolving Loan, or Alternate Currency Loan; (v) in the case of each Alternate Currency Loan or Eurocurrency Advance, the Interest Period applicable thereto; and (vi) whether such Advance is to be made to the Company or to a specified Borrowing Subsidiary. 2.2.3. Conversion and Continuation of Outstanding Advances. Alternate --------------------------------------------------- Base Rate Advances shall continue as Alternate Base Rate Advances unless and until such Alternate Base Rate Advances are converted into Eurocurrency Advances. Each Eurocurrency Advance shall continue as a Eurocurrency Advance until the end of the then applicable Interest Period therefor, at which time such Eurocurrency Advance shall be automatically converted into an Alternate Base Rate Advance unless the applicable Borrower shall have given the Agent an irrevocable notice (a "Conversion/Continuation Notice") requesting that, at the end of such Interest Period, such Eurocurrency Advance either continue as a Eurocurrency Advance for the same or another Interest Period or be converted into an Alternate Base Rate Advance. Subject to the terms of Sections 2.2.1 and -------------- 2.5.2, such Borrower may elect from time to time to convert all or any part of - ----- an Advance of any Type (other than Alternate Currency Loans and Swing Loans) into any other Type or Types of Advances (other Alternate Currency Loans and than Swing Loans); provided that any conversion of any Eurocurrency Advance shall be made on, and only on, the last day of the Interest Period applicable thereto. The applicable Borrower shall give the Agent the Conversion/Continuation Notice of each conversion of an Advance or continuation of a Eurocurrency Advance not later than 10:00 a.m. (Indianapolis time) at least one Business Day, in the case of a conversion into an Alternate Base Rate Advance, or three Business Days, in the case of a conversion into or 41 continuation of a Eurocurrency Advance, prior to the date of the requested conversion or continuation, specifying: (i) the requested date which shall be a Business Day, of such conversion or continuation; (ii) the aggregate amount and Type of the Advance which is to be converted or continued; and (iii) the amount and Type(s) of Advance(s) into which such Advance is to be converted or continued and, in the case of a conversion into or continuation of a Eurocurrency Advance, the duration of the Interest Period applicable thereto. 2.3. Applicable Margin. The Applicable Margins set forth below, with ----------------- respect to each Advance and for commitment fees and Letter of Credit Fees payable hereunder, shall be subject to adjustment (upwards or downwards, as appropriate) based on the Company's status (the "Company's Status") as at the end of each fiscal quarter in accordance with the table set forth below. The Company's Status as at the last day of each fiscal quarter shall be determined from the annual or quarterly financial statements of the Company which first included such fiscal quarter delivered by the Company to the Lenders pursuant to Section 6.1. The adjustments, if any, to the Applicable Margin shall be - ----------- effective five days after the Agent has received such annual or quarterly financial statements, as the case may be. In the event that the Company shall at any time fail to furnish to the Lenders such financial statements within the time limitations specified by Section 6.1, then the Company's Status shall be ----------- Level I Status from the date of such failure until the fifth day after such financial statements are so delivered. 42
=============================================================================================== EUROCURRENCY ALTERNATE BASE RATE COMMITMENT MARGINS MARGINS FEE PERCENTAGE ----------------------------------------------------------- REVOLVING TERM LOANS REVOLVING TERM LOANS LOANS LOANS LEVERAGE RATIO =============================================================================================== Level I 3.50% 4.00% 2.50% 3.00% 0.50% Status - ----------------------------------------------------------------------------------------------- Level II 3.25% 4.00% 2.25% 3.00% 0.50% Status - ----------------------------------------------------------------------------------------------- Level III 3.00% 4.00% 2.00% 3.00% 0.50% Status - ----------------------------------------------------------------------------------------------- Level IV 2.75% 4.00% 1.75% 3.00% 0 .50% Status - ----------------------------------------------------------------------------------------------- Level V 2.50% 4.00% 1.50% 3.00% 0.375% Status - ----------------------------------------------------------------------------------------------- Level VI 2.25% 4.00% 1.25% 3.00% 0.375% Status - -----------------------------------------------------------------------------------------------
For the purposes of this Agreement, the Company's Status will be determined based on the following definitions: "Level I Status" exists at any date if, as of the last day of the then most recently ended fiscal quarter of the Company, the Leverage Ratio is greater than or equal to 5.5 to 1.0. "Level II Status" exists at any date if, as of the last day of the then most recently ended fiscal quarter of the Company, the Leverage Ratio is greater than or equal to 5.0 to 1.0 but less than 5.5 to 1.0. 43 "Level III Status" exists at any date if, as of the last day of the then most recently ended fiscal quarter of the Company, the Leverage Ratio is greater than or equal to 4.5 to 1.0 but less than 5.0 to 1.0. "Level IV Status" exists at any date if, as of the last day of the then most recently ended fiscal quarter of the Company, the Leverage Ratio is greater than or equal to 4.0 to 1.0 but less than 4.5 to 1.0. "Level V Status" exists at any date if, as of the last day of the then most recently ended fiscal quarter of the Company, the Leverage Ratio is greater than or equal to 3.5 to 1.0 but less than 4.0 to 1.0. "Level VI Status" exists at any date if, as of the last day of the then most recently ended fiscal quarter of the Company, the Leverage Ratio is less than 3.5 to 1.0 Notwithstanding the foregoing, the Applicable Margin for the period from the date hereof until March 31, 1999 shall be the Applicable Margin assuming the Company's Status is Level I Status. On March 31, 1999, the Applicable Margin shall be based upon the Company's Status as at the end of the fiscal quarter most recently ended prior to such date and for which the Agent has received financial statements pursuant to Section 6.1, which Applicable Margin shall ----------- remain in effect until adjusted pursuant to the provisions of this Section 2.5 ----------- set forth above. 2.4. Fees. In addition to the Letter of Credit Fees and issuance ---- fees identified in Section 2.6.5, the Company and the Borrowing Subsidiaries ------------- agree to pay the following fees: 2.4.1. Commitment Fee. The Company and the Borrowing Subsidiaries -------------- hereby jointly and severally agree to pay to the Agent for the ratable account of each Lender, for the period from the date hereof to and including the Termination Date, a commitment fee at a rate per annum equal to the annual percentage rate indicated as the Applicable Margin for the commitment fee on the average daily amount by which such Lender's Revolving Loan Commitment exceeds the sum of the outstanding principal balance of such Lender's Revolving Loans plus Swing Loans plus such Lender's Percentage of the L/C Obligations, the accrued but unpaid portion of which shall be payable on each Payment Date hereafter and on the Termination Date. All accrued commitment fees shall be payable on the effective date of any termination of the obligations of the Lenders to make Revolving Loans and issue or participate in Letters of Credit hereunder, and commitment fees shall cease to accrue thereafter. For purposes of calculating the commitment fee hereunder, the principal amount of each Advance or Swing Loan made in a currency other than Dollars shall be the Dollar Amount of such Advance as determined under clause (ii) of the definition herein of ----------- "Dollar Amount". 2.4.2. Agent Fees. The Company agrees to pay certain fees to the ---------- Agent and the Arranger, for its sole account, on the dates and in the amounts set forth in each of (i) the fee letter among Company, the Arranger and The First National Bank of Chicago, dated June 19, 1998, and (ii) the 44 fee letter among the Company, the Agent and the Arranger, dated September 30, 1998, in each case, as amended from time to time (the "Fee Letters"). 2.4.3. Prepayment Fee. The Company agrees that if the Borrowers -------------- shall prepay the entire amount of the Term Loans (x) on or before the first anniversary of the Effective Date, the Borrowers shall pay to the Agent for the account of the Lenders a prepayment fee equal to three percent (3.0%) of the Aggregate Term Loan Commitments as of the Effective Date; (y) on or before the second anniversary of Effective Date but after the first anniversary of the Effective Date, the Borrowers shall pay to the Agent for the account of the Lenders a prepayment fee equal to two percent (2.0%) of the outstanding balance of the Term Loans as of the first anniversary of the Effective Date (as reduced by regularly scheduled prepayments and mandatory prepayments subsequent to the first anniversary of the Effective Date; (z) prior to the third anniversary of the Effective Date but after the second anniversary of the Effective Date, the Borrowers shall pay to the Agent for the account of the Lenders a prepayment fee equal to one percent (1.0%) of the outstanding balance of the Term Loans as of the second anniversary of the Effective Date (as reduced by regularly scheduled prepayments and mandatory prepayments subsequent to the second anniversary of the Effective Date. 2.5. General Facility Terms. ---------------------- 2.5.1. Method of Borrowing. (i) Promptly after receipt of a ------------------- Borrowing Notice, the Agent shall notify each Lender by telex, or telecopy, or other similar form of transmission, of the proposed Advance. On each Borrowing Date, each Lender shall make available its Revolving Loan or Term Loan, as applicable, (x) if such Loan is denominated in Dollars, not later than 2:00 p.m., Indianapolis time, in Federal or other funds immediately available to the Agent, in Indianapolis, Indiana at its address specified in or pursuant to Article XIV and, (y) if such Loan is denominated in another currency, not later - ----------- than 12:00 noon, local time in the city of the Agent's Eurocurrency Payment Office for such currency, in such funds as may then be customary for the settlement of international transactions in such currency in the city of and at the address of the Agent's Eurocurrency Payment Office for such currency, provided, however, that with respect to any Loans to be made to any of the French Borrowing Subsidiaries, such funds shall be made available to the Agent's French Lending Installation by such Lender's French Lending Installation. Unless the Agent determines that any applicable condition specified in Article IV has ---------- not been satisfied, the Agent will make the funds so received from the Lenders available to the applicable Borrower at the Agent's aforesaid address not later than 3:00 p.m. local time. Notwithstanding the foregoing provisions of this Section 2.5.1, to the extent that a Loan made by a Lender matures on the - ------------- Borrowing Date of a requested Loan, such Lender shall apply the proceeds of the Loan it is then making to the repayment of principal of the maturing Loan. (ii) Subject to the procedures set forth in the applicable Alternate Currency Addendum, each Alternate Currency Bank shall make available its Alternate Currency Loan or Loans, in funds immediately available to the Alternate Currency Agent at its office designated in the Alternate Currency Addendum for payments of such Alternate Currency in the Alternate Currency. The 45 Alternate Currency Agent will promptly make the funds so received from the Alternate Currency Banks available to the applicable Borrower. Promptly upon any such disbursement of an Alternate Currency Loan, the Alternate Currency Agent, shall give written notice to the Agent by telex or telecopy of the making of such Loan, which notice shall be substantially in the form attached hereto as Exhibit K. - --------- (iii) If for any reason any applicable Alternate Currency Bank fails to make payment to the applicable Alternate Currency Agent of any amount due under Section 2.5.1(ii) and the applicable Alternate Currency Addendum, the ----------------- applicable Alternate Currency Agent shall be entitled to receive, retain and apply against such obligation the principal and interest otherwise payable to such Alternate Currency Bank hereunder until the Alternate Currency Agent receives such payment from such Alternate Currency Bank or such obligation is otherwise fully satisfied. In addition to the foregoing, if for any reason any Alternate Currency Bank fails to make payment to the applicable Alternate Currency Agent of any amount due under Section 2.5.1(ii) and the applicable ----------------- Alternate Currency Addendum, such Alternate Currency Bank shall be deemed, at the option of the applicable Alternate Currency Agent, to have unconditionally and irrevocably purchased from the applicable Alternate Currency Agent, without recourse or warranty, an undivided interest in and participation in the applicable Alternate Currency Loan in the amount such Alternate Currency Bank was required to pay pursuant to Section 2.5.1(ii) and the applicable Alternate ----------------- Currency Addendum, and such interest and such participation may be recovered from such Alternate Currency Bank together with interest thereon at the Federal Funds Effective Rate for each day during the period commencing on the date of demand by the applicable Alternate Currency Agent and ending on the date such obligation is fully satisfied. 2.5.2. Minimum Amount of Each Advance. Each Advance shall be in the ------------------------------ minimum amount of $1,000,000 and in integral multiples of $500,000 if in excess thereof (or the Approximate Equivalent Amount if denominated in an Agreed Currency other than Dollars or an Alternate Currency (or such other amounts as may be specified in the applicable Alternate Currency Addendum)); provided, however, that any Alternate Base Rate Advance may be in the amount of (i) the aggregate applicable unused Aggregate Revolving Loan Commitment and (ii) any Alternate Base Rate Advance required to be made in connection with the required repayment of a Swing Loan under Section 2.1.2(iv). ----------------- 2.5.3. Prepayments. (A) Optional Payments. (i) Any Borrower may ----------- ----------------- from time to time prepay, without penalty or premium, all or any portion of all outstanding Swing Loans. Payments in respect of the Swing Loans shall be applied to each of the outstanding Swing Loans in the order of their maturity beginning with the Swing Loan which has been outstanding longest. (ii) Any Borrower may from time to time and at any time repay or prepay all or any part of outstanding Alternate Base Rate Advances without premium or penalty of any kind except as provided in Section 2.4.3; provided, ------------- -------- that no Borrower may so prepay Alternate Base Rate Advances consisting of Term Loans unless it shall have provided at least one Business Day's written notice to the Agent of such prepayment. Eurocurrency Advances and Alternate Currency 46 Loans may be voluntarily repaid or prepaid prior to the last day of the applicable Interest Period, subject to the indemnification provisions contained in Section 3.4 and the provisions of Section 2.4.3, provided, that the Borrower ----------- ------------- -------- may not so prepay Eurocurrency Advances unless it shall have provided at least two (2) Business Days' written notice to the Agent of such prepayment. Unless the aggregate outstanding principal balance of the Term Loans is to be prepaid in full, voluntary prepayments of the Term Loans shall be in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount, and shall be applied ratably to each of the then remaining installments payable thereunder; provided, that optional prepayments of -------- Eurocurrency Advances made pursuant to Section 2.1.1 shall be for the entire ------------- amount of the outstanding Eurocurrency Advance. (B) Mandatory Prepayments. --------------------- (i) Mandatory Prepayments of Term Loans. ----------------------------------- (a) Upon the consummation of any Asset Sale by the Company or any Subsidiary of the Company, other than those Asset Sales permitted pursuant to Section 6.9(i), (iii), (iv), (v), (vi) and (ix), --------------------- ---- --- ---- ---- except to the extent that the Net Cash Proceeds of such Asset Sale, when combined with the Net Cash Proceeds of all such Asset Sales during the immediately preceding twelve-month period, do not exceed $1,000,000 or the Approximate Equivalent Amount of any Agreed Currency other than Dollars, and except as provided in the second sentence of this Section 2.5.3(B)(i)(a), within three (3) Business Days after the ---------------------- Company's or any of its Subsidiaries' (i) receipt of any Net Cash Proceeds from any such Asset Sale, or (ii) conversion to cash or Cash Equivalents of non-cash proceeds (whether principal or interest and including securities, release of escrow arrangements or lease payments) received from any Asset Sale, the Company shall, or shall cause the other Borrowers to, make a mandatory prepayment of the Obligations in an amount equal to one hundred percent (100%) of such Net Cash Proceeds or such proceeds converted from non-cash to cash or Cash Equivalents. Net Cash Proceeds of Asset Sales with respect to which the Company shall have given the Agent written notice of its intention to replace the assets within twelve (12) months, following such Asset Sale shall not be subject to the provisions of the first sentence of this Section 2.5.3(B)(i)(a) unless and to the extent that ---------------------- such applicable period shall have expired without such replacement having been made. (b) (i) Except as provided in clause (b)(ii) below, upon -------------- the consummation of any Financing by the Company or any Subsidiary of the Company, within three (3) Business Days after the Company's or any of its Subsidiaries' receipt of any Net Cash Proceeds from such Financing, the Company shall, or shall cause the other Borrowers to, make a mandatory prepayment of the Obligations in an amount equal to one hundred percent (100%) of such Net Cash Proceeds. (ii) Notwithstanding the foregoing, Net Cash Proceeds subject to clause (i) above shall not include Net Cash Proceeds ---------- received in connection with the issuance of any Capital 47 Stock, other than Disqualified Stock, to any employee, executive, director or officer and if the Company or any Subsidiary of the Company issues Equity Interests of such Person or any Permitted Refinancing Indebtedness of such Person, the proceeds of any such offering of Equity Interests or Indebtedness may be used to refinance the Seller Senior Subordinated Note or the Additional Junior Security. (c) Simultaneously with the delivery of the annual audited financial statements required to be delivered pursuant to Section ------- 6.1(i) for each fiscal year beginning with the fiscal year ending ------ November 30, 1999, the Company shall calculate Excess Cash Flow for such fiscal year and shall, or shall cause the other Borrowers to, make a mandatory prepayment of the Obligations, payable not later than the earlier of ten (10) days after such financial statements and calculation are delivered or one hundred (100) days after the end of such fiscal year, in an amount equal to: (x) at any time the Leverage Ratio (calculated as of the last day of such fiscal year) shall be greater than or equal to 4.5 to 1.0, 85% of such Excess Cash Flow; and (y) at any time the Leverage Ratio (calculated as of the last day of such fiscal year) shall be less than 4.5 to 1.0, 50% of such Excess Cash Flow. (d) If on the last Business Day of any month: (x) the Dollar Amount of the Revolving Credit Obligations exceeds 105% of the Maximum Revolving Credit Amount, the Company for the ratable benefit of the Lenders shall or shall cause the other Borrowers to immediately prepay Loans (to be applied to such Loans as the Company shall direct at the time of such payment) in an aggregate amount such that after giving effect thereto the Dollar Amount of the Revolving Credit Obligations is less than or equal to the Maximum Revolving Credit Amount; or (y) the Dollar Amount of all outstanding Alternate Currency Loans under the Alternate Currency Addenda exceeds 105% of the aggregate Alternate Currency Commitments with respect thereto, the applicable Borrowers shall on such date prepay Alternate Currency Loans in an aggregate amount such that after giving effect thereto the Dollar Amount of all such Alternate Currency Loans is less than or equal to the aggregate Alternate Currency Commitments with respect thereto; or (z) the Dollar Amount of the aggregate outstanding principal amount of Alternate Currency Loans exceeds $80,000,000, the applicable Borrowers shall on such date prepay Alternate Currency Loans in an aggregate amount 48 such that after giving effect thereto the Dollar amount of all Alternate Currency Loans is less than or equal to $80,000,000. (e) Nothing in this Section 2.5.3(B)(i) shall be construed ------------------- to constitute the Lenders' consent to any transaction referred to in clauses (a) and (b) above which is not expressly permitted by the --- --- terms of this Agreement. (f) Each mandatory prepayment required by clauses (a), (b) -------------- --- and (c) of this Section 2.5.3(B) shall be referred to herein as a --- ---------------- "Designated Prepayment". Designated Prepayments shall be allocated and applied to the Obligations as follows: (I) the amount of each Designated Prepayment shall be applied to each of the then remaining installments payable under the Term Loans on a ratable basis based upon the respective amounts of such remaining installments; and (II) following the payment in full of the Term Loans, the amount of each Designated Prepayment shall be applied to repay Revolving Loans (but shall not reduce Revolving Loan Commitments) and following the payment in full of the Revolving Loans, the amount of each Designated Prepayment shall be applied first to interest on the Reimbursement Obligations, then to principal on the Reimbursement Obligations, then to fees on account of Letters of Credit and then, to the extent any L/C Obligations are contingent, deposited with the Agent as cash collateral in respect of such L/C Obligations. (ii) Mandatory Prepayments of Revolving Loans. In addition to ---------------------------------------- repayments under Section 2.5.3(B)(i)(d), if at any time and for any reason other ---------------------- than the fluctuation in currency exchange rates the Dollar Amount of the Revolving Credit Obligations are greater than the Maximum Revolving Credit Amount, the Company shall immediately make a mandatory prepayment of the Obligations in an amount equal to such excess. If after giving effect to such payment the Dollar Amount of L/C Obligations outstanding at any time is greater than the Maximum Revolving Credit Amount at such time, the Company shall deposit cash collateral with the Agent in an amount in Dollars equal to such excess. (iii) Subject to the preceding provisions of this Section 2.5.3(B), ---------------- all of the mandatory prepayments made under this Section 2.5.3(B) shall be ---------------- applied first to Alternate Base Rate Loans and to any Eurocurrency Loans and Alternate Currency Loans in the Equivalent Amount of such prepayment maturing on such date and then to subsequently maturing Eurocurrency Loans and Alternate Currency Loans in order of maturity; provided, that, if requested by the -------- Company, the Agent shall hold as cash collateral the part of any such prepayment which, in accordance with this clause (iii) is to be applied to outstanding ------------ Eurocurrency Loans. The Agent shall apply such cash 49 collateral to outstanding Eurocurrency Loans on the last day of the next expiring Interest Period with respect to such Loans. 2.5.4. Interest Rates; Interest Periods. Each Alternate Base Rate -------------------------------- Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such loan is made until it becomes due at a rate per annum equal to the Alternate Base Rate for such day. Each Eurocurrency Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Eurocurrency Rate applicable thereto. Each Alternate Currency Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum set forth in the applicable Alternate Currency Memorandum. Subject to the provisions of Section 2.5.5, each Advance shall bear ------------- interest from and including the first day of the Interest Period applicable thereto to (but not including) the earlier of (i) the last day of such Interest Period or (ii) the date of any earlier prepayment as permitted by Section 2.5.3, ------------- at the interest rate determined as applicable to such Advance. 2.5.5. Default Rate. After the occurrence and during the ------------ continuance of a Default, at the option of the Agent or at the direction of the Required Lenders, the interest rate(s) applicable to the Obligations and the fees payable under Section 2.4 shall be equal to the interest rate(s) and fees ----------- applicable for Level I Status plus two percent (2.0%) per annum. ---- 2.5.6. Interest Payment Dates; Interest Basis. Interest accrued on -------------------------------------- each Alternate Base Rate Advance and each Swing Loan shall be payable on each Payment Date and with respect to any Swing Loan, on any date on which such Swing Loan is repaid or prepaid, whether due to acceleration or otherwise and at maturity. Interest accrued on each Eurocurrency Advance shall be payable on the last day of its applicable Interest Period, on any date on which such Eurocurrency Advance is prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued on each Eurocurrency Advance having an Interest Period longer than three months shall also be payable on the last day of each three-month interval during such Interest Period. Except as may otherwise be prescribed in the applicable Alternate Currency Addendum, interest on Alternate Base Rate Loans, Alternate Currency Loans, the commitment fee payable under Section 2.4.1 and any other fees payable pursuant to this Agreement shall be - ------------- calculated for actual days elapsed on the basis of a 365/366-day year. All Eurocurrency Loans shall be calculated for actual days elapsed on the basis of a 360-day year (or a 365-day year if that is deemed by the Agent to be consistent with market practices for the applicable currency). Interest shall be payable for the day an Advance is made but not for the day of any payment on the amount paid if payment is received prior to noon (local time) at the place of payment. If any payment of principal of or interest on an Advance or a Swing Loan shall become due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and, in the case of a principal payment, such extension of time shall be included in computing interest in connection with such payment. 2.5.7. Method of Payment. Each Advance shall be repaid or prepaid ----------------- in the currency in which it was made in the amount borrowed and interest payable thereon shall be paid in such currency. Subject to the last sentence of Section ------- 2.5.1, all payments of principal, interest, and fees - ----- 50 in Dollars hereunder shall be made by noon (Indianapolis time) on the date when due in immediately available funds to the Agent at the Agent's address specified pursuant to Article XIV, or at any other Lending Installation of the Agent ----------- specified in writing by the Agent to the Company and shall be made ratably among all Lenders in the case of fees and payments in respect of Advances. After the occurrence of a Default, all payments of principal shall be applied ratably among all outstanding Advances. Each payment delivered to the Agent for the account of any Lender shall be delivered promptly by the Agent to such Lender in the same type of funds which the Agent received at its address specified pursuant to Article XIV or at any Lending Installation specified in a notice ----------- received by the Agent from such Lender. All payments to be made by the Borrowers hereunder or under the Notes in any currency other than Dollars (other than in respect of any Alternate Currency Loan) shall be made in such currency on the date due in such funds as may then be customary for the settlement of international transactions in such currency for the account of the Agent, at its Eurocurrency Payment Office for such currency, provided, however, that with respect to any such payments by any of the French Borrowing Subsidiaries, such payments shall be made at the Agent's French Lending Installation. All payments to be made by the Borrowers hereunder in respect of any Alternate Currency Loans shall be made in the currencies in which such Loans are denominated and in funds immediately available, at the office or branch from which the Loan was made under Section 2.1.4 not later than 3:00 p.m. local time on the date on which ------------- such payment shall become due. Promptly upon receipt of any payment of principal of the Alternate Currency Loans the Lender receiving such payment shall give written notice to the Agent by telex or telecopy of the receipt of such payment, which notice shall be substantially in the form attached hereto as Exhibit L. --------- The Agent will promptly cause such payments to be distributed to each Lender in like funds and currency. Notwithstanding the foregoing provisions of this Section, if, after the making of any Advance in any currency other than Dollars, currency control or exchange regulations are imposed in the country which issues such currency with the result that different types of such currency (the "New Currency") are introduced and the type of currency in which the Advance was made (the "Original Currency") no longer exists or the applicable Borrower is not able to make payment to the Agent for the account of the Lenders in such Original Currency, then all payments to be made by the applicable Borrower hereunder or under the Notes in such currency shall be made in such amount and such type of the New Currency or Dollars as shall be equivalent to the amount of such payment otherwise due hereunder or under the Notes in the Original Currency, it being the intention of the parties hereto that the Borrowers take all risks of the imposition of any such currency control or exchange regulations. In addition, notwithstanding the foregoing provisions of this Section, if, after the making of any Advance in any currency other than Dollars, the applicable Borrower is not able to make payment to the Agent for the account of the Lenders in the type of currency in which such Advance was made because of the imposition of any such currency control or exchange regulation, then such Advance shall instead be repaid when due in Dollars in a principal amount equal to the Dollar Amount (as of the date of repayment) of such Advance; provided, -------- that if and to the extent that any legislative measures of the Council of the European Union for the introduction of, changeover to or operation of a single or unified currency provided that following the commencement of the third stage of the Economic and Monetary Union an amount denominated either in the Euro or in the National Currency Unit of a participating member state and payable within that participating member state by crediting an account of the 51 creditor can be paid by the debtor either in the Euro or in that National Currency Unit and so long as the applicable National Currency Unit in which the applicable Loan was made is an Eligible Currency, each Borrower shall be entitled to pay or repay any such amount either in the Euro or in such National Currency Unit. 2.5.8. Notes; Telephonic Notices. Each Lender is hereby authorized ------------------------- to record on the schedule attached to each of its Notes, or otherwise record in accordance with its usual practice, the date, the currency, the amount and the maturity of each of its Loans of the type evidenced by such Note; provided, however, that any failure to so record shall not affect the Company's or any Subsidiary's obligations under any Loan Document. The Company and each Borrower hereby authorize the Lenders, the Agent, the Issuing Lenders and the Swing Loan Lenders to extend or continue Advances, effect selections of Types of Advances and transfer funds based on telephonic notices made by any person or persons the Agent or such Lender, Issuing Lender or Swing Loan Lender in good faith believes to be a Financial Officer or an officer, employee or agent of the Company designated by a Financial Officer. The Company agrees to deliver or to cause to deliver promptly to the Agent a written confirmation of each telephonic notice given by the Company or any Subsidiary, signed by a Financial Officer. If the written confirmation differs in any material respect from the action taken by the Agent, the Lenders, the Issuing Lenders, or the Swing Loan Lenders, the records of the Agent, the Lenders, the Issuing Lenders and the Swing Loan Lenders shall govern absent manifest error. 2.5.9. Notification of Advances, Interest Rates and Prepayments. -------------------------------------------------------- Promptly after receipt thereof, the Agent will notify each Lender of the contents of each Aggregate Revolving Loan Commitment reduction notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice received by it hereunder. The Agent will notify each Lender of the interest rate applicable to each Eurocurrency Advance promptly upon determination of such interest rate and will give each Lender prompt notice of each change in the Alternate Base Rate. 2.5.10. Non-Receipt of Funds by the Agent. Unless the Company, a --------------------------------- Borrowing Subsidiary, a Lender or a Swing Loan Lender, as the case may be, notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of (i) in the case of a Lender or Swing Loan Lender, the proceeds of a Loan or (ii) in the case of the Company or a Borrowing Subsidiary, a payment of principal, interest or fees to the Agent for the account of the Lenders or Swing Loan Lenders, that it does not intend to make such scheduled payment, the Agent may assume that such scheduled payment has been made. The Agent may, but shall not be obligated to, make the amount of such scheduled payment available to the intended recipient in reliance upon such assumption. If such Lender, Swing Loan Lender, Borrowing Subsidiary or the Company, as the case may be, has not in fact made such scheduled payment to the Agent, the recipient of such scheduled payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (x) in the case of scheduled payment by a Lender or a Swing Loan Lender, the Federal 52 Funds Effective Rate for such day or (y) in the case of scheduled payment by the Company or a Borrowing Subsidiary, the interest rate applicable to the relevant Loan. 2.5.11. Termination or Reduction in the Aggregate Revolving Loan -------------------------------------------------------- Commitment. The Company may at any time after the date hereof permanently - ---------- reduce the Aggregate Revolving Loan Commitment or the Alternate Currency Commitments, in whole, or in a minimum aggregate amount of $1,000,000 and in integral multiples of $1,000,000 if in excess thereof (or in such amounts as may be set forth on the applicable Alternate Currency Addendum), ratably among the Lenders upon at least one Business Day's prior written notice to the Agent, which notice shall specify the amount of such reduction; provided, however, no -------- ------- such notice of reduction shall be effective to the extent that it would reduce the Aggregate Revolving Loan Commitment to an amount which would be less than the outstanding Dollar Amount of the Revolving Credit Obligations outstanding at the time such reduction is to take effect; provided, further, that no such -------- ------- notice of reduction shall be effective to the extent that it would reduce the aggregate Alternate Currency Commitments in any Alternate Currency to an amount which would be less than the outstanding amount of the Alternate Currency Loans in such currency at the time such reduction is to take effect. The Aggregate Revolving Loan Commitment once reduced as provided in this Section 2.5.11 may -------------- not be reinstated. If (y) any Lender notifies the Company in accordance with Section 2.5.15 or (z) a Borrower reasonably determines that it is or will be - -------------- required to make any additional payment to any Lender under Section 3.1, 3.2 or ----------- --- 3.3 the Company may, at any time thereafter (provided that no Default or - --- Unmatured Default then exists and no satisfactory solution has been reached pursuant to Section 3.6) and by not less than five Business Days' prior written ----------- notice to the Agent, cancel such Lender's Commitment, whereupon such Lender shall cease to be obliged to make further Loans hereunder and its Commitment shall be reduced to zero. Upon termination of such Lender's Commitment, each applicable Borrower shall, subject to the last sentence of this subparagraph (i), pay all outstanding Obligations owing to such Lender. Any notice of cancellation given pursuant to this Section 2.5.11 shall be irrevocable and -------------- shall specify the date upon which such cancellation is to take effect. Notwithstanding any such cancellation, the obligations of the Company and the Borrowing Subsidiaries under Sections 3.1, 3.2, 3.3 and 10.6 shall survive any ------------ --- --- ---- such cancellation and be enforceable by such Lender. In any case described in clauses (i)(y) or (i)(z) above in which the Company has the right to cancel a - -------------- ------ Lender's Commitment, the Company may, in connection with such cancellation arrange for a sale (at par) of such Commitment and all outstanding Loans held by such Lender pursuant to the terms of Section 13.3 and such Lender will promptly ------------ enter into any such sale arranged by the Company. 2.5.12. Market Disruption. Notwithstanding the satisfaction of all ----------------- conditions referred to in Article II with respect to any Advance in any currency ---------- other than Dollars, if there shall occur on or prior to the date of such Advance any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which would in the reasonable opinion of the Agent or the Required Lenders make it impracticable for the Eurocurrency Loans or Alternate Currency Loans comprising such Advance to be denominated in the currency specified by the applicable Borrower, then the Agent shall forthwith give notice thereof to the Company and the Lenders, and such Loans shall not be denominated in such currency 53 but shall be made on such Borrowing Date in Dollars, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Borrowing Notice, as Alternate Base Rate Loans, unless the applicable Borrower notifies the Agent at least one Business Day before such date that (i) it elects not to borrow on such date or (ii) it elects to borrow on such date in a different Agreed Currency or Alternate Currency, as the case may be, in which the denomination of such Loans would in the opinion of the Agent and the Required Lenders be practicable and in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related Borrowing Notice. 2.5.13. Lending Installations. Subject to Section 3.6, each Lender --------------------- ----------- may, by written, telex or telecopy notice to the Agent and the Company, book its Loans at any Lending Installation selected by such Lender and may from time to time, change its Lending Installation and for whose account Loan payments are to be made, provided that no Lender (other than a Lender organized under the laws of the Republic of France) may designate a French Lending Installation located outside the European Community with respect to the French Borrowing Subsidiaries. Each Lender will notify the Agent and the Company on or prior to the date of this Agreement of the Lending Installation which it intends to utilize for each type of Loan hereunder. Each Lender's Lending Installation for Loans to any of the French Borrowing Subsidiaries (the "French Lending Installations") is specified on Schedule II. ----------- 2.5.14. Borrowing Subsidiaries. The Company may at any time or from ---------------------- time to time, with the consent of the Agent, which consent shall not be unreasonably withheld, add as a party to this Agreement any French, Dutch, English, Scottish, German or domestic Subsidiary to be a "Borrowing Subsidiary" hereunder by (a) the execution and delivery to the Agent of a duly completed Assumption Letter by such Subsidiary, with the written consent of the Company at the foot thereof and (b) the execution and delivery to the Agent of such other guaranty and security documents as may be reasonably required by the Agent, such documents with respect to any additional French, Dutch, German, English or Scottish Subsidiaries to be substantially similar in form and substance to the Loan Documents executed on or about the date hereof by the French, Dutch, German, English or Scottish Subsidiaries parties hereto as of the Effective Date. Upon such execution, delivery and consent such Subsidiary shall for all purposes be a party hereto as a Borrowing Subsidiary as fully as if it had executed and delivered this Agreement. So long as the principal of and interest on any Advances made to any Borrowing Subsidiary under this Agreement shall have been repaid or paid in full, all Letters of Credit issued for the account of such Borrowing Subsidiary have expired or been returned and terminated and all other obligations of such Borrowing Subsidiary under this Agreement shall have been fully performed, the Company may, by not less than five Business Days' prior notice to the Agent (which shall promptly notify the Lenders thereof), terminate such Borrowing Subsidiary's status as a "Borrowing Subsidiary". 2.5.15. Withholding Tax Exemption. (i) On or prior to the date of ------------------------- its execution and delivery of this Agreement in the case of any Lender, Swing Loan Lender or Issuing Lender (and on or prior to the effective date specified in the Notice of Assignment pursuant to which a Purchaser becomes a Lender in the case of each other Lender), each Lender, Swing Loan Lender or 54 Issuing Lender that is not incorporated under the laws of the United States of America, or a state thereof, agrees that it will deliver to the Company and the Agent two duly completed copies of United States Internal Revenue Service Form 1001 or 4224 (or other appropriate form), certifying in either case that such Lender, Swing Loan Lender or Issuing Lender is entitled to receive payments under the Loan Documents without deduction or withholding of any United States federal income taxes. Each Lender, Swing Loan Lender or Issuing Lender which so delivers a Form 1001 or 4224 further undertakes to deliver to the Company and the Agent two additional copies of such form (or a successor form) on or before the date that such form (or a replacement of an expired form) expires (currently, three successive calendar years for Form 1001 and one calendar year for Form 4224) or becomes obsolete or after the occurrence of any event requiring a change in the most recent forms so delivered by it, and such amendments thereto or extensions or renewals thereof as may be reasonably requested by the Company or the Agent, in each case certifying that such Lender, Swing Loan Lender or Issuing Lender is entitled to receive payments under the Loan Documents without deduction or withholding of any United States federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender, Swing Loan Lender or Issuing Lender from duly completing and delivering any such form with respect to it and such Lender, Swing Loan Lender or Issuing Lender promptly advises the Company and the Agent that it is not capable of receiving payments without any deduction or withholding of United States federal income tax. If any Lender, Swing Loan Lender or Issuing Lender so advises the Company and the Agent of such fact, the Company shall be entitled to exercise its rights under Section 2.5.11. -------------- (ii) Within five Business Days after any request made in writing by any UK Borrowing Subsidiary in relation to payments under or pursuant to this Agreement by such UK Borrowing Subsidiary, each Lender, Swing Loan Lender or Issuing Lender (and on or prior to the effective date specified in the Notice of Assignment pursuant to which a Purchaser becomes a Lender in the case of each other Lender), in relation to which such payments are to be made and which is not a Qualifying Bank, agrees that it will complete and file, with the relevant tax authority in the jurisdiction in which it is treated as resident for the purposes of any double taxation treaty between that jurisdiction and the United Kingdom, such form as may be required in order to facilitate the obtaining by such UK Borrowing Subsidiary of a direction issued by the United Kingdom Inland Revenue pursuant to The Double Taxation Relief (Taxes on Income)(General) Regulations 1970 (or any legislation replacing those regulations) by which such UK Borrowing Subsidiary is directed to make payments under or pursuant to this Agreement to such Lender without deduction or withholding of any United Kingdom income tax. (iii) Each Lender, Swing Loan Lender, or Issuing Lender agrees to file with the Agent and the Company, in duplicate, (a) on the date such Lender, Swing Loan Lender, or Issuing Lender (and on or prior to the effective date specified in the Notice of Assignment pursuant to which a Purchaser becomes a Lender in the case of each other Lender) becomes an Alternate Currency Bank with respect to an Alternate Currency or a Lender, Swing Loan Lender or Issuing Lender with respect to an Obligation of a Dutch Borrowing Subsidiary and (b) thereafter as frequently as 55 required by applicable law unless not legally able to do so as a result of a change in applicable tax law enacted, or treaty promulgated, after the date on which such Lender, Swing Loan Lender, or Issuing Lender becomes a party hereunder on or prior to the immediately following due date of any payment by the Borrowers hereunder, a properly completed and executed copy of any form, certification or similar documentation, if any, necessary for claiming complete exemption from withholding taxes with respect to all payments to be made to such Alternate Currency Bank under the applicable Alternate Currency Addendum or by such Dutch Borrowing Subsidiary to such Lender, Swing Loan Lender or Issuing Lender, as the case may be, or an opinion of counsel reasonably acceptable to Borrowers confirming such exemption; provided that such Lender's failure to -------- complete, execute and file such form, certification or similar documentation shall not relieve the Borrowers of any of their obligations under this Agreement, other than their obligations under Section 3.1 and Section 3.2 with ----------- ----------- respect to increased costs that are a result of such failure and the applicable Borrower, the Agent and the Alternate Currency Agent shall be permitted to withhold federal, state and local income taxes due under the relevant jurisdiction from any payments made under such Alternate Currency Addendum at the applicable statutory rate. 2.5.16. Judgment Currency. If for the purposes of obtaining judgment ----------------- in any court it is necessary to convert a sum due from a Borrower hereunder or under any of the Notes in the currency expressed to be payable herein or under the Notes (the "specified currency") into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase the specified currency with such other currency at the Agent's office in Indianapolis, Indiana on the Business Day preceding that on which final, non-appealable judgment is given. The obligations of the applicable Borrower in respect of any sum due to any Lender or the Agent hereunder or under any Note shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or the Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Agent, as the case may be, in the specified currency, the applicable Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Agent, as the case may be, in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 12.2, such ------------ Lender or the Agent, as the case may be, agrees to remit such excess to the applicable Borrower. 2.5.17 Overall Effective Rate; Limitation on German Borrowing ------------------------------------------------------ Subsidiaries' Obligations. - ------------------------- (a) For the purposes of Articles L 313.1 and L 313.2 of the French consumer code (Code de la Consommation) only, the Lenders represent to the Borrowers, who accept such 56 representation, that the "overall effective rate" (taux effectif global, within the meaning of French law) calculated in accordance with the above articles on the basis of a three hundred and sixty-five (365) day year, would be [___]% ([___] percent per annum) if the French Borrowing Subsidiaries were to borrow on October 15, 1998. (b) The above overall effective rate was calculated on the assumptions of (i) an existing Level I Status, (ii) an Advance to the Borrowers in an amount of [$_________ (_______ Million Dollars)], (iii) a Borrowing Date on October 15, 1998 and (iv) an Alternate Base Rate at [____%] plus the Applicable Margin at [_____%]. (c) The obligations of any German Borrowing Subsidiary under this Agreement or any other Loan Document shall always be limited to the extent that the enforcement of any of its obligations hereunder would cause its net assets (Reinvermogen) to be reduced below the amount of its registered share capital, as protected by Sections 30 and 31 of the German Act concerning Limited Liability Companies (GmbHG). 2.6. Letter of Credit Facility. -------------------------- 2.6.1. Letters of Credit. (a) Upon receipt of duly executed ----------------- applications therefor, and such other documents, instruments and agreements as an Issuing Lender may reasonably require, and subject to the provisions of Article IV, the Agent or one of its affiliates that is a Lender shall, or any - ---------- other Lender, in its sole discretion, may, issue Letters of Credit for the account of the applicable Borrower (the Agent and each such other Lender in such capacity being referred to as an "Issuing Lender"), on terms as are satisfactory to such Issuing Lender; provided, however, that no Letter of Credit will be -------- ------- issued for the account of any Borrower by an Issuing Lender if on the date of issuance, before or after taking such Letter of Credit into account (i) the Dollar Amount of the aggregate unpaid principal balance of the Revolving Credit Obligations at such time would exceed the Maximum Revolving Credit Amount at such time or (ii) the aggregate outstanding amount of the L/C Obligations would exceed $20,000,000; and provided, further, that no Letter of Credit shall be -------- ------- issued unless (A) it is denominated in Dollars or Agreed Currency and (B) it has an expiration date that is (1) no more than one year after the date of issuance of such Letter of Credit (provided that a Letter of Credit may provide for an annual renewal if such renewal is consented to by the Issuing Lender and the conditions precedent to the issuance of such Letter of Credit are met at the time of such renewal) and (2) no later than the Termination Date. If any Borrower applies for a Letter of Credit from any Lender other than the Agent, such Borrower or the Company on behalf of such Borrower shall simultaneously notify the Agent of the proposed amount and expiration date of such Letter of Credit. The Agent shall promptly notify the applicable Borrower and the Lender to which such application has been made whether the issuance of such Letter of Credit would comply with the terms of this Section 2.6.1. Upon the effectiveness ------------- of this Agreement, the Existing Letters of Credit shall be deemed to constitute Letters of Credit hereunder having as their issuance date the effective date of this Agreement. Fees shall accrue in respect of the Existing Letters of Credit as provided in Section 2.6.5 of this Agreement beginning as of the effective ------------- date of this Agreement 57 but the Company shall receive full credit for fees paid in advance with respect to such Existing Letters of Credit. 2.6.2. Letter of Credit Participation. Immediately upon the ------------------------------- Effective Date with respect to the Existing Letters of Credit and immediately upon the issuance of each other Letter of Credit hereunder, each Lender with a Revolving Loan Commitment greater than zero shall be deemed to have automatically, irrevocably and unconditionally purchased and received from the applicable Issuing Lender an undivided interest and participation in and to such Letter of Credit, the obligations of the applicable Borrower in respect thereof, and the liability of the applicable Issuing Lender thereunder (collectively, an "L/C Interest") in an amount equal to the amount available for drawing under ------------ such Letters of Credit multiplied by a fraction having as its numerator such Lender's Revolving Loan Commitment and as its denominator, the Aggregate Revolving Loan Commitment. The Agent will notify each Lender (or in the case of an Issuing Lender other than the Agent, such Issuing Lender shall notify the Agent who in turn will notify each Lender) promptly upon presentation to it of an L/C Draft or upon any other draw under any Letter of Credit. On or before the Business Day on which any Issuing Lender makes payment of each such L/C Draft or, in the case of any other draw on the Letter of Credit, on demand of such Issuing Lender, each Lender shall make payment to the Agent for the account of the applicable Issuing Lender, in immediately available funds in an amount equal to such Lender's ratable share (determined in accordance with the fraction described above) of the amount of such payment or draw. The obligation of each Lender with a Revolving Loan Commitment greater than zero to pay the Agent for the account of the applicable Issuing Lender under this Section 2.6.2 shall be ------------- unconditional, continuing, irrevocable and absolute and shall not be affected or impaired by, among other things, the reduction, suspension or termination of the Aggregate Revolving Loan Commitment pursuant to this Agreement. In the event that any Lender fails to make payment to the Agent of any amount due under this Section 2.6.2, the Agent shall be entitled to receive, retain and apply against - ------------- such obligation the principal and interest otherwise payable to such Lender hereunder until the Agent receives such payment from such Lender or such obligation is otherwise fully satisfied; provided, however, that nothing -------- ------- contained in this sentence shall relieve such Lender of its obligation to reimburse the Agent for such amount in accordance with this Section 2.6.2. ------------- 2.6.3. Reimbursement Obligation. Each Borrower agrees ------------------------ unconditionally, irrevocably and absolutely upon receipt of notice from the Agent or the applicable Issuing Lender to pay immediately to the Agent, for the account of the applicable Issuing Lenders or the account of the Lenders, as the case may be, the amount of each advance which may be drawn under or pursuant to a Letter of Credit or an L/C Draft related thereto issued at such Borrower's request (such obligation of any Borrower to reimburse the Issuing Lender or the Agent for an advance made under a Letter of Credit or L/C Draft being hereinafter referred to as a "Reimbursement Obligation" with respect to a Letter ------------------------ of Credit or L/C Draft). If any Borrower at any time fails to repay a Reimbursement Obligation pursuant to this Section 2.6.3, such Borrower shall be ------------- deemed to have elected to borrow an Alternate Base Rate Advance from the Lenders, as of the date of the advance giving rise to the Reimbursement Obligation, equal in amount to the amount of the unpaid Reimbursement Obligation, the proceeds of which Advance shall be used to repay such Reimbursement Obligation 58 and such an Advance shall be available from the Lenders notwithstanding the fact that the Aggregate Revolving Loan Commitment may have been reduced, suspended or terminated pursuant to this Agreement (notwithstanding the minimum amount of Advances as provided in Section 2.5.2). If, for any reason, the Borrower fails ------------- to repay a Reimbursement Obligation on the day such Reimbursement Obligation arises, then such Reimbursement Obligation shall bear interest from and after such day, until paid in full, at the interest rate applicable to Alternate Base Rate Advances. 2.6.4. Cash Collateral. Notwithstanding anything to the contrary --------------- herein or in any application for any Letter of Credit, (a) after the occurrence and during the continuance of a Default or (b) to the extent necessary in connection with any mandatory reduction of the Aggregate Revolving Loan Commitment pursuant to Section 2.5.11, each Borrower with outstanding L/C -------------- Obligations shall, upon the Agent's demand or if earlier, at the time of the applicable mandatory reduction of the Aggregate Revolving Loan Commitment pursuant to Section 2.5.11 or mandatory prepayment or repayment of Loans -------------- pursuant to Section 2.5.3, as the case may be, deliver to the Agent for the ------------- benefit of the Lenders, cash collateral in an amount equal to the aggregate outstanding L/C Obligations of such Borrower, or in connection with a deposit made pursuant to the foregoing clause (b), such lesser amount of the outstanding ---------- L/C Obligations of such Borrower as shall satisfy the requirements of Section ------- 2.5.11 or Section 2.5.3, as applicable. Any such collateral shall be held by - ------ ------------- the Agent in a separate account appropriately designated as a cash collateral account in relation to this Agreement and the Letters of Credit and retained by the Agent for the benefit of the Lenders as collateral security for the applicable Borrower's obligations in respect of this Agreement and the Letters of Credit and L/C Drafts. Such amounts shall be applied to reimburse the Agent or each Issuing Lender for drawings or payments under or pursuant to the Letters of Credit or L/C Drafts, or if no such reimbursement is required, to payment of any other due and unpaid costs, fees, expenses and other Obligations related to the Letters of Credit, any L/C Drafts and such cash collateral account, as the Agent shall determine. If no Default shall be continuing, amounts remaining in any cash collateral account established pursuant to this Section 2.6.4 pursuant ------------- to clause (a) above which are not to be applied to reimburse the Agent for ---------- amounts drawn under the Letters of Credit or L/C Drafts or to the payment of related costs, fees, expenses and other Obligations then due and payable as described above, shall be returned to the Borrower. In addition, if the conditions giving rise to a deposit of cash collateral pursuant to clause (b) ---------- above cease to exist, any amounts remaining in any cash collateral account established pursuant to this Section 2.6.4 pursuant to such clause (b) which are ------------- ---------- not to be applied to reimburse the Agent for amounts drawn under the Letters of Credit or L/C Drafts or to the payment of related costs, fees, expenses and other Obligations then due and payable as described above, shall be returned to the applicable Borrower. Investment earnings (net of any unpaid costs, fees, expenses and other Obligations related to the Letters of Credit, any L/C Drafts and such cash collateral account) on amounts on deposit in the cash collateral account shall be for the account of the Borrower, and the Agent shall remit any such accrued earnings to the Borrower no less frequently than quarterly. 2.6.5. Letter of Credit Fees. The Borrowers agree to pay (a) to ---------------------- the Agent for the ratable benefit of the Lenders, a letter of credit fee (the "Letter of Credit Fee") equal to the Applicable 59 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, 60 interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telecopy, telex, or other similar form of teletransmission or otherwise; (v) for errors in interpretation of technical trade terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (vii) for the misapplication by the beneficiary of any Letter of Credit of the proceeds of any drawing under any Letter of Credit; and (viii) for any consequences arising from causes beyond the control of the Agent, the issuer of any Letter of Credit, and the Lenders including, without limitation, any Governmental Acts. None of the above shall affect, impair, or prevent the vesting of any rights or powers of the issuer of any Letter of Credit under this Section 2.6.6. - ------------- (c) In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by the issuer of any Letter of Credit under or in connection with a Letter of Credit issued on behalf of any Borrower or any related certificates shall not, in the absence of Gross Negligence or willful misconduct, as determined by the final judgment of a court of competent jurisdiction, put such issuer, the Agent, any Issuing Lender, any Swing Loan Lender or any Lender under any resulting liability to the Company or any Guarantor or relieve the Borrower or any Guarantor of any of its obligations hereunder or under the relevant Guaranty to any such Person. (d) Without prejudice to the survival of any other agreement of any Borrower hereunder, the agreements and obligations of the Borrowers contained in this Section 2.6.6 shall survive the payment in full of ------------- principal and interest hereunder, the termination of the Letters of Credit and the termination of this Agreement. (e) Notwithstanding anything therein to the contrary, in the event any of the provisions of any application submitted by any Borrower in connection with any Letter of Credit conflict with the provisions of this Agreement, the terms of this Agreement shall govern. 2.7 Termination Date. This Agreement shall be effective until ---------------- the earlier of (A) the later of (i) the Termination Date, (ii) the Term Loan Termination Date and (iii) the date on which all Rate Hedging Obligations shall have been fully paid and satisfied or (B) the date on which no Loans shall be outstanding, all of the Secured Obligations (other than contingent indemnity obligations) shall have been fully paid and satisfied, all Commitments shall have been terminated, and all of the Letters of Credit shall have expired, been canceled or terminated or cash collateralized. Upon termination of this Agreement all of the rights and remedies under this Agreement and the other Loan Documents (other than those which by their terms survive such termination) shall terminate and the Agent shall release its security interest in and to all existing and future Collateral and return any Collateral in its possession to the Borrowers or applicable parties. 61 ARTICLE III: CHANGE IN CIRCUMSTANCES ----------------------- 3.1. Taxes. ----- 3.1.1. Payments to be Free and Clear. All sums payable by each Borrower ----------------------------- under the Loan Documents, whether in respect of principal, interest, fees or otherwise, shall be paid without deduction for any present and future taxes, levies, imposts, deductions, charges or withholdings imposed by any government or any political subdivision or taxing authority thereof (but excluding any franchise tax or tax on or measured by the net income, profits or gains of any Lender, Swing Loan Lender, or Issuing Lender) and all interest, penalties or similar liabilities with respect thereto (collectively, all such as excluded taxes, "taxes"), which amounts shall be paid by the applicable Borrower as provided in Section 3.1.2 and subject to Section 3.1.3 below. ------------- ------------- 3.1.2. Grossing-up of Payments. If: (a) any Borrower or any other Person ----------------------- is required by law to make any deduction or withholding on account of any such taxes from any sum paid or expressed to be payable by the applicable Borrower to any Lender, Swing Loan Lender or Issuing Lender under this Agreement; or (b) any party to this Agreement (or any Person on its behalf) other than any Borrower is required by law to make any deduction or withholding from, or any payment on or calculated by reference to the amount of, any such sum received or receivable (other than on account of any excluded taxes) by any Lender, Swing Loan Lender or Issuing Lender under this Agreement then subject to Section 3.1.3 below: ------------- (i) the applicable party shall notify the Agent and, if such party is not the applicable Borrower, the Agent will notify the applicable Borrower in writing of any such requirement or any change in any such requirement as soon as such party becomes aware of it; (ii) the applicable Borrower shall pay any such taxes before the later of (i) the date on which penalties attached thereto become due and payable or (ii) 15 days after the date of receipt by the applicable Borrower of such written notification provided by the Agent in accordance with paragraph (i) if such applicable party is not the applicable Borrower, such payment to be made (if the liability to pay is imposed on such Borrower) for its own account or (if that liability is imposed on any party to this Agreement) on behalf of and in the name of that party; (iii) the sum payable by the applicable Borrower in respect of which the relevant deduction, withholding or payment is required shall (except, in the case of any such payment, to the extent that the amount thereof is not ascertainable when that sum is paid) be increased to the extent necessary to ensure that, after the making of that deduction, withholding or payment, that party receives on the due date and retains (free from any liability in respect of any such deduction, withholding or payment) a sum equal to that which it would have received and so retained had no such deduction, withholding or payment been required or made; and 62 (iv) within thirty (30) days after payment of any sum from which the applicable Borrower is required by law to make any deduction or withholding, and within thirty (30) days after the due date of payment of any tax or other amount which it is required by paragraph (ii) to pay, it shall deliver to the Agent all such certified documents and other evidence as to the making of such deduction, withholding or payment as (a) are reasonably satisfactory to the affected parties as proof of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority and (b) are required by any such party to enable it to claim a tax credit with respect to such deduction, withholding or payment. 3.1.3 Certification of Withholding Tax Exemption. (a) For any period ------------------------------------------- with respect to which a Lender, Swing Loan Lender, or Issuing Lender has failed to provide the Company with an appropriate form described in Section 2.5.15(i) ----------------- (other than if such failure is due to a change in law occurring after the date on which such Lender, Swing Loan Lender, or Issuing Lender became a party hereunder), such Lender, Swing Loan Lender, or Issuing Lender shall not be entitled to indemnification under this Agreement with respect to taxes imposed by the United States; provided, however, that should a Lender become subject to -------- ------- such taxes because of its failure to deliver a form required hereunder, the Company shall take such steps as such Lender shall reasonably request to assist such Lender to recover such taxes. If at the time a Lender, Swing Loan Lender, or Issuing Lender first becomes a party to this Agreement such party does not deliver to the Company and the Agent an appropriate form described in Section ------- 2.5.15(i) that indicates a complete exemption from (or a complete reduction in - --------- rate of) United States withholding tax, withholding tax at such rate shall be considered excluded from taxes for purposes of Section 3.1 unless and until such ----------- Lender provides an appropriate form certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from taxes for purposes of Section 3.1 for periods governed by such form. ----------- (b) For any period with respect to which a Lender, Swing Loan Lender, or Issuing Lender which is entitled to receive payment under or pursuant to this Agreement from any UK Borrowing Subsidiary either: (i) has ceased to be a Qualifying Bank (unless such cessation is due to a change in law or regulation occurring after the date on which such Lender, Swing Loan Lender, or Issuing Lender became a party hereunder); or (ii) not being a Qualifying Bank, has failed to file a form following a written request as referred to in, and in accordance with, Section ------- 2.5.15(ii) (other than if such failure is due to a change in treaty, ---------- law or regulation occurring after the date on which such Lender, Swing Loan Lender, or Issuing Lender became a party hereunder); such Lender, Swing Loan Lender, or Issuing Lender shall not be entitled to indemnification under this Agreement with respect to taxes imposed by the United Kingdom; provided, however, that should a Lender, Swing Loan Lender, -------- ------- or Issuing Lender become subject to 63 such taxes because of its failure to make such filing as is required hereunder, the Company shall, and shall procure that such UK Borrowing Subsidiary shall, take such steps as such Lender shall reasonably request to assist such Lender to recover such taxes. (c) For any period with respect to which a Lender, Swing Loan Lender, or Issuing Lender has failed to provide the Company with an appropriate form described in Section 2.5.15(iii) (other than if such failure is due to a change ------------------- in law or any regulation occurring after the date on which such Lender, Swing Loan Lender, or Issuing Lender became a party hereunder), such Lender, Swing Loan Lender or Issuing Lender shall not be entitled to indemnification under this Agreement with respect to taxes imposed as a result of such failure and the Agent or the Alternative Currency Agent, as applicable, shall be permitted to withhold federal, state and local income taxes due under the relevant jurisdiction from any payments at the applicable statutory rate; provided, -------- however, that should a Lender, Swing Loan Lender or Issuing Lender became - ------- subject to such taxes because of its failure to deliver a form required hereunder, the Company shall, and shall cause such Borrowing Subsidiary to, take such steps as such Lender, Swing Loan Lender or Issuing Lender, shall reasonably request to assist such Lender to recover such taxes. 3.2. Increased Costs. If, at any time after the date of this Agreement, --------------- the adoption of any law or the application of any governmental or quasi- governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any change therein, or any change in the interpretation or administration thereof, (i) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender, any Swing Loan Lender or any Issuing Lender or any applicable Lending Installation (other than reserves and assessments taken into account in determining the interest rate applicable to Advances bearing interest at the Eurocurrency Rate), or (ii) imposes any other condition (not being a tax imposed, levied, collected, withheld or assessed by any taxing authority), the result of which is to increase the cost to any Lender, any Swing Loan Lender or any Issuing Lender or any applicable Lending Installation of making, funding or maintaining such Loans or issuing or participating in Letters of Credit or reduces any amount receivable by any Lender, Swing Loan Lender or Issuing Lender or any applicable Lending Installation in connection with such Loans or Letters of Credit, or requires any Lender, Swing Loan Lender or Issuing Lender or any applicable Lending Installation to make any payment calculated by reference to the amount of such Loans or Letters of Credit held or interest received by it, by an amount deemed material by such Lender, Swing Loan Lender or Issuing Lender, then, within 15 days of written demand by such Lender, Swing Loan Lender or Issuing Lender, the applicable Borrower shall pay such Lender, Swing Loan Lender or Issuing Lender that portion of such increased expense incurred or reduction in an amount received which such Lender, Swing 64 Loan Lender or Issuing Lender determines (as evidenced by its written demand) is attributable to making, funding and maintaining its Loans, its L/C Interests, the Letters of Credit and its Revolving Loan Commitment. 3.3. Changes in Capital Adequacy Regulations. If a Lender, Swing Loan --------------------------------------- Lender or Issuing Lender reasonably determines that the amount of capital required or expected to be maintained by such Lender, Swing Loan Lender or Issuing Lender, any Lending Installation of such Lender, Swing Loan Lender or Issuing Lender or any corporation controlling such Lender, Swing Loan Lender or Issuing Lender attributable to this Agreement, the Loans, the L/C Interests, the Letters of Credit or its obligation to make Loans or participate in Letters of Credit hereunder is increased as a result of a Change (as hereafter defined), then, within 15 days of written demand by such Lender, Swing Loan Lender or Issuing Lender (with a copy of such demand to the Agent), the Company shall pay such Lender, Swing Loan Lender or Issuing Lender the amount which such Lender, Swing Loan Lender or Issuing Lender determines is necessary to compensate it for any reduction in the rate of return on capital to an amount below that which such Lender, Swing Loan Lender or Issuing Lender could have achieved but for such Change and is attributable to this Agreement, the Loans, its L/C Interests, the Letters of Credit or its obligation to make Loans or participate in Letters of Credit hereunder. "Change" means (i) any change after the date of this Agreement in the Risk-Based Capital Guidelines (as hereafter defined) or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the date of this Agreement which affects the amount of capital required or expected to be maintained by any Lender, Swing Loan Lender or Issuing Lender or any Lending Installation or any corporation controlling any Lender, Swing Loan Lender or Issuing Lender. "Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in effect in the United States of America on the date of this Agreement, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States of America implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices Entitled "International Convergence of Capital Measurements and Capital Standards," including transition rules, and any amendments to such regulations adopted prior to the date of this Agreement. 3.4. Availability of Types of Advances. If the Required Lenders --------------------------------- reasonably determine that (i) deposits of a type and maturity appropriate to match fund Advances bearing interest at the Eurocurrency Rate are not available or (ii) the interest applicable to a Type of Advance does not accurately reflect the cost of making or maintaining such Advance, then the Agent shall suspend the availability of the affected Type of Advance. If any Lender determines that maintenance of its Eurocurrency Loans would violate any applicable law, rule, regulation or directive, whether or not having the force of law, then such Lender may by notice to the applicable Borrower, through the Agent, require that any of its Eurocurrency Loans be promptly converted to an unaffected Type of Loan until such illegality shall cease; and thereafter, any request for a Eurocurrency Loan shall, with respect to such Lender, be deemed a request for an Alternate Base Rate Loan. 65 3.5. Funding Indemnification. If any payment of a Eurocurrency Advance ----------------------- or a Swing Loan occurs on a date which is not the last day of the applicable Interest Period, whether because of acceleration, prepayment or otherwise (including, without limitation, any conversion of an Alternate Currency Loan to Dollars pursuant to Section 2.1.4(vi) or any receipt by a Lender of all or a ----------------- portion of the principal of a Loan prior to the last day of the applicable Interest Period as a result of a sale arranged by the Company pursuant to Section 2.5.11) or a Eurocurrency Advance or Swing Loan is not made on the date - -------------- specified by the applicable Borrower for any reason other than default by the Lenders or applicable Swing Loan Lenders, such Borrower will indemnify each Lender or Swing Loan Lender, as applicable for any loss or cost incurred by it resulting therefrom, including, without limitation, any loss or cost in liquidating or employing deposits acquired to fund or maintain the Eurocurrency Advance or Swing Loan. In connection with any assignment by any Lender pursuant to Section 13.3 of any portion of the Loans made prior to the earlier of (i) the ------------ completion of the syndication of the facilities hereunder (as determined by the Arranger) and (ii) ninety (90) days following the initial funding hereunder, if any Borrower has Eurocurrency Loans outstanding an interest in which is being assigned, then, unless the assigning Lender in its discretion agrees otherwise, such Borrower shall be deemed to have repaid all outstanding Eurocurrency Advances as of such date and reborrowed such amount as an Alternate Base Rate Advance and/or Eurocurrency Advance (chosen in accordance with the provisions of Article II) and the indemnification provisions under this Section 3.5 shall - ---------- ----------- apply. 3.6. Mitigation of Additional Costs or Adverse Circumstances. If, in -------------------------------------------------------- respect of any Lender, Swing Loan Lender and Issuing Lender, circumstances arise which would or would upon the giving of notice result in: (a) an increase in the liability of a Borrower to such Lender under Section 3.1, 3.2 or 3.3 or ----------- --- --- (b) the unavailability of a Type of Loan under Section 3.4; ----------- then, without in any way limiting, reducing or otherwise qualifying the applicable Borrower's obligations under any of the clauses referred to above in this Section 3.6 and subject to Section 2.5.11, such Lender shall promptly upon ----------- -------------- becoming aware of the same notify the Agent thereof and shall, in consultation with the Agent and the Company and to the extent that it can do so without prejudice to its own position, take such reasonable steps as may be reasonably open to it to mitigate the effects of such circumstances (including, without limitation, (i) the transfer of its Loans to a Lending Installation in another jurisdiction, (ii) the assignment of its rights and obligations hereunder to a financial institution willing to participate in this facility or (iii) the restructure of its participation in this facility in a manner which will avoid the event in question and on terms mutually acceptable to such Lender, the Agent and the Company). If and so long as a Lender has been unable to take, or has not taken, steps acceptable to the Company to mitigate the effect of the circumstances in question, such Lender shall be obliged, at the request of the Company, to assign all its rights and obligations hereunder to a financial institution nominated by the Company with the approval of the Agent and willing to participate in the facility in place of such Lender; provided 66 that such financial institution satisfies all of the requirements of this Agreement including, but not limited to, providing the forms required by Sections 2.5.15 and 13.3.2. Notwithstanding any such assignment, the obligations - --------------- ------ of the Company under Sections 3.1, 3.2, 3.3 and 10.6 shall survive any such ------------ --- --- ---- assignment and be enforceable by such Lender. 3.7. Lender Statements; Survival of Indemnity. Each Lender, Swing Loan ---------------------------------------- Lender and Issuing Lender shall deliver a written statement of such Lender, Swing Loan Lender or Issuing Lender as to the amount due, if any, under Section ------- 3.1, 3.2, 3.3 or 3.5. Such written statement shall set forth in reasonable - --- --- --- --- detail the event by reason of which such Lender, Swing Loan Lender or Issuing Lender is entitled to make a claim for such amount and the calculations upon which such Lender, Swing Loan Lender or Issuing Lender determined such amount, which shall be final, conclusive and binding on the applicable Borrower in the absence of manifest error. Determination of amounts payable under such Sections in connection with a Eurocurrency Loan shall be calculated as though each Lender funded its Eurocurrency Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the Eurocurrency applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement shall be payable within three (3) Business Days of demand after receipt by the applicable Borrower of the written statement. Notwithstanding any contrary provision of this Article III, no Borrower shall be required to make any ----------- payments to any Lender, Swing Loan Lender or Issuing Lender pursuant to Sections -------- 3.2 or 3.3 with respect to periods of time more than 60 days prior to date upon - --- --- which such Lender's, Swing Loan Lender's or Issuing Lender's written statement in accordance with the terms of this Section 3.7 is first delivered to the ----------- applicable Borrower. The obligations of such Borrower under Sections 3.1, 3.2, ------------ --- 3.3 and 3.5 shall survive payment of any other of such Borrower's Obligations - --- --- and the termination of this Agreement. ARTICLE IV: CONDITIONS PRECEDENT -------------------- 4.1. Initial Advance. The initial Advance hereunder shall occur no later --------------- than October 30, 1998. No Lender shall be required to make the Term Loans or any initial Revolving Loan or purchase participations in the Letters of Credit, Swing Loans or Alternate Currency Loans hereunder, no Issuing Lender shall be required to issue the initial Letter of Credit hereunder, and no Swing Loan Lender shall be required to make any Swing Loans hereunder, and no Alternate Currency Lender shall be required to make any Alternate Currency Loan hereunder unless (a) the Company has furnished or caused to be furnished to the Agent with sufficient copies for the Lenders: (i) Copies of the articles of incorporation of each Borrower and each Guarantor Subsidiary, together with all amendments, and a certificate of good standing, both certified by the appropriate governmental officer in its jurisdiction of incorporation, along with copies, certified as a true up to date copy, dated not more than fifteen (15) days prior to the date of this Agreement, by a duly 67 authorized officer of each of the French Borrowing Subsidiaries, of the constitutional documents of the French Borrowing Subsidiaries, as filed with the Registry of Commerce and Companies and a K-bis record, dated not more than fifteen (15) days prior to the date of this Agreement. (ii) Copies, certified by the Secretary or Assistant Secretary of each Borrower and each Guarantor Subsidiary, of its by-laws, "statuts" or comparable governance documents and of its Board of Directors' resolutions (and resolutions of other bodies, if any are deemed necessary by counsel for the Agent) authorizing the execution of the Loan Documents. (iii) An incumbency certificate, executed by the Secretary or Assistant Secretary of each Borrower and each Guarantor Subsidiary, which shall identify by name and title and bear the signature of the officers of such Borrower or such Guarantor Subsidiary, as applicable, authorized to sign the Loan Documents and, if applicable, to make borrowings hereunder, upon which certificate the Agent, the Lenders, the Swing Loan Lenders and the Issuing Lenders shall be entitled to rely until informed of any change in writing by the Company. (iv) A certificate, signed by a Financial Officer of the Company, stating that on the initial Borrowing Date no Default or Unmatured Default has occurred and is continuing. (v) A certificate, signed by a Financial Officer of the Company, stating that on the initial Borrowing Date the representations and warranties contained in the Loan Documents are true and correct in all material respects. (vi) A written opinion of the counsel (a) to the Company and the Guarantor Subsidiaries with respect to U.S. law addressed to each of the Lenders, in substantially the form of Exhibit E --------- hereto, (b) to the Company and the French Borrowing Subsidiaries with respect to the laws of France addressed to each of the Lenders in substantially the form of Exhibit F-1 ----------- hereto, (c) to the Company and the Dutch Borrowing Subsidiaries with respect to the laws of The Netherlands addressed to each of the Lenders in substantially the form of Exhibit F-2 hereto, ----------- (d) to the Company and the German Borrowing Subsidiaries with respect to the laws of Germany addressed to each of the Lenders in substantially the form of Exhibit F-3 hereto, and (e) to the ----------- Company and the UK Borrowing Subsidiaries with respect to Scottish law addressed to each of the Lenders in substantially the form of Exhibit F-4 hereto. ----------- (vii) The Notes payable to the order of each of the Lenders. 68 (viii) Evidence satisfactory to the Agent and the Required Lenders that the Company's directors and shareholders, and, to the extent required under applicable law, the directors and shareholders of any of the Company's Acquisition Subsidiaries (and, to the extent required under applicable law, the directors and shareholders of Schlumberger) shall have approved the Schlumberger Acquisition. (ix) Evidence of regulatory and legal approval, if any, for the Schlumberger Acquisition and the financing described herein, including without limitation any French or European Union regulatory approvals. (x) A Certificate signed by either the chief executive officer or the chief financial officer of the Company that since December 31, 1997, no change, event, development or combination of developments shall have occurred which, individually or in the aggregate has resulted in a Material Adverse Effect on the business acquired pursuant to the Schlumberger Acquisition. (xi) Unqualified audited financial statements for the last three fiscal years with respect to the fuel dispenser, manufacturing, sales and service business units of Schlumberger, certified by Befec Price Waterhouse, including balance sheets, related profit and loss and reconciliation of surplus statements and a statement of cash flows, together with copies of such financial statements which have been translated into English and converted into Dollar Amounts as of and for the periods stated by Befec Price Waterhouse. (xii) An Officer's Certificate from a Financial Officer of the Company with respect to value, solvency, and other appropriate factual information regarding the Company and its Subsidiaries, including without limitation the Borrowing Subsidiaries, that after giving effect to the Schlumberger Acquisition, the Company and its Subsidiaries, including the Borrowing Subsidiaries, on a consolidated basis, are solvent and will be solvent subsequent to incurring the Indebtedness to be incurred in connection with the Schlumberger Acquisition, will be able to pay their debts and liabilities as they become due, and will not be left with unreasonably small capital with which to engage in their businesses. (xiii) Evidence reasonably satisfactory to the Agent that the Borrowers and each of their Subsidiaries (a) has made a full and complete assessment of the Year 2000 Issues; (b) has a realistic and achievable program for remediating the Year 2000 Issues, including a timetable and budget of anticipated costs; and (c) has a source of funds as required in such budget. 69 (xiv) Pro Forma opening financial statements ("Pro Forma Opening --------- Statements") giving effect to the Schlumberger Acquisition and projections ("Updated Projections") updating the projections dated as of June 16, 1998 ("Earlier Projections") previously provided to the Agent, together with such information as the Agents and the Required Lenders may reasonably request to confirm the tax, legal, and business assumptions made in such Pro Forma Opening Statements and Updated Projections which Pro Forma Opening Statements and Updated Projections demonstrate, in the reasonable judgment of the Agents and the Required Lenders, together with all other information then available to the Agents and the Required Lenders, that the ability of the Company and its Subsidiaries to repay their debts and satisfy their respective other obligations as and when due and to comply with the financial covenants acceptable to the Agents and Required Lenders has not changed in any material respect from the Earlier Projections. (xv) Such other documents as any Lender or its counsel may have reasonably requested including without limitation those documents set forth on the List of Closing Documents attached hereto as Exhibit G. --------- and (b) (i) There shall be no injunction or temporary restraining order which, in the judgment of the Agent or the Required Lenders, would prohibit the making of the Advance or the consummation of the Schlumberger Acquisition. (ii) There shall be no litigation which would reasonably be expected to result in a Material Adverse Effect. (iii) The Agent and the Lenders shall be satisfied with the results of the due diligence investigation of the Borrowing Subsidiaries including, without limitation, contingent liabilities and contractual obligations. (iv) All financial, accounting and tax aspects of the Schlumberger Acquisition shall be acceptable to the Agent and the Lenders. (v) The representations and warranties contained in the Acquisition Agreement shall be accurate in all material respects as of the date of the Schlumberger Acquisition; the Acquisition Agreement shall not have been amended or modified by the Company without the prior agreement and consent of the Agent; and the conditions to the consummation of the Schlumberger Acquisition set forth in the Acquisition Agreement, other than the transfer of funds, shall have been satisfied or, with the prior written consent of the Agent, waived. 70 (vi) All obligations of the Company or the Borrowing Subsidiaries under existing loan facilities shall have been prepaid (other than Indebtedness scheduled on Schedule 6.18). ------------- (vii) Liens creating a first priority security interest in the Collateral subject to Liens permitted hereunder in favor of the Agent on behalf of the Lenders shall have been granted pursuant to the Loan Documents and appropriate financing statements shall have been signed by the Borrowers in proper form for filing in the appropriate jurisdictions to perfect such security interests. (viii) No Material Adverse Change shall have occurred since (i) May 31, 1998 in the case of the Company and its Subsidiaries (not including the fuel dispenser, manufacturing, sales and service business units of Schlumberger) and (ii) December 31, 1997 in the case of the fuel dispenser, manufacturing, sales and service business units of Schlumberger. (ix) Each of the Loan Documents shall have been duly executed by the Borrowers and the Subsidiary Guarantors parties thereto. (x) The terms and conditions of the Seller Subordinated Notes, including, without limitation, in respect of subordination provisions, interest rate, maturity, amortization, premiums, fees, blockage periods, standstill periods, covenants, events of default and remedies, shall be acceptable to the Agent and the Lenders. (xi) The terms and conditions of the Seller Equity Interests issued by the Company to Schlumberger shall be acceptable to the Agent and the Lenders. 1. (xii) The Seller Senior Subordinated Note shall constitute payment of not less than $170,000,000 of the purchase price for the Schlumberger Acquisition. The Seller Junior Subordinated Note shall constitute payment of not less than $40,000,000 of the purchase price for the Schlumberger Acquisition. The Seller Equity Interests shall constitute payment of not less than $20,000,000 of the purchase price for the Schlumberger Acquisition. Not less than $20,000,000 of the purchase price for the Schlumberger Acquisition will be paid in additional Seller Subordinated Notes or Seller Equity Interests (the "Additional Junior Security"). 4.2. Initial Advance to Each New Borrowing Subsidiary. No Lender shall ------------------------------------------------ be required to make an Advance hereunder or purchase participations in Letters of Credit, Swing Loans or Alternate Currency Loans hereunder, no Issuing Lender shall be required to issue a Letter of Credit hereunder, no Swing Loan Lender shall be required to make any Swing Loans hereunder, and no 71 Alternate Currency Lender shall be required to make any Alternate Currency Loans, in each case, to a new Borrowing Subsidiary added after the Effective Date unless (a) all such documents, instruments and agreements required by the Agent granting a first priority security interest in substantially all of the Property of such new Borrowing Subsidiary (subject to Liens permitted hereunder, and other than property which the Agent and the Company agree to exclude, and limited, in the case of a domestic Subsidiary pledging the Capital Stock of a foreign subsidiary, to 65% of such issued and outstanding Capital Stock to secure all of the Secured Obligations) in favor of the Agent on behalf of the Lenders and the Holders of Secured Obligations shall have been executed and ready to be filed in the appropriate jurisdictions and (b) the Company has furnished or caused to be furnished to the Agent with sufficient copies for the Lenders: (i) The Assumption Letter executed and delivered by such Borrowing Subsidiary and containing the written consent of the Company at the foot thereof, as contemplated by Section 2.5.14. -------------- (ii) Copies, certified by the Secretary or Assistant Secretary of the Borrowing Subsidiary, of its Board of Directors' resolutions (and resolutions of other bodies, if any are deemed necessary by counsel for any Lender) approving the Assumption Letter. (iii) An incumbency certificate, executed by the Secretary or Assistant Secretary of the Borrowing Subsidiary, which shall identify by name and title and bear the signature of the officers of such Borrowing Subsidiary authorized to sign the Assumption Letter and the other documents to be executed and delivered by such Borrowing Subsidiary hereunder, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by the Company. (iv) An opinion of counsel to such Borrowing Subsidiary, substantially in the form of Exhibit H hereto or, in the case --------- of a new Non-Domestic Borrowing Subsidiary, in a form reasonably acceptable to the Agent. (v) The Notes payable to the order of each of the Lenders. (vi) A pledge agreement in form and substance acceptable to the Agent pursuant to which all of the outstanding Capital Stock of such Borrowing Subsidiary is pledged to the Agent for the benefit of itself and the Holders of Secured Obligations limited, in the case of the Company or a domestic Subsidiary pledging Capital Stock of a foreign subsidiary to 65% of such issued and outstanding Capital Stock. (vii) Guaranty documentation and contribution agreement documentation from such Borrowing Subsidiary in form and substance acceptable to the Agent. 72 (viii) Collateral Documents with respect to such Borrowing Subsidiary's Property in form and substance reasonably acceptable to the Agent. (ix) With respect to the initial Advance made to any UK Borrowing Subsidiary, the Agent shall have received originals and/or copies, as applicable, of all filings required to be made establishing to the Agent's satisfaction that each Lender, Swing Loan Lender or Issuing Lender is entitled to receive payments under the Loan Documents without deduction or withholding of any English taxes. 4.3. Each Advance and Letter of Credit. No Lender shall be required to --------------------------------- make any Advance or Swing Loan (including, without limitation, the initial Advance hereunder) or purchase participations in Letters of Credit, Swing Loans or Alternate Currency Loans and no Issuing Lender shall be required to issue Letters of Credit hereunder, unless on the applicable Borrowing Date: (i) Prior to and after giving effect to such Advance, Swing Loan or Letter of Credit there exists no Default or Unmatured Default. (ii) The representations and warranties contained in the Loan Documents are true and correct in all material respects as of such Borrowing Date or date for issuance of such Letter of Credit (except such representations and warranties which expressly relate solely to, and were true and correct in all material respects as of, an earlier date). (iii) All legal and regulatory matters incident to the making of such Advance or Swing Loan or issuing such Letter of Credit shall be reasonably satisfactory to the Lenders and their counsel, including, without limitation, the compliance by the Company and its Subsidiaries with Regulations T, U and X. Each borrowing or Letter of Credit shall constitute a representation and warranty by the applicable Borrower that the conditions contained in Section ------- 4.3(i) and (ii) have been satisfied. - ------ ---- ARTICLE V: REPRESENTATIONS AND WARRANTIES ------------------------------ The Company represents and warrants to the Lenders that: 5.1. Corporate Existence and Standing. Each of the Company and its -------------------------------- domestic Borrowing Subsidiaries is duly incorporated or duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted except to the extent that the failure to be have such authority would not reasonably be expected to result in a Material Adverse Effect. Each of the French Borrowing Subsidiaries is duly incorporated and validly existing under 73 the laws of France as a societe anonyme and has power to carry on its business as it is now being conducted and to own its property and other assets. 5.2. Authorization and Validity. The Company and each of the Borrowing -------------------------- Subsidiaries has the corporate or other power and authority and legal right to execute and deliver the Loan Documents and to perform its obligations thereunder. The execution and delivery by the Company and each of the Borrowing Subsidiaries of the Loan Documents and the performance of its obligations thereunder have been duly authorized by proper corporate or other proceedings, and the Loan Documents constitute legal, valid and binding obligations of the Company and each of the Borrowing Subsidiaries enforceable against them in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and general equitable principles. It is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of this Agreement that it or any other instrument be filed, recorded, registered or enrolled in any court, public office or elsewhere in France or that any stamp, registration or similar tax be paid in France or in relation to this Agreement, except for the stamp duty known as "timbre de dimension" which is due if this Agreement is signed in France. This Agreement, once translated into French by a sworn translator before the French courts, is in proper form for its enforcement in the courts of France. 5.3. No Conflict; Government Consent. Neither the execution and delivery ------------------------------- by the Company and the Borrowing Subsidiaries of the Loan Documents, nor the consummation of the transactions therein contemplated, nor compliance with the provisions thereof will violate any law (including, without limitation, any law of the United States of America, England, Scotland, The Netherlands, the Republic of France or the European Community), rule, regulation, order, writ, judgment, injunction, decree or award binding on the Company or any of its Borrowing Subsidiaries or the Company's or any Borrowing Subsidiary's articles of incorporation or by-laws or the provisions of any indenture, instrument or agreement to which the Company or any of its Borrowing Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the Property of the Company or a Borrowing Subsidiary pursuant to the terms of any such indenture, instrument or agreement, in any such case which violation, conflict, default, creation or imposition could reasonably be expected to have a Material Adverse Effect. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents except filings necessary to create or perfect security interests in the Collateral. 5.4. Financial Statements. The November 30, 1997 financial statements of -------------------- the Company and its Consolidated Subsidiaries heretofore delivered to the Lenders were prepared in accordance with U.S. GAAP in effect on the date such statements were prepared and fairly present the financial condition of the Company and its Consolidated Subsidiaries at such date and the results of their operations for the period then ended. The financial statements of the fuel dispenser, manufacturing, 74 sales and service business units of Schlumberger attached hereto as Schedule 5.4 ------------ were prepared in accordance with U.S. GAAP in effect on the date such statements were prepared and fairly present the financial condition of such units at such date and the results of their operations for the period then ended. 5.5. Material Adverse Change. Since May 31, 1998, in the case of the ----------------------- Company and its Subsidiaries and since December 31, 1997 in the case of the fuel dispenser, manufacturing, sales and service business units of Schlumberger acquired pursuant to the Schlumberger Acquisition there has occurred no Material Adverse Change which have not been previously disclosed to the Agent. 5.6. Taxes. The Company and its Consolidated Subsidiaries have filed all ----- United States federal income tax returns and all other material tax returns which are required to be filed and have paid all material taxes due pursuant to said returns or pursuant to any assessment received by the Company or any of its Consolidated Subsidiaries, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The United States consolidated income tax returns of the Company and its Consolidated Subsidiaries have been audited by the Internal Revenue Service through the fiscal year ended November 30, 1990. To the best of the Company's knowledge, the Borrowing Subsidiaries have filed all income tax returns and all other material tax returns which are required to be filed pursuant to the laws of the jurisdiction of their incorporation and any division thereof and have paid all material taxes due pursuant to said returns or pursuant to any assessment received by any of such Borrowing Subsidiaries, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. The charges, accruals and reserves on the books of the Company and its Consolidated Subsidiaries in respect of any taxes or other governmental charges are adequate. Provided that payments by the Borrowers are made in accordance with this Agreement, no Taxes are imposed by withholding or otherwise by the Republic of France on any payment to be made by the Borrowers under this Agreement or are imposed on or by virtue of the execution or delivery by the Borrowers of this Agreement or any document or instrument to be executed or delivered under this Agreement, except for the stamp duty known as "timbre de dimension" and the stamp duty known as "timbre d'enregistrement" each of which is due if the Agreement is signed in France. 5.7. Litigation. There is no litigation, arbitration, governmental ---------- investigation, proceeding or inquiry pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect. 5.8. Subsidiaries. Schedule 5.8 hereto contains an accurate list of all ------------ ------------ of the presently existing Subsidiaries of the Company as of the Effective Date, setting forth their respective jurisdictions of incorporation and the percentage of their respective Capital Stock owned by the Company or other Subsidiaries. All of the issued and outstanding shares of Capital Stock of the Material Subsidiaries have been duly authorized and issued and are fully paid and non- assessable. 75 5.9. ERISA. Neither the Company nor any ERISA Affiliate maintains or ----- contributes to any Plan as of the Effective Date other than those listed on Schedule 5.9 hereto. Each Plan which is intended to be qualified under Section - ------------ 401(a) of the Internal Revenue Code as currently in effect has been determined by the IRS to be so qualified, and each trust related to any such Plan has been determined to be exempt from federal income tax under Section 501(a) of the Internal Revenue Code as currently in effect. Except as disclosed in Schedule -------- 5.9, neither the Company nor any Subsidiary maintains or contributes to any - --- employee welfare benefit plan within the meaning of Section 3(1) of ERISA which provides benefits to employees after termination of employment other than as required by Section 601 of ERISA. The Company and all its ERISA Affiliates are in compliance in all material respects with the responsibilities, obligations or duties imposed on them by ERISA, the Internal Revenue Code and regulations promulgated thereunder with respect to all Plans. No Benefit Plan has incurred any accumulated funding deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Internal Revenue Code) whether or not waived. Neither the Company nor any ERISA Affiliates nor any fiduciary of any Plan which is not a Multiemployer Plan (i) has engaged in a nonexempt prohibited transaction described in Sections 406 of ERISA or 4975 of the Internal Revenue Code or (ii) has taken or failed to take any action which would constitute or result in a Termination Event that could result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has any material liability of any kind whatsoever, whether direct, indirect, contingent or otherwise, (i) on account of any violation of the health care requirements of Part 6 of Title I of ERISA or Section 4980B of the Code, (ii) under Section 502(i) or Section 502(l) of ERISA or Section 4975 of the Code, (iii) under Section 302 of ERISA or Section 412 of the Code or (iv) under Title IV of ERISA. Neither the Company nor any ERISA Affiliate has incurred any liability to the PBGC which remains outstanding other than the payment of premiums, and there are no premium payments which have become due which are unpaid. Schedule B to the most recent annual report filed with the IRS with respect to each Benefit Plan and furnished to the Lender is complete and accurate. Since the date of each such Schedule B, there has been no material adverse change in the funding status or financial condition of the Benefit Plan relating to such Schedule B. Neither the Company nor any ERISA Affiliate has (i) failed to make a required contribution or payment to a Multiemployer Plan or (ii) suffered a complete or partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer Plan. Neither the Company nor any ERISA Affiliate has failed to make a required installment or any other required payment under Section 412 of the Internal Revenue Code on or before the due date for such installment or other payment. Neither the Company nor any ERISA Affiliate is required to provide security to a Benefit Plan under Section 401(a)(29) of the Internal Revenue Code due to a Plan amendment that results in an increase in current liability for the plan year. Except as disclosed on Schedule 5.9, the Company does not have, by reason of the transactions - ------------ contemplated hereby any obligation to make any payment to the employee pursuant to any Plan or existing contract or arrangement. The Company has given to the Agent copies of all of the following: each Benefit Plan and related trust agreement (including all amendments to such Plan and trust) in existence or committed to as of the Effective Date and in respect to which the Company or any ERISA Affiliate is currently an "employer" as defined in Section 3(5) of ERISA, and the most recent actuarial report, determination letter issued by the IRS and Form 5500 filed in respect of each such Benefit Plan in existence; a listing of all of the Multiemployer Plans currently contributed to by the 76 Company or any ERISA Affiliate with the aggregate amount of the most recent annual contributions required to be made by the Company and all ERISA Affiliates to each such Multiemployer Plan, any information which has been provided to the Company or an ERISA Affiliate regarding withdrawal liability under any Multiemployer Plan and the collective bargaining agreement pursuant to which such contribution is required to be made. For purposes of this Section 5.9 and Section 6.19 below, the Company and any ----------- ------------ ERISA Affiliate shall be deemed to know all facts known by the Administrator of any Plan of which the Company or any ERISA Affiliate is the plan sponsor. 5.10. Full Disclosure. The financial statements referred to in Section --------------- ------- 5.4 with respect to the Company and its Consolidated Subsidiaries, and, to the - --- best of the Company's knowledge with respect to Schlumberger, do not, nor do any other written statements furnished by the Company to the Agent or the Lenders in connection with the negotiation of the Loan Documents taken as a whole, contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading as of the dates thereof. 5.11. Assets and Properties. The Borrower and each of its Subsidiaries --------------------- has good and marketable title to all of its assets and properties (tangible and intangible, real or personal) owned by it or a valid leasehold interest in all of its leased assets (except insofar as marketability may be limited by any laws or regulations of any Governmental Authority affecting such assets) (in each case necessary for the conduct of its business), and all such assets and property are free and clear of all Liens, except Liens securing the Obligations and Liens permitted under Section 6.10. On the Effective Date, except as ------------ specified on Schedule 5.11, substantially all of the assets and properties owned ------------- by, leased to or used by the Borrower and/or each such Subsidiary of the Borrower (in each case necessary for the conduct of its business) are in adequate operating condition and repair, ordinary wear and tear excepted. Except for Liens granted to the Agent for the benefit of the Agent and the Lenders, neither this Agreement nor any other Loan Document, nor any transaction contemplated under any such agreement, will affect any right, title or interest of the Borrower or such Subsidiary in and to any of such assets in a manner that would have or is reasonably likely to have a Material Adverse Effect. 5.12. Patents and Trademarks. The Company and each Material Subsidiary ---------------------- owns or possesses all material patents, trademarks, trade names, service marks, copyright, licenses and rights with respect to the foregoing necessary for the future conduct of its business, without any known material conflict with the rights of others. 5.13. No Defaults. No Default or Unmatured Default has occurred and is ----------- continuing. Neither the Company nor any Borrowing Subsidiary is in default in the payment of principal or interest on any Indebtedness in excess of $3,000,000 (or the Equivalent Amount of Indebtedness if denominated in a currency other than Dollars) in the aggregate, is not in default under any instrument or instruments or agreements under and subject to which such Indebtedness has been 77 issued, no event has occurred and is continuing under the provisions of any such instrument or agreement which with the lapse of time or the giving of notice, or both, would constitute an event of default thereunder and the Company is not in violation of any term of its articles of incorporation. 5.14. Investment Company Act. Neither the Company nor any Subsidiary ---------------------- is an "investment company" or an "affiliated person" thereof or an "affiliated person" of such affiliated person as such terms are defined in the Investment Company Act of 1940, as amended. 5.15. Compliance with Environmental Laws. Neither the Company nor any ---------------------------------- Subsidiary has notice or knowledge of any violation of any applicable Federal, state, regional, departmental or local laws, statutes, rules, regulations or ordinances relating to public health, safety or the environment, including, without limitation, relating to releases, discharges, emissions or disposals to air, water, land or ground water, to the withdrawal or use of ground water, to the use, handling or disposal of polychlorinated biphenyls (PCB's), asbestos or urea formaldehyde, to the treatment, storage, disposal or management of hazardous or dangerous substances (including, without limitation, petroleum, crude oil or any fraction thereof, or other hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or other controlled, prohibited or regulated substances or emissions which violation could reasonably be expected to have a Material Adverse Effect. The total liability arising out of any environmental matters, if adversely determined, would not reasonably be expected to exceed a Substantial Portion. 5.16. Regulations T, U and X. The Company and its Subsidiaries, ---------------------- including the French Borrowing Subsidiaries, are in compliance with Regulations T, U and X. Margin stock (as defined in Regulations U and X) constitutes less than 25% of those assets of the Company and its Subsidiaries which are subject to any limitation on sale, pledge, or other restriction hereunder. 5.17. Filing. To ensure the enforceability or admissibility in evidence ------ of this Agreement and the Notes executed by any French Borrowing Subsidiary in such French Borrowing Subsidiary's country of organization or incorporation and country which is its principal place of business (each, a "SUBJECT COUNTRY"), it is not necessary that this Agreement or the Notes of such French Borrowing Subsidiary or any other document be filed or recorded with any court or other authority in any Subject Country or that any stamp or similar tax be paid to or in respect of this Agreement, except for the stamp duty known as "timbre de dimension" which is due if this Agreement is signed in France, or the Notes of such French Borrowing Subsidiary except as specified in Section 5.2. The ----------- qualification by any Lender or the Agent for admission to do business under the laws of any Subject Country does not constitute a condition to, and the failure to so qualify does not affect, the exercise by any Lender or the Agent of any right, privilege, or remedy afforded to any Lender or the Agent in connection with the Loan Documents to which such French Borrowing Subsidiary is a party or the enforcement of any such right, privilege, or remedy against such French Borrowing Subsidiary. The performance by any Lender or the Agent of any action required or permitted under the Loan Documents will not (i) violate any law or regulation of any Subject Country or any political subdivision thereof, (ii) result in any tax or other monetary liability 78 to such party pursuant to the laws of any such Subject Country or political subdivision or taxing authority thereof (provided that, should any such action result in any such tax or other monetary liability to the Lender or the Agent, the Company hereby agrees to indemnify such Lender or the Agent, as the case may be, against (x) any such tax or other monetary liability and (y) any increase in any tax or other monetary liability which results from such action by such Lender or the Agent and, to the extent the Company makes such indemnification, the incurrence of such liability by the Agent or any Lender will not constitute a Default) or (iii) violate any rule or regulation of any federation or organization or similar entity of which such Subject Country is a member. 5.18. No Immunity. No French Borrowing Subsidiary nor any of its assets ----------- is entitled to immunity from suit, execution, attachment or other legal process. Such French Borrowing Subsidiary's execution and delivery of the Loan Documents to which it is a party constitute, and the exercise of its rights and performance of and compliance with its obligations under such Loan Documents will constitute, private and commercial acts done and performed for private and commercial purposes. 5.19. Contingent Obligations. Other than any liability incident to any ---------------------- pending litigation, arbitration or proceedings, neither the Company nor any Borrowing Subsidiary has material contingent obligations as of the Effective Date not provided for or disclosed in the financial statements referred to in Section 5.4. - ----------- 5.20. Foreign Employee Benefit Matters. Each Foreign Employee Benefit -------------------------------- Plan is in compliance in all respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Plan, except for any non-compliance the consequences of which, in the aggregate, would not result in a material obligation to pay money. The aggregate of the accumulated benefit obligations under all Foreign Pension Plans does not exceed the current Fair Market Value of the assets held in the trusts or similar funding vehicles for such Plans or reasonable reserves have been established in accordance with prudent business practices or as required by U.S. GAAP with respect to any shortfall. With respect to any Foreign Employee Benefit Plan maintained or contributed to by the Company or any Subsidiary or any member of its Controlled Group (other than a Foreign Pension Plan), reasonable reserves have been established in accordance with prudent business practice or where required by ordinary accounting practices in the jurisdiction in which such Plan is maintained. There are no actions, suits or claims (other than routine claims for benefits) pending or, to the knowledge of the Borrowers, threatened against the Company or any Subsidiary or any ERISA Affiliate with respect to any Foreign Employee Benefit Plan. 5.21. French Withholding. As at the date of this Agreement, with ------------------ respect to any portion of the Aggregate Revolving Loan Commitment, the interest referred to in Article II is not subject to withholding in France if the initial ---------- Lender in respect of such portion of the Term Loans or the Aggregate Revolving Loan Commitment is (x) a non-French Bank and the debt claim in respect of which such interest or commission or utilization commissions is not effectively connected with the French branch (if any) of such non-French Bank, or (y) the foreign branch of a French Bank, and 79 the income of such branch is taxed in the country in which it is situated. If any interest referred to in Article II due to a French Bank or to the French ---------- branch of a non-French Bank are paid to the Agent in accordance with the provisions of Article XI, then, as at the date of this Agreement, such interest ---------- or commitment and utilization commission is not subject to any withholding in France. For the purposes of this Section, a "French Bank" shall mean a Lender incorporated in France, and a "non-French Bank" shall mean a Lender incorporated in a country other than France. 5.22 Year 2000 Issues. Each of the Company and its Subsidiaries has made ---------------- a reasonable assessment of the Year 2000 Issues with respect to the Company and its Subsidiaries (other than with respect to the Subsidiaries and assets acquired from Schlumberger (the "Schlumberger Assets")) and has a realistic and achievable program for remediating such Year 2000 Issues on a timely basis. Tokheim Sofitam has made an initial assessment of the Year 2000 Issues with respect to the Schlumberger Assets and believes it has a realistic and achievable program for remediating such Year 2000 Issues on a timely basis. Based on this assessment and program, the Company does not, as of the Effective Date, reasonably anticipate any Material Adverse Effect on its or its Subsidiaries' operations, business or financial condition as a result of Year 2000 Issues. ARTICLE V-A: REPRESENTATIONS AND WARRANTIES OF ADDITIONAL -------------------------------------------- FRENCH BORROWING SUBSIDIARIES ----------------------------- Each French Borrowing Subsidiary which is a party hereto or which becomes a party hereto after the Effective Date represents and warrants to the Lenders as provided in this Article V-A that: ----------- 5A.1. Corporate Existence and Standing. Such French Borrowing -------------------------------- Subsidiary is a societe anonyme duly incorporated, validly existing and in good standing under the laws of France and has all requisite authority to conduct its business as it is now being conducted except where the failure to have such requisite authority would not have a Material Adverse Effect. 5A.2. Authorization and Validity. Such French Borrowing Subsidiary has -------------------------- the corporate power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by such French Borrowing Subsidiary of the Loan Documents to which it is a party and the performance by it of its obligations thereunder have been duly authorized by proper corporate proceedings, and such Loan Documents constitute legal, valid and binding obligations of such French Borrowing Subsidiary enforceable against such French Borrowing Subsidiary in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally. 5A.3. No Conflict; Government Consent. Neither the execution and ------------------------------- delivery by such French Borrowing Subsidiary of the Loan Documents to which it is a party, nor the consummation 80 by it of the transactions therein contemplated to be consummated by it, nor compliance by such French Borrowing Subsidiary with the provisions thereof will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on such French Borrowing Subsidiary or any of its Subsidiaries or such French Borrowing Subsidiary's or any of its Subsidiaries' certificates or articles of incorporation or by-laws (statuts) or the provisions of any indenture, instrument or agreement to which such French Borrowing Subsidiary or any of its Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the Property of such French Borrowing Subsidiary or any of its Subsidiaries pursuant to the terms of any such indenture, instrument or agreement in any such case which violation, conflict, default, creation or imposition could reasonably be expected to have a Material Adverse Effect. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental agency is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents other than the mandatory filings with the relevant French Companies Register and the French tax authorities, as the case may be. 5A.4. Filing. To ensure the enforceability or admissibility in evidence ------ of this Agreement and the Notes of such French Borrowing Subsidiary in France, it is not necessary that this Agreement or the Notes of such French Borrowing Subsidiary or any other document be filed or recorded with any court or other authority in France or that any stamp or similar tax be paid to or in respect of this Agreement or the Notes of such French Borrowing Subsidiary other than taxes paid or payable in connection with any real property lien filings with respect to the real property collateral and the stamp duty known as "timbre de dimension" which is due if this Agreement is signed in France. The qualification by any Lender or the Agent for admission to do business under the laws of France does not constitute a condition to, and the failure to so qualify does not affect, the exercise by any Lender or the Agent of any right, privilege, or remedy afforded to any Lender or the Agent in connection with the Loan Documents to which such French Borrowing Subsidiary is a party or the enforcement of any such right, privilege, or remedy against such French Borrowing Subsidiary. The performance by any Lender or the Agent of any action required or permitted under the Loan Documents will not (i) violate any law or regulation of France or any political subdivision thereof, (ii) result in any tax or other monetary liability to such party pursuant to the laws of France or political subdivision or taxing authority thereof (provided that, should any such action result in any such tax or other monetary liability to the Lender or the Agent, the Borrower hereby agrees to indemnify such Lender or the Agent, as the case may be, against (x) any such tax or other monetary liability and (y) any increase in any tax or other monetary liability which results from such action by such Lender or the Agent and, to the extent the Borrower makes such indemnification, the incurrence of such liability by the Agent or any Lender will not constitute a Default) or (iii) violate any rule or regulation of any federation or organization or similar entity of which France is a member. 5A.5. No Immunity. Neither such French Borrowing Subsidiary nor any of ----------- its assets is entitled to immunity from suit, execution, attachment or other legal process. Such French 81 Borrowing Subsidiary's execution and delivery of the Loan Documents to which it is a party constitute, and the exercise of its rights and performance of and compliance with its obligations under such Loan Documents will constitute, private and commercial acts done and performed for private and commercial purposes. ARTICLE V-B: REPRESENTATIONS AND WARRANTIES OF --------------------------------- EACH DUTCH BORROWING SUBSIDIARY ------------------------------- Each Dutch Borrowing Subsidiary which is a party hereto or which becomes a party hereto after the Effective Date represents and warrants to the Lenders as provided in this Article V-B that: ----------- 5B.1. Corporate Existence and Standing. Such Dutch Borrowing -------------------------------- Subsidiary is a private company with limited liability ("besloten vennootschap met beperkte aansprakolijkheid") duly incorporated and validly existing and in good standing under the laws of The Netherlands and has all requisite authority to conduct its business as it is now being conducted except where the failure to have such requisite authority would not have a Material Adverse Effect. 5B.2. Authorization and Validity. Such Dutch Borrowing Subsidiary has -------------------------- the corporate power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by such Dutch Borrowing Subsidiary of the Loan Documents to which it is a party and the performance by it of its obligations thereunder have been duly authorized by proper corporate proceedings, and such Loan Documents constitute legal, valid and binding obligations of such Dutch Borrowing Subsidiary enforceable against such Dutch Borrowing Subsidiary in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and general equitable principles. 5B.3. No Conflict; Government Consent. Neither the execution and ------------------------------- delivery by such Dutch Borrowing Subsidiary of the Loan Documents to which it is a party, nor the consummation by it of the transactions therein contemplated to be consummated by it, nor compliance by such Dutch Borrowing Subsidiary with the provisions thereof will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on such Dutch Borrowing Subsidiary or any of its Subsidiaries or such Dutch Borrowing Subsidiary's or any of its Subsidiaries' articles of association ("statuten") or the provisions of any indenture, instrument or agreement to which such Dutch Borrowing Subsidiary or any of its Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the Property of such Dutch Borrowing Subsidiary or any of its Subsidiaries pursuant to the terms of any such indenture, instrument or agreement in any such case which violation, conflict, default, creation or imposition could reasonably be expected to have a Material Adverse Effect. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental agency is required to 82 authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents other than the mandatory filings with the relevant Dutch Companies Register ("handels-Register") and the Dutch tax authorities, as the case may be. 5B.4. Filing. To ensure the enforceability or admissibility in evidence ------ of this Agreement and the Notes of such Dutch Borrowing Subsidiary in The Netherlands, it is not necessary that this Agreement or the Notes of such Dutch Borrowing Subsidiary or any other document be filed or recorded with any court or other authority in The Netherlands or that any stamp or similar tax be paid to or in respect of this Agreement or the Notes of such Dutch Borrowing Subsidiary. The qualification by any Lender or the Agent for admission to do business under the laws of The Netherlands does not constitute a condition to, and the failure to so qualify does not affect, the exercise by any Lender or the Agent of any right, privilege, or remedy afforded to any Lender or the Agent in connection with the Loan Documents to which such Dutch Borrowing Subsidiary is a party or the enforcement of any such right, privilege, or remedy against such Dutch Borrowing Subsidiary. The performance by any Lender or the Agent of any action required or permitted under the Loan Documents will not (i) violate any law or regulation of The Netherlands or any political subdivision thereof, (ii) result in any tax or other monetary liability to such party pursuant to the laws of The Netherlands or political subdivision or taxing authority thereof (provided that, should any such action result in any such tax or other monetary liability to the Lender or the Agent, the Borrower hereby agrees to indemnify such Lender or the Agent, as the case may be, against (x) any such tax or other monetary liability and (y) any increase in any tax or other monetary liability which results from such action by such Lender or the Agent and, to the extent the Borrower makes such indemnification, the incurrence of such liability by the Agent or any Lender will not constitute a Default) or (iii) violate any rule or regulation of any federation or organization or similar entity of which The Netherlands is a member. 5B.5. No Immunity. Neither such Dutch Borrowing Subsidiary nor any of ----------- its assets is entitled to immunity from suit, execution, attachment or other legal process. Such Dutch Borrowing Subsidiary's execution and delivery of the Loan Documents to which it is a party constitute, and the exercise of its rights and performance of and compliance with its obligations under such Loan Documents will constitute, private and commercial acts done and performed for private and commercial purposes. ARTICLE V-C: REPRESENTATIONS AND WARRANTIES OF --------------------------------- EACH GERMAN BORROWING SUBSIDIARY -------------------------------- Each German Borrowing Subsidiary which is a party hereto or which becomes a party hereto after the Effective Date represents and warrants to the Lenders as provided in this Article V-C that: ----------- 83 5C.1. Corporate Existence and Standing. Such German Borrowing -------------------------------- Subsidiary is a limited liability company (GmbH) and upon registration with the Commercial Registry will be duly incorporated and validly existing under the laws of Germany, and has all requisite authority to conduct its business as it is now being conducted except where the failure to have such requisite authority would not have a Material Adverse Effect. 5C.2. Authorization and Validity. Such German Borrowing Subsidiary has -------------------------- the corporate power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by such German Borrowing Subsidiary of the Loan Documents to which it is a party and the performance by it of its obligations thereunder have been duly authorized by proper corporate proceedings, and such Loan Documents constitute legal, valid and binding obligations of such German Borrowing Subsidiary enforceable against such German Borrowing Subsidiary in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and general equitable principles. 5C.3. No Conflict; Government Consent. Neither the execution and ------------------------------- delivery by such German Borrowing Subsidiary of the Loan Documents to which it is a party, nor the consummation by it of the transactions therein contemplated to be consummated by it, nor compliance by such German Borrowing Subsidiary with the provisions thereof will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on such German Borrowing Subsidiary or any of its Subsidiaries or such German Borrowing Subsidiary's or any of its Subsidiaries' certificates or articles of incorporation or by-laws (Satzung or Gesellschaftevertrag) or the provisions of any indenture, instrument or agreement to which such German Borrowing Subsidiary or any of its Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the Property of such German Borrowing Subsidiary or any of its Subsidiaries pursuant to the terms of any such indenture, instrument or agreement in any such case which violation, conflict, default, creation or imposition could reasonably be expected to have a Material Adverse Effect. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental agency is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents other than the mandatory filings with the relevant German Companies Register and the German tax authorities, as the case may be. 5C.4. Filing. To ensure the enforceability or admissibility in evidence ------ of this Agreement and the Notes of such German Borrowing Subsidiary in Germany, it is not necessary that this Agreement or the Notes of such German Borrowing Subsidiary or any other document be filed or recorded with any court or other authority in Germany or that any stamp or similar tax be paid to or in respect of this Agreement or the Notes of such German Borrowing Subsidiary. The qualification by any Lender or the Agent for admission to do business under the laws of Germany does not constitute a condition to, and the failure to so qualify does not affect, the exercise by any Lender or the Agent of any right, privilege, or remedy afforded to any Lender or the Agent in connection with 84 the Loan Documents to which such German Borrowing Subsidiary is a party or the enforcement of any such right, privilege, or remedy against such German Borrowing Subsidiary. The performance by any Lender or the Agent of any action required or permitted under the Loan Documents will not (i) violate any law or regulation of Germany or any political subdivision thereof, (ii) result in any tax or other monetary liability to such party pursuant to the laws of Germany or political subdivision or taxing authority thereof (provided that, should any such action result in any such tax or other monetary liability to the Lender or the Agent, the Borrower hereby agrees to indemnify such Lender or the Agent, as the case may be, against (x) any such tax or other monetary liability and (y) any increase in any tax or other monetary liability which results from such action by such Lender or the Agent and, to the extent the Borrower makes such indemnification, the incurrence of such liability by the Agent or any Lender will not constitute a Default) or (iii) violate any rule or regulation of any federation or organization or similar entity of which Germany is a member. 5C.5. No Immunity. Neither such German Borrowing Subsidiary nor any of ----------- its assets is entitled to immunity from suit, execution, attachment or other legal process. Such German Borrowing Subsidiary's execution and delivery of the Loan Documents to which it is a party constitute, and the exercise of its rights and performance of and compliance with its obligations under such Loan Documents will constitute, private and commercial acts done and performed for private and commercial purposes. ARTICLE V-D: REPRESENTATIONS AND WARRANTIES OF --------------------------------- EACH UK BORROWING SUBSIDIARY ---------------------------- Each UK Borrowing Subsidiary which is a party hereto or which becomes a party hereto after the Effective Date represents and warrants to the Lenders as provided in this Article V-A that: ----------- 5D.1. Corporate Existence and Standing. Such UK Borrowing Subsidiary -------------------------------- is a limited liability company duly incorporated and validly existing under the laws of England or Scotland (as applicable) and has all requisite authority to conduct its business as it is now being conducted except where the failure to have such requisite authority would not have a Material Adverse Effect. 5D.2. Authorization and Validity. Such UK Borrowing Subsidiary has the -------------------------- corporate power and authority and legal right to execute and deliver the Loan Documents to which it is a party and to perform its obligations thereunder. The execution and delivery by such UK Borrowing Subsidiary of the Loan Documents to which it is a party and the performance by it of its obligations thereunder have been duly authorized by proper corporate proceedings, and such Loan Documents constitute legal, valid and binding obligations of such UK Borrowing Subsidiary enforceable against such UK Borrowing Subsidiary in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally and general equitable principles. 85 5D.3. No Conflict; Government Consent. Neither the execution and ------------------------------- delivery by such UK Borrowing Subsidiary of the Loan Documents to which it is a party, nor the consummation by it of the transactions therein contemplated to be consummated by it, nor compliance by such UK Borrowing Subsidiary with the provisions thereof will violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on such UK Borrowing Subsidiary or any of its Subsidiaries or such UK Borrowing Subsidiary's or any of its Subsidiaries' memoranda or articles of association or the provisions of any indenture, instrument or agreement to which such UK Borrowing Subsidiary or any of its Subsidiaries is a party or is subject, or by which it, or its Property, is bound, or conflict with or constitute a default thereunder, or result in the creation or imposition of any Lien in, of or on the Property of such UK Borrowing Subsidiary or any of its Subsidiaries pursuant to the terms of any such indenture, instrument or agreement in any such case which violation, conflict, default, creation or imposition could reasonably be expected to have a Material Adverse Effect. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental agency is required to authorize, or is required in connection with the execution, delivery and performance of, or the legality, validity, binding effect or enforceability of, any of the Loan Documents. 5D.4. Filing. To ensure the enforceability or admissibility in ------ evidence of this Agreement and the Notes of such UK Borrowing Subsidiary in the United Kingdom, it is not necessary that this Agreement or the Notes of such UK Borrowing Subsidiary or any other document be filed or recorded with any court or other authority in the United Kingdom or that any stamp or similar tax be paid to or in respect of this Agreement or the Notes of such UK Borrowing Subsidiary. The qualification by any Lender or the Agent for admission to do business under the laws of the United Kingdom does not constitute a condition to, and the failure to so qualify does not affect, the exercise by any Lender or the Agent of any right, privilege, or remedy afforded to any Lender or the Agent in connection with the Loan Documents to which such UK Borrowing Subsidiary is a party or the enforcement of any such right, privilege, or remedy against such UK Borrowing Subsidiary. The performance by any Lender or the Agent of any action required or permitted under the Loan Documents will not (i) violate any law or regulation of the United Kingdom or any political subdivision thereof, (ii) result in any tax or other monetary liability to such party pursuant to the laws of the United Kingdom or political subdivision or taxing authority thereof (provided that, should any such action result in any such tax or other monetary liability to the Lender or the Agent, the Borrower hereby agrees to indemnify such Lender or the Agent, as the case may be, against (x) any such tax or other monetary liability and (y) any increase in any tax or other monetary liability which results from such action by such Lender or the Agent and, to the extent the Borrower makes such indemnification, the incurrence of such liability by the Agent or any Lender will not constitute a Default) or (iii) violate any rule or regulation of any federation or organization or similar entity of which the United Kingdom is a member. 5D.5. No Immunity. Neither such UK Borrowing Subsidiary nor any of its ----------- assets is entitled to immunity from suit, execution, attachment or other legal process. Such UK Borrowing Subsidiary's execution and delivery of the Loan Documents to which it is a party constitute, and the exercise of its rights and performance of and compliance with its obligations under such Loan 86 Documents will constitute, private and commercial acts done and performed for private and commercial purposes. ARTICLE VI: COVENANTS --------- During the term of this Agreement, unless the Required Lenders shall otherwise consent in writing: 6.1. Financial Reporting. The Company will maintain, for itself and each ------------------- Consolidated Subsidiary, a system of accounting established and administered in accordance with generally accepted accounting principles, and furnish to the Agent, for distribution to the Lenders: (i) Within 90 days after the close of each of its fiscal years, an unqualified audit report (with all amounts stated in Dollars) certified by independent certified public accountants acceptable to the Required Lenders, prepared in accordance with U.S. GAAP on a consolidated basis for itself and the Consolidated Subsidiaries, including balance sheets as of the end of such period, related profit and loss and reconciliation of surplus statements, and a statement of cash flows, accompanied by a certificate of said accountants that, in the course of their examination necessary for their certification of the foregoing, they have (x) reviewed the calculations in respect of EBITDA for purposes of calculating the financial covenants set forth in Article VI ---------- and such calculations of EBITDA have been adequately prepared in accordance with the terms of this Agreement, and (y) obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof. (ii) Within 60 days after the close of the first three quarterly periods of each of its fiscal years, for itself and the Consolidated Subsidiaries, unaudited balance sheets as at the close of each such period and consolidated and consolidating profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of such fiscal year to the end of such quarter, all certified by its Financial Officer. (iii) Together with the financial statements required hereunder, a compliance certificate in substantially the form of Exhibit ------- I hereto signed by its Financial Officer showing the - calculations necessary to determine compliance with this Agreement and stating that no Default or Unmatured 87 Defaullt exists, or if any Default or Unmatured Default exists, stating the nature and status thereof. (iv) Promptly upon the furnishing thereof to the shareholders of the Company, copies of all financial statements, reports and proxy statements so furnished. (v) Promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which the Company or any of its Subsidiaries files with the Securities and Exchange Commission. (vi) As soon as practicable, and in any event within thirty (30) days after the close of each calendar month, with sufficient copies for the Lenders, a Borrowing Base Certificate, together with such supporting documents as the Agent may reasonably request, all certified as being true and correct by a Financial Officer. The Company may update the Borrowing Base Certificates and supporting documents more frequently than monthly and the most recently delivered Borrowing Base Certificates shall be the applicable Borrowing Base Certificates for purposes of determining the Borrowing Base at any time. (vii) As soon as practicable and in any event not later than ninety (90) days after the beginning of each fiscal year commencing with the fiscal year beginning December 1, 1999, for itself and the Consolidated Subsidiaries, a copy of the plan and forecast (including a projected balance sheet, income statement and a statement of cash flow and management's discussion of business assumptions with respect thereto) for the upcoming fiscal year prepared in such detail as shall be reasonably satisfactory to the Agent. (viii) Such other information (including non-financial information) as the Agent or any Lender may from time to time reasonably request. 6.2. Use of Proceeds. The Company will use the proceeds of the Term Loan --------------- to refinance existing Indebtedness, fund the Schlumberger Acquisition pursuant to the Acquisition Agreement, and for payment of expenses incurred in connection therewith. The Borrowers shall use the proceeds of the Revolving Loans to refinance existing Indebtedness of the Borrowers, for Permitted Acquisitions, to provide funds for the additional working capital needs and other general corporate purposes of the Company and its Subsidiaries. The French Borrowing Subsidiaries, the Dutch Borrowing Subsidiaries, the German Borrowing Subsidiaries and the UK Borrowing Subsidiaries will use the proceeds of each Advance, to the extent a portion of such Advance is lent to any one of them, solely for general corporate purposes, excluding the purchase of the Capital Stock of any of the Non-Domestic Borrowing Subsidiaries. None of the proceeds of the Advances shall be used to purchase or carry Margin Stock (as defined in Regulation U) or in any manner 88 which would violate or cause any Lender to be in violation of Regulations T, U or X of the Board of Governors of the Federal Reserve System. 6.3. Notice of Default. The Company will, and will cause each of its ------------------ Material Subsidiaries to, give prompt notice in writing to the Agent of the occurrence of any Default or Unmatured Default. 6.4. Corporate Existence. The Company will, and will cause each domestic ------------------- Material Subsidiary to, do all things necessary to remain duly incorporated, validly existing and in good standing as a domestic corporation in its jurisdiction of incorporation and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted except to the extent that the failure to maintain such authority would not reasonably be expected to result in a Material Adverse Effect. The Company will cause each non-domestic Material Subsidiary to do all things necessary to remain duly organized, validly existing and in good standing in its jurisdiction of organization and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted except to the extent that the failure to maintain such authority would not reasonably be expected to result in a Material Adverse Effect. 6.5. Taxes. The Company will, and will cause each Material Subsidiary ----- to, pay when due all material taxes, assessments and governmental charges and levies upon it or its income, profits or Property, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside. 6.6. Insurance. The Company will, and will cause each Material --------- Subsidiary to, maintain with financially sound and reputable insurance companies insurance on all their Property in such amounts and covering such risks as is consistent with sound business practice. 6.7. Compliance with Laws. The Company will, and will cause each -------------------- Material Subsidiary to, comply with all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which it may be subject, including, without limitation, laws relating to pension funds and environmental liabilities, which, if violated, could reasonably be expected to have a Material Adverse Effect. 6.8. Inspection. The Company will, and will cause each Material and ---------- Borrowing Subsidiary to, permit the Lenders, by their respective representatives and agents, to inspect any of the Properties, corporate books and financial records of the Company and each such Subsidiary, to examine and make copies of the books of accounts and other financial records of the Company and each such Subsidiary, and to discuss the affairs, finances and accounts of the Company and each such Subsidiary with, and to be advised as to the same by, their respective officers at such reasonable times and intervals as the Lenders may designate, provided that, after the occurrence and during the continuance of a Default, the preceding references to "each Material and Borrowing Subsidiary" and "such Subsidiary" shall be deemed to refer to each Subsidiary of the Company, whether or not such Subsidiary is a Borrowing Subsidiary or a Material Subsidiary. The expenses 89 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. 90 (x) The sale of the stock of the Subsidiary of Tokheim Sofitam to which Tokheim Sofitam contributed its Bulk Meter business. 6.10. Liens. The Company will not, nor will it permit any Consolidated ----- Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the Property of the Company or any Consolidated Subsidiary, except: (i) Liens existing on the date of this Agreement securing Indebtedness outstanding on the date of this Agreement as set forth on Schedule 6.10 attached hereto; ------------- (ii) any Lien existing on any Property of any corporation at the time such corporation becomes a Consolidated Subsidiary and not created in contemplation of such event, provided that such Lien does not extend to or cover any Property of the Company or any other Consolidated Subsidiary; (iii) any Lien on any Property securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring such Property, provided that such Lien attaches to such Property concurrently with or within 120 days after the acquisition thereof and such Lien does not extend to or cover any Property of the Company or any Consolidated Subsidiary other than the Property then being acquired; (iv) any Lien on any Property of any other corporation existing at the time such corporation is merged or consolidated with or into the Company or a Consolidated Subsidiary and not created in contemplation of such event, provided that such Lien does not extend to or cover any Property of the Company or any Consolidated Subsidiary other than the Property of such other corporation; (v) any Lien existing on any Property prior to the acquisition thereof by the Company or a Consolidated Subsidiary and not created in contemplation of such acquisition, provided that such Lien does not extend to or cover any Property of the Company or any Consolidated Subsidiary other than the Property then being acquired; (vi) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section, provided that such Indebtedness is not increased and is not secured by any additional Property; (vii) Liens incidental to the conduct of its business or the ownership of its Property which (i) do not secure Indebtedness and (ii) do not in the 91 aggregate materially detract from the value of its Property or materially impair the use thereof in the operation of its business; (viii) Statutory Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other similar Liens imposed by law created in the ordinary course of business for amounts not yet due or which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves or other appropriate provisions are being maintained in accordance with U.S. GAAP. (ix) Liens in favor of the Agent for the benefit of itself and the Holders of Secured Obligations to secure the Secured Obligations. (x) Liens not otherwise permitted by the foregoing clauses of this Section securing Indebtedness in an aggregate principal amount at any time outstanding not to exceed $15,000,000. (xi) Liens on assets of Subsidiaries that are not Wholly-Owned to secure Indebtedness permitted under Section 6.18(ix). ---------------- (xii) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings; provided, that -------- adequate reserves with respect thereto or other appropriate provisions are being maintained in conformity with U.S. GAAP. (xiii) Pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation. (xiv) Deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business in an aggregate amount not to exceed $5,000,000 at any time. (xv) Liens, if any, created through the sale, assignment or discounting of "traites" or trade receivables or invoices to the extent permitted by Section 6.9. ----------- 6.11. Rentals. Neither the Company nor any Subsidiary shall have as of ------- the end of the fiscal year obligations for Rentals in excess of the amounts set forth below as of the dates set forth below in the aggregate for the Company and its Subsidiaries: 92 Fiscal Year Ending On or About the Dates Set Forth Below Maximum Amount November 30, 1998 $11,000,000 November 30, 1999 $13,000,000 November 30, 2000 $15,000,000 November 30, 2001 $17,000,000 Thereafter $19,000,000 6.12. Consolidated Net Worth. The Company shall maintain, as of the end ---------------------- of each fiscal quarter, Consolidated Net Worth of not less than the sum of (i)$53,000,000 plus (ii) sixty percent (60%) of Consolidated Net Income (if ---- positive) for each fiscal year of the Company commencing with the fiscal year ending on or about November 30, 1998 and concluding with the fiscal year ending most recently prior to the date of determination but without deduction for any fiscal year in which there is a loss plus (iii) 100% of Net Cash Proceeds ---- received after the Effective Date from the issuance of Capital Stock of the Company or any of its Subsidiaries to any Person other than the Company or its Subsidiaries. 6.13. Dividends. The Company will not, nor will it permit any --------- Subsidiary to, declare or pay any dividends or make any distributions on its Capital Stock (other than dividends payable in its own Capital Stock) or redeem, repurchase or otherwise acquire or retire any of its Capital Stock at any time outstanding, except that (a) any Subsidiary may declare and pay dividends or make distributions to the Company or to a Wholly-Owned Subsidiary and (b) the Company may declare and pay dividends the proceeds of which are used to make required payments on the ESOP Loans, and, after the ESOP Loans are repaid, to fulfill the Company's obligations in connection with the Company's agreements with its Employee Stock Ownership Plan, and (c) to repurchase stock options provided to its employees. 6.14 Additional Guarantors/Pledge of Capital Stock. (i) The Company --------------------------------------------- will cause each Person that becomes a material (as defined in Section 1- 02(w)(1), (2) or (3) of Regulation S-X under the Securities Act of 1933, as amended) direct or indirect domestic Subsidiary of the Company after the date of this Agreement (whether as the result of an Acquisition, creation or otherwise) to execute and deliver (a) an agreement evidencing the pledge, to the Agent, for the benefit of the Holders of Secured Obligations, of all of the Capital Stock owned by such Subsidiary of each material (as defined in Section 1-02(w)(1), (2) or (3) of Regulation S-X under the Securities Act of 1933, as amended) direct domestic Subsidiary of such Subsidiary, (b) a Subsidiary Guaranty and Subsidiary Security Agreement to and in favor of the Agent for the benefit of itself and the Holders of Secured Obligations and (c) a supplement to the Contribution Agreement, in each case together with an opinion of counsel, corporate resolutions, opinions of counsel, stock certificates, stock powers, UCC financing statements with respect to the Capital Stock Collateral and such other corporate documentation as the Agent may reasonably request, all in form and substance reasonably satisfactory to the Agent and in each case within 30 days after becoming a direct or indirect material Subsidiary of the Company. Subject to applicable law, the Company will 93 cause each Person that becomes a material (as defined in Section 1-02(w)(1), (2) or (3) of Regulation S-X under the Securities Act of 1933, as amended) direct or indirect Non-Domestic Borrowing Subsidiary after the date of this Agreement (whether as the result of an Acquisition, creation or otherwise) to execute and deliver a guaranty and security documentation to and in favor of the Agent for the benefit of itself and the Holders of Secured Obligations with respect to the Loans made to Non-Domestic Borrowing Subsidiaries, in each case together with an opinion of counsel, corporate resolutions and such other corporate documentation as the Agent may reasonably request, all in form and substance reasonably satisfactory to the Agent and in each case within 30 days after becoming a material (as defined in Section 1-02(w)(1), (2) or (3) of Regulation S-X under the Securities Act of 1933, as amended) direct or indirect Non-Domestic Borrowing Subsidiary of the Company. (ii) The Company shall execute and deliver an agreement evidencing the pledge, to the Agent, for the benefit of the Holders of Secured Obligations, of (A) all of the Capital Stock owned by the Company of each Person that becomes a material (as defined in Section 1-02(w)(1), (2) or (3) of Regulation S-X under the Securities Act of 1933, as amended) direct domestic Subsidiary of the Company after the date of this Agreement (whether as the result of an Acquisition, creation or otherwise); and (B) the lesser of 65% of the Capital Stock of each Person that becomes a material (as defined in Section 1-02(w)(1), (2) or (3) of Regulation S-X under the Securities Act of 1933, as amended) direct first-tier foreign Subsidiary of the Company after the date of this Agreement (whether as the result of an Acquisition, creation or otherwise) or the amount owned by the Company, within thirty (30) days after such Subsidiary has become a Subsidiary of the Company, together, in each such case, with corporate resolutions, opinions of counsel, stock certificates, stock powers and such other corporate documentation as the Agent may reasonably request, all in form and substance reasonably satisfactory to the Agent. (iii) If at any time any foreign Subsidiary subject to clause (ii) shall ----------- issue or cause to be issued Capital Stock, or warrants or options with respect to its Capital Stock, such that the aggregate amount of the Capital Stock of such Subsidiary pledged to the Agent for the benefit of the Holders of Secured Obligations is less than 65% of all of the outstanding Capital Stock thereof and the Company or one of its Subsidiaries owns such Capital Stock, warrants or options which are not so pledged, the Company shall (A) promptly notify the Agent of such deficiency and (B) deliver or cause to be delivered any agreements, instruments, certificates and other documents as the Agent may reasonably request all in a form and substance reasonably satisfactory to the Agent in order to cause all of the Capital Stock thereof owned by the Company or any of its Subsidiaries (but not in excess of 65% of all of the outstanding Capital Stock thereof) to be pledged to the Agent for the benefit of the Holders of Secured Obligations. 6.15 Sale and Leaseback Transactions or other Off Balance Sheet ---------------------------------------------------------- Liabilities. The Company will not, nor will it permit any Subsidiary to, enter - ----------- into or suffer to exist any (i) Sale and Leaseback Transaction or (ii) any other transaction pursuant to which it incurs or has incurred Off Balance Sheet Liabilities (other than Rate Hedging Obligations permitted to be incurred under the terms of Section 6.22). ------------ 94 6.16 Merger and Consolidation. The Company will not, nor will it permit ------------------------ any Subsidiary to, merge or consolidate with or into any other Person, except that a Subsidiary may merge into the Company or a Wholly-Owned Subsidiary. 6.17 Investments and Acquisitions. The Company will not, nor will it ---------------------------- permit any Subsidiary to, make or suffer to exist any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or commitments therefor, or to create any Subsidiary or to become or remain a partner or member in any partnership, limited liability company or joint venture, or to make any Acquisition of any Person, except Investments consisting of: (i) Cash Equivalents. (ii) Demand deposit accounts maintained in the ordinary course of business. (iii) Existing Investments in Subsidiaries and other Investments in existence or currently planned on the date hereof and described in Schedule 6.17 hereto. ------------- (iv) Loans permitted under Section 6.18(ii), (iv), (v), (vi), (vii), ---------------- ---- --- ---- ----- (viii), (x) and (xii). ------ --- ----- (v) Investments received in connection with the sale or other disposition of assets or received in connection with the collection or compromise of accounts receivable. (vi) only so long as the Leverage Ratio (calculated after giving effect to such acquisition (including the incurrence of any Indebtedness) on a pro forma basis for the Company and its Consolidated --- ----- Subsidiaries as of the date of such acquisition), shall be less than or equal to 4.5 to 1.0 and excluding those acquisitions set forth on Schedule 6.17 hereto, acquisitions which satisfy all of the ------------- following conditions: (a) all acquisitions permitted by this subsection 6.17(vi) shall ------------------- require the Company or any of its Subsidiaries to pay in cash (or assume Indebtedness) an aggregate amount for all such acquisitions not in excess of $5,000,000 or the Equivalent Amount thereof; (b) no Default or Unmatured Default shall have occurred and be continuing at the time of the closing of any such acquisition or would result therefrom; (c) the business being acquired is substantially similar, related or incidental to the business of the Company and its Subsidiaries; (d) the acquisition is consummated pursuant to a negotiated acquisition agreement on a non-hostile basis; 95 (e) any additional Collateral Documents considered appropriate by the Agent are executed by the applicable Person and, if appropriate, filed; (f) prior to any such acquisition, the Company shall deliver to the Agent (i) a certificate demonstrating to the satisfaction of the Agent that after giving effect to the acquisition on a pro forma basis, the Company and its Subsidiaries will be in compliance with the financial covenants in this Agreement and (ii) such other information as the Agent shall reasonably request. 6.18 Indebtedness. The Company will not, nor will it permit any ------------ Subsidiary to, create, incur or suffer to exist any Indebtedness, except: (i) The Loans, Reimbursement Obligations, ESOP Loans, other Indebtedness under the Loan Documents and Permitted Subordinated Debt. (ii) Indebtedness existing on or about the date hereof and described in Schedule 6.18 hereto. ------------- (iii) Indebtedness arising under Rate Hedging Obligations permitted by Section 6.22. ------------ (iv) Indebtedness of Tokheim Sofitam or a Borrowing Subsidiary to the Company arising from loans made on or about the Effective Date by the Company to such Subsidiary on terms and with interest rates reasonably acceptable to the Agent and evidenced by notes pledged to the Agent to secure the Secured Obligations. (v) Indebtedness of any Subsidiary to the Company or Tokheim Sofitam or any other Borrower pursuant to management agreements or other similar agreements acceptable to the Agent. (vi) Indebtedness of the Company to any Subsidiary in connection with loans made by any such Subsidiary to the Company. (vii) Indebtedness of any of the Borrowers or Guarantor Subsidiaries to any of the Borrowers or Guarantor Subsidiaries evidenced by loan agreements or notes pledged to the Agent to secure the Secured Obligations; provided that the Non-Domestic Borrowing Subsidiaries -------- shall pledge the notes to secure the Secured Obligations of the Non-Domestic Borrowing Subsidiaries. (viii) Indebtedness of Subsidiaries that are neither Borrowers nor Guarantor Subsidiaries not otherwise permitted by the foregoing clauses of this Section provided the aggregate outstanding principal amount of all such Indebtedness does not at any time exceed $20,000,000. 96 (ix) Indebtedness secured by Liens permitted pursuant to Section ------- 6.10(iii), (iv) and (v), Indebtedness in connection with overdraft --------- ---- --- facilities and other Indebtedness not otherwise permitted by the foregoing clauses of this Section provided the aggregate outstanding principal amount for all such Indebtedness described in this Section 6.18(ix) does not at any time exceed $15,000,000. ---------------- (x) Indebtedness of any Subsidiary in connection with sales made to such Subsidiary on normal trade terms. (xi) Indebtedness in connection with sales, assignments or discounting of "traites" or trade receivables or invoices to the extent permitted by Section 6.9. ----------- (xii) Permitted Refinancing Indebtedness with respect to Indebtedness permitted pursuant to Sections 6.18(i) through (xi). ---------------- ---- 6.19 ERISA. ----- (a) ERISA Information. The Company shall deliver or cause to be delivered ----------------- to the Agent, at the Company's expense, the following information and notices as soon as reasonably possible, and in any event: (i) within ten (10) Business Days after the Company or any ERISA Affiliate knows or has reason to know that a Termination Event has occurred, a written statement of the chief financial officer of the Company describing such Termination Event and the action, if any, which the Company or any ERISA Affiliate has taken, is taking or proposes to take with respect thereto, and when known, any action taken or threatened by the IRS, DOL or PBGC with respect thereto; (ii) within ten (10) Business Days after the Company or any ERISA Affiliate knows or has reason to know that a non-exempt prohibited transaction (defined in Sections 406 of ERISA and 4975 of the Internal Revenue Code) with respect to any Plan has occurred, a statement of the chief financial officer of the Company describing such transaction and the action which the Company or any ERISA Affiliate has taken, is taking or proposes to take with respect thereto; (iii) within ten (10) Business Days after the request by the Agent or the Required Lenders therefor, copies of each annual report (Form 5500 Series), including Schedule B thereto, filed with respect to each Benefit Plan. (iv) within ten (10) Business Days after request therefor by the Agent or the Required Lenders, each actuarial report for any Benefit Plan or Multiemployer Plan and each annual report for any Multiemployer Plan, copies of each such report; 97 (v) within ten (10) Business Days after the filing thereof with the IRS, a copy of each funding waiver request filed with respect to any Benefit Plan and all communications received by the Company or any ERISA Affiliate with respect to such request; (vi) within ten (10) Business Days upon the occurrence thereof, notification of any material increase in the benefits of any existing Plan or the establishment of any new Plan or the commencement of contributions to any Plan to which the Company or any ERISA Affiliate was not previously contributing; (vii) within ten (10) Business Days after receipt by the Company or any ERISA Affiliate of the PBGC's intention to terminate a Benefit Plan or to have a trustee appointed to administer a Benefit Plan, copies of each such notice; (viii) within ten (10) Business Days after receipt by the Company or any ERISA Affiliate of any unfavorable determination letter from the IRS regarding the qualification of a Plan under Section 401(a) of the Internal Revenue Code, copies of each such letter; (ix) within ten (10) Business Days after receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan regarding the imposition of withdrawal liability, copies of each such notice; (x) within ten (10) Business Days after the Company or any ERISA Affiliate fails to make a required installment or any other required payment under Section 412 of the Internal Revenue Code on or before the due date for such installment or payment, a notification of such failure; (xi) within ten (10) Business Days after the Company or any ERISA Affiliate knows or has reason to know (a) a Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan; and (xii) within ten (10) Business Days after receipt by the Company of a written notice from the Agent or the Required Lenders, copies of any Foreign Employee Benefit Plan and related documents, reports and correspondence as requested by the Lenders in such notice. (b) The Company shall, and shall cause each of its Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Plans to comply in all material respects with the provisions of ERISA, the Internal Revenue Code, all other applicable laws, and the regulations and interpretations thereunder and the respective requirements of the governing documents for such Plans. 98 6.20 Affiliates. Except as otherwise specifically permitted in the other ---------- provisions of this Agreement, the Company will not, and will not permit any Subsidiary to, enter into any transaction (including, without limitation, the purchase or sale of any Property or service) with, or make any payment or transfer to, any Affiliate except in the ordinary course of business and pursuant to the reasonable requirements of the Company's or such Subsidiary's business and upon fair and reasonable terms no less favorable to the Company or such Subsidiary than the Company or such Subsidiary would obtain in a comparable arms-length transaction; provided, however, that nothing in this Section shall -------- ------- prevent the Company and its Subsidiaries from entering into any management agreement as in effect on the Effective Date or as amended or replaced thereafter provided such amendment or replacement agreement is on terms and conditions reasonably acceptable to the Agent and the Required Lenders or any intercompany loan agreements or notes from the Company to any of its Wholly- Owned Subsidiaries. 6.21 Conduct of Business. The Company will, and will cause each ------------------- Subsidiary to, carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted. 6.22 Rate Hedging Obligations. The Company shall not and shall not ------------------------ permit any of its Subsidiaries to enter into any Rate Hedging Obligations or commodity or foreign currency exchange, swap, collar, cap, leveraged derivative or similar agreements other than as required pursuant to Section 6.33 and other ------------ Rate Hedging Obligations, foreign currency or commodity exchange, swap, collar, cap or similar agreements pursuant to which the Company or its Subsidiaries have hedged its or its Subsidiaries' reasonably estimated interest rate, foreign currency or commodity exposure (such hedging agreements are sometimes referred to herein as "INTEREST RATE AGREEMENTS"). 6.23 Leverage Ratio and Senior Leverage Ratio. (a) At any and all times, ---------------------------------------- the Company shall not permit the Leverage Ratio to exceed the amounts set forth below during the fiscal periods set forth below: Fiscal Quarter Ending On or About the Dates Set Forth Below: Maximum Ratio - -------------------------- ------------- February 28, 1999 7.5 to 1.00 May 31, 1999 7.0 to 1.00 August 31, 1999 6.5 to 1.00 November 30, 1999 5.5 to 1.00 February 29, 2000 5.5 to 1.00 May 31, 2000 5.0 to 1.00 August 31, 2000 5.0 to 1.00 November 30, 2000 4.0 to 1.00 99 February 28, 2001 4.0 to 1.00 May 31, 2001 4.0 to 1.00 August 31, 2001 4.0 to 1.00 November 30, 2001 3.5 to 1.00 February 28, 2002 3.5 to 1.00 May 31, 2002 3.5 to 1.00 August 31, 2002 3.5 to 1.00 And at all times during each fiscal quarter thereafter 3.0 to 1.00 (b) At any and all times, the Company shall not permit the Senior Leverage Ratio to exceed the amounts set forth below during the fiscal periods set forth below: Fiscal Quarter Ending On or About the Dates Set Forth Below: Maximum Ratio - -------------------------- ------------- February 28, 1999 4.0 to 1.00 May 31, 1999 4.0 to 1.00 August 31, 1999 4.0 to 1.00 November 30, 1999 3.5 to 1.00 February 29, 2000 3.5 to 1.00 May 31, 2000 3.5 to 1.00 August 31, 2000 3.5 to 1.00 November 30, 2000 3.0 to 1.00 February 28, 2001 3.0 to 1.00 May 31, 2001 3.0 to 1.00 August 31, 2001 3.0 to 1.00 November 30, 2001 2.5 to 1.00 February 28, 2002 2.5 to 1.00 May 31, 2002 2.5 to 1.00 August 31, 2002 2.5 to 1.00 And at all times during each fiscal quarter thereafter 2.0 to 1.00 The Leverage Ratio and Senior Leverage Ratio shall be calculated, in each case, determined as of the last day of each fiscal quarter based upon (A) for Indebtedness, Indebtedness as of the last day of each such fiscal quarter; and (B) for EBITDA, the actual amount for the four-quarter period 100 ending on such day (provided, however, that the Leverage Ratio and Senior Leverage Ratio shall be calculated using EBITDA for the Company and its Consolidated Subsidiaries (a) for the fiscal quarter ending February 28, 1999, multiplied by four (4), (b) for the two fiscal quarters ending May 31, 1999, - ------------- multiplied by two (2), and (c) for the three fiscal quarters ending August 31, - ------------- 2000 multiplied by four-thirds (4/3)). ------------- 6.24 Interest Expense Coverage Ratio. The Company shall not permit the ------------------------------- Interest Expense Coverage Ratio to be less than the amounts set forth below for the fiscal periods set forth below: Fiscal Quarter Ending On or About the Dates Set Forth Below: Minimum Ratio - -------------------------- ------------- November 30, 1998 through August 31, 1999 1.45 to 1.00 November 30, 1999 1.50 to 1.00 February 28, 2000 through November 30, 2000 2.00 to 1.00 February 28, 2001 through November 30, 2001 2.25 to 1.00 And for each fiscal quarter ending thereafter 2.50 to 1.00 6.25 Fixed Charge Coverage Ratio. The Company shall not permit the Fixed --------------------------- Charge Coverage Ratio to be less than the amounts set forth below for the fiscal periods set forth below: Fiscal Quarter Ending On or About the Dates Set Forth Below: Minimum Ratio - -------------------------- ------------- November 30, 1998 through May 31, 1999 1.05 to 1.00 August 31, 1999 through November 30, 2000 1.10 to 1.00 February 28, 2001 through November 30, 2001 1.20 to 1.00 And for each fiscal quarter ending thereafter 1.25 to 1.00 6.26 Foreign Employee Benefit Compliance. The Company shall, and shall ----------------------------------- cause each of the other Material Subsidiaries and ERISA Affiliates to, establish, maintain and operate all Foreign Employee Benefit Plans to comply in all material respects with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Plans, except for failures to comply which, in the aggregate, would not result in a material obligation to pay money. 101 6.27 Subordinated Indebtedness. The Company shall not amend, supplement ------------------------- or modify the terms of the Permitted Subordinated Debt, or make any payment required as a result of an amendment or change thereto other than amendments, supplements or modifications which (i) decrease the rate of interest payable on such Permitted Subordinated Debt, (ii) provide for the payment in kind in lieu of cash of any portion of the interest on such Permitted Subordinated Debt, (iii) provide for the extension of the maturity date with respect to any principal or interest payment to be made under the instruments evidencing the Permitted Subordinated Debt, (iv) provide more flexibility to the Company in connection with any financial or other covenants, and (v) waive any defaults existing in connection with the Permitted Subordinated Debt. 6.28 Payments and Prepayments. Neither the Company nor any of its ------------------------ Subsidiaries shall make any payment or prepayment of principal, fees or other charges (other than interest) on or with respect to, or any redemption, purchase, retirement, defeasance, sinking fund or payment on any claim for damages or rescission with respect to the Permitted Subordinated Debt except in connection with the issuance of Equity Interests or the incurrence of Permitted Refinancing Indebtedness in respect of the Seller Senior Subordinated Notes and the Additional Junior Security. 6.29 ERISA. The Company shall not: ----- (i) engage, or permit any ERISA Affiliate to engage, in any prohibited transaction described in Sections 406 of ERISA or 4975 of the Internal Revenue Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the Department of Labor; (ii) permit to exist any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of the Internal Revenue Code) with respect to any Benefit Plan, whether or not waived; (iii) fail, or permit any ERISA Affiliate to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; (iv) terminate, or permit any ERISA Affiliate to terminate, any Benefit Plan which would result in any liability of Borrower or any ERISA Affiliate under Title IV of ERISA in excess of $5,000,000; (v) fail to make any contribution or payment to any Multiemployer Plan which Borrower or any ERISA Affiliate may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining thereto; (vi) fail, or permit any ERISA Affiliate to fail, to pay any required installment or any other payment required under Section 412 of the Internal Revenue Code on or before the due date for such installment or other payment; 102 (vii) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an increase in current liability for the plan year such that the Company or any ERISA Affiliate is required to provide security to such Plan under Section 401(a)(29) of the Internal Revenue Code; (viii) permit any unfunded liabilities with respect to any Foreign Pension Plan which are not liabilities on the Company's financial statements referred to in Section 6.1(i) and (ii) in excess of $500,000; or -------------- ---- (ix) fail, or permit any Subsidiary or ERISA Affiliate to fail, to pay any required contributions or payments to a Foreign Pension Plan on or before the due date for such required installment or payment. 6.30 Year 2000 Issues. The Company shall, and shall cause each of its ---------------- Subsidiaries to, take all actions the Company believes are reasonably necessary to assure that the Year 2000 Issues will not have a Material Adverse Effect. The Company shall provide the Agent and each of the Lenders a copy of the Company's program to address Year 2000 Issues, including updates and progress reports upon request. The Company shall advise the Agent if the Company believes that any Year 2000 Issues will have or would reasonably be expected to have a Material Adverse Effect. 6.31 FIRREA. Upon request by the Agent and the Required Lenders, the ------ Company shall, at the Company's expense and within sixty (60) days after the Effective Date, deliver to the Agent appraisals for real estate located in the United States to the extent required by and in compliance with FIRREA which appraisals shall be performed by an appraiser engaged directly by the Agent and having no direct or indirect interest, financial or otherwise, in the properties appraised or in the transaction which appraiser shall be reasonably acceptable to the Company. 6.32 Environmental Reports. Upon request by the Agent and the Required --------------------- Lenders, the Company shall, at the Company's expense and within six months after the Effective Date, deliver to the Agent a Phase I Environmental Property Assessment report with respect to specified manufacturing facilities owned by the Company or one of its Subsidiaries (other than Bladel, The Netherlands), with results reasonably acceptable to the Agent, prepared by an environmental review firm reasonably acceptable to the Agent, as to any environmental hazards or liabilities of the Acquired Subsidiaries and the Company's plans with respect thereto. 6.33 Interest Rate Agreements. Within one hundred twenty (120) days ------------------------ after the Effective Date, the Company shall enter into, and shall thereafter maintain, Interest Rate Agreements on terms and with counterparties determined by the Company and reasonably acceptable to the Agent by which the Company is protected against increases in interest rates from and after the date of such contracts as to notional amount reasonably acceptable to the Agent for periods reasonably acceptable to the Agent. In the event a Lender elects to enter into any Interest Rate Agreement with the Company, the obligations of the Company with respect to such Interest Rate Agreement shall be Secured Obligations secured by the Collateral. 103 6.34. Minimum EBITDA. The Company shall not permit EBITDA to be less than -------------- the amounts set forth below for the fiscal periods ending on the dates set forth below:
Fiscal Quarter Ending on or About the Dates Set Forth Below: Minimum EBITDA - -------------------------- -------------- 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
In each case, EBITDA shall be determined as of the last day of each fiscal quarter then ended for the four fiscal quarter period ending on such date (provided, however that (a) EBITDA for the period ending on November 30, 1998 - --------- ------- shall be calculated using EBITDA for the fiscal quarter ending on November 30, 1998, (b) EBITDA for the period ending on February 28, 1999 shall be calculated using EBITDA for the two fiscal quarters ending on February 28, 1999, and (c) EBITDA for the period ending on May 31, 1999 shall be calculated using EBITDA for the three fiscal quarters ending May 31, 1999). ARTICLE VII: DEFAULTS -------- The occurrence and continuance of any one or more of the following events shall constitute a Default: 7.1. Any material representation or warranty made or deemed made under Article V by the Company or any Subsidiary to the Lenders or the Agent under or in connection with this Agreement or any certificate or other document delivered in connection with this Agreement or any other Loan Document shall be materially false on the date as of which made or deemed made. 7.2. Nonpayment of principal of any Note, Swing Loan or Reimbursement Obligation when due, or nonpayment of interest upon any Note, Swing Loan or Reimbursement Obligation or 104 of any facility fee or other obligations under any of the Loan Documents within five days after the same becomes due. 7.3. The breach by the Company of any of the terms or provisions of Sections 6.2, 6.9, 6.10, 6.12, 6.13, 6.15, 6.16, 6.18, 6.23, 6.24, 6.25, 6.27, - ------------------------------------------------------------------------------- 6.28 and 6.34. - ---- ---- 7.4. The breach by the Company of any of the terms or provisions of Section 6.1 which is not remedied within fifteen days of the initial occurrence - ----------- of such breach. 7.5. The breach by the Company (other than a breach which constitutes a Default under Section 7.1, 7.2, 7.3 or 7.4) of any of the terms or provisions of ---------------------------- this Agreement which is not remedied within thirty days after written notice from the Agent or any Lender. 7.6. Failure of the Company or any of its Subsidiaries to pay Indebtedness in an aggregate amount equal to or greater than $5,000,000 (or the Equivalent Amount of Indebtedness denominated in a currency other than Dollars) when due; or the default by the Company or any of its Subsidiaries in the performance of any term, provision or condition contained in any agreement under which any such Indebtedness was created or is governed, or any other event shall occur or condition exist, the effect of which is to cause, or to permit the holder or holders of such Indebtedness to cause, Indebtedness in such aggregate amount to become due prior to its stated maturity; or Indebtedness in such aggregate amount of the Company or any of its Subsidiaries shall be declared to be due and payable or required to be prepaid (other than by a regularly scheduled payment or as a result of the sale of an asset securing such Indebtedness) prior to the stated maturity thereof. 7.7. Any Borrower or any Material Subsidiary shall (i) commence a voluntary case under any bankruptcy, insolvency or other similar law as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) fail to pay, or admit in writing its inability to pay, its debts generally as they become due, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any Substantial Portion of its Property, (v) institute any proceeding seeking an order for relief under any bankruptcy, insolvency or other similar law as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate action to authorize or effect any of the foregoing actions set forth in this Section 7.7 or (vii) fail ----------- to contest in good faith any appointment or proceeding described in Section 7.8. ----------- 7.8. Without the application, approval or consent of any Borrower or any Material Subsidiary, a receiver, trustee, examiner, liquidator or similar official shall be appointed for any Borrower or any Material Subsidiary or any Substantial Portion of the Property of any such Person, or a proceeding described in Section 7.7(iv) shall be instituted against any Borrower or any --------------- 105 Material Subsidiary and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of 60 consecutive days. 7.9. Any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of (each a "Condemnation"), all or any portion of the Property of any Borrower or any Material Subsidiary which, when taken together with all other Property of any Borrower and the Material Subsidiaries so condemned, seized, appropriated, or taken custody or control of, during the twelve-month period ending with the month in which any such Condemnation occurs, constitutes a Substantial Portion. 7.10. The Company or any of its Subsidiaries shall fail within 30 days to pay, bond or otherwise discharge any judgment or order for the payment of money in excess of $5,000,000 (or the Equivalent Amount if denominated in a currency other than Dollars), which is not stayed on appeal or otherwise being appropriately contested in good faith. 7.11. The Unfunded Liabilities of all Single Employer Plans shall exceed in the aggregate $5,500,000, or any Reportable Event shall occur in connection with any Plan which could reasonably be expected to have a Material Adverse Effect. 7.12. The Company or any of its Subsidiaries shall be the subject of any proceeding or proceedings pertaining to the spill, release or disposal by the Company or any of its Subsidiaries, or any other Person of any toxic, dangerous or hazardous waste or substance into the environment, or to any violation of any federal, state, regional, departmental or local environmental, health or safety law or regulation, which could reasonably be expected to result in total liability to the Company or any of its Subsidiaries, in the aggregate, in excess of a Substantial Portion. 7.13. The obligations of the Company under Article IX hereof shall fail to ---------- remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any of such obligations, or the Company shall deny that it has any further liability under such Article IX, or ---------- shall give notice to such effect. 7.14. Any Change in Control shall occur. 7.15. At any time, for any reason, (i) any Loan Document as a whole that materially affects the ability of the Agent, or any of the Lenders to enforce the Obligations or enforce their rights against the Collateral ceases to be in full force and effect or the Company or any of its Subsidiaries party thereto seeks to repudiate its obligations thereunder and the Liens intended to be created thereby are, or the Company or any such Subsidiary seeks to render such Liens, invalid and unperfected, or (ii) Liens on Collateral with a Fair Market Value in excess of $1,000,000 in favor of the Agent contemplated by the Loan Documents shall, at any time, for any reason, be invalidated or otherwise cease to be in full force and effect, or such Liens shall not have the priority contemplated by this Agreement or the Loan Documents and such situation contemplated by this subclause (ii) shall continue for five (5) Business Days. -------------- 106 7.16 Any Termination Event occurs which could reasonably be expected to subject either the Company or any ERISA Affiliate to liability individually or in the aggregate in excess of $5,000,000. 7.17 The plan administrator of any Plan applies under Section 412(d) of the Code for a waiver of the minimum funding standards of Section 412(a) of the Code. ARTICLE VIII: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES ---------------------------------------------- 8.1. Acceleration. If any Default described in Section 7.7 or 7.8 occurs ------------ ----------- --- with respect to the Company or any of its Material Subsidiaries, the obligations of the Lenders to make Loans or purchase participations in Letters of Credit hereunder, the obligations of the Swing Loan Lenders to make Swing Loans hereunder and the obligation of the Issuing Lenders to issue Letters of Credit hereunder shall automatically terminate and the Obligations of the Company and each Borrowing Subsidiary shall immediately become due and payable without presentment, demand, protest or notice of any kind (all of which the Company hereby expressly waives) or any other election or action on the part of the Agent, any Lender, any Swing Loan Lender or any Issuing Lender. If any other Default occurs and is continuing, the Required Lenders may terminate or suspend the obligations of the Lenders to make Loans (including, without limitation, Alternate Currency Loans) or purchase participations in Swing Loans and Letters of Credit hereunder, whereupon the obligation of the Swing Loan Lenders to make Swing Loans, the Alternate Currency Lenders to make Alternate Currency Loans and the Issuing Lenders to issue Letters of Credit hereunder shall also terminate or be suspended or declare the Obligations of the Company and each Borrowing Subsidiary to be due and payable, or both, in either case upon written notice to the Company and the applicable Borrower, whereupon the Obligations shall become immediately due and payable, without presentment, demand, protest or further notice of any kind, all of which each Borrower hereby expressly waives. 8.2. Amendments. Subject to the provisions of this Article VIII, the ---------- ------------ Required Lenders (or the Agent with the consent in writing of the Required Lenders) and the Company may enter into agreements supplemental hereto for the purpose of adding or modifying any provisions to the Loan Documents or changing in any manner the rights of the Lenders or the Company hereunder or waiving any Default hereunder; provided, however, that no such supplemental agreement shall, without the consent of each Lender affected thereby: (i) Postpone or extend the Termination Date, the Revolving Loan Termination Date, the Term Loan Termination Date (except with respect to any modifications of the provisions relating to prepayments of Loans and other Obligations (provided that any modifications of the provisions relating to the prepayments of the Term Loans shall also require the approval of Lenders with Term Loan Percentages greater than fifty percent (50%))); 107 (ii) Reduce the principal amount of any Loans or L/C Obligations, or reduce the rate or extend the time of payment of interest or fees thereon; (iii) Reduce the percentage specified in the definition of Required Lenders or any other percentage of Lenders specified to be the applicable percentage in this Agreement to act on specified matters or amend the definitions of "Required Lenders", "Revolving Loan Percentage", "Term Loan Percentage" or "Percentage"; (iv) Increase the amount of the Revolving Loan Commitment of any Lender hereunder (except with respect to an increase in the amount, or other modification to the terms or components, of the Borrowing Base) or increase any Lender's Revolving Loan Percentage, Term Loan Percentage or Percentage; (v) Permit any Borrower to assign its rights under this Agreement; (vi) Amend or modify Section 8.1 or this Section 8.2; ----------- ----------- (vii) Amend, modify or waive Article IX or release the Company from ---------- its obligations thereunder; (viii) Release any guarantor of the Obligations (except in connection with a sale or other disposition of all of the Capital Stock of such guarantor that is permitted hereunder or consented to by the Required Lenders) or all or substantially all of the Collateral ; provided, further that no such supplemental agreement shall waive any Default -------- ------- in respect of, or otherwise consent to or modify any provision in respect of (including, without limitation, in respect of the refinancing thereof), the Seller Junior Subordinated Note, without the consent of the Lenders with Percentages equal to at least ninety percent (90%). No amendment of any provision of this Agreement relating in any way to the Agent, any Swing Loan Lender or any Issuing Lender shall be effective without the written consent of the Agent, the Swing Loan Lenders or the Issuing Lenders, as the case may be. The Agent may waive payment of the fees required under Section 2.4.2 or Section 13.3.2 without obtaining the consent of any of the - ------------- ------- Lenders. Notwithstanding anything herein to the contrary, after the Euro Implementation Date, or in immediate anticipation thereof, the Agent (acting reasonably and after consultation with other parties hereto) may by reasonable prior notice to the other parties hereto amend this Agreement after consultation with the Company unilaterally for the exclusive purpose of effectuating changes hereto which are necessary to the integration of the making of Revolving Loans hereunder in Euro and only in a manner which shall not result in a deterioration of the position of any Agent or Lender from its respective position prior to the Euro Implementation Date. The Agent may notify the other parties to this Agreement of any amendments to this Agreement which the Agent reasonably determines to be necessary as a result of the 108 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 109 Obligations or any part thereof, and provided further that if at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of any of the Borrowing Subsidiaries or otherwise, the Company's obligations hereunder with respect to such payment shall be reinstated at such time as though such payment had not been made and whether or not the Agent or the Lenders are in possession of this guaranty. The Agent and the Lenders shall have no obligation to disclose or discuss with the Company their assessments of the financial condition of the Borrowing Subsidiaries. 9.3. Guaranty Absolute. This guaranty is a guaranty of payment and not ----------------- of collection, is a primary obligation of the Company and not one of surety, and the validity and enforceability of this guaranty shall be absolute and unconditional irrespective of, and shall not be impaired or affected by any of the following: (a) any extension, modification or renewal of, or indulgence with respect to, or substitutions for, the Guaranteed Obligations or any part thereof or any agreement relating thereto at any time; (b) any failure or omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or any collateral; (c) any waiver of any right, power or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto or with respect to any collateral; (d) any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any collateral, any other guaranties with respect to the Guaranteed Obligations or any part thereof, or any other obligation of any Person with respect to the Guaranteed Obligations or any part thereof; (e) the enforceability or validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral; (f) the application of payments received from any source to the payment of obligations other than the Guaranteed Obligations, any part thereof or amounts which are not covered by this guaranty even though the Agent and the Lenders might lawfully have elected to apply such payments to any part or all of the Guaranteed Obligations or to amounts which are not covered by this guaranty; (g) any change in the ownership of any Borrowing Subsidiary or the insolvency, bankruptcy or any other change in the legal status of any Borrowing Subsidiary; (h) the change in or the imposition of any law, decree, regulation or other governmental act which does or might impair, delay or in any way affect the validity, enforceability or the payment when due of the Guaranteed Obligations; (i) the failure of the Company or any Borrowing Subsidiary to maintain in full force, validity or effect or to obtain or renew when required all governmental and other approvals, licenses or consents required in connection with the Guaranteed Obligations or this guaranty, or to take any other action required in connection with the performance of all obligations pursuant to the Guaranteed Obligations or this guaranty; (j) the existence of any claim, setoff or other rights which the Company may have at any time against any Borrowing Subsidiary, or any other Person in connection herewith or an unrelated transaction; or (k) any other circumstances, whether or not similar to any of the foregoing, which could constitute a defense to a guarantor; all whether or not the Company shall have had notice or knowledge of any act or omission referred to in the foregoing clauses (a) through (k) of this paragraph. It is agreed that the Company's - ----------- --- liability hereunder is several and independent of any other guaranties or other obligations at any time in effect with respect to the Guaranteed Obligations or any part thereof and that the Company's 110 liability hereunder may be enforced regardless of the existence, validity, enforcement or non-enforcement of any such other guaranties or other obligations or any provision of any applicable law or regulation purporting to prohibit payment by any Borrowing Subsidiary of the Guaranteed Obligations in the manner agreed upon between the Borrowing Subsidiary and the Agent and the Lenders. 9.4. Acceleration. The Company agrees that, as between the Company on ------------ the one hand, and the Lenders and the Agent, on the other hand, the obligations of each Borrowing Subsidiary guaranteed under this Article IX may be declared to ---------- be forthwith due and payable, or may be deemed automatically to have been accelerated, as provided in Section 8.1 hereof for purposes of this Article IX, ----------- ---------- notwithstanding any stay, injunction or other prohibition (whether in a bankruptcy proceeding affecting such Borrowing Subsidiary or otherwise) preventing such declaration as against such Borrowing Subsidiary and that, in the event of such declaration or automatic acceleration, such obligations (whether or not due and payable by such Borrowing Subsidiary) shall forthwith become due and payable by the Company for purposes of this Article IX. ---------- 9.5. Marshaling; Reinstatement. None of the Lenders nor the Agent nor ------------------------- any Person acting for or on behalf of the Lenders or the Agent shall have any obligation to marshall any assets in favor of the Company or against or in payment of any or all of the Guaranteed Obligations. If the Company, any Borrower or any other guarantor of all or any part of the Guaranteed Obligations makes a payment or payments to any Lender or the Agent, or any Lender or the Agent receives any proceeds of Collateral, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to such Borrower, the Company, such other guarantor or any other Person, or their respective estates, trustees, receivers or any other party, including, without limitation, the Company, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, the part of the Guaranteed Obligations which has been paid, reduced or satisfied by such amount shall be reinstated and continued in full force and effect as of the time immediately preceding such initial payment, reduction or satisfaction. 9.6. Termination Date. This guaranty shall continue in effect until the ---------------- earlier of (a) the later of (i) the Termination Date, (ii) the Term Loan Termination Date, and (b) the date on which this Agreement has otherwise expired or been terminated in accordance with its terms and all of the Guaranteed Obligations have been paid in full in cash. ARTICLE X: GENERAL PROVISIONS ------------------ 10.1. Governmental Regulation. Anything contained in this Agreement to ----------------------- the contrary notwithstanding, no Lender shall be obligated to extend credit to the Company or a Borrowing Subsidiary in violation of any limitation or prohibition provided by any applicable statute or regulation. 111 10.2. Taxes. Any recording or documentary taxes or other similar ----- assessments or charges payable or ruled payable by any governmental authority in respect of the Loan Documents shall be paid by the Company. 10.3. Headings. Section headings in the Loan Documents are for -------- convenience of reference only, and shall not govern the interpretation of any of the provisions of the Loan Documents. 10.4. Entire Agreement. The Loan Documents embody the entire agreement ---------------- and understanding among the Borrowers, the Agent and the Lenders and supersede all prior agreements and understandings among the Borrowers, the Agent and the Lenders relating to the subject matter thereof except as contemplated in Section ------- 2.4.2. - ----- 10.5. Several Obligations. The respective obligations of the Lenders ------------------- hereunder are several and not joint and no Lender shall be the partner or agent of any other (except to the extent to which the Agent is authorized to act as such). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. No Lender shall have any liability for the failure of any other Lender to perform its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns. 10.6. Expenses; Indemnification. The Company and each Borrowing ------------------------- Subsidiary, jointly and severally, shall reimburse (i) the Agent and the Arranger for any reasonable costs, internal charges and out-of-pocket expenses (including reasonable attorneys' fees and, in connection with the preparation, execution and delivery of the Loan Documents, time charges of attorneys for the Agent and/or the Arranger, which attorneys may be employees of the Agent and/or the Arranger) including title insurance premiums, lien search charges, recording taxes, filing charges and other similar expenses paid or incurred by the Agent or the Arranger in connection with the preparation, review, execution, delivery, amendment, modification and administration of the Loan Documents, and (ii) the Agent, the Arranger, the Lenders, Swing Loan Lenders and Issuing Lenders for any costs, internal charges and out-of-pocket expenses (including attorneys' fees and time charges of attorneys for the Agent, the Arranger, the Lenders, the Swing Loan Lenders or the Issuing Lenders) paid or incurred by the Agent, the Arranger, any Lender, any Swing Loan Lender or any Issuing Lender in connection with the collection and enforcement of the Loan Documents (except to the extent that a court of competent jurisdiction rules against the Agent, the Arranger, the Lenders, the Swing Loan Lenders or the Issuing Lenders in a final judgment in any such collection or enforcement action), any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a "work-out" or any insolvency or bankruptcy proceedings in respect of the Company or any Borrowing Subsidiary. The Company and each Borrowing Subsidiary, jointly and severally, further agree to indemnify the Agent, the Arranger and each Lender, Swing Loan Lender and Issuing Lender, their respective directors, officers and employees (the "Indemnitees") against all losses, claims, damages, penalties, judgments, liabilities and expenses (including, without limitation, all expenses of litigation or preparation therefor whether or not the Agent, the 112 Arranger or any Lender, Swing Loan Lender or Issuing Lender is a party thereto) (collectively, the "Indemnified Amounts") which any of them may pay or incur arising out of or relating to the direct or indirect application or proposed application of the proceeds of any Loan or Letter of Credit hereunder; provided, however, that neither the Company nor any Borrowing Subsidiary shall be liable to any Indemnitee for any Indemnified Amounts to the extent that a court of competent jurisdiction has determined in a final non-appealable judgment that the foregoing resulted solely from such Indemnitee's Gross Negligence or willful misconduct. The Company and each Borrowing Subsidiary further agree (y) to assert no claims for consequential damages on any theory of liability in connection in any way with the Loan Documents or the transactions evidenced thereby and (z) not to settle any claim, litigation or proceeding relating to the Loan Documents or the transactions evidenced thereby unless such settlement releases all Indemnitees from any and all liability in respect of such transaction or unless each Indemnitee approves such settlement. The obligations of the Company and each Borrowing Subsidiary under this Section 10.6 shall ------------ survive the termination of this Agreement. 10.7. Numbers of Documents. All statements, notices, closing documents, -------------------- and requests hereunder shall be furnished to the Agent with sufficient counterparts so that the Agent may furnish one to each of the Lenders. 10.8. Severability of Provisions. Any provision in any Loan Document -------------------------- that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of all Loan Documents are declared to be severable. 10.9. Nonliability of Lenders. The relationship between the Borrowers ----------------------- and the Lenders, Swing Loan Lenders, Issuing Lenders and the Agent shall be solely that of borrower and lender. Neither the Agent nor any Lender, Swing Loan Lender or Issuing Lender shall have any fiduciary responsibilities to the Borrowers. Neither the Agent nor any Lender, Swing Loan Lender or Issuing Lender undertakes any responsibility to the Borrowers to review or inform the Borrowers of any matter in connection with any phase of the Borrowers' business or operations. 10.10. CHOICE OF LAW. THIS AGREEMENT AND, UNLESS OTHERWISE SET FORTH ------------- THEREIN, THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING 735 ILCS 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. IN THE EVENT THAT A COURT DETERMINED THAT THE PARTIES' CHOICE OF ILLINOIS LAW AS SET FORTH ABOVE IS NOT ENFORCEABLE, THIS AGREEMENT AND, UNLESS OTHERWISE SET FORTH THEREIN, THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) 113 OF THE STATE OF INDIANA, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. 10.11 CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO AGREES THAT ----------------------- ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE RESOLVED BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. TO THE EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SECTION ANY OBJECTION THAT IT MAY HAVE TO ------- THE LOCATION OF THE COURT CONSIDERING THE DISPUTE. 10.12. Confidentiality. Each Lender agrees to hold any confidential --------------- information which it may receive from the Company or any Subsidiary pursuant to this Agreement in confidence, except for disclosure (i) to other Lenders and their respective affiliates, (ii) to legal counsel, accountants, and other professional advisors to that Lender, (iii) to regulatory officials, (iv) as requested pursuant to or as required by law, regulation, or legal process, (v) in connection with any legal proceeding to which that Lender is a party, and (vi) permitted by Section 13.4. The restrictions in this Section 10.12 shall not ------------ ------------- apply to any information which is or becomes generally available to the public other than as a result of disclosure by a Lender or a Lender's representatives. 10.13. Performance of Obligations. The Company and each of the Borrowing -------------------------- Subsidiaries agree that the Agent may, but shall have no obligation to (i) at any time, pay or discharge taxes, liens, security interests or other encumbrances levied or placed on or threatened against any Collateral and (ii) after the occurrence and during the continuance of a Default make any other payment or perform any act required of the Company or any of the Borrowing Subsidiaries under any Loan Document or take any other action which the Agent in its discretion deems necessary or desirable to protect or preserve the Collateral, including, without limitation, any action to (y) effect any repairs or obtain any insurance called for by the terms of any of the Loan Documents and to pay all or any part of the premiums therefor and the costs thereof and (z) pay any rents payable by the Company which are more than 60 days past due, or as to which the landlord has given notice of termination, under any lease. The Agent shall use its best efforts to give the Company notice of any action taken under this Section 10.13 prior to the taking of such action or promptly ------------- thereafter provided the failure to give such notice shall not affect the Company's obligations in respect thereof. The Company agrees to pay the Agent, upon demand, the principal amount of all funds advanced by the Agent under this Section 10.13, together with interest thereon at the rate from time to time - ------------- applicable to Alternate Base Rate Loans from the date of such advance until the outstanding principal balance thereof is paid in full. If the Borrower fails to make payment in respect of any such advance under this Section 10.13 within one ------------- (1) Business Day after the date the Company receives written demand therefor from the Agent, the Agent shall promptly notify each Lender and 114 each Lender agrees that it shall thereupon make available to the Agent, in Dollars in immediately available funds, the amount equal to such Lender's pro rata share of such advance. If such funds are not made available to the Agent by such Lender within one (1) Business Day after the Agent's demand therefor, the Agent will be entitled to recover any such amount from such Lender together with interest thereon at the Federal Funds Effective Rate for each day during the period commencing on the date of such demand and ending on the date such amount is received. The failure of any Lender to make available to the Agent its pro rata share of any such unreimbursed advance under this Section 10.13 shall ------------- relieve any other Lender of its obligation hereunder to make available to the Agent such other Lender's pro rata share of such advance on the date such payment is to be made nor increase the obligation of any other Lender to make such payment to the Agent. All outstanding principal of, and interest on, advances made under this Section 10.13 shall constitute Obligations secured by ------------- the Collateral until paid in full by the Company. 10.14. English Language. With the exception of the French Collateral ---------------- Documents, all certificates, instruments and other documents to be delivered under or supplied in connection with this Agreement shall be in the English language or shall attach a certified English translation thereof, which translation shall be the governing version. Within one month of the delivery of any financial statements written in French pursuant to the Loan Documents the Company shall deliver to the Agent, for distribution to the Lenders, sufficient copies for all the Lenders of an English translation of such financial statements. 10.15 Alternate Currency Addenda Binding on Each Lender; Provisions ------------------------------------------------------------- Regarding Alternate Currency Agents. Each of the Lenders agrees that it shall - ----------------------------------- be bound by the provisions of each Alternate Currency Addendum entered into in connection herewith, in particular as it relates to the provisions applicable to the Alternate Currency Agent appointed thereunder. ARTICLE XI: THE AGENT AND THE COLLATERAL AGENT ---------------------------------- 11.1. Appointment. NBD Bank, N.A. is hereby appointed Agent and Credit ----------- Lyonnais is hereby appointed Collateral Agent, in each case, hereunder and under each other Loan Document and under the ESOP Loan Agreements, and each of the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders irrevocably authorizes the Agents to act as the contractual representative of such Lender, Swing Loan Lender, Issuing Lender or ESOP Lender. The Agents agree to act as such upon the express conditions contained in this Article XI. The Agents shall ---------- not have a fiduciary relationship in respect of the Company, any Borrowing Subsidiary, any Lender, any Swing Loan Lender, any Issuing Lender or any ESOP Lender by reason of this Agreement or the ESOP Loan Agreements. Notwithstanding the use of the defined term "Agent," and "Collateral Agent" it is expressly understood and agreed that neither of the Agents shall have any fiduciary responsibilities to any Lender, Swing Loan Lender, Issuing Lender or any ESOP Lender by reason of this Agreement and that the Agents are merely acting as the representative of the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders', Swing Loan 115 Lenders', Issuing Lenders' and ESOP Lenders' contractual representative, the Agents (i) do not assume any fiduciary duties to any of the Lenders, Swing Loan Lenders, Issuing Lenders or ESOP Lenders, (ii) are a "representative" of the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders within the meaning of Section 9-105 of the Uniform Commercial Code or "mandataire" within the ------------- meaning of Articles 1984 et seq. of the French Civil Code and (iii) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders agrees to assert no claim against either of the Agents on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender, Swing Loan Lender, Issuing Lender and ESOP Lender waives. 11.2. Powers. The Agents shall have and may exercise such powers under ------ the Loan Documents as are specifically delegated to the Agents by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Agents shall have no implied duties to the Lenders, Swing Loan Lenders, Issuing Lenders or ESOP Lenders or any obligation to the Lenders, Swing Loan Lenders, Issuing Lenders or ESOP Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by either of the Agents. 11.3. General Immunity. Neither any Agent nor any of their respective ---------------- directors, officers, agents or employees shall be liable to the Company or to any Borrowing Subsidiary, Lender, Swing Loan Lender, Issuing Lender or ESOP Lender for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any other Loan Document except to the extent such action or inaction is found in a final judgment by a court of competent jurisdiction to have arisen solely from (i) the Gross Negligence or willful misconduct of such Person or an Affiliate thereof or (ii) breach of contract by such Person with respect to the Loan Documents. 11.4. No Responsibility for Loans, Collateral, Recitals, etc. Neither ------------------------------------------------------- any Agent nor any of their respective directors, officers, agents or employees shall be responsible for or have any duty to ascertain, inquire into, or verify (i) any statement, warranty or representation made in connection with any Loan Document or any borrowing hereunder, including statements made in any offering memorandum or "Bank Book"; (ii) the performance or observance of any of the covenants or agreements of any obligor under any Loan Document; (iii) the satisfaction of any condition specified in Article IV, except receipt of items ---------- required to be delivered to the Agent; or (iv) the validity, effectiveness or genuineness of any Loan Document or any other instrument or writing furnished in connection therewith, except for the authority of the Agent's and/or the Collateral Agent's signatory to this Agreement. Neither Agent shall be responsible to any Lender, Swing Loan Lender, Issuing Lender or ESOP Lender for any recitals, statements, representations or warranties herein or in any of the other Loan Documents, for the perfection or priority of any of the Liens on any of the Collateral, or for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any of the other Loan Documents or the transactions contemplated thereby, or for the financial condition of any guarantor of any or all of the Obligations, the Company or any of its Subsidiaries. 116 11.5. Action on Instructions of Lenders. The Agents shall in all cases --------------------------------- be fully protected in acting, or in refraining from acting, hereunder and under any other Loan Document in accordance with written instructions signed by the Required Lenders or all the Lenders, Swing Loan Lenders or Issuing Lenders, as applicable, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders and on all holders of Notes. The Agents shall be fully justified in failing or refusing to take any action hereunder and under any other Loan Document unless it shall first be indemnified to its satisfaction by the Lenders and ESOP Lenders pro rata against any and all liability, cost and expense that it may incur by reason of taking or continuing to take any such action, provided that, such indemnity need not include liability, costs and expenses which a court of competent jurisdiction has determined in a final non- appealable judgment arose solely from the Gross Negligence or willful misconduct of such Agent. 11.6. Employment of Agents and Counsel. Each Agent may execute any of -------------------------------- its duties as Agent or Collateral Agent, as applicable, hereunder and under any other Loan Document by or through employees, agents, and attorneys-in-fact and shall not be answerable to the Lenders, Swing Loan Lenders, Issuing Lenders or ESOP Lenders except as to money or securities received by it or its authorized agents, for the default or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. The Agents shall be entitled to advice of counsel concerning all matters pertaining to the agency hereby created and its duties hereunder and under any other Loan Document. 11.7. Reliance on Documents; Counsel. The Agents shall be entitled to ------------------------------ rely upon any Note, notice, consent, certificate, affidavit, letter, telegram, statement, paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons, and, in respect to legal matters, upon the opinion of counsel selected by the Agents, which counsel may be employees of the Agents. 11.8. Agents' Reimbursement and Indemnification. The Lenders and ESOP ----------------------------------------- Lenders agree to reimburse and indemnify the Agents ratably in proportion to their respective Percentages and the outstanding balance of the ESOP Loans held by the ESOP Lenders (i) for any amounts not reimbursed by the Company or any Borrowing Subsidiary for which such Agent is entitled to reimbursement by the Company or any Borrowing Subsidiary under the Loan Documents, (ii) for any other expenses not reimbursed by the Company or any Borrowing Subsidiary incurred by the Agents on behalf of the Lenders, Swing Loan Lenders, Issuing Lenders or ESOP Lenders in connection with the preparation, execution, delivery, administration and enforcement of the Loan Documents or the ESOP Loan Agreements (including reasonable attorneys' fees) and (iii) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever and not reimbursed by the Company or any Borrowing Subsidiary which may be imposed on, incurred by or asserted against any Agent in any way relating to or arising out of the Loan Documents or the ESOP Loan Agreements or any other document delivered in connection therewith or the transactions contemplated thereby, or the enforcement of any of the terms thereof or of any such other documents, provided that no Lender 117 shall be liable for any of the foregoing to the extent any of the foregoing is found in a final non-appealable judgment by a court of competent jurisdiction to have arisen solely from the Gross Negligence or willful misconduct of such Agent. 11.9. Rights as a Lender and Issuing Lender. With respect to its ------------------------------------- Revolving Loan Commitment, its Term Loan Commitment, Loans made by it (including without limitation Swing Loans), participations in Letters of Credit and Swing Loans, Letters of Credit issued by it, the Notes issued to it and the ESOP Loans held by it, each Agent shall have the same rights and powers hereunder and under any other Loan Document or the ESOP Loan Agreements as any Lender, Swing Loan Lender, Issuing Lender or ESOP Lender, as applicable, and may exercise the same as though it were not the Agent or Collateral Agent, as applicable, and the term "Lender," "Lenders", "Swing Loan Lender," "Issuing Lender" or "ESOP Lender" shall, unless the context otherwise indicates, include each of the Agents in its individual capacity. Each Agent may accept deposits from, lend money to, and generally engage in any kind of trust, debt, equity or other transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Company or any of its Subsidiaries. 11.10. Lender Credit Decision. Each Lender acknowledges that it has, ---------------------- independently and without reliance upon any Agent or any other Lender, Swing Loan Lender, Issuing Lender or ESOP Lender and based on the financial statements prepared by the Company and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and the other Loan Documents. Each Lender also acknowledges that it will, independently and without reliance upon any Agent or any other Lender, Swing Loan Lender, Issuing Lender or ESOP Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement and the other Loan Documents. 11.11. Successor Agent. Any Agent may resign at any time by giving at --------------- least 30 days' prior written notice thereof to the Lenders and the Company and such resignation shall be effective at the end of such 30-day period or upon the earlier appointment of a successor agent, and any Agent may be removed at any time with or without cause by written notice received by such Agent from the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint, on behalf of the Company, the Borrowing Subsidiaries, the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders, a successor Agent or Collateral Agent, as applicable. If no successor Agent or Collateral Agent, as applicable, shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days after the retiring Agent's or Collateral Agent's removal or giving notice of resignation, then the retiring Agent or Collateral Agent, as applicable, may appoint, on behalf of the Company and the Lenders, Swing Loan Lenders, Issuing Lenders and ESOP Lenders, a successor Agent or Collateral Agent, as applicable. Such successor Agent and Collateral Agent shall be a commercial bank having capital and retained earnings of at least $500,000,000. The retiring Agent or Collateral Agent, as applicable, shall be discharged from its duties and obligations hereunder and under the other Loan Documents and the ESOP Loan Agreements upon the effectiveness of its removal or 118 resignation hereunder. After any retiring Agent's or Collateral Agent's resignation or removal hereunder as Agent or Collateral Agent, as applicable, the provisions of this Article XI shall continue in effect for its benefit in ---------- respect of any actions taken or omitted to be taken by it while it was acting as the Agent or Collateral Agent, as applicable, hereunder and under the other Loan Documents and the ESOP Loan Agreements. 11.12 Collateral Documents. Each Lender, Swing Loan Lender, Issuing -------------------- Lender and ESOP Lender authorizes the Agents to enter into each of the Collateral Documents to which it is a party and to take all action contemplated by such documents. Each Lender, Swing Loan Lender, Issuing Lender and ESOP Lender agrees that no Lender, Swing Loan Lender, Issuing Lender or ESOP Lender shall have the right individually to seek to realize upon the security granted by any Collateral Document, it being understood and agreed that such rights and remedies may be exercised solely by the Agent or Collateral Agent, as applicable for the benefit of the Holders of Secured Obligations, upon the terms of the Collateral Documents. 11.13 ESOP Loans. Each ESOP Lender hereby authorizes the Agent to ---------- enter into the ESOP Agreements on its behalf and accepts an interest in the ESOP Loans in an amount equal to the amount set forth opposite such ESOP Lender's name under the heading "ESOP Lenders" on Schedule I hereof. 11.14 Agent as Joint Creditor. The parties hereto agree that the Agent ----------------------- shall be the joint and several creditor (together with each Lender or Affiliate of a Lender) of each and every Obligation or Rate Hedging Obligation, if any, payable by the Company or any of its Subsidiaries to such Lender or such Affiliate of a Lender under any Loan Documents, so that accordingly the Agent will have its own independent right to demand performance by the Company or such of its Subsidiaries of such Obligation or Rate Hedging Obligation, as the case may be, and such Obligation or Rate Hedging Obligation, as the case may be, will be discharged by and to the extent of any discharge thereof either to the Agent or to the relevant Lender or Affiliate of a Lender, as the case may be. ARTICLE XII: SETOFF; RATABLE PAYMENTS ------------------------ 12.1. Setoff. In addition to, and without limitation of, any rights of ------ the Lenders, Swing Loan Lenders and Issuing Lenders under applicable law, if any Borrower becomes insolvent, however evidenced, or any Default occurs, any indebtedness from any Lender, Swing Loan Lender or Issuing Lender to such Borrower (including all account balances, whether provisional or final and whether or not collected or available) may be offset and applied toward the payment of the Obligations owing to such Lender, Swing Loan Lender or Issuing Lender whether or not the Obligations, or any part thereof, shall then be due. 12.2. Ratable Payments. If, after the occurrence of a Default, any ---------------- Lender, whether by setoff or otherwise, has payment made to it upon its share of any Advance (other than payments 119 received which are for the account of the Agent, any Swing Loan Lender or any Issuing Lender or pursuant to Article III) in a greater proportion than that ----------- received by any other Lender, such Lender agrees, promptly upon demand, to purchase a portion of the Loans comprising that Advance held by the other Lenders so that after such purchase each Lender will hold its ratable proportion of Loans comprising that Advance. If any Lender, whether in connection with setoff or amounts which might be subject to setoff or otherwise, receives collateral or other protection for its Obligations or such amounts which may be subject to setoff, such Lender agrees, promptly upon demand, to take such action necessary such that all Lenders share in the benefits of such collateral ratably in proportion to their Loans. In case any such payment is disturbed by legal process, or otherwise, appropriate further adjustments shall be made. 12.3 Application of Payments. The Agent shall, unless otherwise ----------------------- specified at the direction of the Required Lenders which direction shall be consistent with the last sentence of this Section 12.3, apply all payments and ------------ prepayments in respect of any Obligations and all proceeds of the Collateral in the following order: (A) first, to pay interest on and then principal of any portion of the Loans which the Agent may have advanced on behalf of any Lender for which the Agent has not then been reimbursed by such Lender or the Company; (B) second, to pay interest on and then principal of any advance made under Section 10.13 for which the Agent has not then been paid by the ------------- applicable Borrower or reimbursed by the Lenders; (C) third, to pay Obligations in respect of any fees, expense reimbursements or indemnities then due to the Agent; (D) fourth, to pay Obligations in respect of any fees, expenses, reimbursements or indemnities then due to the Lenders and the issuer(s) of Letters of Credit; (E) fifth, to pay interest due in respect of Swing Loans; (F) sixth, to pay interest due in respect of Loans (other than Swing Loans) and L/C Obligations; (G) seventh, to the ratable payment or prepayment of principal outstanding on Swing Loans; (H) eighth, to the ratable payment or prepayment of principal outstanding on Loans (other than Swing Loans) and Reimbursement Obligations; (I) ninth, to provide required cash collateral, if required pursuant to Section 2.6.4; ------------- 120 (J) tenth, to the ratable payment of all other Obligations; and (K) eleventh, to the Rate Hedging Obligations, if any, payable by the Company or any of its Subsidiaries to one or more of the Lenders or an Affiliate of a Lender. Unless otherwise designated (which designation shall only be applicable prior to the occurrence of a Default) by the Company, all principal payments in respect of Loans (other than Swing Loans) shall be applied first, to the outstanding ----- Revolving Loans, and second, to the outstanding Term Loans, in each case, first, ------ ----- to repay outstanding Alternate Base Rate Loans, and then to repay outstanding ---- Eurocurrency Loans with those Eurocurrency Loans which have earlier expiring Interest Periods being repaid prior to those which have later expiring Interest Periods. The order of priority set forth in this Section 12.3 and the related ------------ provisions of this Agreement are set forth solely to determine the rights and priorities of the Agent, the Lenders, the Swing Loan Lender and the issuer(s) of Letters of Credit and other Holders of Secured Obligations as among themselves. The order of priority set forth in clauses (D) through (K) of this Section 12.3 ----------- --- ------------ may at any time and from time to time be changed by the Required Lenders without necessity of notice to or consent of or approval by the Borrower, or any other Person; provided, that the order of priority of payments in respect of Swing -------- Loans may be changed only with the prior written consent of the Swing Loan Lender. The order of priority set forth in clauses (A) through (C) of this ----------- --- Section 12.3 may be changed only with the prior written consent of the Agent. - ------------ ARTICLE XIII: BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS ------------------------------------------------- 13.1. Successors and Assigns. The terms and provisions of the Loan ---------------------- Documents shall be binding upon and inure to the benefit of the Borrowers, the Lenders, the Swing Loan Lenders and the Issuing Lenders and their respective successors and assigns, except that (i) no Borrower shall have the right to assign its rights or obligations under the Loan Documents and (ii) any assignment by any Lender must be made in compliance with Section 13.3. ------------ Notwithstanding clause (ii) of this Section, any Lender may at any time, without ----------- the consent of any Borrower, the Agent, any Swing Loan Lender or any Issuing Lender, assign all or any portion of its rights under this Agreement and its Notes to a Federal Reserve Bank; provided, however, that no such assignment shall release the transferor Lender from its obligations hereunder. The Agent may treat the payee of any Note as the owner thereof for all purposes hereof unless and until such payee complies with Section 13.3 in the case of an ------------ assignment thereof or, in the case of any other transfer, a written notice of the transfer is filed with the Agent. Any assignee or transferee of a Note agrees by acceptance thereof to be bound by all the terms and provisions of the Loan Documents. Any request, authority or consent of any Person, who at the time of making such request or giving such authority or consent is the holder of any Note, shall be conclusive and binding on any subsequent holder, transferee or assignee of such Note or of any Note or Notes issued in exchange therefor. 13.2. Participations. -------------- 121 13.2.1. Permitted Participants; Effect. Any Lender may, in the ordinary ------------------------------ course of its business and in accordance with applicable law, at any time sell to one or more financial institutions ("Participants") participating interests in any Loan owing to such Lender, any Note held by such Lender, the Revolving Loan Commitment of such Lender, or any other interest of such Lender under the Loan Documents. In the event of any such sale by a Lender of participating interests to a Participant, such Lender's obligations under the Loan Documents shall remain unchanged, such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, such Lender shall remain the holder of any such Note for all purposes under the Loan Documents, all amounts payable by the Borrowers under this Agreement shall be determined as if such Lender had not sold such participating interests, and the Borrowers and the Agent, Lenders, Swing Loan Lenders and Issuing Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under the Loan Documents. 13.2.2. Voting Rights. Each Lender shall retain the sole right to ------------- approve, without the consent of any Participant, any amendment, modification or waiver of any provision of the Loan Documents other than any amendment, modification or waiver with respect to any Loan or Revolving Loan Commitment in which such Participant has an interest which forgives principal, interest or fees or reduces the interest rate or fees payable with respect to any such Loan or Revolving Loan Commitment, postpones any date fixed for any regularly- scheduled payment (but not prepayments) of principal of, or interest or fees on, any such Loan or Revolving Loan Commitment, releases any guarantor of any such Loan (other than as contemplated hereunder or under any other Loan Document), if any, or releases all or substantially all of the Collateral, if any, securing any such Loan. 13.2.3. Benefit of Setoff. The Borrowers agree that each Participant ------------------ shall be deemed to have the right of setoff provided in Section 12.1 in respect ------------ of its participating interest in amounts owing under the Loan Documents to the same extent as if the amount of its participating interest were owing directly to it as a Lender under the Loan Documents, provided that each Lender shall retain the right of setoff provided in Section 12.1 with respect to the amount ------------ of participating interests sold to each Participant. The Lenders agree to share with each Participant, and each Participant, by exercising the right of setoff provided in Section 12.1, agrees to share with each Lender, any amount received ------------ pursuant to the exercise of its right of setoff, such amounts to be shared in accordance with Section 12.2 as if each Participant were a Lender. ------------ 13.3. Assignments. ----------- 13.3.1. Permitted Assignments. Any Lender may, in the ordinary course of --------------------- its business and in accordance with applicable law, at any time assign to one or more financial institutions that are, at the time of such assignment, entitled to receive interest on the Obligations being assigned to such institution without such payments being subject to any withholding taxes ("Purchasers") all or a portion of its rights and obligations under the Loan Documents, which assignment shall in the case of assignments to Purchasers other than Lenders be in amounts equal to or greater than $5,000,000 122 (or the Equivalent Amount thereof if denominated in an Alternate Currency or an Agreed Currency other than Dollars) or, if less, all of such assigning Lender's remaining Loans, Revolving Loan Commitments and participations in Letters of Credit, Alternate Currency Loans and Swing Loans hereunder, provided, however, that any such Purchaser must agree to designate a French Lending Installation in compliance with Section 2.5.13 and if such French Lending Installation is an -------------- affiliate of such Purchaser, the Revolving Loan Commitment shall be a Revolving Loan Commitment of the Purchaser and (with respect to Loans to be made to the French Borrower Subsidiaries) such affiliate which will not in the aggregate exceed the amount of the Revolving Loan Commitment assigned. Such assignment shall be substantially in the form of Exhibit B hereto. The consent of the Agent --------- shall be required prior to an assignment becoming effective with respect to a Purchaser which is not a Lender or an Affiliate thereof. 13.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of a ---------------------- notice of assignment, substantially in the form attached as Exhibit I to Exhibit --------- ------- B hereto (a "Notice of Assignment"), together with any consent required by - - Section 13.3.1 (provided however, that no consent shall be required for an - -------------- assignment from a Lender to an Affiliate of the Lender), and (ii) payment of a $3,500 fee to the Agent by the assigning Lender for processing such assignment, such assignment shall become effective on the effective date specified in such Notice of Assignment. On and after the effective date of such assignment, such Purchaser shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party hereto, and no further consent or action by any Borrower, the Lenders, the Swing Loan Lenders, the Issuing Lenders or the Agent shall be required to release the transferor Lender with respect to the percentage of the Aggregate Revolving Loan Commitment and Loans assigned to such Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to this Section ------- 13.3.2, the transferor Lender, the Agent and the Borrowers shall make - ------ appropriate arrangements so that replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Term Loans and Revolving Loan Commitments, as adjusted pursuant to such assignment. 13.4. Dissemination of Information. Each Borrower authorizes each ---------------------------- Lender to disclose to any Participant or Purchaser or any other Person acquiring an interest in the Loan Documents by operation of law (each a "Transferee") and any prospective Transferee any and all information in such Lender's possession concerning the creditworthiness of the Company and its Subsidiaries; provided that each Transferee and prospective Transferee agrees to be bound by Section ------- 10.12 of this Agreement. - ----- 13.5. Tax Treatment. If any interest in any Loan Document is ------------- transferred to any Purchaser which is organized under the laws of any jurisdiction other than the United States of America or any State thereof, the transferor Lender shall cause such Purchaser, concurrently with the effectiveness of such transfer, to comply with the provisions of Section ------- 2.5.15(i). - --------- 123 ARTICLE XIV: NOTICES ------- 14.1. Giving Notice. Except as otherwise permitted by Section 2.5.8, ------------- ------------- all notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing or by telex or by facsimile and addressed or delivered to such party at its address set forth below its signature hereto or at such other address as may be designated by such party in a notice to the other parties. Any notice, if mailed and properly addressed with postage prepaid, shall be deemed given when received; any notice, if transmitted by telex or facsimile, shall be deemed given when transmitted (answerback confirmed in the case of telexes). 14.2. Change of Address. The Company, each Borrowing Subsidiary, the ----------------- Agent and each Lender may change the address for service of notice upon it by a notice in writing to the other parties hereto. ARTICLE XV: COUNTERPARTS ------------ This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Company, the Agent, the Lenders, the Swing Loan Lenders and the Issuing Lenders and each party has notified the Agent by telex or telephone, that it has taken such action. ARTICLE XVI: WAIVER OF JURY TRIAL -------------------- EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 124 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: TOKHEIM SOFITAM APPLICATIONS S.A., as a Borrower By:____________________________ Title:_________________________ Attention: Title: Telephone: Facsimile: TOKHEIM LIMITED, as a Borrower By:____________________________ Title:_________________________ Attention: Title: Telephone: Facsimile: 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: GASBOY INTERNATIONAL, INC. as a Borrower By:____________________________ Title:_________________________ Attention: Title: Telephone: Facsimile: NBD BANK, N.A., as Agent, as a Lender, as Issuing Lender, and a Swing Loan Lender By:______________________________ Title:___________________________ Attention: Title: Telephone: Facsimile: CREDIT LYONNAIS, CHICAGO BRANCH, as a Lender By:______________________________ Title:___________________________ Attention: Title: Telephone: Facsimile: NATIONAL WESTMINSTER BANK PLC, as a Lender By:______________________________ Title:___________________________ Attention: Andrew Weinberg Title: Senior Vice President Telephone: (212) 418-4500 Facsimile: (212) 602-4599 BT INTERNATIONAL PLC as a Lender with respect to the Non-Domestic Borrowing Subsidiaries By:____________________________________ Title:_________________________________ Attention: Title: Telephone: Facsimile: BANKERS TRUST COMPANY as a Lender By:____________________________________ Title:_________________________________ Attention: Title: Telephone: Facsimile: -----END PRIVACY-ENHANCED MESSAGE-----