Document:

EXHIBIT 4.7

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE

SECURITIES ACT

OF 1933 AND MAY NOT BE SOLD, TRANSFERRED OR

OTHERWISE

DISPOSED OF UNLESS REGISTERED UNDER THAT ACT

OR AN EXEMPTION FROM REGISTRATION IS

AVAILABLE.

 

[THIS

NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”)

AS

DEFINED BY SECTION 1273(a)(1) OF THE INTERNAL REVENUE

CODE

OF 1986, AS AMENDED.  THE FOLLOWING

INFORMATION IS

PROVIDED

PURSUANT TO THE INFORMATION REPORTING REQUIREMENTS

SET

FORTH IN TREASURY REGULATION 1.1275-3.

 

THE

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

THE

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

THE

ISSUE DATE OF THIS DEBT INSTRUMENT IS JULY 22, 1999.

THE

PER ANNUM YIELD TO MATURITY OF THIS DEBT INSTRUMENT IS 10.95%

COMPOUNDED

QUARTERLY.]

 

BANCTEC, INC.

 

Senior

Subordinated 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 PARTNERS

III, L.P. (“WCAS CP III”), or registered assigns, the principal sum of ONE

HUNDRED SIXTY MILLION DOLLARS ($160,000,000), on July 22, 2009, and to pay

interest as provided in Section 2 hereof until the principal amount hereof

shall have become due and payable, whether at maturity or by acceleration or

otherwise, and thereafter at the rate of 13% per annum on any overdue principal

amount and (to the extent permitted by applicable law) on any overdue interest

until paid.

 

Subject to the provisions of Section 2

hereof, all payments of principal and interest on this Note shall be in such

coin or currency of the United States of America as at the time of payment

shall be legal tender for payment of public and private debts.  Such payments shall be subject to the

limitations of the Credit Agreement, dated as of July 22, 1999, among the

Company, as borrower, Chase Securities Inc. (“CSI”), as advisor, lead arranger

and book manager, Chase Bank of Texas, N.A. (“Chase” or the “Agent”), as

administrative agent and syndication agent, and the lenders from time to time

party thereto, together with all related documents, including without

limitation all guarantees, security agreements, pledge agreements, mortgages,

other collateral documents and other agreements entered into in connection

therewith

 

 

or in connection with any

restatement, renewal, extension, restructuring, refunding or refinancing

thereof (collectively, the “Credit Agreement”).

 

On any Interest Payment Date (as defined

herein) on or after September 30, 2004, the Company shall pay any amount

of accrued original issue discount on this Note as shall be necessary to ensure

that this Note shall not be considered an “applicable high yield discount

obligation” within the meaning of Section 163(i) of the Internal Revenue Code

of 1986, as amended, or any successor provision; provided, however,

that each such payment shall only be made if also permitted under the Credit

Agreement.  The amount of principal

payable on this Note shall be reduced by the amount of any accrued original

issue discount that is paid pursuant to this paragraph.

 

If any payment on this Note is due on a day

which is not a Business Day, it shall be due on the next succeeding Business

Day.  For purposes of this Note,

“Business Day” shall mean any day other than a Saturday, Sunday or a legal

holiday or day on which banks are authorized or required to be closed in

Chicago or New York.

 

1.             The

Notes.  This Note is issued pursuant

to the Securities Purchase Agreement, dated as of June 17, 1999 (the “Purchase

Agreement”), among Colonial Acquisition Corp., a predecessor in interest to the

Company, WCAS CP III and the several Purchasers named in Schedules I and II

thereto.  As used herein, the term

“Note” or “Notes” includes the Senior Subordinated Note due 2009 of the Company

originally so issued.

 

2.             Interest.  (a) Until the principal amount hereof shall

have become due and payable, the Company shall pay interest (computed on the

basis of a 360-day year consisting of twelve 30-day months) from the date

hereof on the unpaid principal amount hereof at the rate of 10% per annum

quarterly in arrears on March 31, June 30, September 30 and

December 31 of each year (each said day being an “Interest Payment Date”),

commencing on September 30, 1999.

 

(b)           The

holder of this Note may elect at any time prior to any Interest Payment Date to

have the Company satisfy its obligation to pay interest by issuing to the

holder hereof a deferred interest note or notes (the “Deferred Interest

Notes”), dated as of such Interest Payment Date, in a principal amount equal to

the 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 effective

rate of 13% instead of 10%).  The

Deferred Interest Notes shall be in substantially the form hereof and shall

bear an appropriate legend with respect to any original issue discount.

 

3.             Transfer,

Etc. of Notes.  The Company shall

keep at its office or agency maintained as provided in paragraph (a) of Section

11 a register in which the Company shall provide for the registration of this

Note 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 by

its duly authorized attorney, surrender the same for registration of transfer

or exchange at the office or agency of the Company maintained as provided in

Section 11 and, without expense to such holder (except for taxes or

governmental charges imposed in connection therewith), receive in exchange

therefor a Note or Notes each in such denomination or denominations as such

holder may request, dated as of the date to which interest has been paid

 

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on the Note or Notes so

surrendered for transfer or exchange, for the same aggregate principal amount

as the then unpaid principal amount of the Note or Notes so surrendered for

transfer or exchange, and registered in the name of such person or persons as

may be designated by such holder.  Every

Note presented or surrendered for registration of transfer or exchange shall be

duly endorsed, or shall be accompanied by a written instrument of transfer,

satisfactory in form to the Company, duly executed by the holder of such Note

or its attorney duly authorized in writing. 

Every Note so made and delivered in exchange for such Note shall in all

other respects be in the same form and have the same terms as such Note.  No transfer or exchange of any Note shall be

valid 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 holder

thereof reasonably satisfactory to the Company, or, in the case of any such

mutilation, upon surrender and cancellation of this Note, the Company will make

and deliver, in lieu of this Note, a new Note of like tenor and unpaid principal

amount and dated as of the date to which interest has been paid on this Note.

 

5.             Persons

Deemed Owners; Holders.  The Company

may deem and treat the person in whose name any Note is registered as the owner

and holder of such Note for the purpose of receiving payment of principal of

and interest on such Note and for all other purposes whatsoever, whether or not

such Note shall be overdue.  With

respect 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 as

aforesaid at such time.

 

6.             Prepayments.

 

(a)           Optional

Prepayment.  Subject to any

applicable restrictions under the Credit Agreement, the Company may, at its

option, prepay this Note without premium or penalty, as a whole at any time or

in part from time to time in amounts which shall be integral multiples of

$1,000,000.

 

(b)           Mandatory

Prepayment on Change of Control. 

Subject to any applicable restrictions under the Credit Agreement, if at

any time while this Note is outstanding a Change in Control (as hereinafter

defined) shall occur, the Company shall prepay, without penalty or premium, all

principal and interest then outstanding hereunder.

 

(c)           For

purposes of this Section 6, a “Change in Control” shall be deemed to have

occurred if:

 

(i)            any

person 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, together

with any affiliates or related persons thereof, other than any of the

Purchasers named in the Purchase Agreement together with their respective

 

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affiliates, shall beneficially own (for

purposes 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 capital

stock of the Company; or

 

(ii)           any

person or Group, together with any affiliates or related persons thereof, other

than any of the Purchasers named in the Purchase Agreement together with their

respective affiliates, shall succeed in having a majority of its or their

nominees elected to the Board of Directors of the Company; or

 

(iii)          the

Company is a party to any merger or consolidation with any other business

entity, at the conclusion of which transaction the stockholders of the Company

immediately prior to the transaction do not continue to hold a majority of the

total voting capital stock of the successor entity, in substantially the same

proportions, following such transaction; or

 

(iv)          the

Company sells, leases, transfers or otherwise disposes of all or substantially

all of its assets.

 

(d)           In

the 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 the

Credit Agreement, repay some or all of such holders of Senior Indebtedness to

the extent necessary (including, if necessary, payment in full of such Senior

Indebtedness and payment of any prepayment premiums, fees, expenses or

penalties) to permit the prepayment contemplated hereby without such consent.

 

7.             Notice

of Prepayment and Other Notices. 

The Company shall give written notice of any prepayment of this Note or

any portion hereof pursuant to Section 6 not less than 30 nor more than 60

days prior to the date fixed for such prepayment.  Such notice of prepayment and all other notices to be given to

the holder of this Note shall be given by registered or certified mail to the

person in whose name this Note is registered at its address designated on the

register maintained by the Company on the date of mailing such notice of

prepayment or other notice.  Upon notice

of prepayment being given as aforesaid, the Company covenants and agrees that

it will prepay, on the date therein fixed for prepayment, this Note or the

portion hereof, as the case may be, so called for prepayment, at the principal

amount thereof so called for prepayment, together with interest accrued thereon

to the date fixed for such prepayment. 

A prepayment of less than all of the outstanding principal amount of

this Note shall not relieve the Company of its obligation to make scheduled

payments of interest payable in respect of the principal remaining outstanding

on the Interest Payment Dates.

 

8.             Allocation

of All Payments.  In the event of

any partial payment of less than all of the interest then due on the Notes then

outstanding or any prepayment, purchase, redemption or retirement of less than

all of the outstanding Notes, the Company will allocate the amount of interest

so to be paid and the principal amount so to be prepaid, purchased, redeemed or

retired to each Note in proportion, as nearly as may be, to the aggregate

principal amount of all Notes then outstanding.

 

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9.             Interest

After Date Fixed for Prepayment.  If

this Note or a portion hereof is called for prepayment as herein provided, this

Note or such portion shall cease to bear interest on and after the date fixed

for such prepayment unless, upon presentation for such purpose, the Company

shall fail to pay this Note or such portion, as the case may be, in which event

this 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 date

fixed for such prepayment and until paid at the rate per annum provided herein

for overdue principal.

 

10.           Surrender

of Note; Notation Thereon.  Upon any

prepayment of a portion of the principal amount of this Note, the holder

hereof, at its option, may require the Company to execute and deliver at the

expense of the Company (other than for transfer taxes, if any), upon surrender

of this Note, a new Note registered in the name of such person or persons as

may be designated by such holder for the principal amount of this Note then remaining

unpaid, dated as of the date to which the interest has been paid on the

principal amount of this Note then remaining unpaid, or may present this Note

to the Company for notation hereon of the payment of the portion of the

principal amount of this Note so prepaid.

 

11.           Covenants

Relating to the Note.  The Company

covenants and agrees that so long as the Note shall be outstanding:

 

(a)           Maintenance

of Office.  The Company will

maintain an office or agency in such place in the United States of America as

the Company may designate in writing to the registered holder of this Note,

where this Note may be presented for registration of transfer and for exchange

as herein provided, where notices and demands to or upon the Company in respect

of this Note may be served and where this Note may be presented for

payment.  Until the Company otherwise

notifies the holder hereof, said office shall be the principal office of the

Company located at 4851 LBJ Freeway, Suite 1100, Dallas, Texas 75244.

 

(b)           Payment

of Taxes.  The Company will promptly

pay and discharge or cause to be paid and discharged, before the same shall

become in default, all material lawful taxes and assessments imposed upon the

Company or any of its subsidiaries or upon the income and profits of the Company

or any of its material subsidiaries, or upon any property, real, personal or

mixed, belonging to the Company or any of its material subsidiaries, as well as

all 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 or

cause to be paid or discharged any such tax, assessment, charge or claim whose

amount, applicability or validity is being contested in good fath by

appropriate proceedings and for which disputed amounts adequate reserves have

been established in accordance with GAAP.

 

(c)           Corporate

Existence.  The Company will do or

cause to be done all things necessary and lawful to preserve and keep in full

force and effect its corporate existence, rights and franchises and the

corporate existence, rights and franchises of each of its material

subsidiaries; provided, however, that the Company shall not be

required to preserve, with respect to itself, any right or franchise, and with

respect to any material subsidiary, its existence or any

 

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such right or franchise, if the

Board of Directors of the Company shall determine that the preservation thereof

is no longer desirable in the conduct of the business of such entity.

 

(d)           Maintenance

of Property.  The Company will at

all times maintain and keep, or cause to be maintained and kept, in good

repair, working order and condition all significant properties of the Company

and its subsidiaries used in the conduct of its business, and will from time to

time make or cause to be made all needful and proper repairs, renewals,

replacements, betterments and improvements thereto, so that its business may be

properly and advantageously conducted at all times; provided, however,

that nothing in this paragraph (d) shall prevent the Company from discontinuing

any operation or maintenance of any of such properties, or disposing of any of

them, if such discontinuance or disposal is, in the judgment of the Board of

Directors of the Company, desirable in the conduct of the business of such

entity.

 

(e)           Insurance.  The Company will, and will cause each of its

subsidiaries to, (i) keep adequately insured, by financially sound and

reputable insurers, all property of a character usually insured by corporations

engaged in the same or a similar business similarly situated against loss or

damage 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 are

available at reasonable expense and to the extent believed advisable in the

good faith business judgment of the Company.

 

(f)            Keeping

of Books.  The Company will at all

times keep, and cause each of its subsidiaries to keep, proper books of record

and account in which proper entries will be made of its transactions in

accordance with generally accepted accounting principles consistently applied.

 

(g)           Notice

of Default.  If any one or more

events which constitute, or which with notice or lapse of time or both would

constitute, an Event of Default under Section 13 shall occur, the Company

shall, 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)           Financial

Reporting.  The Company shall

furnish to the holder hereof:

 

(i)            within

90 days after the end of each fiscal year of the Company, a consolidated

balance sheet of the Company and its subsidiaries as of the end of such fiscal

year and the related consolidated statements of operations, changes in

stockholders’ equity and changes in financial position of the Company and its subsidiaries

for the fiscal year then ended, together with supporting notes thereto,

certified without qualification as to scope of audit by a firm of independent

certified public accountants of recognized national standing selected by the

Board of Directors of the Company;

 

(ii)           within

45 days after the end of each quarter in each fiscal year (other than the last

quarter in each fiscal year), a consolidated balance sheet of the Company and

its subsidiaries and the related consolidated statements of operations, changes

in stockholders’ equity and changes in financial position of

 

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the Company and its subsidiaries for the

quarter then ended, unaudited but certified by the principal financial officer

of the Company, such balance sheet to be as of the end of such quarter and such

statements of operations, changes in stockholders’ equity and changes in

financial position to be for such quarter and for the period from the beginning

of the fiscal year to the end of such quarter, in each case subject to normal

year-end adjustments;

 

(iii)          within

30 days after the end of each month in each fiscal year, a consolidated balance

sheet of the Company and its subsidiaries and the related consolidated

statement of operations for the month then ended, unaudited but certified by

the principal financial officer of the Company, such balance sheet to be as of

the end of such month and such statement of operations to be for such month and

for 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)          promptly

upon filing, copies of all registration statements, prospectuses, periodic

reports and other documents filed by the Company with the Securities and Exchange

Commission; 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 holder

hereof may reasonably request, subject to such confidentiality agreements as

the Company may reasonably request.

 

(i)            Consolidation,

Merger and Sale.  The Company will

not consolidate or merge with or into, or sell or otherwise dispose of all or

substantially all of its property to, any other corporation or other entity,

unless:

 

(i)            in

the event of any such transaction which constitutes a Change in Control (as

defined in Section 6 hereof), and in connection with which the Company for any

reason shall not prepay all principal and interest then outstanding under this

Note (whether or not prepayment is restricted by the Credit Agreement) the

Company shall have obtained the written consent of the holders of at least a

majority of the aggregate principal amount then outstanding under the Notes;

 

(ii)           the

surviving corporation or other entity (if other than the Company) shall

expressly and effectively assume in writing the due and punctual payment of the

principal of and interest on this Note, according to its tenor, and the due and

punctual performance and observance of all the terms, covenants, agreements and

conditions of this Note to be performed or observed by the Company to the same

extent as if such surviving corporation had been the original maker of this

Note; and

 

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(iii)          the

Company or such other corporation or other entity shall not otherwise be in

default in the performance or observance of any covenant, agreement or

condition of this Note or the Purchase Agreement.

 

(j)            Restricted

Payments.  The Company will not, and

will not permit any of its subsidiaries to: (i) declare or pay any dividends

on, or make any other distribution or payment on account of, or redeem, retire,

purchase or otherwise acquire for value, directly or indirectly, any shares of

any class of stock of the Company, whether now or hereafter outstanding, or

make any other distribution in respect thereof, either directly or indirectly,

whether in cash, property or in obligations of the Company or any of its

subsidiaries, except for (A) distributions of shares of the same class or of a

different 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 to

any wholly-owned subsidiary of the Company, (D) distributions pro rata to

the stockholders, members, partners or other equity holders of less than

wholly-owned subsidiaries of the Company approved by members of the Company=s

Board of Directors, or (E) repurchases of shares of any class of stock of the

Company from employees upon their termination of employment, or (ii) except as

permitted under the Credit Agreement, make any payments of principal of, or

retire, redeem, purchase or otherwise acquire any indebtedness for money

borrowed other than any Senior Indebtedness (as defined in Section 17) or the

Notes (such declarations, payments, purchases, redemptions, retirements,

acquisitions or distributions being herein called ARestricted Payments@).

 

12.           Modification

by Holders; Waiver.

 

(a)           The

Company may, with the written consent of the holders of not less than a

majority in principal amount of the Notes then outstanding, modify the terms

and provisions of this Note or the rights of the holders of this Note or the

obligations of the Company hereunder, and the observance by the Company of any

term or provision of this Note may be waived with the written consent of the

holders of not less than a majority in principal amount of the Notes then

outstanding; provided, however, that no such modification or

waiver shall:

 

(i)            change

the maturity of any Note, reduce the principal amount thereof or reduce the

rate or extend the time of payment of interest thereon without the consent of

the holder of each Note so affected; or

 

(ii)           give

any Note any preference over any other Note, including, without limitation, by

amending the allocation provisions of Section 8 hereof; or

 

(iii)          reduce

the percentage of principal amount outstanding under any Note, the consent of

the holder of which is required for any such modification; or

 

(iv)          amend

the provisions of Section 17 hereof in any manner adverse to the interests of

the holder of this Note;

 

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

 

(b)           Any

such modification or waiver shall apply equally to each holder of the Notes and

shall be binding upon them, upon each future holder of any Note and upon the

 

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Company, whether or not such

Note shall have been marked to indicate such modification or waiver, but any

Note issued thereafter shall bear a notation referring to any such modification

or waiver.  Promptly after obtaining the

written consent of the holders as herein provided, the Company shall transmit a

copy of such modification or waiver to the holders of the Notes at the time outstanding.

 

(c)           Notwithstanding

anything to the contrary herein, any modification of the Notes that adversely

affects the holders of any Senior Indebtedness shall require the prior written

consent of such holders (or any agent or trustee that is duly authorized to

give such consent).

 

13.           Events

of Default.  Subject to the

provisions of Section 17 of this Note, if any one or more of the following

events, herein called “Events of Default,” shall occur (for any reason

whatsoever, and whether such occurrence shall, on the part of the Company or

any of its subsidiaries, be voluntary or involuntary or come about or be

effected 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 or

regulation of any administrative or other governmental authority) and such

Event of Default shall be continuing:

 

(i)            default

shall be made in the payment of the principal of this Note when and as the same

shall become due and payable, whether at maturity or at a date fixed for

prepayment (in accordance with the requirements of Section 6) or by

acceleration or otherwise;

 

(ii)           default

shall be made in the payment of any installment of interest on this Note

according to its terms when and as the same shall become due and payable and

such default shall continue for a period of 10 days;

 

(iii)          default

shall be made in the due observance or performance of any covenant, condition

or agreement on the part of the Company contained in Section 11(i);

 

(iv)          default

shall 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 performed

pursuant to the terms hereof or of the Purchase Agreement, and such default

shall continue for 30 days after written notice thereof, specifying such

default and requesting that the same be remedied;

 

(v)           the

entry of a decree or order for relief by a court having jurisdiction in the

premises in respect of the Company or any of its subsidiaries in any involuntary

case under the federal bankruptcy laws, as now constituted or hereafter

amended, or any other applicable federal or state bankruptcy, insolvency or

other similar laws, or appointing a receiver, liquidator, assignee, custodian,

trustee, sequestrator (or similar official) of the Company or any of its

subsidiaries for any substantial part of any of their property or ordering the

winding-up or liquidation of any of their affairs and the continuance of any

such decree or order unstayed and in effect for a period of 60 consecutive

days;

 

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(vi)          the

commencement by the Company or any of its subsidiaries of a voluntary case

under the federal bankruptcy laws, as now constituted or hereafter amended, or

any other applicable federal or state bankruptcy, insolvency or other similar

laws, or the consent by any of them to the appointment of or taking possession

by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other

similar official) of the Company or any of its subsidiaries for any substantial

part of any of their property, or the making by any of them of any assignment

for the benefit of creditors, or the failure of the Company or of any of its

subsidiaries generally to pay its debts as such debts become due, or the taking

of corporate action by the Company or any of its subsidiaries in furtherance of

or 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 of

its subsidiaries has outstanding at the time any indebtedness for money

borrowed in excess of $5,000,000 in aggregate principal amount, shall occur and

as a result thereof the maturity of any such indebtedness shall have been accelerated

so that the same shall have become due and payable prior to the date on which

the same would otherwise have become due and payable and such acceleration

shall not have been rescinded or annulled within 30 days; or

 

(viii)        final

judgment for the payment of money in excess of $5,000,000 shall be rendered

against the Company or any of its subsidiaries and the same shall remain

undischarged for a period of 60 days during which execution shall not be

effectively stayed;

 

then, subject to the provisions of Section 17 hereof, the holders of at

least 25% in aggregate principal amount of the Notes at the time outstanding

may, at their option, by a notice in writing to the Company and to the Agent of

the lenders specified in the Credit Agreement declare this Note to be, and this

Note shall thereupon be and become, immediately due and payable together with

interest accrued thereon, without diligence, presentment, demand, protest or

further notice of any kind, all of which are expressly waived by the Company to

the extent permitted by law.  The

Company expressly agrees that this Note, or any payment hereunder, may be

extended from time to time and that the holder thereof may accept security for

this Note or release security for this Note, all without in any way affecting

the liability of the Company hereunder.

 

Without

limiting the foregoing, the Company hereby waives any right to trial by jury in

any legal proceeding related in any way to this Note and agrees that any such

proceeding may, if the holder so elects, be brought and enforced in the Supreme

Court of the State of New York for New York County or the United States

District Court for the Southern District of New York and the Company hereby

waives any objection to jurisdiction or venue in any such proceeding commenced

in such court.  The Company further

agrees that any process required to be served on it for purposes of any such

proceeding may be served on it, with the same effect as personal service on it

within the State of New York, by registered mail addressed to it at its office

or agency set forth in paragraph (a) of Section 11 for purposes of notices

hereunder.

 

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14.           Suits

for Enforcement.  Subject to the

provisions of Section 17 of this Note, in case any one or more of the Events of

Default 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 suit

in equity, action at law and/or by other appropriate proceeding, whether for

the specific performance of any covenant or agreement contained in this Note or

in aid of the exercise of any power granted in this Note, or may proceed to

enforce the payment of this Note or to enforce any other legal or equitable

right of the holder of this Note.

 

In case of any default under this Note, the

Company will pay to the holder hereof such amounts as shall be sufficient to

cover the costs and expenses of such holder due to said default, including

without limitation collection costs and reasonable attorneys’ fees, to the

extent actually incurred.

 

15.           Remedies

Cumulative.  No remedy herein

conferred upon the holder of this Note is intended to be exclusive of any other

remedy and each and every such remedy shall be cumulative and shall be in

addition to every other remedy given hereunder or now or hereafter existing at

law or in equity or by statute or otherwise.

 

16.           Remedies

Not Waived.  No course of dealing

between the Company and the holder of this Note or any delay on the part of the

holder hereof in exercising any rights hereunder shall operate as a waiver of

any right of the holder of this Note.

 

17.           Subordination.

 

(a)           Anything

contained in this Note to the contrary notwithstanding, the indebtedness

evidenced by the Notes shall be subordinate and junior, to the extent set forth

in the following paragraphs (A), (B) and (C), to all Senior Indebtedness of the

Company.  “Senior Indebtedness” shall

mean the principal of, premium, if any, and interest (including any interest

accruing subsequent to the filing of a petition of bankruptcy at the rate

provided for in the documentation with respect thereto, whether or not such

interest is an allowed claim under applicable law) on, and all reasonable fees,

reimbursement and indemnity obligations, and all other obligations arising in

connection with, any indebtedness for borrowed money of the Company, contingent

or otherwise, now outstanding or created, incurred, issued, assumed or

guaranteed in the future, for which, in the case of any particular future

indebtedness, the instrument creating or evidencing the same or pursuant to

which the same is outstanding expressly provides that such indebtedness is

senior in right of payment to the Notes. 

Notwithstanding anything to the contrary herein, Senior Indebtedness

shall include all “Obligations” (under and as defined in each of the Credit

Agreement); notwithstanding the foregoing, Senior Indebtedness shall include

only such Obligations until such time as the same are indefeasibly paid in full

in cash and all obligations to provide financial accommodations under the

Credit Agreement have terminated.

 

(A)          In

the event of any insolvency, bankruptcy, liquidation, reorganization or other

similar proceedings, or any receivership proceedings in connection therewith,

relative to the Company or its creditors or its property, and in the event of

any proceedings for voluntary liquidation, dissolution or other

 

11

 

winding up of the Company, whether or not

involving insolvency or bankruptcy proceedings, then all Senior Indebtedness

shall first be paid in full in cash before any payment, whether on account of

principal, interest or otherwise, is made upon the Notes.

 

(B)           In

any of the proceedings referred to in paragraph (A) above, any payment or

distribution of any kind or character, whether in cash, property, stock or

obligations which may be payable or deliverable in respect of the Notes shall

be paid or delivered directly to the holders of Senior Indebtedness for application

in payment thereof, unless and until all Senior Indebtedness shall have been

paid in full in cash.

 

(C)           No

payment shall be made, directly or indirectly, on account of the Notes upon

maturity of any Senior Indebtedness, whether by lapse of time, acceleration

(unless waived) or otherwise, unless and until all principal thereof and

interest thereon and all other obligations in respect thereof shall first be

paid in full in cash and, in the case of maturity of the Senior Indebtedness

incurred pursuant to the Credit Agreement, all obligations to provide financial

accommodations under the Credit Agreement have terminated.

 

(b)           Subject

to the payment in full in cash of all Senior Indebtedness as aforesaid, the

holders of the Notes shall be subrogated to the rights of the holders of Senior

Indebtedness to receive payments or distributions of any kind or character,

whether in cash, property, stock or obligations, which may be payable or

deliverable to the holders of Senior Indebtedness, until the principal of, and

interest on, the Notes shall be paid in full in cash, and, as between the

Company, its creditors other than the holders of Senior Indebtedness, and the

holders of the Notes, no such payment or distribution made to the holders of

Senior Indebtedness by virtue of this Section 17 which otherwise would have

been made to the holder of the Notes shall be deemed a payment by the Company

on account of the Senior Indebtedness, it being understood that the provisions

of this Section 17 are and are intended solely for the purposes of defining the

relative rights of the holders of the Notes, on the one hand, and the holders

of the Senior Indebtedness, on the other hand. 

Subject to the rights, if any, under this Section 17 of holders of

Senior Indebtedness to receive cash, property, stock or obligations otherwise

payable or deliverable to the holders of the Notes, nothing herein shall either

impair, as between the Company and the holder of this Note, the obligation of

the Company, which is unconditional and absolute, to pay to the holder hereof

the principal hereof and interest hereon in accordance with the terms hereof or

prevent (except as otherwise specified herein) the holder of this Note from

exercising all remedies otherwise permitted by applicable law or hereunder upon

default hereunder.

 

(c)           If

any 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 in

contravention of any of the terms hereof or before all the Senior Indebtedness

obligations have been indefeasibly paid in full in cash and all obligations to

provide financial accommodations under the Credit Agreement have terminated,

such payment or distribution or security shall be received in trust for the

benefit of, and shall be paid over or delivered and transferred to, the holders

of the

 

12

 

Senior Indebtedness at the time

outstanding in accordance with the priorities then existing among such holders

for application to the payment of all Senior Indebtedness remaining unpaid, to

the extent necessary to pay all such Senior Indebtedness in full in cash.  In the event of the failure of any such

holder to endorse or assign any such payment, distribution or security, each

holder of any Senior Indebtedness is hereby irrevocably authorized to endorse

or assign the name of such holder.

 

(d)           The

rights under these subordination provisions of the holders of any Senior

Indebtedness as against any holders of the Notes shall remain in full force and

effect without regard to, and shall not be impaired or affected by:

 

(i)            any

act or failure to act on the part of the Company; or

 

(ii)           any

extension or indulgence in respect of any payment or prepayment of any Senior

Indebtedness or any part thereof or in respect of any other amount payable to

any holder of any Senior Indebtedness; or

 

(iii)          any

amendment, modification or waiver of, or addition or supplement to, or deletion

from, or compromise, release, consent or other action in respect of, any of the

terms of any Senior Indebtedness or any other agreement which may be made

relating to any Senior Indebtedness; or

 

(iv)          any

exercise 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 or

these subordination provisions or any waiver of any such right, power,

privilege or remedy or of any default in respect of such Senior Indebtedness or

these subordination provisions or any receipt by the holder of any Senior

Indebtedness of any security, or any failure by such holder to perfect a

security interest in, or any release by such holder of, any security for the

payment of such Senior Indebtedness; or

 

(v)           any

merger or consolidation of the Company or any of its subsidiaries into or with

any other person, or any sale, lease or transfer of any or all of the assets of

the Company or any of its subsidiaries to any other person; or

 

(vi)          absence

of any notice to, or knowledge by, any holder of any claim hereunder of the

existence or occurrence of any of the matters or events set forth in the

foregoing clauses (i) through (v).

 

(e)           The

holders of the Notes unconditionally waive (i) notice of any of the matters

referred to in Section 13; (ii) all notices which may be required, whether by

statute, rule of law or otherwise, to preserve intact any rights of any holder

of any Senior Indebtedness, including, without limitation, any demand,

presentment and protest, proof of notice of nonpayment under any Senior Indebtedness

and notice of any failure on the part of the Company to perform and comply with

any covenant, agreement, term or condition of any Senior Indebted-

 

13

 

ness, (iii) any right to the

enforcement, assertion or exercise by any holder of any Senior Indebtedness of

any right, power, privilege or remedy conferred in such Senior Indebtedness or

otherwise, (iv) any requirements of diligence on the part of any holder of any

of the Senior Indebtedness, (v) any requirement on the part of any holder of

any Senior Indebtedness to mitigate damages resulting from any default under

such Senior Indebtedness and (vi) any notice of any sale, transfer or other

disposition of any Senior Indebtedness by any holder thereof.

 

(f)            The

obligations of the holder under these subordination provisions shall continue

to be effective, or be reinstated, as the case may be, if at any time any

payment in respect of any Senior Indebtedness, or any other payment to any

holder of any Senior Indebtedness in its capacity as such, is rescinded or must

otherwise be restored or returned by the holder of such Senior Indebtedness

upon the occurrence of any proceeding referred to in Section 17(a)(A) or upon

or as a result of the appoint of a receiver, intervenor or conservator of, or

trustee or similar officer for, the Company or any substantial part of its

property or otherwise, all as though such payment had not been made.

 

18.           Covenants

Bind Successors and Assigns.  All

the covenants, stipulations, promises and agreements in this Note contained by

or on behalf of the Company shall bind its successors and assigns, whether so

expressed or not.

 

19.           Governing

Law.  This Note shall be governed by and construed

in accordance with the laws of the State of New York.

 

20.           Headings.  The headings of the sections and paragraphs

of this Note are inserted for convenience only and do not constitute a part of

this Note.

 

21.           Third

Party Beneficiaries.  The provisions

of Section 17 are intended to be for the benefit of, and shall be

enforceable directly by each holder of, the Senior Indebtedness.

 

14

 

IN WITNESS WHEREOF, BancTec, Inc. has caused

this Note to be signed in its corporate name by one of its officers thereunto

duly 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

  

 

15Exhibit 10.9

 

500 West Monroe Street

Chicago, Illinois 60661

312-441-7000

Fax: 312-441-7367

[Heller

Financial Logo]

 

 

December 31, 2001

 

 

Via Facsimile (972) 579-6448

 

 

BANCTEC, INC.

2701 East Grauwyler Road

Building #3

Irving, Texas 75061

Attention: Chief Financial Officer

 

Re:

LOAN AND SECURITY AGREEMENT—WAIVER AND CONSENT RELATING TO BTC INTERNATIONAL

HOLDINGS TRANSACTION

 

Ladies and Gentleman:

 

                Reference

is hereby made to that certain Loan and Security Agreement by and among

BANCTEC, INC., a Delaware corporation, (“Borrower’’), the financial institution(s) listed on the

signature pages hereof, and their respective successors and Eligible Assignees

(“Lender”) and HELLER

FINANCIAL, INC., a Delaware corporation (“Agent”), as Agent for the Lender, dated as of May 30,

2001, as amended by that certain First Amendment to Loan and Security Agreement

dated as of November 8, 2001, executed by Borrower, Lender and Agent (as

amended or otherwise modified in writing, the “Loan Agreement”). Unless otherwise indicated, all terms used

herein shall have the same meanings as in the Loan Agreement.

 

                Borrower

has requested (i) permission from Agent and Lender to consummate the following

transactions (the “Transactions”):

creation of a new, wholly owned Subsidiary, BTC International Holdings, Inc. (“BTC International”), to be

organized in the state of Delaware and contribution by Borrower to BTC

International of the capital stock of BancTec (Canada), Inc., BancTec Limited,

Plexus Europe Limited, BancTec Japan, Inc., and BancTec Holding N.V. (the “Foreign Subsidiaries”) to BTC

International, (ii) that the Agent and Lender waive the covenants embodied in Sections 7.3, 7.6 and 7.11 of the Loan Agreement to the

extent that such covenants would be deemed violated solely due to the consummation

of the Transactions and (iii) that the Agent and Lender waive the covenant

embodied in Section 5.15 of

the Loan Agreement to the extent that such covenant requires Borrower to

deliver the stock certificate of BancTec Holding N.V.

 

 

1

 

 

                Subject

to the terms, conditions and provisions of this letter, each of Lender and

Agent hereby (i) consents to the consummation of the Transactions, (ii) waives

the covenants embodied in Sections

7.3, 7.6 and 7.11 of the Loan Agreement to the

extent such covenants would be deemed violated solely due to the consummation

of the Transactions and (iii) waives the covenant embodied in Section 5.15 to the extent that

such covenant requires the Borrower to deliver the stock certificate of BancTec

Holding N.V. Notwithstanding the foregoing Lender’s and Agent’s consent, waiver

and agreement herein is subject to the satisfaction of the following

conditions:

 

i.                  Agent shall

have received a copy of this letter agreement duly and validly executed by

Borrower;

 

ii.               Agent shall

have received a copy of the Capital Contribution Agreements, dated as of

December 31, 2001 and January 31, 2002, by and between Borrower and BTC

International and all documentation executed and issued in connection with the

Transactions;

 

iii.            Agent shall

have received (A) an Amended and Restated Pledge Agreement executed by

Borrower, in favor of Agent, for the benefit of Lender, whereby Borrower

pledges all the issued and outstanding capital stock of BTC International,

together with duly executed stock powers and all original stock certificates,

(B) a Pledge Agreement and Pledge Amendment executed by BTC International, in

favor of Agent, for the benefit of Lender, whereby Borrower pledges 65% of the

issued and outstanding capital stock of each Foreign Subsidiary, together with

duly executed stock powers and originals of the relevant stock certificates, if

applicable, (C) a Guaranty Agreement executed by BTC International in favor of

Agent and Lender, whereby BTC International guarantees payment of the

Obligations, and (D) a Security Agreement executed by BTC International, in

favor of Agent, for the benefit of Lender, whereby BTC International grants a

first priority lien in such assets of BTC International as shall be required by

Agent, together with such executed UCC-1 Financing Statements as shall be

required by Agent, all such agreements to be in form and substance satisfactory

to Agent;

 

iv.           Agent shall

have received, no later than January 31, 2002, a legal opinion from Borrower’s

legal counsel in connection with the Transaction; and

 

v.              such other

items as Agent shall reasonably request by January 31, 2002.

 

                Borrower

hereby represents and warrants that no stock certificate was issued to Borrower

evidencing all of the outstanding capital stock of BancTec Holding N.V. under

Dutch law. Borrower hereby agrees that if at anytime such stock certificate is

issued to BTC International pursuant to Dutch law, Borrower will cause BTC

International to deliver the stock certificate to Agent within ten days of such

issuance, together with a stock power duly executed in blank by BTC

International. Borrower further agrees to cause BTC International to take all

steps necessary under Dutch law to effectuate in favor of Agent a valid and

first priority lien in 65% of the capital stock of BancTec Holding N.V.

 

 

2

 

                Borrower

is hereby notified that irrespective of (i) any waivers previously granted by

Agent or Lender regarding the Loan Agreement and the Loan Documents, (ii) any

previous failures or delays of Agent or Lender in exercising any right, power

or privilege under the Loan Agreement or the Loan Documents, or (iii) any

previous failures or delays of Agent or Lender in the monitoring or in the

requiring of compliance by Borrower with the duties, obligations, and

agreements of Borrower in the Loan Agreement and the Loan Documents, hereafter

Borrower will be expected to comply strictly with its duties, obligations and

agreements under the Loan Agreement and the Loan Documents.

 

                The

consent, waiver and agreement detailed herein are strictly limited to the

Transactions described above and to the Sections of the Loan Agreement

described above.

 

                Except

as expressly provided above, nothing contained in this letter or any other

communication between Agent and/or Lender and Borrower shall be a waiver of any

past, present or future violation, default or Event of Default of Borrower

under the Loan Agreement or any Loan Documents.  Similarly, each of Agent and Lender hereby expressly reserve any

rights, privileges and remedies under the Loan Agreement and each Loan Document

that Agent or Lender may have with respect to each violation, default or Event

of Default, and any failure by Agent or Lender to exercise any right, privilege

or remedy as a result of the violation set forth above shall not directly or

indirectly in any way whatsoever either (i) impair, prejudice or otherwise

adversely affect the rights of Agent or Lender, except as set forth herein, at

any time to exercise any right, privilege or remedy in connection with the Loan

Agreement or any Loan Documents, (ii) amend or alter any provision of the Loan

Agreement or any Loan Documents or any other contract or instrument, or (iii) constitute

any course of dealing or other basis for altering any obligation of Borrower or

any rights, privilege or remedy of Agent under the Loan Agreement or any Loan

Documents or any other contract or instrument. 

Nothing in this letter shall be construed to be a consent by Agent or

Lender to any prior, existing or future violations of the Loan Agreement or any

Loan Document or to any other transaction involving Borrower.

 

[Remainder

of Page Intentionally Left Blank]

 

 

3

 

                Please

acknowledge your agreement to the terms and conditions of this letter by

executing it in the space below and returning it to the undersigned.

 

	

   

  	

   

  	

   

  	

   

  	

  Very truly yours,

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  HELLER FINANCIAL, INC.,

  as Agent and Lender 

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  By:

  	

  /s/ Elizabeth Geannopulos

  
	

   

  	

   

  	

   

  	

   

  	

  Name:

  	

  Elizabeth Geannopulos

  
	

   

  	

   

  	

   

  	

   

  	

  Title:

  	

  Senior Vice President

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  AGREED TO AND ACCEPTED:

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  BANCTEC,

  INC.

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Brian R. Stone

  	

   

  	

   

  	

   

  	

   

  
	

  Name:

  	

  Brian R. Stone

  	

   

  	

   

  	

   

  	

   

  
	

  Title:

  	

  Chief Financial Officer

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

  cc.

  	

  Via Facsimile (212)

  841-5725

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Reboul, MacMurray, Hewitt,

  Maynard & Kristol

  	

   

  	

   

  
	

   

  	

  45 Rockefeller Plaza

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  New York, New York  10111

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Attn:  Steven R. Rutkovsky, Esq.

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Via Facsimile (312)

  441-6876

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Heller Financial, Inc.

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  500 West Monroe

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Chicago, Illinois  60661

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Attn:  Legal Services/HCF-BancTec, Inc.

  	

   

  	

   

  
									

 

 

4

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