EXHIBIT 10.1
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$125,000,000
CREDIT AGREEMENT
among
BANCTEC, INC.,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
ABN AMRO BANK N.V.,
as Co-Agent
and
CHASE BANK OF TEXAS, N.A.,
as Syndication Agent and as Administrative Agent
Dated as of July 22, 1999.
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CHASE SECURITIES INC., as Lead Arranger and Book Manager
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.................................................... 1
1.1 Defined Terms.................................................. 1
1.2 Other Definitional Provisions.................................. 19
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS............................... 20
2.1 Term Commitments............................................... 20
2.2 Procedure for Term Loan Borrowing.............................. 20
2.3 Repayment of Term Loans........................................ 20
2.4 Revolving Commitments.......................................... 20
2.5 Procedure for Revolving Loan Borrowing......................... 21
2.6 Commitment Fees, etc........................................... 21
2.7 Termination or Reduction of Revolving Commitments.............. 21
2.8 Optional Prepayments........................................... 22
2.9 Mandatory Prepayments and Commitment Reductions................ 22
2.10 Conversion and Continuation Options............................ 23
2.11 Limitations on Eurodollar Tranches............................. 24
2.12 Interest Rates and Payment Dates............................... 24
2.13 Computation of Interest and Fees............................... 24
2.14 Inability to Determine Interest Rate........................... 25
2.15 Pro Rata Treatment and Payments................................ 25
2.16 Requirements of Law............................................ 26
2.17 Taxes.......................................................... 27
2.18 Indemnity...................................................... 29
2.19 Change of Lending Office....................................... 29
2.20 Replacement of Lenders......................................... 29
SECTION 3. LETTERS OF CREDIT.............................................. 30
3.1 L/C Commitment................................................. 30
3.2 Procedure for Issuance of Letter of Credit..................... 30
3.3 Fees and Other Charges......................................... 31
3.4 L/C Participations............................................. 31
3.5 Reimbursement Obligation of the Borrower....................... 32
3.6 Obligations Absolute........................................... 32
3.7 Letter of Credit Payments...................................... 32
3.8 Applications................................................... 32
SECTION 4. REPRESENTATIONS AND WARRANTIES................................. 32
4.1 Financial Condition............................................ 33
4.2 No Change...................................................... 33
4.3 Corporate Existence; Compliance with Law....................... 33
4.4 Corporate Power; Authorization; Enforceable Obligations......... 34
4.5 No Legal Bar.................................................... 34
4.6 Litigation...................................................... 34
4.7 No Default...................................................... 34
4.8 Ownership of Property; Liens.................................... 34
4.9 Intellectual Property........................................... 34
4.10 Taxes........................................................... 35
4.11 Federal Regulations............................................. 35
4.12 Labor Matters................................................... 35
4.13 ERISA........................................................... 35
4.14 Investment Company Act; Other Regulations....................... 35
4.15 Subsidiaries.................................................... 36
4.16 Use of Proceeds................................................. 36
4.17 Environmental Matters........................................... 36
4.18 Accuracy of Information, etc.................................... 37
4.19 Security Documents.............................................. 37
4.20 Solvency........................................................ 38
4.21 Senior Indebtedness............................................. 38
4.22 Year 2000 Matters............................................... 38
4.23 Regulation H.................................................... 38
4.24 Insurance....................................................... 38
4.25 Certain Documents............................................... 38
SECTION 5. CONDITIONS PRECEDENT........................................... 39
5.1 Conditions to Initial Extension of Credit....................... 39
5.2 Conditions to Each Extension of Credit.......................... 43
SECTION 6. AFFIRMATIVE CONVENANTS......................................... 43
6.1 Financial Statements............................................ 43
6.2 Certificates; Other Information................................. 44
6.3 Payment of Obligations.......................................... 45
6.4 Maintenance of Existence; Compliance........................... 45
6.5 Maintenance of Property; Insurance.............................. 45
6.6 Inspection of Property; Books and Records; Discussions.......... 45
6.7 Notices......................................................... 46
6.8 Environmental Laws.............................................. 46
6.9 Additional Collateral, etc...................................... 47
SECTION 7. NEGATIVE CONVENANTS............................................ 48
7.1 Financial Condition Covenants................................... 48
7.2 Indebtedness.................................................... 49
7.3 Liens........................................................... 50
7.4 Fundamental Changes............................................. 51
7.5 Disposition of Property..................................................... 51
7.6 Restricted Payments......................................................... 52
7.7 Capital Expenditures........................................................ 52
7.8 Investments................................................................. 52
7.9 Optional Payments and Modifications of Certain Debt Instruments............. 53
7.10 Transactions with Affiliates................................................ 53
7.11 Sales and Leasebacks........................................................ 53
7.12 Changes in Fiscal Periods................................................... 54
7.13 Negative Pledge Clauses..................................................... 54
7.14 Clauses Restricting Sudsidiary Distributions................................ 54
7.15 Lines of Business........................................................... 54
7.16 Amendments to Acquisition Documentation..................................... 54
SECTION 8. EVENTS OF DEFAULT........................................................... 54
SECTION 9. THE AGENTS.................................................................. 57
9.1 Appointment................................................................. 57
9.2 Delegation of Duties........................................................ 58
9.3 Exculpatory Provisions...................................................... 58
9.4 Reliance by Administrative Agent............................................ 58
9.5 Notice of Default........................................................... 58
9.6 Non-Reliance on Agents and Other Lenders.................................... 59
9.7 Indemnification............................................................. 59
9.8 Agent in Its Individual Capacity............................................ 60
9.9 Successor Administrative Agent.............................................. 60
9.10 Syndication Agent........................................................... 60
SECTION 10. MISCELLANEOUS.............................................................. 60
10.1 Amendments and Waivers...................................................... 60
10.2 Notices..................................................................... 61
10.3 No Waiver; Cumulative Remedies.............................................. 61
10.4 Survival of Representations and Warranties.................................. 62
10.5 Payment of Expenses and Taxes............................................... 62
10.6 Successors and Assigns; Participations and Assignments...................... 63
10.7 Adjustments; Set-off........................................................ 64
10.8 Counterparts................................................................ 65
10.9 Severability................................................................ 65
10.10 Integration................................................................. 65
10.11 GOVERNING LAW............................................................... 65
10.12 Submission To Jurisdiction; Waivers......................................... 65
10.13 Acknowledgements............................................................ 66
10.14 Releases of Guarantees and Liens............................................ 66
10.15 Confidentiality............................................................. 67
10.16 WAIVERS OF JURY TRIAL....................................................... 67
CREDIT AGREEMENT, dated as of July 22, 1999, among BANCTEC, INC., a Delaware
corporation (the "Borrower"), the several banks and other financial institutions
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or entities from time to time parties to this Agreement (the "Lenders"), ABN
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AMRO Bank N.V., as Co-Agent, CHASE BANK OF TEXAS, N.A. ("CHASE"), as syndication
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agent, and CHASE BANK OF TEXAS, N.A., as administrative agent.
RECITALS
A. WHEREAS, Welsh, Carson, Xxxxxxxx & Xxxxx VIII, L.P., together with
its Affiliates (collectively, the "Sponsor"), proposes to acquire and effect the
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recapitalization (the "Acquisition") of the Borrower through a wholly owned
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subsidiary, Colonial Acquisition Corp. ("Newco"). The acquisition and
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recapitalization will be effected by a merger of Newco with and into the
Borrower, as a result of which the Sponsor will own approximately 93.5% of the
common stock of the Borrower and Convergent Equity Partners L.L.C. (the "Other
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Investor") will own approximately 6.5% of such common stock. All of the existing
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stockholders of the Borrower will receive cash consideration in exchange for
their common stock in the Borrower.
B. WHEREAS, concurrently with the Acquisition, BancTec USA, Inc.
will be merged with or liquidated into (the "Subsidiary Merger") the Borrower;
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C. WHEREAS, in connection with the Acquisition and the Subsidiary
Merger, all amounts outstanding under the Existing Credit Agreements (as defined
herein), which shall not be greater than $6,500,000, will be refinanced (the
"Refinancing"; together with the Acquisition and the Subsidiary Merger, the
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"Transactions");
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D. WHEREAS, in order to finance a portion of the purchase price of,
and to pay and reimburse certain costs and expenses incurred in connection with,
the Transactions, and to provide for certain ongoing working capital needs of
the Borrower and its Subsidiaries, the Borrower desires to obtain financing
through (i) the issuance of subordinated unsecured notes by the Borrower for an
aggregate principal amount of not more than $160,000,000 and (ii) the incurrence
of senior secured Indebtedness of an aggregate principal amount of not more than
$125,000,000 by entering into this Agreement with the Lenders hereto;
E. NOW, THEREFORE, in consideration of the mutual provisions,
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
SECTION I. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
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this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
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to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
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annum publicly announced from time to time by the Reference Lender as its prime
rate in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by the Reference Lender
in connection with extensions of credit to debtors). Any change in the ABR due
to a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.
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"ABR Loans": Loans the rate of interest applicable to which is based
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upon the ABR.
"Acquisition": as defined in Section 5.1.
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"Acquisition Agreement": the Amended and Restated Agreement and Plan
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of Merger, dated as of June 17, 1999, by and between Newco and the Borrower
(prior to the Acquisition).
"Acquisition Documentation": collectively, the Acquisition Agreement
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and all schedules, exhibits and annexes thereto and all side letters and
agreements affecting the terms thereof or entered into in connection therewith,
in each case as amended, supplemented or otherwise modified from time to time in
accordance with Section 7.16.
"Adjustment Date": as defined in the Pricing Grid.
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"Administrative Agent": Chase, together with its affiliates, as the
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administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its permitted successors hereunder.
"Affiliate": as to any Person, any other Person that, directly or
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indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Syndication Agent and the
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Administrative Agent.
"Aggregate Exposure": with respect to any Lender at any time, an
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amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any
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time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented or
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otherwise modified from time to time.
"Applicable Margin": for each Type of Loan, the rate per annum set
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forth under the relevant column heading below:
ABR Loans Eurodollar Loans
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Revolving Loans 1.75% 2.75%
Tranche A Term Loans 1.75% 2.75%
; provided, that on and after the first Adjustment Date occurring after the
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completion of two full fiscal quarters of the Borrower after the Closing Date,
the Applicable Margin with respect to Revolving Loans and Tranche A Term Loans
will be determined pursuant to the Pricing Grid.
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"Application": an application, in such form as the Issuing Lender may
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specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Asset Coverage Ratio": at any date, the ratio of (a) the sum of (i)
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100% of the book accounts receivable and inventory (less obsolete inventory)
plus (ii) the greater of $40,000,000 and 15% of Consolidated Net Tangible Assets
to (b) outstanding Term Loans and Revolving Extensions of Credit, as of such
date.
"Asset Sale": any Disposition of property or series of related
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Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 7.5).
"Assignee": as defined in Section 10.6(c).
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"Assignment and Acceptance": an Assignment and Acceptance,
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substantially in the form of Exhibit E.
"Assignor": as defined in Section 10.6(c).
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"Available Revolving Commitment": as to any Revolving Lender at any
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time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect over (b) such Lender's Revolving Extensions of Credit
then outstanding.
"Benefitted Lender": as defined in Section 10.7(a).
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"Board": the Board of Governors of the Federal Reserve System of the
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United States (or any successor).
"Borrower": as defined in the preamble hereto.
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"Borrowing Date": any Business Day specified by the Borrower as a date
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on which the Borrower requests the relevant Lenders to make Loans hereunder.
"Business": as defined in Section 4.17(b).
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"Business Day": a day other than a Saturday, Sunday or other day on
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which commercial banks in New York City are authorized or required by law to
close, provided, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
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the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
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Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
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"Capital Stock": any and all shares, interests, participations or
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other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
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unconditionally guaranteed by, (i) the government of (X) the United States or
(Y) any other country in which any Subsidiary has operations, provided the
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investment in such obligations is made by the Subsidiary having such operations
or (ii) any agency or instrumentality of any of the foregoing, provided, that
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the full faith and credit of the relevant jurisdiction is pledged in support
thereof, and, in the case of each of (i) and (ii), maturing within one year from
the date of acquisition; (b) certificates of deposit, time deposits, eurodollar
time deposits or overnight bank deposits having maturities of one year or less
from the date of acquisition issued by (i) any Lender or (ii) by any commercial
bank organized under the laws of (X) the United States or any state thereof or
(Y) any other country in which any Subsidiary has operations, provided the
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investment in such obligations is made by the Subsidiary having such operations,
and, in the case of each of (X) and (Y), having combined capital and surplus of
not less than $500,000,000 (or its foreign currency equivalent as determined by
reference to the exchange rate most recently reported in The Wall Street
Journal); (c) commercial paper of an issuer rated at least A-1 by Standard &
Poor's Ratings Services ("S&P") or P-1 by Xxxxx'x Investors Service, Inc.
("Moody's"), or carrying an equivalent rating by a nationally recognized rating
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agency, if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within one year from the date
of acquisition; (d) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a term
of not more than 90 days, with respect to securities issued or fully guaranteed
or insured by the United States government; (e) securities with maturities of
one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A by Moody's; (f) securities with
maturities of one year or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"Chase": as defined in the preamble hereto.
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"Closing Date": the date on which the conditions precedent set forth
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in Section 5.1 shall have been satisfied, which date is July 22, 1999.
"Code": the Internal Revenue Code of 1986, as amended from time to
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time.
"Collateral": all of the property of the Loan Parties, now owned or
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hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Collateral Agreement": the Collateral Agreement to be executed and
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delivered by the Borrower, substantially in the form of Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time.
"Commitment": as to any Lender, the sum of the Tranche A Term
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Commitment and the Revolving Commitment of such Lender.
5
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on and
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after the first Adjustment Date occurring after the completion of two full
fiscal quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not incorporated,
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that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
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Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
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Memorandum dated June 1999 and furnished to the Lenders.
"Consolidated Current Assets": at any date, all amounts (other than
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cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts that
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would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Loans
to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for
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such period plus, without duplication and to the extent reflected as a charge in
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the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
reportable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), (f) fees and expenses and other costs and charges incurred
or reserved, and any other charges required by the SEC to be taken, in
connection with the consummation of the Acquisition, and (g) any other non-cash
charges, and minus, to the extent included in the statement of such Consolidated
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Net Income for such period, the sum of (a) interest income, (b) any
extraordinary, unusual or non-recurring income or gains (including, whether or
not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (c) any other non-cash income earned
outside of the ordinary course of business, all as determined on a consolidated
basis. For any period of four consecutive fiscal quarters which includes the
fiscal quarter ended December 31, 1998, Consolidated EBITDA shall exclude
$37,500,000 in pretax expenses and charges accrued for such fiscal quarter. For
the purposes of calculating Consolidated EBITDA for any period of four
consecutive fiscal quarters (each, a "Reference Period") pursuant to any
determination of the Consolidated Leverage Ratio, (i) if at any time during such
Reference Period the Borrower or any Subsidiary shall have made any Material
Disposition, the Consolidated EBITDA for such Reference Period shall be reduced
by an amount equal to the Consolidated EBITDA (if positive) attributable to the
property that is the subject of such Material Disposition for such Reference
Period or increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (ii) if during such Reference
Period the Borrower or any Subsidiary shall have made a Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after giving
pro forma effect thereto as if such Material Acquisition occurred on the first
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day of
6
such Reference Period. As used in this definition, "Material Acquisition" means
any acquisition of property or series of related acquisitions of property that
(a) constitutes assets comprising all or substantially all of an operating unit
of a business or constitutes all or substantially all of the common stock of a
Person and (b) involves the payment of consideration by the Borrower and its
Subsidiaries in excess of $5,000,000; and "Material Disposition" means any
Disposition of property or series of related Dispositions of property that (x)
constitutes assets comprising all or substantially all of an operating unit of a
business or constitutes all or substantially all of the common stock of a person
and (y) yields gross proceeds to the Borrower or any of its Subsidiaries in
excess of $5,000,000.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
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of (a) Consolidated EBITDA for such period less the aggregate amount actually
paid by the Borrower and its Subsidiaries during such period on account of
Capital Expenditures (excluding the principal amount of Indebtedness incurred in
connection with such expenditures) to (b) Consolidated Interest Expense for such
period.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
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(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"Consolidated Interest Expense": for any period, total cash interest
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expense (including that attributable to Capital Lease Obligations), net of cash
interest income, of the Borrower and its Subsidiaries for such period with
respect to all outstanding Indebtedness of the Borrower and its Subsidiaries.
Consolidated Interest Expense shall include, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Hedge Agreements
in respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP, but shall exclude net payments received under
such Hedge Agreements.
"Consolidated Leverage Ratio": as at the last day of any period, the
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ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for
such period.
"Consolidated Net Income": for any period, the consolidated net income
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(or loss) of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
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income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Net Tangible Assets" as defined in the Senior Indenture.
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"Consolidated Total Debt": at any date, the aggregate principal amount
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of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the excess of
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Consolidated Current Assets on such date over Consolidated Current Liabilities
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on such date.
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"Continuing Directors": the directors of the Borrower on the Closing
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Date, after giving effect to the Transactions and the other transactions
contemplated hereby, and each other director, if, in each case, such other
director's nomination for election to the board of directors of the Borrower is
recommended by at least a majority of the then Continuing Directors (provided,
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that the act or vote of a majority of the directors is sufficient to constitute
such act or vote as that of the board of directors of the Borrower, otherwise,
such nomination for election of directors of the Borrower shall be by at least
the requisite number of the then Continuing Directors as is required therefor)
or such other director receives the vote of the Permitted Investors in his or
her election by the shareholders of the Borrower.
"Contractual Obligation": as to any Person, any provision of any
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security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control Investment Affiliate": as to any Person, any other Person
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that (a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition, "control" of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"Default": any of the events specified in Section 8, whether or not
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any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Designated Lender": as defined in Section 5.1(a).
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"Disposition": with respect to any property, any sale, lease, sale and
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leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "Dispose" and "Disposed of" shall have correlative meanings.
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"Dollars" and "$": dollars in lawful currency of the United States.
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"Domestic Subsidiary": any Subsidiary of the Borrower organized under
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the laws of any jurisdiction within the United States.
"ECF Percentage": 50%.
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"Environmental Laws": any and all foreign, Federal, state, local or
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municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human health
as affected by the environment, as now or may at any time hereafter be in
effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
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Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as
8
"Eurocurrency Liabilities" in Regulation D of the Board) maintained by a member
bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
--------------------
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Dow Xxxxx Markets screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Dow Xxxxx Markets screen (or otherwise on
such screen), the "Eurodollar Base Rate" shall be determined by reference to
--------------------
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
----------------
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
------------------
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8, provided
---------------- --------
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess,
----------------
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) an amount equal to the amount of all non-cash charges
(including depreciation and amortization) deducted in arriving at such
Consolidated Net Income, (iii) decreases in Consolidated Working Capital for
such fiscal year, and (iv) an amount equal to the aggregate net non-cash loss on
the Disposition of property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of business),
to the extent deducted in arriving at such Consolidated Net Income over (b) the
----
sum, without duplication, of (i) an amount equal to the amount of all non-cash
credits included in arriving at such Consolidated Net Income, (ii) the aggregate
amount actually paid by the Borrower and its Subsidiaries in cash during such
fiscal year on account of Capital Expenditures and, without duplication,
Permitted Acquisitions (excluding the principal amount of Indebtedness incurred
in connection with such expenditures and any such expenditures financed with (x)
the proceeds of any Reinvestment Deferred Amount, (y) any Net Cash Proceeds of
an Asset Sale retained by the Borrower or any of its Subsidiaries pursuant to
Section 2.9(b) and (z) the proceeds of any issuance of Capital Stock by the
Borrower or its Subsidiaries), (iii) the aggregate amount of all prepayments of
Revolving Loans during such fiscal year to the extent accompanying permanent
optional reductions of the Revolving Commitments and all optional prepayments of
the Term Loans during such fiscal year, (iv) the aggregate amount of all
regularly scheduled principal payments of Funded Debt (including the Term Loans)
of the Borrower and its Subsidiaries made during
9
such fiscal year (other than in respect of any revolving credit facility to the
extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such fiscal year,
(vi) an amount equal to the aggregate net non-cash gain on the Disposition of
property by the Borrower and its Subsidiaries during such fiscal year (other
than sales of inventory in the ordinary course of business), to the extent
included in arriving at such Consolidated Net Income, and (vii) without
duplication, an amount equal to the amount of all Restricted Payments actually
paid to the Borrower pursuant to Section 7.6 during such fiscal year, including,
without limitation, management fees paid by the Borrower as set forth in Section
7.6(b).
"Excess Cash Flow Application Date": as defined in Section 2.9(c).
---------------------------------
"Exchange Act": as defined in Section 8(k).
------------
"Excluded Foreign Subsidiary": any Foreign Subsidiary in respect of
---------------------------
which the pledge of all of the Capital Stock of such Subsidiary as Collateral
would result in adverse tax consequences to the Borrower.
"Existing Credit Agreements": the Credit Agreement, dated as of
--------------------------
February 22, 1996, among BancTec USA, Inc, the Borrower, certain Subsidiaries,
the banks listed therein and Chase Bank of Texas, N.A. (formerly known as Texas
Commerce Bank, National Association), as amended, and any of the Borrower's
other existing uncommitted lines of credit.
"Facility": each of (a) the Tranche A Term Commitments and the Tranche
--------
A Term Loans made thereunder (the "Tranche A Term Facility") and (b) the
Revolving Commitments and the extensions of credit made thereunder (the
"Revolving Facility").
"Federal Funds Effective Rate": for any day, 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 on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
------------------
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person that
-----------
matures more than one year from the date of its creation or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrower, Indebtedness in respect of the
Loans.
"Funding Office": the office of the Administrative Agent specified in
--------------
Section 10.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
----
as in effect from time to time, except that for purposes of Section 7.1, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements delivered pursuant to Section 4.1(b). In the event that any
"Accounting
10
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
"Governmental Authority": any nation or government, any state or other
----------------------
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
-------------------- -------------------
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
-------------------
of any other third Person (the "primary obligor") in any manner, whether
---------------
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
-------- -------
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable (or is limited
to certain property or the value thereof), in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the board of directors
of the Borrower in good faith or, with respect to any property, the fair market
value of such property or, if such fair market value is not readily
determinable, the maximum value of such property as determined by the board of
directors of the Borrower in good faith.
"Hedge Agreements": all interest rate swaps, caps or collar agreements
----------------
or similar arrangements providing for protection against fluctuations in
interest rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Indebtedness": of any Person at any date, without duplication, (a)
------------
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
11
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptances, letters of credit, surety bonds or similar
arrangements, (g) the liquidation value of all mandatorily redeemable preferred
Capital Stock of such Person, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above,
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation, and (j) for the
purposes of Section 8(e) only, all obligations of such Person in respect of
Hedge Agreements. With respect to any obligations for which recourse is limited
to certain property or the value thereof, the amount of such Person's
Indebtedness shall be the fair market value of such property or, if such fair
market value is not readily determinable, the maximum value of such property as
determined by the board of directors of the Borrower in good faith. In
calculating Indebtedness of the Borrower and its Subsidiaries on a consolidated
basis for any purpose herein, any Guarantee Obligation of the Borrower or any
Subsidiary in respect of any other Indebtedness of the Borrower or any
Subsidiary shall be disregarded.
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Intellectual Property": the collective reference to all rights,
---------------------
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, quarterly in arrears
---------------------
on the last day of each quarter following the Closing Date while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan, the date of any repayment or prepayment made in
respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
---------------
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of
12
such extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) the Borrower may not select an Interest Period under a
particular Facility that would extend beyond the Scheduled Revolving
Termination Date or beyond the date final payment is due on the Term Loans;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
"Investments": as defined in Section 7.8.
-----------
"IPO": the issuance by the Borrower of shares of its common stock to
---
the public pursuant to a bona fide underwritten public offering, resulting in at
least 15% of the Borrower's outstanding shares of common stock having been
issued to the public by the Borrower.
"Issuing Lender": Chase, in its capacity as issuer of any Letter of
--------------
Credit.
"L/C Commitment": $20,000,000.
--------------
"L/C Fee Payment Date": the last day of each quarter following the
--------------------
Closing Date and the last day of the Revolving Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
---------------
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
----------------
Lenders other than the Issuing Lender.
"Lenders": as defined in the preamble hereto.
-------
"Letters of Credit": as defined in Section 3.1(a).
-----------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
----
"Loan Documents": this Agreement, the Security Documents and the
--------------
Notes, if any.
"Loan Parties": the Borrower and each Subsidiary of the Borrower that
------------
is a party to a Loan Document.
13
"Majority Facility Lenders": with respect to any Facility, the holders
-------------------------
of more than 50% of the aggregate unpaid principal amount of the Term Loans or
the Total Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Facility, prior to any
termination of the Revolving Commitments, the holders of more than 50% of the
Total Revolving Commitments).
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
Acquisition and the other Transactions, (b) the business, property, operations,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole or (c) the validity or enforceability of this
Agreement or any of the other Loan Documents.
"Materials of Environmental Concern": any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation, and any other substance the presence of or
exposure to which could reasonably be expected to result in liability under any
applicable Environmental Law.
"Mortgaged Properties": the real properties listed on Schedule 1.1B,
--------------------
as to which the Administrative Agent for the benefit of the Lenders shall be
granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any Loan
---------
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders, substantially in the form of Exhibit D (with such
changes thereto as shall be advisable under the law of the jurisdiction in which
such mortgage or deed of trust is to be recorded), as the same may be amended,
supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
-----------------
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, other consultants' fees in connection therewith not already set forth
herein and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset that is the subject of such Asset Sale or Recovery Event (other than
any Lien pursuant to a Security Document) including amounts paid as penalties or
premiums on the repayment of such Indebtedness, amounts of any reserves
reasonably estimated to be paid out within eighteen months from the date of the
occurrence of such Asset Sale or Recovery Event that are directly attributable
to such event and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, other consultants' fees in
connection therewith not already set forth herein, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Newco": as defined in the Recitals hereto.
-----
"Non-Excluded Taxes": as defined in Section 2.17(a).
------------------
14
"Non-Executing Persons": as defined in Section 5.1(a).
---------------------
"Non-U.S. Lender": as defined in Section 2.17(d).
---------------
"Notes": the collective reference to any promissory note evidencing
-----
Loans.
"Obligations": the unpaid principal of and interest on (including
-----------
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Hedge Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Hedge Agreement
entered into with any Lender or any affiliate of any Lender or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including all reasonable fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary
-----------
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 10.6(b).
-----------
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisitions": any acquisition by the Borrower or a
----------------------
Subsidiary of all or substantially all of the assets of, or all the Capital
Stock of, a Person or division or line of business of a Person if, immediately
after giving effect thereto, (a) no Default or Event of Default has occurred and
is continuing or would result therefrom, (b) all transactions related thereto
are consummated in accordance with applicable laws, except where any non-
compliance could not, singly or in the aggregate, reasonably be expected to have
a Material Adverse Effect, (c) all of the Capital Stock in each Subsidiary
formed for the purpose of or resulting from such acquisition shall be owned
directly by the Borrower or a Subsidiary of the Borrower and all actions
required to be taken with respect to such acquired or newly created Subsidiary
under Section 6.10 have been taken, (d) the Borrower and its Subsidiaries are in
compliance, on a pro forma basis as at the end of the last fiscal quarter of the
Borrower for which financial statements are available after giving effect to
such acquisition, with the covenants contained in Section 7.1 calculated as at
the last day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available, as if such acquisition (and any related
incurrence or repayment of Indebtedness, with any new Indebtedness being deemed
amortized over the applicable testing period in accordance with its terms, and
with any Revolving Loans borrowed in connection with such acquisition being
deemed to be repaid with excess cash balances as available) had occurred on the
first day of each relevant period for testing such compliance and (e) the
Borrower has delivered to the Administrative Agent an officers' certificate to
the effect set forth in clauses (a), (b), (c) and (d) above, together with all
relevant financial information for the Person or assets to be acquired.
15
"Permitted Investors": the collective reference to the Sponsor and its
-------------------
Control Investment Affiliates.
"Person": an individual, partnership, corporation, limited liability
------
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is
----
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pricing Grid": the pricing grid attached hereto as Annex A.
------------
"Pro Forma Balance Sheet": as defined in Section 4.1(a).
-----------------------
"Projections": as defined in Section 6.2(c).
-----------
"Properties": as defined in Section 4.17(a).
----------
"Proxy Statement": The proxy statement, dated June 23, 1999, filed by
---------------
the Borrower with the SEC in connection with the Transactions.
"Recovery Event": any settlement of or payment in respect of any
--------------
property or casualty insurance claim or any condemnation proceeding relating to
any asset of the Borrower or any of its Subsidiaries.
"Reference Lender": Chase.
----------------
"Refinancing": as defined in the recitals hereto.
-----------
"Register": as defined in Section 10.6(d).
--------
"Regulation U": Regulation U of the Board as in effect from time to
------------
time.
"Reimbursement Obligation": the obligation of the Borrower to
------------------------
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
----------------------------
Event, the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith that are not applied to prepay the Term
Loans or reduce the Revolving Commitments pursuant to Section 2.9(b) as a result
of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Recovery Event in respect of which the
------------------
Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
-------------------
Officer stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of a Recovery Event to acquire, repair or replace assets useful in its business.
16
"Reinvestment Prepayment Amount": with respect to any Reinvestment
------------------------------
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire, repair
or replace assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
----------------------------
Event, the earlier of (a) the date occurring six months after such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire, repair or replace assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
----------------
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Xxx.xx. 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
----------------
until the Closing Date, the Commitments then in effect and (b) thereafter, the
sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer, president, chief
-------------------
financial officer, treasurer or controller of the Borrower, but in any event,
with respect to financial matters, the chief financial officer, treasurer or
controller of the Borrower.
"Restricted Payments": as defined in Section 7.6.
-------------------
"Revolving Commitment": as to any Lender, the obligation of such
--------------------
Lender, if any, to make Revolving Loans and Letters of Credit in an aggregate
principal and/or face amount not to exceed the amount set forth under the
heading "Revolving Commitment" opposite such Lender's name on Schedule 1.1A or
in the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original amount of the Total Revolving Commitments is $50,000,000.
"Revolving Commitment Period": the period from and including the
---------------------------
Closing Date to the Scheduled Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender at any
------------------------------
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding and (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding.
"Revolving Lender": each Lender that has a Revolving Commitment or
----------------
that holds Revolving Loans.
"Revolving Loans": as defined in Section 2.4(a).
---------------
17
"Revolving Percentage": as to any Revolving Lender at any time, the
--------------------
percentage which such Lender's Revolving Commitment then constitutes of the
Total Revolving Commitments (or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender's Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding).
"Scheduled Revolving Termination Date": July 22, 2004.
------------------------------------
"SEC": the Securities and Exchange Commission, any successor thereto
---
and any analogous Governmental Authority.
"Security Documents": the collective reference to the Collateral
------------------
Agreement, the Mortgages and all other security documents hereafter delivered to
the Administrative Agent granting a Lien on any property of any Person to secure
the obligations and liabilities of any Loan Party under any Loan Document.
"Senior Indenture": the indenture, dated as of May 22, 1998, between
----------------
BancTec, Inc. and The First National Bank of Chicago, as Trustee, as the same
maybe amended, supplemented or otherwise modified from time to time
"Senior Notes": the notes issued pursuant to the Senior Indenture.
------------
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
--------------------
but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
-------
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as defined in the
---------------------------
Sponsor Notes.
"Sponsor": as defined in the recitals hereto.
-------
"Sponsor Notes": the $160,000,000 subordinated unsecured notes of the
--------------
Borrower due 2009, issued on the Closing Date in form and substance
substantially similar to the draft dated July 16, 1999 provided to the
Administrative Agent, bearing cash interest at a rate of 10%, and payment-in-
kind interest at a rate equal to 13% minus 10%. The Sponsor Notes shall not be
guaranteed by any Subsidiary.
"Subsidiary": as to any Person, a corporation, partnership, limited
----------
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than
18
stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to "Subsidiaries" in
this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Syndication Agent": Chase, together with its affiliates, as the
-----------------
administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its successors.
"Term Lenders": the collective reference to the Tranche A Term
------------
Lenders.
"Term Loans": the collective reference to the Tranche A Term Loans.
----------
"Total Revolving Commitments": at any time, the aggregate amount of
---------------------------
the Revolving Commitments then in effect.
"Total Revolving Extensions of Credit": at any time, the aggregate
------------------------------------
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Tranche A Term Commitment": as to any Lender, the obligation of such
-------------------------
Lender, if any, to make a Tranche A Term Loan to the Borrower hereunder in a
principal amount not to exceed the amount set forth under the heading "Tranche A
Term Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Tranche A Term Commitments is $75,000,000.
"Tranche A Term Lender": each Lender that has a Tranche A Term
---------------------
Commitment or is the holder of a Tranche A Term Loan.
"Tranche A Term Loan": as defined in Section 2.1.
-------------------
"Tranche A Term Percentage": as to any Tranche A Term Lender at any
-------------------------
time, the percentage which such Lender's Tranche A Term Commitment then
constitutes of the aggregate Tranche A Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding).
"Transactions": as defined in the recitals hereto.
------------
"Transferee": any Assignee or Participant.
----------
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
----
Loan.
"United States": the United States of America.
-------------
1.2 Other Definitional Provisions. (a) Unless otherwise specified
----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
19
not defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), (iv) the words "asset" and "property" shall be construed to have the
same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights, and (v) the Borrower, any of
its respective Subsidiaries or any Loan Party shall be deemed to have
"knowledge" or "know" of a particular matter, or such matter shall be deemed
"known" to any of them if any of their respective directors, chief executive
officer, president, chief financial officer, treasurer, controller, general
counsel, corporate secretary or other senior officers shall have actual
knowledge or actually know of such matter or such matter is actually known to
any of them.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Commitments. Subject to the terms and conditions hereof,
----------------
each Tranche A Term Lender severally agrees to make a term loan (a "Tranche A
---------
Term Loan") to the Borrower on the Closing Date in an amount not to exceed the
---------
amount of the Tranche A Term Commitment of such Lender. The Term Loans may from
time to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.2 and 2.10.
2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
---------------------------------
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, on the anticipated
Closing Date) requesting that the Term Lenders make the Term Loans on the
Closing Date and specifying the amount to be borrowed. The Term Loans made on
the Closing Date shall initially be ABR Loans. Upon receipt of such notice the
Administrative Agent shall promptly notify each Term Lender thereof. Not later
than 12:00 Noon, New York City time, on the Closing Date each Term Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by
such Lender. The Administrative Agent shall credit the account of the Borrower
on the books of such office of the Administrative Agent with the aggregate of
the amounts made available to the Administrative Agent by the Term Lenders in
immediately available funds.
2.3 Repayment of Term Loans. The Tranche A Term Loan of each Tranche
-----------------------
A Lender shall mature in 16 consecutive quarterly installments, commencing on
September 30, 2000, each of which shall be in an amount equal to such Lender's
Tranche A Term Percentage multiplied by the amount set forth below opposite such
installment:
Installment Principal Amount
----------- ----------------
September 30, 2000 $3,750,000
December 31, 2000 $3,750,000
March 31, 2001 $3,750,000
June 30, 2001 $3,750,000
September 30, 2001 $3,750,000
20
December 31, 2001 $3,750,000
March 31, 2002 $3,750,000
June 30, 2002 $3,750,000
September 30, 2002 $5,000,000
December 31, 2002 $5,000,000
March 31, 2003 $5,000,000
June 30, 2003 $5,000,000
September 30, 2003 $6,250,000
December 31, 2003 $6,250,000
March 31, 2004 $6,250,000
June 30, 2004 $6,250,000
2.4 Revolving Commitments. (a) Subject to the terms and conditions
---------------------
hereof, each Revolving Lender severally agrees to make revolving credit loans
("Revolving Loans") to the Borrower from time to time during the Revolving
---------------
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Percentage of the L/C Obligations
then outstanding, does not exceed the amount of such Lender's Revolving
Commitment. During the Revolving Commitment Period the Borrower may use the
Revolving Commitments by borrowing, prepaying the Revolving Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
The Revolving Loans may from time to time be Eurodollar Loans or ABR Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.5 and 2.10.
(b) The Borrower shall repay all outstanding Revolving Loans on the
Scheduled Revolving Termination Date.
2.5 Procedure for Revolving Loan Borrowing. The Borrower may borrow
--------------------------------------
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) prior to 9:00
A.M., New York City time, on the requested Borrowing Date, in the case of ABR
Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Revolving Loans in an amount not to exceed
$7,500,000 may be made on the Closing Date and any Revolving Loans made on the
Closing Date shall initially be ABR Loans. Each borrowing under the Revolving
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$1,000,000 or a multiple of $500,000 in excess thereof (or, if the then
aggregate Available Revolving Commitments are less than $1,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $2,500,000 or a whole multiple
of $500,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Lender
thereof. Each Revolving Lender will make the amount of its pro rata share of
--- ----
each borrowing available to the Administrative Agent for the account of the
Borrower at the Funding Office prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the
Administrative Agent by the Revolving Lenders and in like funds as received by
the Administrative Agent.
2.6 Commitment Fees, etc. The Borrower agrees to pay to the
--------------------
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the
21
average daily amount of the Available Revolving Commitment of such Lender during
the period for which payment is made, payable quarterly in arrears on the last
day of each March, June, September and December and on the Scheduled Revolving
Termination Date, commencing on the first of such dates to occur after the date
hereof.
(b) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates previously agreed to in writing by the Borrower
and the Administrative Agent.
2.7 Termination or Reduction of Revolving Commitments. The Borrower
-------------------------------------------------
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
--------
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Commitments. Any such reduction shall be in an amount equal
to $1,000,000, or a whole multiple thereof, and shall reduce permanently the
Revolving Commitments then in effect.
2.8 Optional Prepayments. The Borrower may at any time and from time
--------------------
to time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent at least three Business
Days prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.18. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Revolving Loans that are ABR Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof and shall
be applied as set forth in Section 2.15(b) or (c), as the case may be.
2.9 Mandatory Prepayments and Commitment Reductions. If any Capital
-----------------------------------------------
Stock or Indebtedness shall be issued or incurred by the Borrower or any of its
Subsidiaries (other than the Capital Stock issued to (i) directors and employees
of the Borrower or any of its Subsidiaries under employee benefit plans, (ii)
sellers as consideration in acquisitions of equity or ownership interests in, or
assets of, other Persons, or (iii) existing stockholders of the Borrower or
other investors in private placements of the Capital Stock organized by the
Sponsor in connection with the financing of Permitted Acquisitions) an amount
equal to 50% of the Net Cash Proceeds from the issuance of such Capital Stock
shall be applied on the date of such issuance toward the prepayment of the Term
Loans and the reduction of the Revolving Commitments as set forth in Section
2.9(d). If any Indebtedness shall be incurred by the Borrower or any of its
Subsidiaries (other than the Sponsor Notes and other Indebtedness permitted in
accordance with Section 7.2 as in effect on the date hereof) an amount equal to
100% of the Net Cash Proceeds from the incurrence of such Indebtedness shall be
applied on the date of such issuance or incurrence toward the prepayment of the
Term Loans and the reduction of the Revolving Commitments as set forth in
Section 2.9(d).
(b) If on any date the Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event then, unless a
Reinvestment Notice in respect of any Recovery Event shall be delivered in
respect thereof, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Term Loans and the reduction of the Revolving Commitments as
set forth in Section 2.9(d); provided, that, notwithstanding the foregoing, (i)
an aggregate amount not to exceed $2,000,000 of
22
Net Cash Proceeds from Asset Sales in any fiscal year of the Borrower may be
retained by the Borrower or any of its Subsidiaries, as the case may be; (ii) on
each Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the relevant Reinvestment Event shall be
applied toward the prepayment of the Term Loans and the reduction of the
Revolving Commitments as set forth in Section 2.9(d); and (iii) Net Cash
Proceeds of any sale or other disposition of the assets of the Computer &
Network Services or BancTec Financial Systems division of the Borrower shall be
applied toward the prepayment of the Term Loans and the prepayment of the
Revolving Loans then outstanding as set forth in Section 2.9(d), and, following
such prepayment, any remaining Net Cash Proceeds may be applied to the
prepayment of the Sponsor Notes, if immediately after giving effect to the
prepayment of the Sponsor Notes, the Borrower and its Subsidiaries are in
compliance, on a pro forma basis as at the end of the last fiscal quarter of the
Borrower for which financial statements are available after giving effect to all
prepayments described in this clause (iii), with the covenants contained in
Section 7.1 calculated as at the last day of the most recently ended fiscal
quarter of the Borrower for which financial statements are available, as if all
such prepayments had occurred on the first day of each relevant period for
testing such compliance and the Borrower has delivered to the Administrative
Agent an officers' certificate to that effect.
(c) If, for any fiscal year of the Borrower commencing with the
fiscal year ending December 31, 2000, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply the ECF
Percentage of such Excess Cash Flow toward the prepayment of the Term Loans and
the reduction of the Revolving Commitments as set forth in Section 2.9(d). Each
such prepayment and commitment reduction shall be made on a date (an "Excess
------
Cash Flow Application Date") no later than five days after the earlier of (i)
--------------------------
the date on which the financial statements of the Borrower referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section 2.9 shall be applied, first,
-----
to the prepayment of the Term Loans and, second, to reduce permanently the
------
Revolving Commitments (or, in the case of an Asset Sale described in Section
2.9(b)(iii), to the prepayment of the Revolving Loans then outstanding and not
to reduce permanently the Revolving Commitments). Any such reduction of the
Revolving Commitments shall be accompanied by prepayment of the Revolving Loans
to the extent, if any, that the Total Revolving Extensions of Credit exceed the
amount of the Total Revolving Commitments as so reduced, provided that if the
--------
aggregate principal amount of Revolving Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Borrower shall, to the extent of the balance of such excess, replace
outstanding Letters of Credit and/or deposit an amount in cash in a cash
collateral account established with the Administrative Agent for the benefit of
the Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to this Section 2.9 shall
be made, first, to ABR Loans and, second, to Eurodollar Loans and shall be
----- ------
applied as set forth in Sections 2.15(b) or (c), as the case may be. Each
prepayment of the Loans under this Section 2.9 (except in the case of Revolving
Loans that are ABR Loans) shall be accompanied by accrued interest to the date
of such prepayment on the amount prepaid.
2.10 Conversion and Continuation Options. The Borrower may elect from
-----------------------------------
time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
--------
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
--------
converted into a
23
Eurodollar Loan when any Event of Default has occurred and is continuing and, so
long as any Event of Default has occurred and is continuing, the Administrative
Agent or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such conversions. Upon
receipt of any such notice the Administrative Agent shall promptly notify each
relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
--------
that no Eurodollar Loan under a particular Facility may be continued as such
when any Event of Default has occurred and is continuing and, so long as any
Event of Default has occurred and is continuing, the Administrative Agent has or
the Majority Facility Lenders in respect of such Facility have determined in its
or their sole discretion not to permit such continuations, and provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
ABR Loans on the last day of such then expiring Interest Period. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
2.11 Limitations on Eurodollar Tranches. Notwithstanding anything to
----------------------------------
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $2,500,000 or a whole
multiple of $500,000 in excess thereof and (b) no more than eight.
2.12 Interest Rates and Payment Dates. Each Eurodollar Loan shall bear
--------------------------------
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to
the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section plus 2%
----
or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans under the Revolving Facility plus 2%, and (ii) if all or a portion of any
----
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans
under the relevant Facility plus 2% (or, in the case of any such other amounts
----
that do not relate to a particular Facility, the rate then applicable to ABR
Loans under the Revolving Facility plus 2%), in each case, with respect to
----
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
--------
shall be payable from time to time on demand.
24
2.13 Computation of Interest and Fees. Interest and fees payable
--------------------------------
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.12(a).
2.14 Inability to Determine Interest Rate. If prior to the first day
------------------------------------
of any Interest Period:
(a) the Administrative Agent shall have determined in good faith
(which determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
2.15 Pro Rata Treatment and Payments. Each borrowing by the Borrower
-------------------------------
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee and any reduction of the Commitments of the Lenders shall be made
pro rata according to the respective Tranche A Term Percentages or Revolving
--- ----
Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
--- ----
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. The amount of each principal prepayment of the Term
Loans shall be applied to reduce the then remaining installments of the Tranche
A Term Loans then held by the Term Lenders. Prepayments of the Term Loans shall
be made pro rata according to the respective outstanding principal amounts
--- ----
thereof. The amount of each such principal prepayment shall be
25
applied to ratably reduce the then remaining installments of the Tranche A Term
Loan, except that the first $7,500,000 of prepayments allocated to the Tranche A
Term Loans may be applied to installments thereof at the direction of the
Borrower. Amounts prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Loans shall be made pro
---
rata according to the respective outstanding principal amounts of the Revolving
----
Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
--- ----
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.16 Requirements of Law. If the adoption of or any change in any
-------------------
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or
26
directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any Application or any
Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 2.17 and changes in the rate of tax on the overall net income of
such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems in good faith to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this paragraph, it
shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation reasonably
believes it could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction; provided that the Borrower shall not be required
--------
to compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of such
Lender's intention to claim compensation therefor; and provided further that, if
-------- -------
the circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.17 Taxes. All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
27
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income
taxes) imposed on the Administrative Agent or any Lender as a result of a
present or former connection between the Administrative Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such non-
excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") or Other Taxes are required to be withheld
------------------
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to
-------- -------
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
---------------
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this
28
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
--------
legally entitled to complete, execute and deliver such documentation and in such
Lender's good faith judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a refund in
respect of Non-Excluded Taxes or Other Taxes paid by the Borrower, which in the
sole judgment of such Lender is allocable to such payment, it shall promptly pay
such refund, together with any other amounts paid by the Borrower in connection
with such refunded Taxes or Other Taxes, to the Borrower, net of all out-of-
pocket expenses of such Lender incurred in obtaining such refund, provided,
however, that such Borrower agrees to promptly return such refund to the
Administrative Agent or the applicable Lender, as the case may be, if it
receives notice from the Administrative Agent or applicable Lender that such
Administrative Agent or Lender is required to repay such refund.
(g) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.18 Indemnity. The Borrower agrees to indemnify each Lender and to
---------
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
----
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 Change of Lending Office. Each Lender agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 2.16 or 2.17(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
--------
designation is made on terms that, in the sole good faith judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic, legal
or
29
regulatory disadvantage, and provided, further, that nothing in this Section
-------- -------
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender pursuant to Section 2.16 or 2.17(a).
2.20 Replacement of Lenders. The Borrower shall be permitted to
----------------------
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.16 or 2.17(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
--------
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.19 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.16 or 2.17(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall
be liable to such replaced Lender under Section 2.18 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, which determination shall not be unreasonably delayed,
(vii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 10.6 (provided that the Borrower shall
be obligated to pay the registration and processing fee referred to therein),
(viii) until such time as such replacement shall be consummated, the Borrower
shall pay all additional amounts (if any) required pursuant to Section 2.16 or
2.17(a), as the case may be, and (ix) any such replacement shall not be deemed
to be a waiver of any rights that the Borrower, the Administrative Agent or any
other Lender shall have against the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. Subject to the terms and conditions hereof, the
--------------
Issuing Lender, in reliance on the agreements of the other Revolving Lenders set
forth in Section 3.4(a), agrees to issue letters of credit ("Letters of Credit")
-----------------
for the account of the Borrower on any Business Day during the Revolving
Commitment Period in such form as may be approved from time to time by the
Issuing Lender; provided that the Issuing Lender shall have no obligation to
--------
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars and (ii) expire no later than the earlier of
(x) the first anniversary of its date of issuance (unless extended with the
consent of the Majority Facility Lenders in respect of the Revolving Facility)
and (y) the date that is five Business Days prior to the Scheduled Revolving
Termination Date, provided that any Letter of Credit with a one-year term may
--------
provide for the renewal thereof, with or without notice from the Issuing Lender,
for additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).
(b) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may from
------------------------------------------
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the reasonable satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may reasonably request. Upon receipt of any Application,
the Issuing Lender will promptly process such Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall promptly issue
the Letter of Credit requested thereby (but in no event shall the Issuing Lender
be required to issue any Letter of Credit earlier than three Business Days after
its receipt of the Application therefor and all such other certificates,
30
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower promptly following the
issuance thereof. The Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).
3.3 Fees and Other Charges. The Borrower will pay a fee on all
----------------------
outstanding Letters of Credit at a per annum rate equal to the Applicable Margin
then in effect with respect to Eurodollar Loans under the Revolving Facility,
shared ratably among the Revolving Lenders and payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date. In addition, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee of 1/8 of 1%
per annum on the average daily undrawn and unexpired amount of each Letter of
Credit, payable quarterly in arrears on each L/C Fee Payment Date after the
Issuance Date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.5 L/C Participations. The Issuing Lender irrevocably agrees to
------------------
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Percentage in the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of such amount, times the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the
Issuing Lender, times a fraction the numerator of which is the number of days
that elapse during such period and the denominator of which is 360. If any such
amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is
not made available to the Issuing Lender by such L/C Participant within three
Business Days after the date such payment is due, the Issuing Lender shall be
entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to ABR Loans under the Revolving Facility. A certificate of the Issuing Lender
submitted to any L/C Participant with respect to any amounts owing under this
Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
---
rata share of such payment in accordance with Section 3.4(a), the Issuing Lender
----
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or
31
any payment of interest on account thereof, the Issuing Lender will distribute
to such L/C Participant its pro rata share thereof; provided, however, that in
--- ---- -------- -------
the event that any such payment received by the Issuing Lender shall be required
to be returned by the Issuing Lender, such L/C Participant shall return to the
Issuing Lender the portion thereof previously distributed by the Issuing Lender
to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
----------------------------------------
reimburse the Issuing Lender on the Business Day immediately following the date
on which the Issuing Lender notifies the Borrower of the date and amount of a
draft presented under any Letter of Credit and paid by the Issuing Lender for
the amount of (a) such draft so paid and (b) any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection with such
payment. Each such payment shall be made to the Issuing Lender at its address
for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate set forth in (i) until the second Business Day
following the date of the applicable drawing, Section 2.12(b) and (ii)
thereafter, Section 2.12(c).
3.6 Obligations Absolute. The Borrower's obligations under this
--------------------
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions resulting from the gross negligence or willful misconduct of the
Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any Application
------------
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Borrower hereby represents and warrants to the Administrative Agent
and each Lender that:
32
4.1 Financial Condition. The unaudited pro forma consolidated balance
-------------------
sheet of the Borrower and its consolidated Subsidiaries as at June 30, 1999
(including the notes thereto) (the "Pro Forma Balance Sheet"), copies of which
-----------------------
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the consummation of the
Transactions, (ii) the Loans to be made hereunder and the Sponsor Notes to be
issued on the Closing Date and the use of proceeds thereof and (iii) the payment
of fees and expenses in connection with the foregoing. The Pro Forma Balance
Sheet has been prepared based on the best information available to the Borrower
as of the date of delivery thereof, and presents fairly on a pro forma basis the
--- -----
estimated financial position of Borrower and its consolidated Subsidiaries as at
June 30, 1999, assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as at
December 31, 1998, December 31, 1997 and December 31, 1996 and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
Xxxxxx Xxxxxxxx LLP, present fairly the consolidated financial condition of the
Borrower as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of the Borrower as at March 31, 1999, and
the related unaudited consolidated statements of income and of cash flows for
the three-month period ended on such date, present fairly the consolidated
financial condition of the Borrower as at such date, and the consolidated
results of its operations and its consolidated cash flows for the three-month
period then ended (subject to normal year-end audit adjustments). All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein, and, in the case of the unaudited financial statements,
subject to normal year-end adjustments and the absence of notes thereto) and
comply as to form in all material respects with the published rules and
regulations of the SEC with respect thereto. The Borrower and its Subsidiaries
do not have any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, that are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from March 31, 1999 to and including the date hereof there has
been no Disposition by the Borrower of any material part of its business or
property.
4.2 No Change. Since December 31, 1998 there has been no development
---------
or event that has had or is reasonably expected to have a Material Adverse
Effect.
4.3 Corporate Existence; Compliance with Law. Each of the Borrower
----------------------------------------
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to qualify as
a foreign corporation or be in good standing could not reasonably be expected to
have a Material Adverse Effect, and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each
-------------------------------------------------------
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to
33
which it is a party and, in the case of the Borrower, to authorize the
borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
Acquisition and the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except (i) consents, authorizations, filings and notices described in
Schedule 4.4, which consents, authorizations, filings and notices have been
obtained or made and are in full force and effect and (ii) the filings referred
to in Section 4.19. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
4.5 No Legal Bar. The execution, delivery and performance of this
------------
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate or
conflict with any Requirement of Law or any material Contractual Obligation of
the Borrower or any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents).
4.6 Litigation. No litigation, investigation or proceeding of or
----------
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that is reasonably expected to have a Material Adverse
Effect.
4.7 No Default. Neither the Borrower nor any of its Subsidiaries is
----------
in default under or with respect to anyof its Contractual Obligations in any
respect that is reasonably expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. The Borrower and its Subsidiaries
----------------------------
has title in fee simple to, or a valid leasehold interest in, all its real
property, and good title to, or a valid leasehold interest in, all its other
material property, and none of such property is subject to any Lien except as
permitted by Section 7.3.
4.9 Intellectual Property. The Borrower and each of its Subsidiaries
---------------------
owns, or is licensed to use, all Intellectual Property material in the conduct
of its business as currently conducted. No material claim has been asserted and
is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does the Borrower know of any valid basis for any such claim. The
use of such Intellectual Property by the Borrower and its Subsidiaries does not,
to the Borrower's knowledge, infringe on the rights of any Person in any
material respect.
4.10 Taxes. The Borrower and each of its Subsidiaries has filed or
-----
caused to be filed all Federal, state and other material tax returns that are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of that are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the
34
Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge. Such tax returns accurately reflect in all material respects all
liability for taxes of the Borrower and its Subsidiaries for the periods covered
thereby.
4.11 Federal Regulations. No part of the proceeds of any Loans will be
-------------------
used for "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U in any manner that
violates the provisions of the Regulations of the Board. On the Closing Date,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U.
4.12 Labor Matters. Except as, in the aggregate, could not reasonably
-------------
be expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against the Borrower or any of its Subsidiaries pending or, to
the knowledge of the Borrower, threatened; (b) hours worked by and payment made
to employees of the Borrower and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law dealing
with such matters; and (c) all payments due from the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of the Borrower or the relevant
Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
-----------------------------------------
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 Subsidiaries. Except as disclosed to the Administrative Agent by
------------
the Borrower in writing from time to time after the Closing Date, Schedule 4.15
sets forth the name and jurisdiction of incorporation of each Subsidiary and, as
to each such Subsidiary, the percentage of each class of Capital Stock owned by
any Loan Party and there are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors' qualifying shares) of any
nature relating to any Capital Stock of the Borrower or any Subsidiary, except
as created by the Loan Documents and the Sponsor Notes.
4.16 Use of Proceeds. The proceeds of the Term Loans and of the
---------------
Revolving Credit Loans made on the Closing Date shall be used to finance a
portion of the Transactions and to pay related fees and expenses. The proceeds
of the Revolving Loans to be made and the Letters of Credit to be issued
35
after the Closing Date, shall be used for general corporate purposes, including
to finance the working capital needs of the Borrower and its Subsidiaries and,
subject to Section 7.8, their acquisitions of Capital Stock or ownership
interests of, and investments in, other Persons.
4.17 Environmental Matters. Except as, in the aggregate, could not
---------------------
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "Properties") do not
----------
contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could
reasonably be expected to give rise to liability under, any
Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard
to any of the Properties or the business operated by the Borrower or
any of its Subsidiaries (the "Business"), nor does the Borrower have
--------
knowledge or reason to believe that any such notice will be received or
is being threatened;
(c) Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or
to a location that could reasonably be expected to give rise to
liability under, any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed of
at, on or under any of the Properties in violation of, or in a manner
that could give rise to liability under, any applicable Environmental
Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any Subsidiary is
or will be named as a party, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business;
(e) there has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any Subsidiary in
connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with
all applicable Environmental Laws, and there is no contamination at,
under or about the Properties or violation of any Environmental Law
with respect to the Properties or the Business; and
(g) neither the Borrower nor any of its Subsidiaries has
retained or assumed any liability of any other Person under
Environmental Laws.
4.18 Accuracy of Information, etc. No statement or information
----------------------------
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or written statement
furnished by or on behalf of any Loan Party to the Administrative Agent or the
Lenders, or any of them (including, without limitation, the Proxy Statement),
for use in connection with
36
the transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished (or, in the case of the Confidential Information Memorandum and
the Proxy Statement, as of the date of this Agreement), any untrue statement of
a material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading, provided, that with
--------
respect to any statement or information furnished on behalf of any Loan Party by
any other Person that is not a Loan Party, the representation and warranty set
forth in this Section 4.18 is limited to such Loan Party's best knowledge. The
projections and pro forma financial information contained in the materials
--- -----
referenced above are based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. As of the date hereof,
the representations and warranties contained in the Acquisition Documentation
and the Proxy Statement are true and correct in all material respects. There is
no fact known to any Loan Party that is reasonably expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and written statements furnished to the Administrative Agent and
the Lenders (including, without limitation, the Proxy Statement) for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
4.19 Security Documents. The Collateral Agreement is effective to
------------------
create in favor of the Administrative Agent, for the benefit of the Lenders, a
legal, valid and enforceable security interest in the Collateral described
therein, all rights, title or interest thereto and proceeds thereof. In the case
of the Pledged Stock described in the Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the Administrative
Agent, and in the case of the other Collateral described in the Collateral
Agreement, when financing statements and other filings specified on Schedule
4.19(a) in appropriate form are filed in the offices specified on Schedule
4.19(a), the Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Collateral Agreement), in each case prior and superior in right
to any other Person (except, in the case of Collateral other than Pledged Stock,
Liens permitted by Section 7.3).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
4.19(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
(as defined in the relevant Mortgage), in each case prior and superior in right
to any other Person. As of the Closing Date, Schedule 1.1B lists each of the
real properties in the United States owned in fee simple by the Borrower having
a value, in the reasonable opinion of the Borrower, in excess of $1,000,000.
4.20 Solvency. Each Loan Party is, and after giving effect to the
--------
Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.21 Senior Indebtedness. The Obligations constitute "Senior
-------------------
Indebtedness" of the Borrower under and as defined in the Sponsor Notes.
4.22 Year 2000 Matters. Any reprogramming required to permit the
-----------------
proper functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
37
microchips, in either case owned or operated by the Borrower or any of its
Subsidiaries or used or relied upon in the conduct of, and material to, their
business (including any such systems and other equipment supplied by others or
with which the computer systems of the Borrower or any of its Subsidiaries
interface), and the testing of all such systems and other equipment as so
reprogrammed, will be completed by September 30, 1999. The costs to the Borrower
and its Subsidiaries that have not been incurred as of the date hereof for such
reprogramming and testing and for the other reasonably foreseeable consequences
to them of any improper functioning of other computer systems and equipment
material to the conduct of their respective businesses containing embedded
microchips due to the occurrence of the year 2000 could not reasonably be
expected to result in a Default or Event of Default or to have a Material
Adverse Effect. Except for any reprogramming referred to above, the computer
systems of the Borrower and its Subsidiaries material to each of their
respective businesses are and, with ordinary course upgrading and maintenance,
will continue for the term of this Agreement to be, sufficient for the conduct
of their business as currently conducted.
4.23 Regulation H. No Mortgage encumbers improved real property that
------------
is located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
4.24 Insurance. The insurance maintained by or reserved against on the
---------
books of the Borrower and its Subsidiaries is sufficient to protect the Borrower
and its Subsidiaries against such risks as are usually insured against in the
same general area by companies engaged in the same or similar business. None of
the Loan Parties or any of their Subsidiaries is in default under any provisions
of any such policy of insurance the result of which could reasonably be expected
to cause a cancellation of such policy of insurance or to limit or delay the
entitlement to any payment thereunder or has received notice of cancellation of
any such insurance (other than in connection with the replacement of any such
policy). None of the Loan Parties or any of their Subsidiaries has made any
material claims under any policy of insurance with respect to which the
insurance carrier has denied liability.
4.25 Certain Documents. The Borrower has delivered to the
-----------------
Administrative Agent a complete and correct copy of the Acquisition
Documentation, the Sponsor Notes, the Proxy Statement and all other documents
reasonably requested by the Administrative Agent, including any amendments,
supplements or modifications with respect to any of the foregoing.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
-----------------------------------------
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date (but in any event no later than
September 15, 1999), of the following conditions precedent:
(a) Credit Agreement; Collateral Agreement. The Administrative Agent
--------------------------------------
shall have received (i) this Agreement, executed and delivered by the
Administrative Agent, the Borrower and each Person listed on Schedule 1.1A,
(ii) each Note requested by a Lender, the Collateral Agreement, executed
and delivered by the Borrower and (iii) an Acknowledgment and Consent in
the form attached to the Collateral Agreement, executed and delivered by
each Issuer (as defined therein), if any, that is not a Loan Party.
In the event that this Agreement has not been duly executed and
delivered by each Person listed on Schedule 1.1A on the date scheduled to
be the Closing Date, the condition referred to in clause (i) above shall
nevertheless be deemed satisfied if on such date the Borrower and the
38
Administrative Agent shall have designated one or more Persons (the
"Designated Lenders") to assume, in the aggregate, all of the Commitments
that would have been held by the Persons listed on Schedule 1.1A (the "Non-
Executing Persons") which have not so executed and delivered this Agreement
(subject to each such Designated Lender's consent and its execution and
delivery of this Agreement). Schedule 1.1A shall automatically be deemed to
be amended to reflect the respective Commitments of the Designated Lenders
and the omission of the Non-Executing Persons as Lenders hereunder.
(b) Acquisition, etc. The following transactions shall have been
----------------
consummated, in each case on terms and conditions reasonably satisfactory
to the Lenders:
(i) The transactions contemplated by the Acquisition Agreement
shall have been consummated in substantially the manner set forth therein,
and the Administrative Agent shall have received true and correct copies,
certified as to authenticity by the Borrower, of the Acquisition
Documentation pursuant to which the Acquisition is to be consummated, the
terms and structure (including, without limitation, the mechanism thereof)
of which shall be satisfactory to the Administrative Agent;
(ii) BancTec USA, Inc. shall have been merged with or
liquidated into the Borrower;
(iii) Newco shall have received from the Sponsor and the Other
Investor at least $145,000,000 in cash from the proceeds of equity issued,
directly or indirectly, by it, on terms and conditions satisfactory to the
Required Lenders and the Administrative Agent, and all such proceeds shall
have been contributed as equity to the Borrower;
(iv) the Borrower shall have received no more than $160,000,000
in gross cash proceeds from the issuance of the Sponsor Notes, the issuance
of which shall be on terms and conditions satisfactory to the Required
Lenders and the Administrative Agent as evidenced by their prior written
approval thereof, and shall have used all such proceeds to consummate the
Transactions;
(v) the Other Investor shall own approximately 6 1/2% of the
Capital Stock of the Borrower after the Acquisition which shall have an
aggregate value of approximately $9,400,000;
(vi) the Administrative Agent shall have received satisfactory
evidence that the fees and expenses to be incurred in connection with the
Transactions and the financing thereof shall not exceed $18,000,000 in the
aggregate; and
(vii) (i) The Administrative Agent shall have received
satisfactory evidence that the Existing Credit Agreements shall have been
terminated and all amounts thereunder shall have been paid in full and (ii)
satisfactory arrangements shall have been made for the termination of all
Liens granted in connection therewith. Immediately after the Closing Date,
neither the Borrower nor any of its Subsidiaries shall have any
Indebtedness other than (A) Indebtedness in an aggregate principal amount
to be agreed to by the Required Lenders and the Administrative Agent and
which terms and conditions shall be satisfactory to the Administrative
Agent, (B) the Sponsor Notes, (C) the Term Loans, (D) the Revolving Loans
made on the Closing Date in an aggregate principal amount not to exceed
$7,500,000 and (E) the Senior Notes.
39
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
---------------------------------------------
have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the Borrower for the 1998 fiscal year and (iii)
unaudited interim consolidated financial statements of the Borrower for
each fiscal month and quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clause (ii) of
this paragraph as to which such financial statements are available, and
such financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated financial
condition of the Borrower, as reflected in the financial statements or
projections contained in the Confidential Information Memorandum.
(d) Approvals. All governmental and third party approvals necessary
---------
or in the reasonable judgment of the Administrative Agent, advisable in
connection with the Transactions, the continuing operations of the Borrower
and its Subsidiaries and the transactions contemplated hereby shall have
been obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened by
any competent authority that would restrain, prevent or otherwise impose
materially adverse conditions on the Transactions or the financings and
transactions contemplated hereby.
(e) Lien Searches. The Administrative Agent shall have received the
-------------
results of a recent lien search in each of the jurisdictions listed for
each of the Loan Parties on Schedule 4.19(a), and such search shall reveal
no liens on any of the assets of the Borrower or its Subsidiaries except
for liens permitted by Section 7.3 or discharged on or prior to the Closing
Date pursuant to documentation satisfactory to the Administrative Agent.
(f) Environmental Audit. The Administrative Agent shall have
-------------------
received an environmental audit with respect to the real properties of the
Borrower and its Subsidiaries specified by the Administrative Agent.
(g) Fees. The Lenders and the Administrative Agent shall have
----
received all fees required to be paid pursuant to this Agreement, and all
expenses required to be reimbursed pursuant to this Agreement and for which
invoices have been presented (including the reasonable fees and expenses of
legal counsel), on or before the Closing Date. All such amounts will be
paid with proceeds of Loans made on the Closing Date and will be reflected
in the funding instructions given by the Borrower to the Administrative
Agent on or before the Closing Date.
(h) Closing Certificate. The Administrative Agent shall have
-------------------
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments.
(i) Legal Opinions. The Administrative Agent shall have received the
--------------
following executed legal opinions:
(i) the legal opinion of Reboul, MacMurray, Xxxxxx, Xxxxxxx &
Kristol, counsel to the Borrower and its Subsidiaries, substantially
in the form of Exhibit F-1;
(ii) the legal opinion of Xxx Xxxxxx, general counsel of the
Borrower and its Subsidiaries, substantially in the form of Exhibit F-
2;
(iii) each legal opinion, if any, delivered in connection with
the Acquisition Agreement (including, without limitation, the legal
opinion delivered to Newco by counsel
40
to the Borrower), each accompanied by, to the extent reasonably
available, a reliance letter in favor of the Lenders; and
(iv) the legal opinion of local counsel in Texas and of such
other special and local counsel as may be reasonably required by the
Administrative Agent.
Each such legal opinion, reports and other documents shall cover such other
matters incident to the transactions contemplated by this Agreement as the
Administrative Agent may reasonably require.
(j) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
------------------------------------------
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Collateral Agreement, together with
an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof and (ii) each promissory
note (if any) pledged to the Administrative Agent pursuant to the
Collateral Agreement endorsed (without recourse) in blank (or accompanied
by an executed transfer form in blank) by the pledgor thereof.
(k) Filings, Registrations and Recordings. Each document (including
-------------------------------------
any Uniform Commercial Code financing statement) required by the Security
Documents or under law or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on
the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section
7.3), shall be in proper form for filing, registration or recordation.
(l) Mortgages, etc. (i) The Administrative Agent shall have received
--------------
a Mortgage with respect to each Mortgaged Property, executed and delivered
by a duly authorized officer of each party thereto.
(ii) If requested by the Administrative Agent, the Administrative
Agent shall have received, and the title insurance company issuing the
policy referred to in clause (iii) below (the "Title Insurance Company")
-----------------------
shall have received, maps or plats of an as-built survey of the sites of
the Mortgaged Properties certified to the Administrative Agent and the
Title Insurance Company in a manner satisfactory to them, dated a date
satisfactory to the Administrative Agent and the Title Insurance Company by
an independent professional licensed land surveyor satisfactory to the
Administrative Agent and the Title Insurance Company, which maps or plats
and the surveys on which they are based shall be made in accordance with
the Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and, without limiting
the generality of the foregoing, there shall be surveyed and shown on such
maps, plats or surveys the following: (A) the locations on such sites of
all the buildings, structures and other improvements and the established
building setback lines; (B) the lines of streets abutting the sites and
width thereof; (C) all access and other easements appurtenant to the sites;
(D) all roadways, paths, driveways, easements, encroachments and
overhanging projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the sites or
otherwise known to the surveyor; (E) any encroachments on any adjoining
property by the building structures and improvements on the sites; (F) if
the site is described as being on a filed map, a legend relating the survey
to said map; and (G) the flood zone designations, if any, in which the
Mortgaged Properties are located.
(iii) The Administrative Agent shall have received in respect of each
Mortgaged Property a mortgagee's title insurance policy (or policies) or
marked up unconditional binder for such
41
insurance. Each such policy shall (A) be in an amount satisfactory to the
Administrative Agent; (B) be issued at ordinary rates; (C) insure that the
Mortgage insured thereby creates a valid first Lien on such Mortgaged
Property free and clear of all defects and encumbrances, except as
disclosed therein; (D) name the Administrative Agent for the benefit of the
Lenders as the insured thereunder; (E) be in the form of ALTA Loan Policy -
1970 (Amended 10/17/70 and 10/17/84) (or equivalent policies); (F) contain
such endorsements and affirmative coverage as the Administrative Agent may
reasonably request and (G) be issued by title companies satisfactory to the
Administrative Agent (including any such title companies acting as co-
insurers or reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence satisfactory to it that
all premiums in respect of each such policy, all charges for mortgage
recording tax, and all related expenses, if any, have been paid.
(iv) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance that (1) covers
any parcel of improved real property that is encumbered by any Mortgage (2)
is written in an amount not less than the outstanding principal amount of
the indebtedness secured by such Mortgage that is reasonably allocable to
such real property or the maximum limit of coverage made available with
respect to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (3) has a term ending not
later than the maturity of the Indebtedness secured by such Mortgage and
(B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(v) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in clause (iii) above and a copy of
all other material documents affecting the Mortgaged Properties.
(m) Solvency Opinion. The Administrative Agent shall have received a
----------------
solvency opinion from Valuation Research Corporation, in substantially the
form of the draft thereof dated July 14, 1999, as to the solvency of the
Borrower (on a consolidated basis) after giving effect to the Transactions
and the financings and transactions contemplated herein.
(n) Insurance. The Administrative Agent shall have received insurance
---------
certificates satisfying the requirements of Section 4.2(b) of the
Collateral Agreement, which insurance (applicable before and after the
Closing Date) shall be reasonably satisfactory to the Administrative Agent.
(o) Consolidated EBITDA. The Borrower shall have Consolidated EBITDA
-------------------
for the twelve months ending June 30, 1999 of not less than $88,000,000.
5.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date, except to the extent that such representation and warranty is
expressly limited by its terms to an earlier date.
(b) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
42
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding (unless cash in an amount equal
to the aggregate amount of the L/C Obligations outstanding has been deposited in
a cash collateral account established by the Administrative Agent) or any Loan
or other amount is owing to any Lender or the Administrative Agent hereunder, it
shall and shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent and
--------------------
each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, copies of (A) the audited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, setting
forth in each case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or exception,
or qualification arising out of the scope of the audit, by Xxxxxx Xxxxxxxx
LLP or other independent certified public accountants of nationally
recognized standing and (B) the unaudited consolidating balance sheet at
the end of such year and the related statements of income and cash flow of
the Borrower for such year (calculated on a business unit basis), setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
notes thereto); and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, a copy of the unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and of
cash flows for such quarter and the portion of the fiscal year through the
end of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and, with respect to unaudited financial statements as set
forth in this Section 6.1, subject, where appropriate, to normal year-end audit
adjustments and the absence of notes thereto) .
6.2 Certificates; Other Information. Furnish to the Administrative
-------------------------------
Agent and each Lender (or, in the case of clause (g), to the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's
43
knowledge, each Loan Party during such period has observed or performed all
of its covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to which it is a
party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information and calculations necessary for determining
compliance by the Borrower and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or
fiscal year of the Borrower, as the case may be, and (y) to the extent not
previously disclosed to the Administrative Agent, a listing of any county
or state within the United States where any Loan Party keeps inventory or
equipment (provided, however, that the Administrative Agent and each Lender
acknowledge that any equipment, including, without limitation, any portable
computer, which by its nature is expressly designed and intended to be
moved around may be temporarily moved to a location other than as set forth
in such listing) and of any Intellectual Property acquired by any Loan
Party since the date of the most recent list delivered pursuant to this
clause (y) (or, in the case of the first such list so delivered, since the
Closing Date);
(c) as soon as available, and in any event within 60 days after the
beginning of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of the
following fiscal year, the related consolidated statements of projected
cash flow and projected income and a description of the underlying
assumptions applicable thereto), and, as soon as available, significant
revisions, if any, of such budget and projections, which revisions, in the
reasonable judgment of the Borrower, are necessary to make the information
contained in such budget and projections not materially misleading or
inaccurate, with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
-----------
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 50 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the portion
of the Projections covering such periods and to the comparable periods of
the previous year;
(e) no later than five Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Sponsor Notes,
the Senior Notes or the Acquisition Documentation;
(f) within 10 days after the same are sent, copies of all financial
statements and reports that the Borrower sends to the holders, in their
capacities as such, of any class of its debt securities or public equity
securities and, within 10 days after the same are filed, copies of all
financial statements and reports that the Borrower may make to, or file
with, the SEC; and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
----------------------
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been provided on the
books of the Borrower or its Subsidiaries, as the case may be, and except where
the failure to pay, discharge or satisfy the obligations could not reasonably be
expected to have a Material Adverse Effect.
6.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and
------------------------------------
keep in full force and effect its corporate existence and business and (ii) take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all property material
----------------------------------
and necessary in its business in good working order and condition, ordinary wear
and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.
6.7 Inspection of Property; Books and Records; Discussions. (a) Keep
------------------------------------------------------
proper books of records and account in which entries in conformity with GAAP and
all Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities and (b) permit representatives of any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with officers
and employees of the Borrower and its Subsidiaries and with its independent
certified public accountants. In the event multiple Lenders separately request
such a visit, inspection or discussion in substantially the same time period,
such Lenders shall comply with reasonable requests by the Borrower to coordinate
the same.
6.6 Notices. Promptly after the Borrower or any Subsidiary has
-------
obtained knowledge thereof, give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding that may exist at any time between the Borrower
or any of its Subsidiaries and any Governmental Authority, that in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $5,000,000 or more and not
covered by insurance or in which injunctive or similar relief (the result
of which could reasonably be expected to have a Material Adverse Effect) is
sought;
(d) any of the following events that could reasonably be expected to
create or be a material liability, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any
45
Multiemployer Plan or (ii) the institution of proceedings or the taking of
any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or
the termination, Reorganization or Insolvency of, any Plan; and
(e) any other development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
6.8 Environmental Laws. Comply in all material respects with, and use
------------------
all reasonable efforts to ensure compliance in all material respects by all
tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply in all material respects with and maintain, and use all
reasonable efforts to ensure that all tenants and subtenants obtain and comply
in all material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Additional Collateral, etc. With respect to any property acquired
--------------------------
after the Closing Date by the Borrower (other than (x) any property described in
paragraph (b), (c) or (d) below and (y) any property subject to a Lien expressly
permitted by Section 7.3(g)) as to which the Administrative Agent, for the
benefit of the Lenders, does not have a perfected Lien, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Collateral Agreement
or such other documents as the Administrative Agent deems necessary or advisable
to grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in such property, including the filing of
Uniform Commercial Code financing statements in such jurisdictions as may be
required by the Collateral Agreement or by law or as may be requested by the
Administrative Agent. Notwithstanding the foregoing, the Borrower shall not be
required, and the Borrower shall not be required to cause any of its
Subsidiaries, to take any actions or accept any contract terms which could
reasonably be expected to have a Material Adverse Effect or cause undue hardship
or excessive costs to the Borrower or such Subsidiary, as the case may be, in
order to obtain the necessary consents to an assignment of its rights, title and
interest in the Collateral.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $10,000,000 acquired
after the Closing Date by the Borrower (other than any such real property
subject to a Lien expressly permitted by Section 7.3(g)), promptly (i) execute
and deliver a first priority Mortgage, in favor of the Administrative Agent, for
the benefit of the Lenders, covering such real property, (ii) if requested by
the Administrative Agent, provide the Lenders with (x) title and extended
coverage insurance covering such real property in an amount at least equal to
the purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate and (y) any consents or
estoppels (which may be obtained without undue hardship or excessive costs)
reasonably deemed necessary or advisable by the Administrative Agent in
connection with such mortgage or deed of trust, each of the foregoing in form
and substance reasonably satisfactory to the Administrative Agent and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
46
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date by the Borrower (which,
for the purposes of this paragraph (c), shall include any existing Subsidiary
that ceases to be an Excluded Foreign Subsidiary), promptly (i) execute and
deliver to the Administrative Agent such amendments to the Collateral Agreement
as the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
the Borrower, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower, and (iii)
if requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Collateral Agreement
as the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
the Borrower (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, and take such other action as may be necessary or, in the
reasonable opinion of the Administrative Agent, desirable to perfect the
Administrative Agent's security interest therein, and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding (unless cash in an amount equal
to the aggregate amount of the L/C Obligations outstanding has been deposited in
a cash collateral account established by the Administrative Agent) or any Loan
or other amount is owing to any Lender or the Administrative Agent hereunder, it
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 Financial Condition Covenants.
-----------------------------
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
---------------------------
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter ending during any period set forth
below to exceed the ratio set forth below opposite such period:
Consolidated
Fiscal Period Leverage Ratio
------------- --------------
9/30/99 to 12/31/99 4.50 to 1.0
1/1/00 to 12/31/00 4.25 to 1.0
1/1/01 to 12/31/01 4.0 to 1.0
1/1/02 to 12/31/02 3.75 to 1.0
1/1/03 and thereafter 3.50 to 1.0
47
; provided, that for the purposes of determining the ratio described above as at
--------
the last day of any of the fiscal quarters of the Borrower ending September 30,
1999, December 31, 1999 and March 31, 2000, such ratio shall be calculated on a
pro forma basis as if the Transactions had occurred on the first day of the
---------
four-quarter period then ended for testing such compliance.
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
------------------------------------
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter ending during any period set forth
below to be less than the ratio set forth below opposite such period:
Consolidated Interest
Fiscal Period Coverage Ratio
------------- ---------------------
9/30/99 to 12/31/99 2.50 to 1.0
1/1/00 to 12/31/00 2.75 to 1.0
1/1/01 and thereafter 3.0 to 1.0
; provided, that for the purposes of determining the ratio described above as at
--------
the last day of any of the fiscal quarters of the Borrower ending September 30,
1999, December 31, 1999 and March 31, 2000, such ratio shall be calculated on a
pro forma basis as if the Transactions had occurred on the first day of the
---------
four-quarter period then ended for testing such compliance.
(c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
----------------------------------------
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower ending with any fiscal quarter ending during any period set
forth below to be less than the ratio set forth below opposite such period:
Consolidated Fixed
Fiscal Period Charge Coverage Ratio
------------- ---------------------
9/30/99 to 12/31/99 1.25 to 1.0
1/1/00 to 12/31/00 1.50 to 1.0
1/1/01 and thereafter 1.75 to 1.0
; provided, that for the purposes of determining the ratio described above as at
--------
the last day of any of the fiscal quarters of the Borrower ending September 30,
1999, December 31, 1999 and March 31, 2000, such ratio shall be calculated on a
pro forma basis as if the Transactions had occurred on the first day of the
---------
four-quarter period then ended for testing such compliance.
(d) Asset Coverage Ratio. Permit the Asset Coverage Ratio to be
--------------------
less than 2.0 to 1.0 at any time.
7.2 Indebtedness. Create, issue, incur, assume, become liable in
------------
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) (i) Indebtedness of any Subsidiary to the Borrower in an aggregate
principal amount not to exceed $20,000,000 at any one time outstanding and
(ii) Indebtedness of any Foreign Subsidiary to the Borrower which (x)
consists of trade payables incurred in the ordinary course of business and
(y) the Borrower has recharacterized as Indebtedness to avoid adverse tax
consequences to the Borrower or such Foreign Subsidiary;
48
(c) Indebtedness of the Borrower to any Subsidiary, provided, however
that:
(i) if the Borrower is the obligor under such Indebtedness,
such Indebtedness must be expressly subordinated to the prior
payment in full of all Obligations hereunder; and
(ii) (A) any subsequent issuance or transfer of Capital Stock or
ownership interests that results in any such Indebtedness being
held by a Person other than the Borrower and (B) any sale or
other transfer of any such Indebtedness to a Person that is not
the Borrower shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Borrower that is not
permitted by this Section 7.2(b);
(d) Guarantee Obligations incurred in the ordinary course of business
by the Borrower or any of its Subsidiaries of obligations of any
Subsidiary;
(e) Indebtedness outstanding on the date hereof and listed on Schedule
7.2(e), including the Senior Notes, and any refinancings, refundings,
renewals or extensions thereof (without increasing, or shortening the
maturity of, the principal amount thereof) and which shall not be adverse
to the Borrower or shall have a negative impact on the Lenders);
(f) Indebtedness (including, without limitation, Capital Lease
Obligations) of the Borrower and its Subsidiaries secured by Liens
permitted by Section 7.3(g) in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding;
(g) Indebtedness of the Borrower in respect of the Sponsor Notes, as
the case may be, in an aggregate principal amount not to exceed
$160,000,000;
(h) Indebtedness incurred by the Borrower or assumed by the Borrower
or any Subsidiary in connection with, or resulting from, Permitted
Acquisitions, provided, that the aggregate principal amount of Indebtedness
--------
permitted by this Section 7.2(h) shall be subject to the limitations set
forth in Section 7.8(g), provided, further, that any Indebtedness assumed
-------- -------
by any Subsidiary in connection with, or resulting from, a Permitted
Acquisition, shall have existed at the time of the consummation of such
Permitted Acquisition and shall not have been created in anticipation
thereof;
(i) Indebtedness of any Subsidiary organized under the laws of Japan,
the proceeds of which are necessary for and are applied to the payment of
taxes imposed by any Japanese Governmental Authority in an aggregate
principal amount at any one time not to exceed $5,000,000; and
(j) additional Indebtedness of the Borrower or any of its Subsidiaries
in an aggregate principal amount (for the Borrower and all Subsidiaries)
not to exceed $5,000,000 at any one time outstanding.
7.3 Liens. Create, incur, assume or suffer to exist any Lien upon
-----
any of its property, whether now owned or hereafter acquired, except for:
49
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
--------
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 30 days or that are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) 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;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d), provided that no such
--------
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any of its
Subsidiaries incurred pursuant to Section 7.2(e) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
--------
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
the Borrower or any of its Subsidiaries in the ordinary course of its
business and covering only the assets so leased; and
(j) Liens not otherwise permitted by this Section so long as neither
(i) the aggregate outstanding principal amount of the obligations secured
thereby nor (ii) the aggregate fair market value (determined as of the date
such Lien is incurred) of the assets subject thereto exceeds (as to the
Borrower and its Subsidiaries) $2,000,000 at any one time.
7.4 Fundamental Changes. Enter into any merger, consolidation or
-------------------
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
--------
surviving corporation) or with or into any other Subsidiary which is wholly
owned by the Borrower; and
50
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
other Subsidiary which is wholly owned by the Borrower.
7.5 Disposition of Property. Dispose of any of its property, whether
-----------------------
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any other Subsidiary;
(e) any Disposition for cash consideration of the assets of the
Computer & Network Services or BancTec Financial Systems division of the
Borrower; and
(f) the Disposition of other property having a fair market value not
to exceed $5,000,000 in the aggregate for any fiscal year of the Borrower.
7.6 Restricted Payments. Declare or pay any dividend (other than
-------------------
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Subsidiary, whether now
or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower or any Subsidiary (collectively, "Restricted Payments"), except
that:
(a) any Subsidiary may make Restricted Payments to the Borrower or any
other Subsidiary; and
(b) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may (i) purchase its common stock or common
stock options from present or former officers or employees of the Borrower
or any Subsidiary upon the death, disability or termination of employment
of such officer or employee, provided, that the aggregate amount of
--------
payments under this clause after the date hereof (net of any proceeds
received by the Borrower after the date hereof in connection with resales
of any common stock or common stock options so purchased) shall not exceed
$5,000,000, and (ii) pay management fees expressly permitted by the last
sentence of Section 7.10.
7.7 Capital Expenditures. Make or commit to make any Capital
--------------------
Expenditure in one fiscal year of the Borrower, except Capital Expenditures of
the Borrower and its Subsidiaries not exceeding the amount set forth opposite
such fiscal year set forth below:
Fiscal Year Capital Expenditures
----------- --------------------
1999 $50,000,000
2000 $55,000,000
2001 $55,000,000
2002 and thereafter $60,000,000
7.8 Investments. Make any advance, loan, extension of credit (by
-----------
way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, "Investments"), except:
-----------
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Borrower or any
Subsidiary of the Borrower in the ordinary course of business (including
for travel, entertainment and relocation expenses) in an aggregate amount
for the Borrower or any Subsidiary of the Borrower not to exceed $1,000,000
at any one time outstanding;
(e) the Acquisition and the other Transactions;
(f) loans by the Borrower to any of its Subsidiaries permitted
by Section 7.2(h); and
(g) Permitted Acquisitions; provided that the sum of all
consideration paid or otherwise delivered in connection with Permitted
Acquisitions (including the principal amount of any Indebtedness issued as
deferred purchase price and the fair market value of any other non-cash
consideration, but excluding common stock issued by the Borrower), plus the
aggregate principal amount of all Indebtedness otherwise incurred or
assumed in connection with, or resulting from Permitted Acquisitions
(including continuing Indebtedness of any acquired Person outstanding at
the time of its Permitted Acquisition), shall not exceed $25,000,000.
7.9 Optional Payments and Modifications of Certain Debt
---------------------------------------------------
Instruments. (a) Make or offer to make any optional or voluntary payment,
-----------
prepayment, repurchase or redemption of or otherwise optionally or voluntarily
defease or segregate funds with respect to the Sponsor Notes or the Senior
Notes, (b) make any payment of interest on the Sponsor Notes or Senior Notes in
cash to the extent that such payment may be made, pursuant to the Sponsor Notes
or the Senior Indenture, as the case may be, in kind, or (c) amend, modify,
waive or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of the Sponsor Notes or the Senior
Notes, as the case may be (other than any such amendment, modification, waiver
or other change that (i) would extend the maturity or reduce the amount of any
payment of principal thereof or reduce the rate or extend any date for payment
of interest thereon and (ii) does not involve the payment of a material consent
fee).
7.10 Transactions with Affiliates. Enter into any transaction,
----------------------------
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any Subsidiary) unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary course of
business of the Borrower or such Subsidiary, as the case may be, and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person that is not an Affiliate. Notwithstanding the
foregoing, the Borrower and its Subsidiaries may pay to the Sponsor and its
Control Investment Affiliates fees and expenses pursuant to a management
agreement approved by the board of directors of the Borrower, as the case may
be, in an
aggregate amount not to exceed $1,000,000 per annum in any fiscal year of the
Borrower, provided, that (x) such management agreement may not be amended in any
manner the result of which shall be to increase the aggregate amount of fees and
expenses payable thereunder to the Sponsor and its Control Investment Affiliates
and (y) at any time such fees and expenses are to be paid, no Default or Event
of Default shall have occurred and be continuing.
7.11 Sales and Leasebacks. Enter into any arrangement with any
--------------------
Person providing for the leasing by the Borrower or any Subsidiary of real or
personal property that has been or is to be sold or transferred by the Borrower
or such Subsidiary to such Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such property or rental
obligations of the Borrower or such Subsidiary; provided that any arrangement
--------
under which the Borrower or any Subsidiary purchases personal computers from a
customer or a vendor, sells the same such computers to a third-party, leases the
same such computers from such third-party and then subleases the same such
computers to a customer for an identical lease period as part of the "Tech
Refresh" program shall not be prohibited by this Section 7.11.
7.12 Changes in Fiscal Periods. Permit the fiscal year of the
-------------------------
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.
7.13 Negative Pledge Clauses. Enter into or suffer to exist or
-----------------------
become effective any agreement that prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).
7.14 Clauses Restricting Subsidiary Distributions. Enter into or
--------------------------------------------
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary and
(iii) any restrictions imposed by any agreement related to secured Indebtedness
permitted by this Agreement if such restrictions apply only to the property or
assets securing such Indebtedness.
7.15 Lines of Business. Enter into any business, either directly
-----------------
or through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement (after giving effect
to the Transactions) or that are reasonably related thereto or ancillary
thereto.
7.16 Amendments to Acquisition Documentation. (a) Amend,
---------------------------------------
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the indemnities and licenses furnished to the Borrower or any of
its Subsidiaries pursuant to the Acquisition Documentation or any other document
delivered by the Borrower or any of its Affiliates in connection therewith such
that after giving effect thereto such indemnities or licenses shall be
materially less favorable to the interests of the Loan Parties or the Lenders
with respect thereto or (b) otherwise amend, supplement or otherwise modify the
terms and conditions of the Acquisition Documentation or any such other
documents except for any
such amendment, supplement or modification that (i) becomes effective after the
Closing Date and (ii) could not reasonably be expected to have a Material
Adverse Effect.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within three days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) any representation or warranty made or, pursuant to the last
sentence of Section 5.2, deemed made by any Loan Party herein or in any
other Loan Document or that is contained in any certificate, document or
financial or other written statement furnished by it at any time under or
in connection with this Agreement or any such other Loan Document shall
prove to have been inaccurate in any material respect on or as of the date
made or deemed made; or
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to the Borrower only), Section 6.7(a) or Section 7 of
this Agreement or Sections 4.5 and 4.7(b) of the Collateral Agreement or
(ii) an "Event of Default" under and as defined in any Mortgage shall have
occurred and be continuing; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other
Loan Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days; or
(e) the Borrower or any of its Subsidiaries shall (i)
default in making any payment of any principal of any Indebtedness
(including any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or to permit the holder or beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the giving
of notice if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided, that a default, event or condition
--------
described in clause (i), (ii) or (iii) of this paragraph (e) shall not at
any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i), (ii)
and (iii) of this paragraph (e) shall have occurred and be continuing with
respect to Indebtedness the outstanding principal amount of which exceeds
in the aggregate $5,000,000; or
(e) (i) the Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with
respect to it or its debts, or (B) seeking appointment of a receiver,
trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower or any of its Subsidiaries
any case, proceeding or other action of a nature referred to in clause (i)
above that (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against
the Borrower or any of its Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets that
results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 45 days
from the entry thereof; or (iv) the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii), or (iii) above; or (v) the Borrower or any of its Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in Section
302 of ERISA), whether or not waived, shall exist with respect to any Plan
or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has acknowledged coverage) of $5,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 45 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason,
to be in full force and effect, or any Loan Party or any Affiliate of any
Loan Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby; or
(j) (i) prior to an IPO, (A) the Permitted Investors shall cease
collectively to own, of record and beneficially, shares of the common stock
of the Borrower equal to at least 51% of all of the issued and outstanding
shares of the common stock of the Borrower on a fully diluted basis and (B)
the Permitted Investors shall cease to have the power to vote or direct the
voting of securities having a majority of the aggregate ordinary voting
power for the election of directors of the Borrower (determined on a fully
diluted basis); (ii) after an IPO, (X) the Permitted Investors shall cease
collectively to own, of record and beneficially, shares of the common stock
of the Borrower equal to at least 35% of all of the issued and outstanding
shares of the common stock of the
Borrower on a fully diluted basis, (Y) the Permitted Investors shall cease
to have the power to vote or direct the voting of securities having at
least 35% of the aggregate ordinary voting power for the election of
directors of the Borrower (determined on a fully diluted basis) and (Z) any
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
excluding the Permitted Investors, shall become, or obtain rights (whether
by means or warrants, options or otherwise) to become, the "beneficial
owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act),
directly or indirectly, of more than 15% of the outstanding common stock of
the Borrower; (iii) the board of directors of the Borrower shall cease to
consist of a majority of Continuing Directors; or (iv) a Specified Change
of Control shall occur; or
(k) the Sponsor Notes shall cease, for any reason, to be validly
subordinated to the Obligations, as provided in the Sponsor Notes, or any
Loan Party, any Affiliate of any Loan Party, the trustee in respect of the
Sponsor Notes or the holders of at least 25% in aggregate principal amount
of the Sponsor Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents,
provided, however, that in the event any and all Events of Default shall have
-------- -------
been waived or cured prior to the application of all amounts held in such cash
collateral account to the payment of drafts drawn under such Letters of Credit
or the repayment of other obligations of the Borrower hereunder and under the
other Loan Documents, such remaining amounts in such cash collateral account
shall be paid back to the Borrower. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
--------------------
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither any Agent nor any of their
----------------------
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent
--------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be
-----------------
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender
----------------------------------------
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify each Agent
---------------
in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful
misconduct. The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. Each Agent and its
--------------------------------
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
9.10 Syndication Agent. The Syndication Agent shall have no
-----------------
duties or responsibilities hereunder in its capacity as such.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other
----------------------
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive or reduce the principal amount or
extend the final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Term Loan, reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date of
any payment thereof, or increase the amount or extend the expiration date of any
Lender's Revolving
Commitment, in each case without the consent of each Lender directly affected
thereby; (ii) eliminate or reduce any voting rights under this Section 10.1,
reduce any percentage specified in the definition of Required Lenders, consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or
substantially all of the Specified Collateral (as such term is defined in the
Collateral Agreement) or all or substantially all of the General Collateral (as
such term is defined in the Collateral Agreement), in each case without the
consent of all Lenders; (iii) amend, modify or waive any condition precedent to
any extension of credit under the Revolving Facility set forth in Section 5.2
(including in connection with any waiver of an existing Default or Event of
Default) without the written consent of the Majority Facility Lenders in respect
of the Revolving Facility; (iv) amend, modify or waive any provision of Section
2.15 without the consent of the Majority Facility Lenders in respect of each
Facility adversely affected thereby; (v) reduce the amount of Net Cash Proceeds
or Excess Cash Flow required to be applied to prepay Loans under this Agreement
without the consent of the Majority Facility Lenders under each Facility; (vi)
reduce the percentage specified in the definition of Majority Facility Lenders
with respect to any Facility without the consent of all Lenders under such
Facility; (vii) amend, modify or waive any provision of Section 9 without the
consent of the Administrative Agent; or (viii) amend, modify or waive any
provision of Section 3 without the consent of the Issuing Lender. Any such
waiver and any such amendment, supplement or modification shall apply equally to
each of the Lenders and shall be binding upon the Loan Parties, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
electronic transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three Business Days
after being deposited in the mail, postage prepaid, or, in the case of
electronic transmission notice, when received, addressed as follows in the case
of the Borrower and the Administrative Agent, and as set forth in an
administrative questionnaire delivered to the Administrative Agent in the case
of the Lenders, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrower: BancTec, Inc.
Address: 0000 XXX Xxxxxxx
Xxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopy: 000-000-0000
Telephone: 000-000-0000
The Administrative Agent: Chase Bank of Texas, N.A.
Address: Agency Services
Chase Bank of Texas, N.A.
One Chase Xxxxxxxxx Xxxxx,
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
provided that any notice, request or demand to or upon the Administrative Agent
--------
or the Lenders shall not be effective until received.
60
10.3 No Waiver; Cumulative Remedies. No failure to exercise and
------------------------------
no delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
-----------------------------
pay or reimburse the Agents for all their respective out-of-pocket costs and
expenses incurred in connection with the syndication and financing of the
Facilities and the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, the
syndication of the Facilities and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and filing and recording
fees and expenses, with statements with respect to the foregoing to be submitted
to the Borrower prior to the Closing Date (in the case of amounts to be paid on
the Closing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as the Administrative Agent shall deem appropriate, (b) to
pay or reimburse each Lender and the Administrative Agent for all its reasonable
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including the reasonable fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent, (c) to pay, indemnify, and
hold each Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any, that
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
the Agents and their respective officers, directors, employees, affiliates,
agents and controlling persons (each, an "Indemnitee") harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments or suits of any kind or nature whatsoever with respect to the
syndication and financing of the Facilities, and the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of the
Borrower any of its Subsidiaries or any of the Properties and the reasonable
fees and expenses of legal counsel in connection with claims, actions or
proceedings by any Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (d), collectively, the "Indemnified
-----------
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
----------- --------
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, the Borrower agrees not to assert and to
cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section 10.5 shall
be payable not later than
61
10 days after written demand therefor. Statements payable by the Borrower
pursuant to this Section 10.5 shall be submitted to Chief Financial Officer
(Telephone No. 000-000-0000) (Telecopy No.972-341-4882), at the address of the
Borrower set forth in Section 10.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative
Agent. The agreements in this Section 10.5 shall survive repayment of the Loans
and all other amounts payable hereunder.
10.9 Successors and Assigns; Participations and Assignments. This
------------------------------------------------------
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their
respective permitted successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
-----------
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. In no event shall any Participant
under any such participation have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Loans or any fees
payable hereunder, or postpone the date of the final maturity of the Loans, in
each case to the extent subject to such participation. The Borrower agrees that
if amounts outstanding under this Agreement and the Loans are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided that, in purchasing such
--------
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as
if it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.16, 2.17 and 2.18 with respect
to its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender; provided that, in the case of Section 2.17, such
--------
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
-------- -------
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with
--------
applicable law, at any time and from time to time assign to any Lender or any
Affiliate thereof or, with the consent of the Borrower and the Administrative
Agent (which, in each case, shall not be unreasonably withheld or delayed), to
an additional bank, financial institution or other entity (an "Assignee") all or
--------
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, executed by such Assignee, such Assignor and any
other Person whose consent is required pursuant to this paragraph, and delivered
to the Administrative Agent for its acceptance and recording in the Register;
provided that no such assignment to an Assignee (other than any Lender or any
--------
affiliate thereof) shall be in an aggregate principal amount of less than
$5,000,000 (other than in the case of an assignment of all of a Lender's
interests under this Agreement), unless otherwise agreed by the Borrower and the
Administrative Agent. Any such assignment need not be
62
ratable as among the Facilities. Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment and/or Loans as set
forth therein, and (y) the Assignor thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of an
Assignor's rights and obligations under this Agreement, such Assignor shall
cease to be a party hereto). Notwithstanding any provision of this Section 10.6,
the consent of the Borrower shall not be required for any assignment that occurs
when an Event of Default pursuant to Section 8(f) shall have occurred and be
continuing with respect to the Borrower.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loans and any Notes evidencing the Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note, if any, shall expressly so provide).
Any assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance, and thereupon one or more new Notes, upon request,
shall be issued to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by
an Assignor, an Assignee and any other Person whose consent is required by
Section 10.6(c), together with payment to the Administrative Agent of a
registration and processing fee of $4,000, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments of
Loans and Notes, if any, relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests, including
any pledge or assignment by a Lender of any Loan or Note, if any, to any Federal
Reserve Bank in accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (f) above.
10.7 Adjustments; Set-off. Except to the extent that this
--------------------
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefitted
----------
Lender") shall, at any time after the Loans and other amounts payable hereunder
------
shall immediately become due and payable pursuant to Section 8, receive any
payment of all or part of the Obligations owing to it, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 8(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of the Obligations owing to
each such other Lender, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral ratably with each of the
63
Lenders; provided, however, that if all or any portion of such excess payment or
-----------------
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower, as the case may be.
Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such setoff and application made by such Lender, provided that the
--------
failure to give such notice shall not affect the validity of such setoff and
application.
10.8 Counterparts. This Agreement may be executed by one or more
------------
of the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in
64
any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower, as the case may be at its address set forth in
Section 10.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.13 Acknowledgments. The Borrower hereby acknowledges that:
---------------
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
10.14 Releases of Guarantees and Liens. (a) Notwithstanding
--------------------------------
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 10.1) to take any action requested by the Borrower having the effect
of releasing any Collateral or guarantee obligations (i) to the extent
necessary to permit consummation of any transaction not prohibited by any Loan
Document or that has been consented to in accordance with Section 10.1 or (ii)
under the circumstances described in paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations
and the other obligations under the Loan Documents (other than obligations under
or in respect of Hedge Agreements) shall have been paid in full, the Commitments
have been terminated and no Letters of Credit shall be outstanding, the
Collateral shall be released from the Liens created by the Security Documents,
and the Security Documents and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each Loan
Party under the Security Documents shall terminate, all without delivery of any
instrument or performance of any act by any Person and at such time, the
Administrative Agent agrees to promptly take such actions and execute and
deliver such instruments and documents as shall be necessary to release the
Liens and security interests created by the Security Documents, including,
without limitation, any Uniform Commercial Code release or termination
statements.
10.15 Confidentiality. Each of the Administrative Agent and each
---------------
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement that is
65
designated by such Loan Party as confidential; provided that nothing herein
--------
shall prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other Lender or any affiliate
of any Lender, (b) to any Transferee or prospective Transferee that agrees to
comply with the provisions of this Section, (c) to its employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of its affiliates, (d) upon the request or demand of any Governmental Authority,
(e) in response to any order of any court or other Governmental Authority or as
may otherwise be required pursuant to any Requirement of Law, (f) if requested
or required to do so in connection with any litigation or similar proceeding,
(g) that has been publicly disclosed without violation of this Section 10.15,
(h) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender, or (i) in connection with the exercise of
any remedy hereunder or under any other Loan Document. Each of the
Administrative Agent and each Lender agrees that in the event it is requested,
required or demanded to disclose such non-public information pursuant to clause
(d), (e) or (f) above, it shall, to the extent permitted by law, promptly notify
the applicable Loan Party thereof, to enable such Loan Party to obtain a
protective order with respect to such information.
10.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE
---------------------
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
BANCTEC, INC.
By:_________________________________
Name:
Title:
CHASE BANK OF TEXAS, N.A., as Administrative
Agent, Syndication Agent and as a Lender
By:__________________________________
Name:
Title:
ABN AMRO BANK N.V., as Co-Agent and as a
Lender
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
THE BANK OF NOVA SCOTIA
By:___________________________________
Name:
Title:
BANK ONE, TEXAS, N.A.
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
COMERICA BANK
By:___________________________________
Name:
Title:
GUARANTY FEDERAL BANK, F.S.B.
By:___________________________________
Name:
Title:
IBM CREDIT CORPORATION
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
NATIONAL CITY BANK OF KENTUCKY
By:___________________________________
Name:
Title:
XXXXX FARGO BANK (TEXAS) N.A.
By:___________________________________
Name:
Title:
