**EXHIBIT 4.7**

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THESECURITIES ACT

OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OROTHERWISE

DISPOSED OF UNLESS REGISTERED UNDER THAT ACT

OR AN EXEMPTION FROM REGISTRATION ISAVAILABLE.

 

**[THISNOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”)**

**ASDEFINED BY SECTION 1273(a)(1) OF THE INTERNAL REVENUE**

**CODEOF 1986, AS AMENDED.  THE FOLLOWINGINFORMATION IS**

**PROVIDEDPURSUANT TO THE INFORMATION REPORTING REQUIREMENTS**

**SETFORTH IN TREASURY REGULATION 1.1275-3.**

 

**THEISSUE PRICE OF THIS DEBT INSTRUMENT IS $136,800,000.**

**THEAMOUNT OF OID ON THIS DEBT INSTRUMENT IS $23,200,000.**

**THEISSUE DATE OF THIS DEBT INSTRUMENT IS JULY 22, 1999.**

**THEPER ANNUM YIELD TO MATURITY OF THIS DEBT INSTRUMENT IS 10.95%**

**COMPOUNDEDQUARTERLY.]**

 

BANCTEC, INC.

 

SeniorSubordinated Note

Due 2009

 

| $160,000,000 |   | July 22, 1999 |
|--------------|--------|---------------|

 

BancTec, Inc., a Delaware corporation (the“Company”), for value received, hereby promises to pay to WCAS CAPITAL PARTNERSIII, L.P. (“WCAS CP III”), or registered assigns, the principal sum of ONEHUNDRED SIXTY MILLION DOLLARS ($160,000,000), on July 22, 2009, and to payinterest as provided in Section 2 hereof until the principal amount hereofshall have become due and payable, whether at maturity or by acceleration orotherwise, and thereafter at the rate of 13% per annum on any overdue principalamount and (to the extent permitted by applicable law) on any overdue interestuntil paid.

 

Subject to the provisions of Section 2hereof, all payments of principal and interest on this Note shall be in suchcoin or currency of the United States of America as at the time of paymentshall be legal tender for payment of public and private debts.  Such payments shall be subject to thelimitations of the Credit Agreement, dated as of July 22, 1999, among theCompany, as borrower, Chase Securities Inc. (“CSI”), as advisor, lead arrangerand book manager, Chase Bank of Texas, N.A. (“Chase” or the “Agent”), asadministrative agent and syndication agent, and the lenders from time to timeparty thereto, together with all related documents, including withoutlimitation all guarantees, security agreements, pledge agreements, mortgages,other collateral documents and other agreements entered into in connectiontherewith

 

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or in connection with anyrestatement, renewal, extension, restructuring, refunding or refinancingthereof (collectively, the “Credit Agreement”).

 

On any Interest Payment Date (as definedherein) on or after September 30, 2004, the Company shall pay any amountof accrued original issue discount on this Note as shall be necessary to ensurethat this Note shall not be considered an “applicable high yield discountobligation” within the meaning of Section 163(i) of the Internal Revenue Codeof 1986, as amended, or any successor provision; provided, however,that each such payment shall only be made if also permitted under the CreditAgreement.  The amount of principalpayable on this Note shall be reduced by the amount of any accrued originalissue discount that is paid pursuant to this paragraph.

 

If any payment on this Note is due on a daywhich is not a Business Day, it shall be due on the next succeeding BusinessDay.  For purposes of this Note,“Business Day” shall mean any day other than a Saturday, Sunday or a legalholiday or day on which banks are authorized or required to be closed inChicago or New York.

 

1.             TheNotes.  This Note is issued pursuantto the Securities Purchase Agreement, dated as of June 17, 1999 (the “PurchaseAgreement”), among Colonial Acquisition Corp., a predecessor in interest to theCompany, WCAS CP III and the several Purchasers named in Schedules I and IIthereto.  As used herein, the term“Note” or “Notes” includes the Senior Subordinated Note due 2009 of the Companyoriginally so issued.

 

2.             Interest.  (a) Until the principal amount hereof shallhave become due and payable, the Company shall pay interest (computed on thebasis of a 360-day year consisting of twelve 30-day months) from the datehereof on the unpaid principal amount hereof at the rate of 10% per annumquarterly in arrears on March 31, June 30, September 30 andDecember 31 of each year (each said day being an “Interest Payment Date”),commencing on September 30, 1999.

 

(b)           Theholder of this Note may elect at any time prior to any Interest Payment Date tohave the Company satisfy its obligation to pay interest by issuing to theholder hereof a deferred interest note or notes (the “Deferred InterestNotes”), dated as of such Interest Payment Date, in a principal amount equal tothe amount of interest due on such Interest Payment Date multiplied by 1.3(with the result that such unpaid interest shall have accrued at an effectiverate of 13% instead of 10%).  TheDeferred Interest Notes shall be in substantially the form hereof and shallbear an appropriate legend with respect to any original issue discount.

 

3.             Transfer,Etc. of Notes.  The Company shallkeep at its office or agency maintained as provided in paragraph (a) of Section11 a register in which the Company shall provide for the registration of thisNote and for the registration of transfer and exchange of this Note.  Subject to the provisions of paragraph (b)hereof, the holder of this Note may, at its option, and either in person or byits duly authorized attorney, surrender the same for registration of transferor exchange at the office or agency of the Company maintained as provided inSection 11 and, without expense to such holder (except for taxes orgovernmental charges imposed in connection therewith), receive in exchangetherefor a Note or Notes each in such denomination or denominations as suchholder may request, dated as of the date to which interest has been paid

 

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on the Note or Notes sosurrendered for transfer or exchange, for the same aggregate principal amountas the then unpaid principal amount of the Note or Notes so surrendered fortransfer or exchange, and registered in the name of such person or persons asmay be designated by such holder.  EveryNote presented or surrendered for registration of transfer or exchange shall beduly endorsed, or shall be accompanied by a written instrument of transfer,satisfactory in form to the Company, duly executed by the holder of such Noteor its attorney duly authorized in writing. Every Note so made and delivered in exchange for such Note shall in allother respects be in the same form and have the same terms as such Note.  No transfer or exchange of any Note shall bevalid unless made in the foregoing manner at such office or agency.

 

4.             Loss,Theft, Destruction or Mutilation of Note. Upon receipt of evidence satisfactory to the Company of the loss, theft,destruction or mutilation of this Note, and, in the case of any such loss,theft or destruction, upon receipt of an affidavit of loss from the holderthereof reasonably satisfactory to the Company, or, in the case of any suchmutilation, upon surrender and cancellation of this Note, the Company will makeand deliver, in lieu of this Note, a new Note of like tenor and unpaid principalamount and dated as of the date to which interest has been paid on this Note.

 

5.             PersonsDeemed Owners; Holders.  The Companymay deem and treat the person in whose name any Note is registered as the ownerand holder of such Note for the purpose of receiving payment of principal ofand interest on such Note and for all other purposes whatsoever, whether or notsuch Note shall be overdue.  Withrespect to any Note at any time outstanding, the term “holder”, as used herein,shall be deemed to mean the person in whose name such Note is registered asaforesaid at such time.

 

6.             Prepayments.

 

(a)           OptionalPrepayment.  Subject to anyapplicable restrictions under the Credit Agreement, the Company may, at itsoption, prepay this Note without premium or penalty, as a whole at any time orin part from time to time in amounts which shall be integral multiples of$1,000,000.

 

(b)           MandatoryPrepayment on Change of Control. Subject to any applicable restrictions under the Credit Agreement, if atany time while this Note is outstanding a Change in Control (as hereinafterdefined) shall occur, the Company shall prepay, without penalty or premium, allprincipal and interest then outstanding hereunder.

 

(c)           Forpurposes of this Section 6, a “Change in Control” shall be deemed to haveoccurred if:

 

(i)            anyperson or any persons acting together that would constitute a “group” (a“Group”) for purposes of Section 13(d) of the Securities Exchange Act of 1934,as amended (the “Exchange Act”), or any successor provision thereto, togetherwith any affiliates or related persons thereof, other than any of thePurchasers named in the Purchase Agreement together with their respective

 

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affiliates, shall beneficially own (forpurposes of Rule 13d-3 of the Exchange Act or any successor provision thereto)at least 50% of the aggregate voting power of all classes of voting capitalstock of the Company; or

 

(ii)           anyperson or Group, together with any affiliates or related persons thereof, otherthan any of the Purchasers named in the Purchase Agreement together with theirrespective affiliates, shall succeed in having a majority of its or theirnominees elected to the Board of Directors of the Company; or

 

(iii)          theCompany is a party to any merger or consolidation with any other businessentity, at the conclusion of which transaction the stockholders of the Companyimmediately prior to the transaction do not continue to hold a majority of thetotal voting capital stock of the successor entity, in substantially the sameproportions, following such transaction; or

 

(iv)          theCompany sells, leases, transfers or otherwise disposes of all or substantiallyall of its assets.

 

(d)           Inthe event of a Change in Control, the Company will promptly, in good faith, (i)seek to obtain any required consent of the holders of any “Senior Indebtedness”(as defined herein) to permit the prepayment contemplated by paragraph (b)above, or (ii) to the extent that it is permitted to do so pursuant to theCredit Agreement, repay some or all of such holders of Senior Indebtedness tothe extent necessary (including, if necessary, payment in full of such SeniorIndebtedness and payment of any prepayment premiums, fees, expenses orpenalties) to permit the prepayment contemplated hereby without such consent.

 

7.             Noticeof Prepayment and Other Notices. The Company shall give written notice of any prepayment of this Note orany portion hereof pursuant to Section 6 not less than 30 nor more than 60days prior to the date fixed for such prepayment.  Such notice of prepayment and all other notices to be given tothe holder of this Note shall be given by registered or certified mail to theperson in whose name this Note is registered at its address designated on theregister maintained by the Company on the date of mailing such notice ofprepayment or other notice.  Upon noticeof prepayment being given as aforesaid, the Company covenants and agrees thatit will prepay, on the date therein fixed for prepayment, this Note or theportion hereof, as the case may be, so called for prepayment, at the principalamount thereof so called for prepayment, together with interest accrued thereonto the date fixed for such prepayment. A prepayment of less than all of the outstanding principal amount ofthis Note shall not relieve the Company of its obligation to make scheduledpayments of interest payable in respect of the principal remaining outstandingon the Interest Payment Dates.

 

8.             Allocationof All Payments.  In the event ofany partial payment of less than all of the interest then due on the Notes thenoutstanding or any prepayment, purchase, redemption or retirement of less thanall of the outstanding Notes, the Company will allocate the amount of interestso to be paid and the principal amount so to be prepaid, purchased, redeemed orretired to each Note in proportion, as nearly as may be, to the aggregateprincipal amount of all Notes then outstanding.

 

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9.             InterestAfter Date Fixed for Prepayment.  Ifthis Note or a portion hereof is called for prepayment as herein provided, thisNote or such portion shall cease to bear interest on and after the date fixedfor such prepayment unless, upon presentation for such purpose, the Companyshall fail to pay this Note or such portion, as the case may be, in which eventthis Note or such portion, as the case may be, and, so far as may be lawful,any overdue installment of interest, shall bear interest on and after the datefixed for such prepayment and until paid at the rate per annum provided hereinfor overdue principal.

 

10.           Surrenderof Note; Notation Thereon.  Upon anyprepayment of a portion of the principal amount of this Note, the holderhereof, at its option, may require the Company to execute and deliver at theexpense of the Company (other than for transfer taxes, if any), upon surrenderof this Note, a new Note registered in the name of such person or persons asmay be designated by such holder for the principal amount of this Note then remainingunpaid, dated as of the date to which the interest has been paid on theprincipal amount of this Note then remaining unpaid, or may present this Noteto the Company for notation hereon of the payment of the portion of theprincipal amount of this Note so prepaid.

 

11.           CovenantsRelating to the Note.  The Companycovenants and agrees that so long as the Note shall be outstanding:

 

(a)           Maintenanceof Office.  The Company willmaintain an office or agency in such place in the United States of America asthe Company may designate in writing to the registered holder of this Note,where this Note may be presented for registration of transfer and for exchangeas herein provided, where notices and demands to or upon the Company in respectof this Note may be served and where this Note may be presented forpayment.  Until the Company otherwisenotifies the holder hereof, said office shall be the principal office of theCompany located at 4851 LBJ Freeway, Suite 1100, Dallas, Texas 75244.

 

(b)           Paymentof Taxes.  The Company will promptlypay and discharge or cause to be paid and discharged, before the same shallbecome in default, all material lawful taxes and assessments imposed upon theCompany or any of its subsidiaries or upon the income and profits of the Companyor any of its material subsidiaries, or upon any property, real, personal ormixed, belonging to the Company or any of its material subsidiaries, as well asall material lawful claims for labor, materials and supplies which, if unpaid,would become a lien or charge upon such property or any part thereof; provided,however, that the Company shall not be required to pay or discharge orcause to be paid or discharged any such tax, assessment, charge or claim whoseamount, applicability or validity is being contested in good fath byappropriate proceedings and for which disputed amounts adequate reserves havebeen established in accordance with GAAP.

 

(c)           CorporateExistence.  The Company will do orcause to be done all things necessary and lawful to preserve and keep in fullforce and effect its corporate existence, rights and franchises and thecorporate existence, rights and franchises of each of its materialsubsidiaries; provided, however, that the Company shall not berequired to preserve, with respect to itself, any right or franchise, and withrespect to any material subsidiary, its existence or any

 

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such right or franchise, if theBoard of Directors of the Company shall determine that the preservation thereofis no longer desirable in the conduct of the business of such entity.

 

(d)           Maintenanceof Property.  The Company will atall times maintain and keep, or cause to be maintained and kept, in goodrepair, working order and condition all significant properties of the Companyand its subsidiaries used in the conduct of its business, and will from time totime make or cause to be made all needful and proper repairs, renewals,replacements, betterments and improvements thereto, so that its business may beproperly and advantageously conducted at all times; provided, however,that nothing in this paragraph (d) shall prevent the Company from discontinuingany operation or maintenance of any of such properties, or disposing of any ofthem, if such discontinuance or disposal is, in the judgment of the Board ofDirectors of the Company, desirable in the conduct of the business of suchentity.

 

(e)           Insurance.  The Company will, and will cause each of itssubsidiaries to, (i) keep adequately insured, by financially sound andreputable insurers, all property of a character usually insured by corporationsengaged in the same or a similar business similarly situated against loss ordamage of the kinds customarily insured against by such corporations and (ii)carry, with financially sound and reputable insurers, such other insurance(including without limitation liability insurance) in such amounts as areavailable at reasonable expense and to the extent believed advisable in thegood faith business judgment of the Company.

 

(f)            Keepingof Books.  The Company will at alltimes keep, and cause each of its subsidiaries to keep, proper books of recordand account in which proper entries will be made of its transactions inaccordance with generally accepted accounting principles consistently applied.

 

(g)           Noticeof Default.  If any one or moreevents which constitute, or which with notice or lapse of time or both wouldconstitute, an Event of Default under Section 13 shall occur, the Companyshall, immediately after it becomes aware that any such event has occurred,give notice to the holder of this Note, specifying the nature of such event.

 

(h)           FinancialReporting.  The Company shallfurnish to the holder hereof:

 

(i)            within90 days after the end of each fiscal year of the Company, a consolidatedbalance sheet of the Company and its subsidiaries as of the end of such fiscalyear and the related consolidated statements of operations, changes instockholders’ equity and changes in financial position of the Company and its subsidiariesfor the fiscal year then ended, together with supporting notes thereto,certified without qualification as to scope of audit by a firm of independentcertified public accountants of recognized national standing selected by theBoard of Directors of the Company;

 

(ii)           within45 days after the end of each quarter in each fiscal year (other than the lastquarter in each fiscal year), a consolidated balance sheet of the Company andits subsidiaries and the related consolidated statements of operations, changesin stockholders’ equity and changes in financial position of

 

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the Company and its subsidiaries for thequarter then ended, unaudited but certified by the principal financial officerof the Company, such balance sheet to be as of the end of such quarter and suchstatements of operations, changes in stockholders’ equity and changes infinancial position to be for such quarter and for the period from the beginningof the fiscal year to the end of such quarter, in each case subject to normalyear-end adjustments;

 

(iii)          within30 days after the end of each month in each fiscal year, a consolidated balancesheet of the Company and its subsidiaries and the related consolidatedstatement of operations for the month then ended, unaudited but certified bythe principal financial officer of the Company, such balance sheet to be as ofthe end of such month and such statement of operations to be for such month andfor the period from the beginning of the fiscal year to the end of such month,in each case subject to normal year-end adjustments;

 

(iv)          promptlyupon filing, copies of all registration statements, prospectuses, periodicreports and other documents filed by the Company with the Securities and ExchangeCommission; and

 

(v)           promptly,from time to time, such other information regarding the operations, business,affairs and financial condition of the Company or any subsidiary as the holderhereof may reasonably request, subject to such confidentiality agreements asthe Company may reasonably request.

 

(i)            Consolidation,Merger and Sale.  The Company willnot consolidate or merge with or into, or sell or otherwise dispose of all orsubstantially all of its property to, any other corporation or other entity,unless:

 

(i)            inthe event of any such transaction which constitutes a Change in Control (asdefined in Section 6 hereof), and in connection with which the Company for anyreason shall not prepay all principal and interest then outstanding under thisNote (whether or not prepayment is restricted by the Credit Agreement) theCompany shall have obtained the written consent of the holders of at least amajority of the aggregate principal amount then outstanding under the Notes;

 

(ii)           thesurviving corporation or other entity (if other than the Company) shallexpressly and effectively assume in writing the due and punctual payment of theprincipal of and interest on this Note, according to its tenor, and the due andpunctual performance and observance of all the terms, covenants, agreements andconditions of this Note to be performed or observed by the Company to the sameextent as if such surviving corporation had been the original maker of thisNote; and

 

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(iii)          theCompany or such other corporation or other entity shall not otherwise be indefault in the performance or observance of any covenant, agreement orcondition of this Note or the Purchase Agreement.

 

(j)            RestrictedPayments.  The Company will not, andwill not permit any of its subsidiaries to: (i) declare or pay any dividendson, or make any other distribution or payment on account of, or redeem, retire,purchase or otherwise acquire for value, directly or indirectly, any shares ofany class of stock of the Company, whether now or hereafter outstanding, ormake any other distribution in respect thereof, either directly or indirectly,whether in cash, property or in obligations of the Company or any of itssubsidiaries, except for (A) distributions of shares of the same class or of adifferent class of stock pro rata to all holders of shares of a class of stock,(B) dividends, distributions or payments by any subsidiary to the Company or toany wholly-owned subsidiary of the Company, (D) distributions pro rata tothe stockholders, members, partners or other equity holders of less thanwholly-owned subsidiaries of the Company approved by members of the Company=sBoard of Directors, or (E) repurchases of shares of any class of stock of theCompany from employees upon their termination of employment, or (ii) except aspermitted under the Credit Agreement, make any payments of principal of, orretire, redeem, purchase or otherwise acquire any indebtedness for moneyborrowed other than any Senior Indebtedness (as defined in Section 17) or theNotes (such declarations, payments, purchases, redemptions, retirements,acquisitions or distributions being herein called ARestricted Payments@).

 

12.           Modificationby Holders; Waiver.

 

(a)           TheCompany may, with the written consent of the holders of not less than amajority in principal amount of the Notes then outstanding, modify the termsand provisions of this Note or the rights of the holders of this Note or theobligations of the Company hereunder, and the observance by the Company of anyterm or provision of this Note may be waived with the written consent of theholders of not less than a majority in principal amount of the Notes thenoutstanding; provided, however, that no such modification orwaiver shall:

 

(i)            changethe maturity of any Note, reduce the principal amount thereof or reduce therate or extend the time of payment of interest thereon without the consent ofthe holder of each Note so affected; or

 

(ii)           giveany Note any preference over any other Note, including, without limitation, byamending the allocation provisions of Section 8 hereof; or

 

(iii)          reducethe percentage of principal amount outstanding under any Note, the consent ofthe holder of which is required for any such modification; or

 

(iv)          amendthe provisions of Section 17 hereof in any manner adverse to the interests ofthe holder of this Note;

 

without the consent of the holder of each Note so affected.

 

(b)           Anysuch modification or waiver shall apply equally to each holder of the Notes andshall be binding upon them, upon each future holder of any Note and upon the

 

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Company, whether or not suchNote shall have been marked to indicate such modification or waiver, but anyNote issued thereafter shall bear a notation referring to any such modificationor waiver.  Promptly after obtaining thewritten consent of the holders as herein provided, the Company shall transmit acopy of such modification or waiver to the holders of the Notes at the time outstanding.

 

(c)           Notwithstandinganything to the contrary herein, any modification of the Notes that adverselyaffects the holders of any Senior Indebtedness shall require the prior writtenconsent of such holders (or any agent or trustee that is duly authorized togive such consent).

 

13.           Eventsof Default.  Subject to theprovisions of Section 17 of this Note, if any one or more of the followingevents, herein called “Events of Default,” shall occur (for any reasonwhatsoever, and whether such occurrence shall, on the part of the Company orany of its subsidiaries, be voluntary or involuntary or come about or beeffected by operation of law or pursuant to or in compliance with any judgment,decree or order of a court of competent jurisdiction or any order, rule orregulation of any administrative or other governmental authority) and suchEvent of Default shall be continuing:

 

(i)            defaultshall be made in the payment of the principal of this Note when and as the sameshall become due and payable, whether at maturity or at a date fixed forprepayment (in accordance with the requirements of Section 6) or byacceleration or otherwise;

 

(ii)           defaultshall be made in the payment of any installment of interest on this Noteaccording to its terms when and as the same shall become due and payable andsuch default shall continue for a period of 10 days;

 

(iii)          defaultshall be made in the due observance or performance of any covenant, conditionor agreement on the part of the Company contained in Section 11(i);

 

(iv)          defaultshall be made in the due observance or performance of any other covenant,condition or agreement on the part of the Company to be observed or performedpursuant to the terms hereof or of the Purchase Agreement, and such defaultshall continue for 30 days after written notice thereof, specifying suchdefault and requesting that the same be remedied;

 

(v)           theentry of a decree or order for relief by a court having jurisdiction in thepremises in respect of the Company or any of its subsidiaries in any involuntarycase under the federal bankruptcy laws, as now constituted or hereafteramended, or any other applicable federal or state bankruptcy, insolvency orother similar laws, or appointing a receiver, liquidator, assignee, custodian,trustee, sequestrator (or similar official) of the Company or any of itssubsidiaries for any substantial part of any of their property or ordering thewinding-up or liquidation of any of their affairs and the continuance of anysuch decree or order unstayed and in effect for a period of 60 consecutivedays;

 

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(vi)          thecommencement by the Company or any of its subsidiaries of a voluntary caseunder the federal bankruptcy laws, as now constituted or hereafter amended, orany other applicable federal or state bankruptcy, insolvency or other similarlaws, or the consent by any of them to the appointment of or taking possessionby a receiver, liquidator, assignee, trustee, custodian, sequestrator (or othersimilar official) of the Company or any of its subsidiaries for any substantialpart of any of their property, or the making by any of them of any assignmentfor the benefit of creditors, or the failure of the Company or of any of itssubsidiaries generally to pay its debts as such debts become due, or the takingof corporate action by the Company or any of its subsidiaries in furtherance ofor which might reasonably be expected to result in any of the foregoing;

 

(vii)         default,as defined in any instrument evidencing or under which the Company or any ofits subsidiaries has outstanding at the time any indebtedness for moneyborrowed in excess of $5,000,000 in aggregate principal amount, shall occur andas a result thereof the maturity of any such indebtedness shall have been acceleratedso that the same shall have become due and payable prior to the date on whichthe same would otherwise have become due and payable and such accelerationshall not have been rescinded or annulled within 30 days; or

 

(viii)        finaljudgment for the payment of money in excess of $5,000,000 shall be renderedagainst the Company or any of its subsidiaries and the same shall remainundischarged for a period of 60 days during which execution shall not beeffectively stayed;

 

then, subject to the provisions of Section 17 hereof, the holders of atleast 25% in aggregate principal amount of the Notes at the time outstandingmay, at their option, by a notice in writing to the Company and to the Agent ofthe lenders specified in the Credit Agreement declare this Note to be, and thisNote shall thereupon be and become, immediately due and payable together withinterest accrued thereon, without diligence, presentment, demand, protest orfurther notice of any kind, all of which are expressly waived by the Company tothe extent permitted by law.  TheCompany expressly agrees that this Note, or any payment hereunder, may beextended from time to time and that the holder thereof may accept security forthis Note or release security for this Note, all without in any way affectingthe liability of the Company hereunder.

 

**Withoutlimiting the foregoing, the Company hereby waives any right to trial by jury inany legal proceeding related in any way to this Note and agrees that any suchproceeding may, if the holder so elects, be brought and enforced in the SupremeCourt of the State of New York for New York County or the United StatesDistrict Court for the Southern District of New York and the Company herebywaives any objection to jurisdiction or venue in any such proceeding commencedin such court.  The Company furtheragrees that any process required to be served on it for purposes of any suchproceeding may be served on it, with the same effect as personal service on itwithin the State of New York, by registered mail addressed to it at its officeor agency set forth in paragraph (a) of Section 11 for purposes of noticeshereunder.**

 

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14.           Suitsfor Enforcement.  Subject to theprovisions of Section 17 of this Note, in case any one or more of the Events ofDefault specified in Section 13 of this Note shall happen and be continuing,the holder of this Note may proceed to protect and enforce its rights by suitin equity, action at law and/or by other appropriate proceeding, whether forthe specific performance of any covenant or agreement contained in this Note orin aid of the exercise of any power granted in this Note, or may proceed toenforce the payment of this Note or to enforce any other legal or equitableright of the holder of this Note.

 

In case of any default under this Note, theCompany will pay to the holder hereof such amounts as shall be sufficient tocover the costs and expenses of such holder due to said default, includingwithout limitation collection costs and reasonable attorneys’ fees, to theextent actually incurred.

 

15.           RemediesCumulative.  No remedy hereinconferred upon the holder of this Note is intended to be exclusive of any otherremedy and each and every such remedy shall be cumulative and shall be inaddition to every other remedy given hereunder or now or hereafter existing atlaw or in equity or by statute or otherwise.

 

16.           RemediesNot Waived.  No course of dealingbetween the Company and the holder of this Note or any delay on the part of theholder hereof in exercising any rights hereunder shall operate as a waiver ofany right of the holder of this Note.

 

17.           Subordination.

 

(a)           Anythingcontained in this Note to the contrary notwithstanding, the indebtednessevidenced by the Notes shall be subordinate and junior, to the extent set forthin the following paragraphs (A), (B) and (C), to all Senior Indebtedness of theCompany.  “Senior Indebtedness” shallmean the principal of, premium, if any, and interest (including any interestaccruing subsequent to the filing of a petition of bankruptcy at the rateprovided for in the documentation with respect thereto, whether or not suchinterest is an allowed claim under applicable law) on, and all reasonable fees,reimbursement and indemnity obligations, and all other obligations arising inconnection with, any indebtedness for borrowed money of the Company, contingentor otherwise, now outstanding or created, incurred, issued, assumed orguaranteed in the future, for which, in the case of any particular futureindebtedness, the instrument creating or evidencing the same or pursuant towhich the same is outstanding expressly provides that such indebtedness issenior in right of payment to the Notes. Notwithstanding anything to the contrary herein, Senior Indebtednessshall include all “Obligations” (under and as defined in each of the CreditAgreement); notwithstanding the foregoing, Senior Indebtedness shall includeonly such Obligations until such time as the same are indefeasibly paid in fullin cash and all obligations to provide financial accommodations under theCredit Agreement have terminated.

 

(A)          Inthe event of any insolvency, bankruptcy, liquidation, reorganization or othersimilar proceedings, or any receivership proceedings in connection therewith,relative to the Company or its creditors or its property, and in the event ofany proceedings for voluntary liquidation, dissolution or other

 

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winding up of the Company, whether or notinvolving insolvency or bankruptcy proceedings, then all Senior Indebtednessshall first be paid in full in cash before any payment, whether on account ofprincipal, interest or otherwise, is made upon the Notes.

 

(B)           Inany of the proceedings referred to in paragraph (A) above, any payment ordistribution of any kind or character, whether in cash, property, stock orobligations which may be payable or deliverable in respect of the Notes shallbe paid or delivered directly to the holders of Senior Indebtedness for applicationin payment thereof, unless and until all Senior Indebtedness shall have beenpaid in full in cash.

 

(C)           Nopayment shall be made, directly or indirectly, on account of the Notes uponmaturity of any Senior Indebtedness, whether by lapse of time, acceleration(unless waived) or otherwise, unless and until all principal thereof andinterest thereon and all other obligations in respect thereof shall first bepaid in full in cash and, in the case of maturity of the Senior Indebtednessincurred pursuant to the Credit Agreement, all obligations to provide financialaccommodations under the Credit Agreement have terminated.

 

(b)           Subjectto the payment in full in cash of all Senior Indebtedness as aforesaid, theholders of the Notes shall be subrogated to the rights of the holders of SeniorIndebtedness to receive payments or distributions of any kind or character,whether in cash, property, stock or obligations, which may be payable ordeliverable to the holders of Senior Indebtedness, until the principal of, andinterest on, the Notes shall be paid in full in cash, and, as between theCompany, its creditors other than the holders of Senior Indebtedness, and theholders of the Notes, no such payment or distribution made to the holders ofSenior Indebtedness by virtue of this Section 17 which otherwise would havebeen made to the holder of the Notes shall be deemed a payment by the Companyon account of the Senior Indebtedness, it being understood that the provisionsof this Section 17 are and are intended solely for the purposes of defining therelative rights of the holders of the Notes, on the one hand, and the holdersof the Senior Indebtedness, on the other hand. Subject to the rights, if any, under this Section 17 of holders ofSenior Indebtedness to receive cash, property, stock or obligations otherwisepayable or deliverable to the holders of the Notes, nothing herein shall eitherimpair, as between the Company and the holder of this Note, the obligation ofthe Company, which is unconditional and absolute, to pay to the holder hereofthe principal hereof and interest hereon in accordance with the terms hereof orprevent (except as otherwise specified herein) the holder of this Note fromexercising all remedies otherwise permitted by applicable law or hereunder upondefault hereunder.

 

(c)           Ifany payment or distribution of any character or any security, whether in cash,securities or other property, shall be received by any holders of the Notes incontravention of any of the terms hereof or before all the Senior Indebtednessobligations have been indefeasibly paid in full in cash and all obligations toprovide financial accommodations under the Credit Agreement have terminated,such payment or distribution or security shall be received in trust for thebenefit of, and shall be paid over or delivered and transferred to, the holdersof the

 

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Senior Indebtedness at the timeoutstanding in accordance with the priorities then existing among such holdersfor application to the payment of all Senior Indebtedness remaining unpaid, tothe extent necessary to pay all such Senior Indebtedness in full in cash.  In the event of the failure of any suchholder to endorse or assign any such payment, distribution or security, eachholder of any Senior Indebtedness is hereby irrevocably authorized to endorseor assign the name of such holder.

 

(d)           Therights under these subordination provisions of the holders of any SeniorIndebtedness as against any holders of the Notes shall remain in full force andeffect without regard to, and shall not be impaired or affected by:

 

(i)            anyact or failure to act on the part of the Company; or

 

(ii)           anyextension or indulgence in respect of any payment or prepayment of any SeniorIndebtedness or any part thereof or in respect of any other amount payable toany holder of any Senior Indebtedness; or

 

(iii)          anyamendment, modification or waiver of, or addition or supplement to, or deletionfrom, or compromise, release, consent or other action in respect of, any of theterms of any Senior Indebtedness or any other agreement which may be maderelating to any Senior Indebtedness; or

 

(iv)          anyexercise or non-exercise by the holder of any Senior Indebtedness of any right,power, privilege or remedy under or in respect of such Senior Indebtedness orthese subordination provisions or any waiver of any such right, power,privilege or remedy or of any default in respect of such Senior Indebtedness orthese subordination provisions or any receipt by the holder of any SeniorIndebtedness of any security, or any failure by such holder to perfect asecurity interest in, or any release by such holder of, any security for thepayment of such Senior Indebtedness; or

 

(v)           anymerger or consolidation of the Company or any of its subsidiaries into or withany other person, or any sale, lease or transfer of any or all of the assets ofthe Company or any of its subsidiaries to any other person; or

 

(vi)          absenceof any notice to, or knowledge by, any holder of any claim hereunder of theexistence or occurrence of any of the matters or events set forth in theforegoing clauses (i) through (v).

 

(e)           Theholders of the Notes unconditionally waive (i) notice of any of the mattersreferred to in Section 13; (ii) all notices which may be required, whether bystatute, rule of law or otherwise, to preserve intact any rights of any holderof any Senior Indebtedness, including, without limitation, any demand,presentment and protest, proof of notice of nonpayment under any Senior Indebtednessand notice of any failure on the part of the Company to perform and comply withany covenant, agreement, term or condition of any Senior Indebted-

 

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ness, (iii) any right to theenforcement, assertion or exercise by any holder of any Senior Indebtedness ofany right, power, privilege or remedy conferred in such Senior Indebtedness orotherwise, (iv) any requirements of diligence on the part of any holder of anyof the Senior Indebtedness, (v) any requirement on the part of any holder ofany Senior Indebtedness to mitigate damages resulting from any default undersuch Senior Indebtedness and (vi) any notice of any sale, transfer or otherdisposition of any Senior Indebtedness by any holder thereof.

 

(f)            Theobligations of the holder under these subordination provisions shall continueto be effective, or be reinstated, as the case may be, if at any time anypayment in respect of any Senior Indebtedness, or any other payment to anyholder of any Senior Indebtedness in its capacity as such, is rescinded or mustotherwise be restored or returned by the holder of such Senior Indebtednessupon the occurrence of any proceeding referred to in Section 17(a)(A) or uponor as a result of the appoint of a receiver, intervenor or conservator of, ortrustee or similar officer for, the Company or any substantial part of itsproperty or otherwise, all as though such payment had not been made.

 

18.           CovenantsBind Successors and Assigns.  Allthe covenants, stipulations, promises and agreements in this Note contained byor on behalf of the Company shall bind its successors and assigns, whether soexpressed or not.

 

19.           GoverningLaw**.  This Note shall be governed by and construedin accordance with the laws of the State of New York.**

 

20.           Headings.  The headings of the sections and paragraphsof this Note are inserted for convenience only and do not constitute a part ofthis Note.

 

21.           ThirdParty Beneficiaries.  The provisionsof Section 17 are intended to be for the benefit of, and shall beenforceable directly by each holder of, the Senior Indebtedness.

 

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IN WITNESS WHEREOF, BancTec, Inc. has causedthis Note to be signed in its corporate name by one of its officers thereuntoduly authorized and to be dated as of the day and year first above written.

 

 
|   | BANCTEC, INC. |
|--------|---------------|
|   |          |
|   |          |
|   | By:           | /s/ Raghavan Rajaji |
|   | Name:         | Raghavan Rajaji |
|   | Title:        | Senior Vice President, Treasurer and Chief Financial Officer |

 

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