Exhibit 4.1
================================================================================
CREDIT AGREEMENT
Dated as of July 15, 1999
by and between
GLOBAL PAYMENT TECHNOLOGIES, INC.
and
THE CHASE MANHATTAN BANK
================================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS............................................. 1
SECTION 1.01. Definitions........................................... 1
SECTION 1.02. Terms Generally...................................... 14
ARTICLE II
LOANS....................................................................... 15
SECTION 2.01. Revolving Credit Loans............................... 15
SECTION 2.02. Revolving Credit Note................................ 16
SECTION 2.03. Term Loan............................................ 16
SECTION 2.04. Term Note............................................ 16
ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS........................................................... 17
SECTION 3.01. Interest Rate; Continuation and Conversion of Loans.. 17
SECTION 3.02. Use of Proceeds...................................... 19
SECTION 3.03. Prepayments.......................................... 20
SECTION 3.04. Fees................................................. 20
SECTION 3.05. Inability to Determine Interest Rate................. 21
SECTION 3.06. Illegality........................................... 21
SECTION 3.07. Increased Costs...................................... 21
SECTION 3.08. Indemnity. .......................................... 23
SECTION 3.09. Taxes................................................ 23
SECTION 3.10. Payments............................................. 24
SECTION 3.11. Disbursement of Loans................................ 24
ARTICLE IV
REPRESENTATIONS AND WARRANTIES.............................................. 24
SECTION 4.01. Organization, Powers. .............................. 24
SECTION 4.02. Authorization of Borrowing, Enforceable Obligations.. 25
SECTION 4.03. Financial Condition.................................. 25
SECTION 4.04. Taxes................................................ 26
SECTION 4.05. Title to Properties.................................. 26
SECTION 4.06. Litigation........................................... 26
SECTION 4.07. Agreements........................................... 27
SECTION 4.08. Compliance with ERISA................................ 27
SECTION 4.09. Federal Reserve Regulations; Use of Proceeds......... 27
SECTION 4.10. Approval............................................. 28
SECTION 4.11. Direct Affiliates.................................... 28
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SECTION 4.12. Hazardous Materials.................................. 28
SECTION 4.13. Investment Company Act............................... 28
SECTION 4.14. No Default........................................... 28
SECTION 4.15. Material Contracts................................... 28
SECTION 4.16. Permits and Licenses................................. 29
SECTION 4.17. Compliance with Law.................................. 29
SECTION 4.18. Y2K.................................................. 29
SECTION 4.19. Disclosure........................................... 29
SECTION 4.20. Pledge Agreements.................................... 29
ARTICLE V
CONDITIONS OF LENDING....................................................... 29
SECTION 5.01. Conditions to Initial Extension of Credit............ 29
SECTION 5.02. Conditions to All Extensions of Credit............... 32
ARTICLE VI
AFFIRMATIVE COVENANTS....................................................... 32
SECTION 6.01. Existence, Properties, Insurance..................... 32
SECTION 6.02. Payment of Indebtedness and Taxes.................... 33
SECTION 6.03. Financial Statements, Reports, etc................... 33
SECTION 6.04. Books and Records; Access to Premises................ 35
SECTION 6.05. Notice of Adverse Change............................. 35
SECTION 6.06. Notice of Default.................................... 35
SECTION 6.07. Notice of Litigation................................. 35
SECTION 6.08. Notice of Default in Other Agreements................ 35
SECTION 6.09. Notice of ERISA Event................................ 36
SECTION 6.10. Notice of Environmental Law Violations............... 36
SECTION 6.11. Notice Regarding Material Contracts.................. 36
SECTION 6.12. Compliance with Applicable Laws...................... 36
SECTION 6.13. Direct Affiliates.................................... 36
SECTION 6.14. Environmental Laws................................... 37
SECTION 6.15. Legal Charge......................................... 37
ARTICLE VII
NEGATIVE COVENANTS.......................................................... 38
SECTION 7.01. Liens................................................ 38
SECTION 7.02. Indebtedness......................................... 39
SECTION 7.03. Guaranties........................................... 40
SECTION 7.04. Sale of Assets....................................... 41
SECTION 7.05. Sales of Receivables................................. 41
SECTION 7.06. Loans and Investments................................ 41
SECTION 7.07. Nature of Business................................... 42
SECTION 7.08. Sale and Leaseback................................... 42
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SECTION 7.09. Federal Reserve Regulations.......................... 42
SECTION 7.10. Accounting Policies and Procedures................... 42
SECTION 7.11. Hazardous Materials.................................. 42
SECTION 7.12. Limitations on Fundamental Changes................... 42
SECTION 7.13. Financial Covenants.................................. 43
SECTION 7.14. Subordinated Debt.................................... 43
SECTION 7.15. Dividends............................................ 44
SECTION 7.16. Transactions with Affiliates......................... 44
ARTICLE VIII
EVENTS OF DEFAULT........................................................... 44
SECTION 8.01. Events of Default.................................... 44
ARTICLE IX
MISCELLANEOUS............................................................... 47
SECTION 9.01. Notices.............................................. 47
SECTION 9.02. Effectiveness; Survival.............................. 48
SECTION 9.03. Expenses............................................. 48
SECTION 9.04. Successors and Assigns; Participations............... 48
SECTION 9.05. No Waiver; Cumulative Remedies....................... 49
SECTION 9.06. APPLICABLE LAW....................................... 49
SECTION 9.07. SUBMISSION TO JURISDICTION........................... 49
SECTION 9.08. Severability......................................... 50
SECTION 9.09. Right of Setoff...................................... 50
SECTION 9.10. Headings............................................. 50
SECTION 9.11. Construction......................................... 50
SECTION 9.12. Counterparts......................................... 50
SCHEDULES
Schedule I - Existing Liens
Schedule II - Pre-Existing Indebtedness
Schedule III - Existing Guarantees
Schedule IV - Material Contracts
Schedule V - Subsidiaries and other Direct Affiliates
Schedule VI - Existing Direct Affiliate Investments
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note
Exhibit C-1 - Form of Unlimited Corporate Guaranty
Exhibit C-2 - Form of Limited Corporate Guaranty
Exhibit D - Form of Pledge Agreement
Exhibit E - Form of Opinion of Counsel
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CREDIT AGREEMENT dated as of July 15, 1999, by and among GLOBAL PAYMENT
TECHNOLOGIES, INC., a Delaware corporation (the "Company") and THE CHASE
MANHATTAN BANK, a New York banking corporation, (the "Lender").
RECITALS
The Company has requested the Lender to extend credit from time to time and
the Lender is willing to extend such credit to the Company, subject to the terms
and conditions hereinafter set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Definitions. As used herein, the following words and terms
shall have the following meanings:
"Adjusted Libor Loans" shall mean Loans at such time as they are made
and/or being maintained at a rate of interest based upon Reserve Adjusted Libor.
"Affiliate" shall mean with respect to a specified Person, another Person
which, directly or indirectly, controls or is controlled by or is under common
control with such specified Person. For the purpose of this definition,
"control" of a Person shall mean the power, direct or indirect, to direct or
cause the direction of the management or policies of such Person whether through
the ownership of voting securities, by contract or otherwise; provided that, in
any event, any Person who owns directly or indirectly 10% or more of the
securities having ordinary voting power for the election of directors or other
governing body of a corporation or 10% or more of the partnership or other
ownership interest of any Person (other than as a limited partner of such other
Person) will be deemed to control such corporation or other Person.
"Aggregate Outstandings" shall mean, at a particular time, the aggregate
outstanding principal amount of all Revolving Credit Loans at such time.
"Agreement" shall mean this Credit Agreement dated as of July 15, 1999, as
it may hereafter be amended, restated, supplemented or otherwise modified from
time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate as in effect on such day, and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If for any reason the Lender shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Lender to obtain sufficient quotations
in accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (b) of the first
sentence of this definition, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.
"Alternate Base Rate Loans" shall mean Loans at such times as they are
being made and/or maintained at a rate of interest based on the Alternate Base
Rate.
"Borrowing Date" shall mean, with respect to any Loan, the date on which
such Loan is disbursed to the Company.
"Business Day" shall mean (a) any day not a Saturday, Sunday or legal
holiday, on which banks in New York City are open for business and (b) as it
relates to any payment, determination, funding or notice to be made or given in
connection with any Adjusted Libor Loan, any day specified in clause (a) on
which trading is carried on by and between banks in Dollar deposits in the
London interbank eurodollar market.
"Capital Lease" shall mean any lease the obligations of which are required
to be capitalized on the balance sheet of a Person in accordance with Generally
Accepted Accounting Principles.
"Change of Control" shall mean (a) the acquisition by any Person (other
than Mr. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or an entity of which all of the
outstanding capital stock is owned by Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ and/or ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ or Odyssey Financial Company if Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ has the power
directly or indirectly through his nominees to vote the capital stock of a
Person held by Odyssey Financial Company and to control the disposition of such
capital stock), or two or more Persons (other than Mr. ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ or an entity of which all of the outstanding capital stock is owned
by Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ and/or ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ or Odyssey Financial Company if
Mr. ▇▇▇▇▇▇▇ ▇▇▇▇ has the power directly or indirectly through his nominees to
vote the capital stock of a Person held by Odyssey Financial Company and to
control the disposition of such capital stock) acting in concert, of beneficial
ownership of 25% or more of the outstanding shares of voting stock (as
determined below) of the Company, or (b) at any time Continuing Directors do not
constitute a majority of the Board of Directors of the Company. "Continuing
Director" means at any date a member of the Company's Board of Directors (i) who
is a member of such Board on the Closing Date or (ii) who was nominated or
elected by at least two-thirds of the directors who were Continuing Directors at
any time of such nomination or election or whose election to the Company's Board
of Directors was recommended or endorsed by at least two-thirds of the directors
who were Continuing Directors at the time of such election. Under this
definition, if the present Board of Directors of the Company were to nominate,
elect, recommend, endorse or otherwise approve a new director or directors and
then resign, no Change of Control would occur even though the present Board of
Directors would thereafter cease to be in office. A "beneficial owner" shall be
determined in accordance with Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, as in
effect on the Closing Date, except that, for
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purposes of clause (a), the number of shares of capital stock of the Company
entitling the holders thereof to vote generally in elections of directors shall
be deemed to include, in addition to all outstanding shares of capital stock of
the Company entitling the holders thereof to vote generally in the election of
directors and Unissued Shares deemed to be held by the Person with respect to
which the Change of Control determination is being made, all Unissued Shares
deemed to be held by all other Persons. As used herein, "Unissued Shares" shall
mean shares of capital stock of the Company not outstanding that are subject to
options, warrants, rights to purchase or conversion privileges exercisable
within 60 days following the date of determination of a Change of Control and
that, upon issuance, shall entitle the holders thereof to vote generally in the
election of directors.
"Chief Financial Officer" shall mean the Chief Financial Officer of the
Company.
"Closing Date" shall mean July 15, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Commitments" shall mean, collectively, the Revolving Credit Commitment and
the Term Loan Commitment.
"Company" shall have the meaning set forth in the preamble hereto.
"Consequential Loss" shall mean, with respect to the Company's payment of
all or any portion of a Fixed Rate Loan on a day other than the Term Loan
Maturity Date, any loss, cost or expense incurred by the Lender as a result of
the timing of such payment or in redepositing such principal amount, including
the sum of (a) the interest which, but for such payment, the Lender would have
earned in respect of such principal amount so paid until the Term Loan Maturity
Date, reduced, if the Lender is able to redeposit such principal amount so paid
for the balance of such period, by the interest earned by the Lender as a result
of so redepositing such principal amount, plus (a) any expense or penalty
incurred by the Lender on redepositing such principal amount.
"Default" shall mean any condition or event which upon notice, lapse of
time or both would constitute an Event of Default.
"Direct Affiliate" shall mean, collectively, each direct and indirect
Subsidiary of the Company and each other Person controlled by the Company or
collectively by the Company and its direct or indirect Subsidiaries. For
purposes of this definition "control" of a Person shall have the meaning set
forth in the second sentence of the definition of "Affiliate".
"Dollar" and the symbol "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiary" shall mean any Subsidiary of the Company which is
organized under the laws of any state or territory of the United States of
America.
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"EBIT" shall mean the Net Income (or net loss), plus the sum, without
duplication, of (a) Interest Expense and (b) all income taxes to any government
or governmental instrumentality expensed on the Company's books (whether paid or
accrued) minus the sum, without duplication, of (a) all extraordinary or unusual
gains, and (b) equity in positive income of unconsolidated Affiliates, in each
case, determined in accordance with Generally Accepted Accounting Principles
applied on a consistent basis. All of the foregoing categories shall be
calculated with respect to the Company and shall be calculated (without
duplication) as of the end of each applicable fiscal quarter for the four fiscal
quarter period then ended.
"EBITDA" shall mean for any period, Net Income (or net loss), plus the sum,
without duplication, of (a) Interest Expense, (b) depreciation and amortization
expenses or charges, and (c) all income taxes to any government or governmental
instrumentality expensed on the Company's books (whether paid or accrued) minus
the sum, without duplication, of (a) all extraordinary or unusual gains and (b)
equity in positive income of unconsolidated Affiliates, in each case, determined
in accordance with Generally Accepted Accounting Principles applied on a
consistent basis. All of the foregoing categories shall be calculated with
respect to the Company and shall be calculated (without duplication) as of the
end of each applicable fiscal quarter for the four fiscal quarter period then
ended.
"Eligible Investments" shall mean (a) direct obligations of the United
States of America or any governmental agency thereof which are fully guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; or (b) dollar denominated
certificates of time deposit maturing within one year issued by any bank
organized and existing under the laws of the United States or any state thereof
and having aggregate capital and surplus in excess of $1,000,000,000; or (c)
money market mutual funds having assets in excess of $2,500,000,000; or (d)
commercial paper rated not less than P-1 or A-1 or their equivalent by ▇▇▇▇▇'▇
Investors Service, Inc. or Standard & Poor's Ratings Group, respectively; or (e)
tax exempt securities of a U.S. issuer rated A or better by Standard and Poor's
Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc.
"Environmental Law" shall mean any law, ordinance, rule, regulation, or
policy having the force of law of any Governmental Authority relating to
pollution or protection of the environment or to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Sections 1801, et seq.) the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901, et seq.) and the rules and regulations
promulgated pursuant thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
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"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Company or any Subsidiary of the Company would be
deemed to be a member of the same "controlled group" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
"Eurocurrency Reserve Requirement" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves, under any regulations of the Board of Governors of the Federal Reserve
System or any other governmental authority having jurisdiction with respect
thereto) as from time to time in effect, dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "eurocurrency
liabilities" in Regulation D) maintained by the Lender. For purposes hereof each
Adjusted Libor Loan shall be deemed to constitute a "eurocurrency liability" as
defined in Regulation D, and subject to the reserve requirements of "Regulation
D," without benefit of credit or proration, exemptions or offsets which might
otherwise be available to the Lenders from time to time under Regulation D.
"Event of Default" shall have the meaning set forth in Article VIII.
"Executive Officer" shall mean any of the President, the Chief Executive
Officer, Chief Financial Officer or the Secretary of the Company, and their
respective successors, if any, designated by the Company's board of directors.
"Exercise Period" shall mean the period commencing the date hereof and
ending on the six month anniversary of such date.
"Existing Adjusted Libor Loan" shall mean the loan in the principal amount
of $1,046,718.75 accruing interest at a rate based on Reserve Adjusted Libor
which was funded by the Lender on June 17, 1999 pursuant to its line of credit
to the Company.
"Existing Direct Affiliate" shall mean a Direct Affiliate of the Company
existing on the Closing Date.
"Existing Direct Affiliate Investments" shall mean guarantees, loans and
capital contributions made by the Company from time to time to each Direct
Affiliate set forth on Schedule VI hereto provided the sum of (a) the aggregate
outstanding principal amount of all loans to such Direct Affiliate, (b) the
aggregate outstanding capital contributions to such Direct Affiliate, and (c)
the aggregate obligations of such Direct Affiliate guaranteed by the Company
shall not exceed the amount set forth opposite the name of such Direct Affiliate
on Schedule VI hereto.
"Existing Indebtedness" shall mean the Company's outstanding indebtedness
owing to the Lender pursuant to lines of credit made available by the Lender to
the Company prior to the Closing Date.
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"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal fund brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the Lender from
three Federal fund brokers of recognized standing selected by the Lender.
"Fixed Rate" shall mean a rate of interest per annum quoted to the Company
by the Lender in its discretion, at approximately 11:00 a.m., New York City
time, on the Borrowing Date of a proposed Fixed Rate Loan. Such quoted rate
shall be the fixed rate applicable to Fixed Rate Loan made by the Lender on the
requested date for such Fixed Rate Loan in the specified amount and for the
period commencing on the requested date and ending on the Term Loan Maturity
Date. Notwithstanding any other provision of this Agreement, the rate so quoted
by the Lender shall be determined in the sole discretion of the Lender by
reference to such factors and considerations as the Lender shall deem relevant.
"Fixed Rate Loan" shall mean the Term Loan at such time as it is made/or
being maintained at the rate of interest based upon the Fixed Rate.
"Foreign Subsidiary" shall mean any Subsidiary of the Company other than a
Domestic Subsidiary.
"Generally Accepted Accounting Principles" shall mean those generally
accepted accounting principles in the United States of America, as in effect
from time to time.
"Governmental Authority" shall mean any nation or government, any state,
province, city or municipal entity or other political subdivision thereof, and
any governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board or similar
body, whether federal, state, provincial, territorial, local or foreign.
"Guarantor" shall mean any Subsidiary of the Company which has executed a
Guaranty.
"Guaranty" shall mean, collectively, the Unlimited Corporate Guaranty and
the Limited Corporate Guaranty.
"Hazardous Materials" shall mean any explosives, radioactive materials, or
other materials, wastes, substances, or chemicals regulated as toxic hazardous
or as a pollutant, contaminant or waste under any applicable Environmental Law.
"Hedging Agreement" shall mean any interest rate swap, collar, cap, floor
or forward rate agreement or other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of the Company or any of its Subsidiaries and
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any confirming letter executed pursuant to such agreement, all as amended,
supplemented, restated or otherwise modified from time to time.
"Indebtedness" shall mean, without duplication, as to any Person or Persons
(a) indebtedness for borrowed money; (b) indebtedness for the deferred purchase
price of property or services; (c) indebtedness evidenced by bonds, debentures,
term notes or other similar instruments; (d) obligations and liabilities secured
by a Lien upon property owned by such Person, whether or not owing by such
Person and even though such Person has not assumed or become liable for the
payment thereof; (e) obligations and liabilities directly or indirectly
guaranteed by such Person; (f) obligations or liabilities created or arising
under any conditional sales contract or other title retention agreement with
respect to property used and/or acquired by such Person; (g) obligations of such
Person as lessee under Capital Leases; (h) net liabilities of such Person under
Hedging Agreements and foreign currency exchange agreements, as calculated in
accordance with accepted practice; (i) all obligations of such Person in respect
of bankers' acceptance; and (j) all obligations, contingent or otherwise of such
Person as an account party or applicant in respect of letters of credit.
"Interest Coverage Ratio" shall mean, for any period, the ratio of (a) EBIT
to (b) Interest Expense.
"Interest Expense" shall mean the gross interest expense of the Company
determined in accordance with Generally Accepted Accounting Principles applied
on a consistent basis and calculated as of the end of each applicable fiscal
quarter for the four fiscal quarter period then ended.
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate Loan
and any Fixed Rate Loan, the last day of each calendar month during the term
hereof; (b) as to any Adjusted Libor Loan, with respect to which the Company has
selected an Interest Period of one, two or three months, the last day of the
Interest Period for such Adjusted Libor Loan; (c) as to any Adjusted Libor Loan,
with respect to which the Company has selected an Interest Period of six, nine
or twelve months, the date which is three months from the first date of such
Interest Period and the last day of each three month period thereafter and the
last day of such Interest Period; and (d) as to any Loan, the date such Loan is
paid in full or in part.
"Interest Period" shall mean with respect to any Adjusted Libor Loan:
(a) initially, the period commencing on the date such Adjusted Libor
Loan is made and ending one, two, three, six, nine or twelve months
thereafter, as selected by the Company in its notice of borrowing or in its
notice of conversion from an Alternate Base Rate Loan provided, in each
case, in accordance with the terms of Articles II and III hereof; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Adjusted Libor Loan and ending
one, two, three, six, nine or
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twelve months thereafter, as selected by the Company by irrevocable written
notice to the Lender not later than 11:00 a.m. New York, New York time
three Business Days prior to the last day of the then current Interest
Period with respect to such Adjusted Libor Loan; provided, however, that
all of the foregoing provisions relating to Interest Periods are subject to
the following:
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) if the Company shall fail to give notice as provided in
clause (b) above, the Company shall be deemed to have requested
conversion of the affected Adjusted Libor Loan to an Alternate Base
Rate Loan on the last day of the then current Interest Period with
respect thereto;
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iv) no more than four (4) Interest Periods may exist at any one
time; and
(v) the Company shall select Interest Periods so as not to
require a payment or prepayment of any Adjusted Libor Loan during an
Interest Period for such Adjusted Libor Loan.
"Interest Rate Margin" shall mean (a) with respect to each Adjusted Libor
Loan, the percentage set forth below under the heading "LIBOR Margin" opposite
the applicable ratio and (b) with respect to each Alternate Base Rate Loan, the
percentage set forth below under the heading "ABR Margin" opposite the
applicable ratio.
Total Unsubordinated
Liabilities to LIBOR Margin ABR Margin
EBITDA (360 day basis) (360 day basis)
------ --------------- ---------------
Less than 1.25:1.00 1.25% 0%
Greater than or equal to
1.25:1.00 but less than
1.50:1.00 1.50% 0%
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Greater than or equal to
1.50:1.00 but less than
1.75:1:00 1.75% 0%
Greater than or equal to
1.75:1:00 2.00% .25%
Notwithstanding the foregoing, during the period commencing the Closing Date and
ending on the fifth Business Day following the date of delivery of the financial
statements to the Lender for the fiscal quarter ending June 30, 1999 (a) the
Interest Rate Margin with respect to each Adjusted Libor Loan shall be 1.50% per
annum, and (b) the Interest Rate Margin with respect to each Alternate Base Rate
Loan shall be 0% per annum. The Interest Rate Margin will be set or reset
quarterly with respect to each Loan on the date which is five Business Days
following the date of receipt by the Lender of the financial statements referred
to in Section 6.03(a) or Section 6.03(b), as applicable, together with a
certificate of the Chief Financial Officer of the Company certifying the ratio
of Total Unsubordinated Liabilities to EBITDA and setting forth the calculation
thereof in detail; provided, however, if any such financial statement and
certificate are not received by the Lender within the time period required
pursuant to Section 6.03(a) or Section 6.03(b), as the case may be, the Interest
Rate Margin will be set or reset, unless the rate of interest specified in
Section 3.01(d) is in effect, based on a ratio of Total Unsubordinated
Liabilities to EBITDA of greater than 1.75:1.00 from the date such financial
statement and certificate were due until the date which is five Business Days
following the receipt by the Lender of such financial statements and
certificate, and provided, further, that the Lender shall not in any way be
deemed to have waived any Default or Event of Default, including, without
limitation, an Event of Default resulting from the failure of the Company to
comply with Section 7.13 of this Agreement, or any rights or remedies hereunder
or under any other Loan Document in connection with the foregoing proviso.
During the occurrence and continuance of an Event of Default, no downward
adjustment, and only upward adjustments, shall be made to the Interest Rate
Margin.
"Lender" shall have the meaning set forth in the preamble hereto.
"Lien" shall mean any lien (statutory or otherwise), security interest,
mortgage, deed of trust, pledge, charge, conditional sale, title retention
agreement, Capital Lease or other encumbrance or similar right of others, or any
agreement to give any of the foregoing.
"Limited Corporate Guaranty" shall mean the Limited Corporate Guaranty in
the form attached hereto as C-2 to be executed and delivered by each Domestic
Subsidiary which is not directly or indirectly wholly-owned by the Company on
the Closing Date and thereafter by each such Domestic Subsidiary of the Company
pursuant to Section 6.13, as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Guaranty and the Pledge Agreement and each other agreement executed in
connection with the transactions
9
contemplated hereby or thereby, as each of the same may hereafter be amended,
restated, supplemented or otherwise modified from time to time.
"Loans" shall mean, collectively, the Revolving Credit Loans and the Term
Loan.
"Material Adverse Effect" shall mean a material adverse effect upon (a) the
business, operations, property, prospects or condition (financial or otherwise)
of the Company or the Company and its Subsidiaries taken as a whole, or (b) the
ability of the Company or any Guarantor to perform in any material respect any
material obligations under any Loan Document to which it is a party.
"Material Contract" shall mean each contract, instrument or agreement (a)
to which the Company or any Subsidiary is a party which is material to the
business, operations or condition (financial or otherwise), prospects, or
properties of the Company or the Company and its Subsidiaries taken as a whole,
or (b) which requires the payment during the term thereof in excess of $250,000.
"Net Income" shall mean, for any period, the net income (or net loss) of
the Company for such period determined in accordance with Generally Accepted
Accounting Principles applied on a consistent basis.
"New Direct Affiliate" shall mean a Direct Affiliate formed, acquired or
established after the Closing Date.
"Notes" shall mean, collectively, the Revolving Credit Note and the Term
Note.
"Obligations" shall mean all obligations, liabilities and indebtedness of
the Company to the Lender, whether now existing or hereafter created, absolute
or contingent, direct or indirect, due or not, whether created directly or
acquired by assignment or otherwise, arising under or relating to this
Agreement, the Notes or any other Loan Document including, without limitation,
all obligations, liabilities and indebtedness of the Company with respect to the
principal of and interest on the Loans, and the obligations arising under
Hedging Agreements with the Lender and all fees, costs, expenses and indemnity
obligations of the Company hereunder and under any other Loan Document.
"Payment Office" shall mean the Lender's office located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the Lender may
designate from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Liens" shall mean the Liens specified in clauses (a) through (h)
of Section 7.01.
10
"Person" shall mean any natural person, corporation, limited liability
company, limited liability partnership, business trust, joint venture,
association, company, partnership or Governmental Authority.
"Plan" shall mean any multi-employer or single-employer plan defined in
Section 4001 of ERISA, which covers, or at any time during the five calendar
years preceding the date of this Agreement covered, employees of the Company or
an ERISA Affiliate on account of such employees' employment by the Company or an
ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in the
form of Exhibit D attached hereto, to be executed and delivered on the Closing
Date by the Company with respect to the outstanding capital stock of each
Foreign Subsidiary of the Company and thereafter by the Company and/or its
Domestic Subsidiaries pursuant to Section 6.13 with respect to the outstanding
capital stock of each Foreign Subsidiary created or acquired after the Closing
Date, as the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.
"Prime Rate" shall mean the rate per annum announced by the Lender from
time to time as its prime rate in effect at its principal office, each change in
the Prime Rate shall be effective on the date such change is announced to become
effective.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30 day notice requirement has not
been waived by the PBGC.
"Reserve Adjusted Libor" shall mean with respect to the Interest Period
pertaining to an Adjusted Libor Loan, the rate per annum equal to the product
(rounded upwards to the next higher 1/16 of one percent) of (a) the annual rate
of the interest at which Dollar deposits of an amount comparable to the amount
of such Loan and for a period equal to the Interest Period applicable thereto
are offered to the Lender in immediately available funds in the London interbank
market for eurodollars at approximately 11:00 A.M. (London time) on the second
Business Day prior to the commencement of such Interest Period, multiplied by
(b) the Eurocurrency Reserve Requirement.
"Revolving Credit Commitment" shall mean the Lender's obligation to make
Revolving Credit Loans to the Company in an aggregate amount not to exceed
$6,000,000, as such amount may be adjusted in accordance with the terms of this
Agreement.
"Revolving Credit Commitment Period" shall mean the period from and
including the Closing Date to, but not including, the Revolving Credit
Commitment Termination Date or such earlier date as the Revolving Credit
Commitment to extend Revolving Credit Loans shall terminate as provided herein.
11
"Revolving Credit Commitment Termination Date" shall mean the third
anniversary of the Closing Date.
"Revolving Credit Loans" shall have the meaning set forth in Section
2.01(a).
"Revolving Credit Note" shall have the meaning set forth in Section 2.02.
"Solvent" shall mean with respect to any Person as of the date of
determination thereof that (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise," as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required on its debts as such debts become absolute
and matured, (c) such Person will not have as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such Person
will be able to pay its debts as they mature.
"Subordinated Indebtedness" shall mean all debt which is subordinated in
right of payment to the prior final and indefeasible payment in full of the
obligations of the Company to the Lender hereunder and under any other Loan
Document on terms satisfactory to and approved in writing by the Lender.
"Subsidiaries" shall mean with respect to any Person any corporation,
association or other business entity more than 50% of the voting stock or other
ownership interests (including, without limitation, membership interests in a
limited liability company) of which is at the time owned or controlled, directly
or indirectly, by such Person or one or more of its Subsidiaries or a
combination thereof.
"Tangible Net Worth" shall mean (a) total assets of the Company, except
that there shall be excluded therefrom (to the extent included therein) (i) all
obligations due to the Company from an Affiliate other than receivables due from
any Affiliate of the Company which are due within 150 days of the date of the
related invoice and are not greater than 60 days past due, (ii) all intangible
assets including, without limitation, organizational expenses, patents,
trademarks, copyrights, goodwill, covenants not to compete, research and
development costs, training costs and all unamortized debt discount and deferred
charges, and (iii) investments in unconsolidated Affiliates less (b) total
liabilities of the Company, in each case, determined in accordance with
Generally Accepted Accounting Principles applied on a consistent basis.
"Taxes" shall have the meaning set forth in Section 3.09.
"Term Loan" shall have the meaning set forth in Section 2.03.
12
"Term Loan Commitment" shall mean the Lender's obligation to make the Term
Loan on the Closing Date to the Company in an amount equal to $4,000,000.
"Term Loan Maturity Date" shall mean June 30, 2004.
"Term Note" shall have the meaning set forth in Section 2.04.
"Total Commitment" shall mean, at any time, the aggregate of the
Commitments in effect at such time which, initially, shall be $10,000,000.
"Total Unsubordinated Liabilities" shall mean all items which, in
accordance with Generally Accepted Accounting Principles applied on a consistent
basis, would properly be included on the liability side of the balance sheet
(other than capital stock, capital surplus, treasury stock, retained earnings
and Subordinated Indebtedness), as of the date on which the amount of Total
Unsubordinated Liabilities is to be determined, of the Company, computed in
accordance with Generally Accepted Accounting Principles applied on a consistent
basis.
"Type" shall mean as to any Loan its status as an Alternate Base Rate Loan,
an Adjusted Libor Loan or a Fixed Rate Loan.
"Unfunded Current Liability" of any Plan shall mean the amount, if any, by
which the present value of the accrued benefits under the Plan as of the close
of its most recent plan year exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"Unlimited Corporate Guaranty" shall mean the Unlimited Corporate Guaranty
in the form attached hereto as Exhibit C-1 to be executed and delivered by each
direct and indirect wholly-owned Domestic Subsidiary of the Company on the
Closing Date and thereafter by each such Domestic Subsidiary pursuant to Section
6.13, as the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.
"Unused Fee Rate" shall mean the percentage set forth below opposite the
applicable ratio.
Total Unsubordinated Unused Fee Rate
Liabilities to EBITDA (360 day basis)
--------------------- ---------------
Less than 1.50:1.00 .250%
Greater than or equal to 1.50:1.00 but less
than 1.75:1.00 .375%
Greater than or equal to 1.75:1.00 .500%
13
Notwithstanding the foregoing, during the period commencing the Closing Date and
ending on the fifth Business Day following the date of the delivery of the
financial statements for the fiscal quarter ending June 30, 1999, the Unused Fee
Rate shall be .250%. The Unused Fee Rate will be set or reset quarterly on the
date which is five Business Days following the date of receipt by the Lender of
the financial statements referred to in Section 6.03(a) or Section 6.03(b), as
applicable, together with a certificate of the Chief Financial Officer of the
Company certifying the ratio of Total Unsubordinated Liabilities to EBITDA and
setting forth the calculation thereof in detail; provided, however, if any such
financial statement and certificate are not received by the Lender within the
time period required pursuant to Section 6.03(a) or Section 6.03(b), as the case
may be, the Unused Fee Rate will be set or reset, based on a ratio of Total
Unsubordinated Liabilities to EBITDA of greater than 1.75:1.00 from the date
such financial statement and certificate were due until the date which is five
Business Days following the receipt by the Lender of such financial statements
and certificate, and provided, further, that the Lender shall not in any way be
deemed to have waived any Default or Event of Default, including without
limitation, an Event of Default resulting from the failure of the Company to
comply with Section 7.13 of this Agreement, or any rights or remedies hereunder
or under any other Loan Document in connection with the foregoing proviso.
During the occurrence and continuance of an Event of Default, no downward
adjustment, and only upward adjustments, shall be made to the Unused Fee Rate.
SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, pronouns stated in the masculine, feminine or neuter gender
shall include the masculine, feminine and the neuter. Except as otherwise herein
specifically provided, each accounting term used herein shall have the meaning
given to it under Generally Accepted Accounting Principles. The term "including"
shall not be limited or exclusive, unless specifically indicated to the
contrary. The word "will" shall be construed to have the same meaning in effect
as the word "shall". The words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole, including the
exhibits and schedules hereto, all of which are by this reference incorporated
into this Agreement.
ARTICLE II
LOANS
SECTION 2.01. Revolving Credit Loans. (a) Subject to the terms and
conditions, and relying upon the representations and warranties, set forth
herein, the Lender agrees to make loans (individually a "Revolving Credit Loan"
and, collectively, the "Revolving Credit Loans") to the Company from time to
time during the Revolving Credit Commitment Period up to but not exceeding at
any one time outstanding the amount of its Revolving Credit Commitment;
provided, however, that no Revolving Credit Loan shall be made if, after giving
effect to such Revolving Credit Loan, the Aggregate Outstandings would exceed
the Revolving Credit Commitment in effect at such time. During the Revolving
Credit Commitment Period, the Company may from
14
time to time borrow, repay and reborrow hereunder on or after the date hereof
and prior to the Revolving Credit Commitment Termination Date, subject to the
terms, provisions and limitations set forth herein. The Revolving Credit Loans
may be (i) Adjusted Libor Loans, (ii) Alternate Base Rate Loans or (iii) a
combination thereof.
(b) The Company shall give the Lender irrevocable written notice (or
telephonic notice promptly confirmed in writing) not later than 11:00 a.m., New
York, New York time, three Business Days prior to the date of each proposed
Adjusted Libor Loan under this Section 2.01 or prior to 11:00 a.m. New York, New
York time on the date of each proposed Alternate Base Rate Loan under this
Section 2.01. Such notice shall be irrevocable and shall specify (i) the amount
and Type of the proposed borrowing, (ii) the proposed use of the loan proceeds,
(iii) the initial Interest Period if an Adjusted Libor Loan, and (iv) the
proposed Borrowing Date. Except for borrowings which utilize the full remaining
amount of the Revolving Credit Commitment, each borrowing of an Alternate Base
Rate Loan shall be in an amount not less than $100,000 or, if greater, whole
multiples of $100,000 in excess thereof. Each borrowing of an Adjusted Libor
Loan shall be an amount not less than $500,000 or whole multiples of $100,000 in
excess thereof. Funding of all Loans shall be made in accordance with Section
3.11 of this Agreement.
(c) The Company shall have the right, upon not less than three Business
Days' prior written notice to the Lender to terminate the Revolving Credit
Commitment or from time to time to permanently reduce the amount of the
Revolving Credit Commitment; provided, however, that no such termination or
reduction shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans made on the effective date thereof,
the Aggregate Outstandings would exceed the Revolving Credit Commitment as then
reduced; provided, further, that any such termination or reduction requiring
prepayment of any Adjusted Libor Loan shall be made only on the last day of the
Interest Period with respect thereto or on the date of payment in full of all
amounts owing pursuant to Section 3.08 as a result of such termination or
reduction. Any such reduction shall be in the amount of $500,000 or whole
multiples of $100,000 in excess thereof, and shall reduce permanently the amount
of the Revolving Credit Commitment then in effect.
(d) The agreement of the Lender to make Revolving Credit Loans pursuant to
this Section 2.01 shall automatically terminate on the Revolving Credit
Commitment Termination Date. Upon such termination, the Company shall
immediately repay in full the principal amount of the Revolving Credit Loans
then outstanding, together with all accrued interest thereon and all other
amounts due and payable hereunder.
SECTION 2.02. Revolving Credit Note. The Revolving Credit Loans made by the
Lender shall be evidenced by a promissory note of the Company (the "Revolving
Credit Note"), substantially in the form attached hereto as Exhibit A,
appropriately completed, duly executed and delivered on behalf of the Company
and payable to the order of the Lender in a principal amount equal to the
Revolving Credit Commitment of the Lender. The Revolving Credit Note shall (a)
be dated the Closing Date, (b) be stated to mature on the Revolving Credit
Commitment
15
Termination Date, and (c) bear interest from the date thereof until paid in full
on the unpaid principal amount thereof from time to time outstanding as provided
in Section 3.01. The Lender is authorized to record the date, Type and amount of
each Revolving Credit Loan and the date and amount of each payment or prepayment
of principal of each Revolving Credit Loan in the Lender's records or on the
grid schedule annexed to the Revolving Credit Note; provided, however, that the
failure of the Lender to set forth each such Revolving Credit Loan, payment and
other information shall not in any manner affect the obligation of the Company
to repay each Revolving Credit Loan made by the Lender in accordance with the
terms of its Revolving Credit Note and this Agreement. The Revolving Credit
Note, the grid schedule and the books and records of the Lender shall constitute
presumptive evidence of the information so recorded absent manifest error.
SECTION 2.03. Term Loan. Subject to the terms and conditions hereof, the
Lender agrees to make a term loan (the "Term Loan") to the Company on the
Closing Date in an amount not to exceed the Term Loan Commitment. The Company
shall give the Lender irrevocable written notice (or telephonic notice promptly
confirmed in writing) not later than 11:00 a.m. New York, New York time on the
Closing Date specifying the amount to be borrowed, which amount shall equal the
Term Loan Commitment. The Term Loan shall initially be an Alternate Base Rate
Loan. Subject to the preceding sentence, the Term Loan may, at the election of
the Company, consist of (i) Adjusted Libor Loans, (ii) Alternate Base Rate
Loans, (iii) a combination of Adjusted Libor Loans and Alternate Base Rate Loan
or (iv) subject to Section 3.01(i), a Fixed Rate Loan. The Term Loan Commitment
shall terminate upon funding of the Term Loan on the Closing Date.
SECTION 2.04. Term Note. The Term Loan made by the Lender shall be
evidenced by a promissory note of the Company, substantially in the form of
Exhibit B, with appropriate insertions (the "Term Note") payable to the order of
the Lender and representing the obligation of the Company to pay the unpaid
principal amount of the Term Loan of the Lender with interest thereon as
prescribed in Section 3.01. The Lender is authorized to record the Type and the
date and amount of each payment or prepayment of principal thereof in the
Lender's records or on the grid schedule annexed to the Term Note; provided,
however, that the failure of the Lender to set forth each payment and other
information shall not in any manner affect the obligation of the Company to
repay the Term Loan in accordance with the terms of the Term Note and this
Agreement. The Term Note, the grid schedule and the books and records of the
Lender shall constitute presumptive evidence of the information so recorded
absent manifest error. The Term Note shall (a) be dated the Closing Date, (b) be
stated to mature on the Term Loan Maturity Date and (c) be payable as to
principal in sixty consecutive monthly installments of $66,667 commencing July
31, 1999; provided that the final installment on the Term Loan Maturity Date
shall be in an amount equal to the remaining principal amount outstanding on the
Term Loan Maturity Date. Repayments and prepayments of the Term Loan may not be
reborrowed. The Term Note shall bear interest from the date thereof until paid
in full on the unpaid principal amount thereof from time to time outstanding at
the applicable interest rate per annum determined as provided in, and payable as
specified in, Section 3.01.
16
ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS
SECTION 3.01. Interest Rate; Continuation and Conversion of Loans.
(a) Each Alternate Base Rate Loan shall bear interest for the period from
the date thereof on the unpaid principal amount thereof at a fluctuating rate
per annum equal to the Alternate Base Rate plus the applicable Interest Rate
Margin.
(b) Each Adjusted Libor Loan (other than a portion of the principal amount
of the Revolving Credit Loans equal to the principal amount of the Existing
Adjusted Libor Loan) shall bear interest for the Interest Period applicable
thereto on the unpaid principal amount thereof at a rate per annum equal to the
Reserve Adjusted Libor determined for each Interest Period thereof in accordance
with the terms hereof plus the applicable Interest Rate Margin. A portion of the
principal amount of the Revolving Credit Loans equal to the principal amount of
the Existing Adjusted Libor Loan shall bear interest at a rate per annum equal
to 6.75% for the period commencing June 17, 1999 to July 19, 1999.
(c) The Fixed Rate Loan shall bear interest for the period from the date
thereof on the unpaid principal amount thereof at a fixed rate per annum equal
to the Fixed Rate.
(d) Upon the occurrence and during the continuance of an Event of Default
the outstanding principal amount of the Loans (excluding any defaulted payment
of principal accruing interest in accordance with clause (e) below), shall, at
the option of the Lender, bear interest payable on demand at a rate of interest
2% per annum in excess of the interest rate otherwise then in effect.
(e) If the Company shall default in the payment of the principal of or
interest on any portion of any Loan or any other amount becoming due hereunder,
whether interest, fees, expenses or otherwise, the Company shall pay interest on
such defaulted amount accruing from the date of such default (without reference
to any period of grace) up to and including the date of actual payment (after as
well as before judgment) at a rate of 2% per annum in excess of the rate
otherwise in effect or, if no rate is in effect, 2% per annum in excess of the
Alternate Base Rate.
(f) The Company may elect from time to time to convert outstanding Loans
from Adjusted Libor Loans to Alternate Base Rate Loans by giving the Lender at
least three Business Day's prior irrevocable written notice of such election,
provided that any such conversion of Adjusted Libor Loans shall only be made on
the last day of an Interest Period with respect thereto or upon the date of
payment in full of any amounts owing pursuant to Section 3.08 as a result of
such conversion. The Company may elect from time to time to convert outstanding
Loans from Alternate Base Rate Loans to Adjusted Libor Loans by giving the
Lender irrevocable
17
written notice of such election not later than 11:00 a.m. New York, New York
time, three Business Days prior to the date of the proposed conversion. All or
any part of outstanding Alternate Base Rate Loans may be converted as provided
herein, provided that each conversion shall be in the principal amount of
$500,000 or whole multiples of $100,000 in excess thereof, and further provided
that no Event of Default shall have occurred and be continuing. Any conversion
to or from Adjusted Libor Loans hereunder shall be in such amounts and be made
pursuant to such elections so that, after giving effect thereto, the aggregate
principal amount of each Adjusted Libor Loan having the same Interest Period
shall not be less than $500,000.
(g) Any Adjusted Libor Loan in a minimum principal amount of $500,000 may
be continued as such upon the expiration of an Interest Period with respect
thereto by compliance by the Company with the notice provisions contained in the
definition of Interest Period; provided, that no Adjusted Libor Loan may be
continued as such when any Event of Default has occurred and is continuing, but
shall be automatically converted to an Alternate Base Rate Loan on the last day
of the Interest Period in effect when the Lender is notified, or otherwise has
actual knowledge, of such Event of Default.
(h) If the Company shall fail to select the duration of any Interest Period
for any Adjusted Libor Loan in accordance with the definition of "Interest
Period" set forth in Section 1.01, the Company shall be deemed to have selected
an Interest Period of one month.
(i) The Company may elect at any time during the Exercise Period to convert
the full outstanding principal amount of the Term Loan to a Fixed Rate Loan,
subject to availability thereof as set forth in the definition thereof, by
giving the Lender prior irrevocable written notice of such election not later
than 11:00 a.m., New York, New York time on the date of the proposed conversion;
provided, however, (i) no conversion may be requested or funded if an Event of
Default shall have occurred and be continuing and (ii) no Adjusted Libor Loan
may be converted to a Fixed Rate Loan unless the date of conversion is the last
day of the Interest Period applicable to such Adjusted Libor Loan.
(j) No Loan may be converted to or continued as an Adjusted Libor Loan with
an Interest Period that extends beyond (i) the Revolving Credit Commitment
Termination Date, with respect to Revolving Credit Loans, or (ii) the Term Loan
Maturity Date with respect to the Term Loan. No Fixed Rate Loan can be converted
at the request of the Company to a Term Loan of another Type.
(k) Anything in this Agreement or in any Note to the contrary
notwithstanding, the obligation of the Company to make payments of interest
shall be subject to the limitation that payments of interest shall not be
required to be paid to the Lender to the extent that the charging or receipt
thereof would not be permissible under the law or laws applicable to the Lender
limiting the rates of interest that may be charged or collected by the Lender.
In each such event payments of interest required to be paid to the Lender shall
be calculated at the highest rate permitted by applicable law until such time as
the rates of interest required hereunder may lawfully be charged
18
and collected by the Lender. If the provisions of this Agreement or any Note
would at any time otherwise require payment by the Company to the Lender of any
amount of interest in excess of the maximum amount then permitted by applicable
law, the interest payments to the Lender shall be reduced to the extent
necessary so that the Lender shall not receive interest in excess of such
maximum amount. To the extent that, pursuant to the foregoing sentence, the
Lender shall receive interest payments hereunder or under any Note in an amount
less than the amount otherwise provided herein or in any Note, such deficit
(hereinafter called the "Interest Deficit") will accumulate and will be carried
forward (without interest) until the termination of this Agreement. Interest
otherwise payable to the Lender hereunder and under such Note for any subsequent
period shall be increased by such maximum amount of the Interest Deficit that
may be so added without causing the Lender to receive interest in excess of the
maximum amount then permitted by applicable law. The amount of the Interest
Deficit relating to any Note at the time of complete payment of such Note and
termination of the Commitments shall be cancelled and not paid.
(l) Interest on each Loan shall be payable in arrears on each Interest
Payment Date and shall be calculated on the basis year of 360 days and shall be
payable for the actual days elapsed. Any rate of interest on the Loans or other
Obligations which is computed on the basis of the Alternate Base Rate shall
change when and as the Alternate Base Rate changes in accordance with the
definition thereof. Each determination by the Lender of an interest rate or fee
hereunder shall, absent manifest error, be conclusive and binding for all
purposes.
SECTION 3.02. Use of Proceeds. The Term Loan shall be used solely to pay
the Existing Indebtedness on the Closing Date. The proceeds of the Revolving
Credit Loans shall be used solely (i) to pay the Existing Indebtedness on the
Closing Date, (ii) for working capital purposes of the Company, (iii) to
purchase shares of the Company's outstanding capital stock from time to time;
provided, however, (x) the aggregate purchase price of all such shares purchased
during the term of this Agreement shall not exceed $1,000,000 and (y) the
aggregate number of such shares purchased by the Company during the term of this
Agreement (adjusted as appropriate, in the event of any split, reclassification
or other adjustments to the capital stock of the Company after the date hereof)
shall not exceed 100,000, (iv) to fund the purchase price of acquisitions
permitted pursuant to Section 7.12, and (v) to fund loans and investments in
Affiliates permitted pursuant to Section 7.06(c) and 7.06(d).
SECTION 3.03. Prepayments.
(a) The Company shall have the right at any time and from time to time to
prepay any Alternate Base Rate Loan in whole or in part, without premium or
penalty, upon the written notice to the Lender (or telephonic notice promptly
confirmed in writing) not later than 11:00 a.m. New York, New York time on the
Business Day of the proposed date of prepayment. The Company shall also have the
right at any time and from time to time to prepay any Fixed Rate Loan or
Adjusted Libor Loan, in whole or in part, without premium or penalty, (except as
provided in Section 3.08 hereof) upon written notice to the Lender (or
telephonic notice promptly confirmed in writing) not later than 11:00 a.m. New
York, New York time, three Business Days
19
before the date of prepayment. Each notice shall be irrevocable and shall
specify the Loan to be prepaid, the date and amount of prepayment and whether
such prepayment is of Adjusted Libor Loans, Fixed Rate Loans or Alternate Base
Rate Loans or a combination thereof, and if a combination thereof, the amount of
prepayment allocable to each. If such notice is given, the Company shall make
such prepayment, and the amount specified in such notice shall be due and
payable, on the date specified therein. Each partial prepayment pursuant to this
Section 3.03 shall be in a principal amount of $500,000 or whole multiples of
$100,000 in excess thereof with respect to any Fixed Rate Loan or Adjusted Libor
Loan, and in a principal amount of $100,000 or whole multiples of $100,000 in
excess thereof with respect to any Alternate Base Rate Loan.
(b) Each prepayment of principal of a Loan pursuant to this Section 3.03
shall be accompanied by accrued interest to the date prepaid on the amount
prepaid. All partial prepayments of the Term Loan, shall be applied to the
remaining installments of principal thereof in inverse order of maturity.
Prepayments of the Term Loan may not be reborrowed. Unless otherwise directed by
the Company pursuant to Section 3.03(a), partial prepayments of any Loan (other
than prepayments of the Term Loan accruing interest at the Fixed Rate) shall be
applied first to outstanding Alternate Base Rate Loans and then to Adjusted
Libor Loans having the shortest remaining Interest Periods.
SECTION 3.04. Fees.
(a) The Company agrees to pay to the Lender a commitment fee on the average
daily unused portion of the Revolving Credit Commitment from the date of this
Agreement until the Revolving Credit Commitment Termination Date at a rate per
annum equal to the Unused Fee Rate, based on a year of 360 days, payable
quarterly in arrears on the first day of July, October, January and April of
each year commencing October 1, 1999, on the Revolving Credit Commitment
Termination Date, and on each date the Revolving Credit Commitment is
permanently reduced in whole or in part.
(b) The Company agrees to pay to the Lender a nonrefundable structuring fee
of $25,000 which shall be paid in full on the Closing Date.
SECTION 3.05. Inability to Determine Interest Rate. In the event that the
Lender shall have determined (which determination shall be conclusive and
binding upon the Company) that, by reason of circumstances affecting the London
interbank market, adequate and reasonable means do not exist for ascertaining
the Reserve Adjusted Libor applicable pursuant to Section 3.01(b) for any
requested Interest Period with respect to (a) the making of an Adjusted Libor
Loan, (b) an Adjusted Libor Loan that will result from the requested conversion
of an Alternate Base Rate Loan into an Adjusted Libor Loan, or (c) the
continuation of an Adjusted Libor Loan beyond the expiration of the then current
Interest Period with respect thereto, the Lender shall forthwith give notice by
telephone of such determination, promptly confirmed in writing, to the Company
of such determination. Until the Lender notifies the Company that the
circumstances
20
giving rise to the suspension described herein no longer exist, the Company
shall not have the right to request or continue an Adjusted Libor Loan or to
convert an Alternate Base Rate Loan to an Adjusted Libor Loan.
SECTION 3.06. Illegality. Notwithstanding any other provisions herein, if
any introduction of or change in any law, regulation, treaty or directive or in
the interpretation or application thereof shall make it unlawful for the Lender
to make or maintain a Fixed Rate Loan or Adjusted Libor Loans as contemplated by
this Agreement, the Lender shall forthwith give notice by telephone of such
circumstances, promptly confirmed in writing, and (a) the commitment of the
Lender to make and to allow conversion to or continuations of Adjusted Libor
Loans or conversion to a Fixed Rate Loan shall forthwith be cancelled for the
duration of such illegality and (b) the Loans then outstanding as Adjusted Libor
Loans or a Fixed Rate Loan, as applicable, if any, shall be converted
automatically to Alternate Base Rate Loans on the next succeeding last day of
each Interest Period applicable to any Adjusted Libor Loan or, with respect to
any Adjusted Libor Loan or Fixed Rate Loan, within such earlier period as may be
required by law. The Company shall pay to the Lender, upon demand, any
additional amounts required to be paid pursuant to Section 3.08 hereof.
SECTION 3.07. Increased Costs. (a) In the event that any introduction of or
change in any applicable law, regulation, treaty, order, directive or in the
interpretation or application thereof (including, without limitation, any
request, guideline or policy, whether or not having the force of law, of or from
any central bank or other governmental authority, agency or instrumentality and
including, without limitation, Regulation D), by any authority charged with the
administration or interpretation thereof shall occur, which:
(i) shall subject the Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, or any Loan, or change the basis of
taxation of payments to the Lender of principal, interest, fees or any
other amount payable hereunder (other than any tax that is measured with
respect to the overall net income of the Lender or lending office of the
Lender and that is imposed by the United States of America, or any
political subdivision or taxing authority thereof or therein, or by any
jurisdiction in which the Lender's lending office is located, or by any
jurisdiction in which the Lender is organized, has its principal office or
is managed and controlled); or
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement (whether or not having the
force of law) against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended by,
or any other acquisition of funds by, any office of the Lender; or
(iii) shall impose on the Lender any other condition, or change
therein;
and the result of any of the foregoing is to increase the cost to the Lender of
making, renewing or maintaining or participating in advances or extensions of
credit hereunder or to reduce any
21
amount receivable hereunder, in each case by an amount which the Lender deems
material, then, in any such case, the Company shall pay the Lender, upon demand,
such additional amount or amounts as the Lender shall have determined will
compensate the Lender for such increased costs or reduction.
(b) If the Lender shall have determined that the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Lender (or any lending office of
the Lender) or the Lender's holding company, with any request or directive
regarding capital adequacy (whether or not having the force of the law) of any
such authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on the Lender's capital or on the capital of the
Lender's holding company as a consequence of its obligations hereunder to a
level below that which the Lender could have achieved but for such adoption,
change or compliance (taking into consideration the Lender's policies and the
policies of the Lender's holding company with respect to capital adequacy) by an
amount deemed by the Lender to be material, then from time to time, the Company
shall pay to the Lender, the additional amount or amounts as the Lender shall
have determined will compensate the Lender or the Lender's holding company for
such reduction. The Lender's determination of such amounts shall be conclusive
and binding on the Company absent manifest error.
(c) A certificate of the Lender setting forth the amount or amounts payable
pursuant to Sections 3.07(a) and 3.07(b) above shall be conclusive absent
manifest error. The Company shall pay the Lender the amount shown as due on any
such certificate within five days after receipt thereof.
(d) In the event the Lender shall be entitled to compensation pursuant to
Section 3.07(a) or Section 3.07(b), it shall promptly notify the Company of the
event by reason of which it has become so entitled; provided, however, no
failure on the part of the Lender to demand compensation under clause (a) or
clause (b) above on one occasion shall constitute a waiver of its right to
demand compensation on any other occasion.
SECTION 3.08. Indemnity. The Company agrees to indemnify the Lender and to
hold the Lender harmless from any loss, cost or expense which the Lender may
sustain or incur, including, without limitation, interest or fees payable by the
Lender to lenders of funds obtained by it in order to maintain Adjusted Libor
Loans hereunder, as a consequence of (a) default by the Company in payment of
the principal amount of or interest on any Adjusted Libor Loan, (b) default by
the Company to accept or make a borrowing of an Adjusted Libor Loan or a
conversion into or continuation of an Adjusted Libor Loan after the Company has
requested such borrowing, conversion or continuation, (c) default by the Company
in making any prepayment of any Adjusted Libor Loan after the Company gives a
notice in accordance with Section 3.03 of this Agreement and/or (d) the making
of any payment or prepayment (whether mandatory or optional) of an Adjusted
Libor Loan or the making of any conversion of an Adjusted Libor Loan to an
Alternate
22
Base Rate Loan on a day which is not the last day of the applicable Interest
Period with respect thereto. The Company further agrees to indemnify the Lender
and to hold the Lender harmless from any Consequential Loss which the Lender may
sustain or incur as a consequence of (a) default by the Company in payment of
the principal amount of or interest on any Fixed Rate Loan, (b) default by the
Company to accept or make a borrowing of a Fixed Rate Loan or a conversion into
a Fixed Rate Loan after the Company has requested such borrowing or conversion,
(c) default by the Company in making any prepayment of any Fixed Rate Loan after
the Company gives notice in accordance with Section 3.03 of this Agreement
and/or (e) the making of any payment or prepayment (whether mandatory or
optional) of any Fixed Rate Loan on a day other than the Term Loan Maturity
Date. A certificate of the Lender setting forth such amounts shall be conclusive
absent manifest error. The Company shall pay the Lender the amount shown as due
on any certificate within five days after receipt thereof.
SECTION 3.09. Taxes. All payments made by the Company under this Agreement
shall be made free and clear of, and without reduction for or on account of, any
present or future taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding income and franchise taxes imposed on
the Lender by (i) the United States of America or any political subdivision or
taxing authority thereof or therein, (ii) the jurisdiction under the laws of
which the Lender is organized or in which it has its principal office or is
managed and controlled or any political subdivision or taxing authority thereof
or therein, or (iii) any jurisdiction in which the Lender's lending office is
located or any political subdivision or taxing authority thereof or therein
(such non-excluded taxes being called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to the Lender hereunder, or under the Notes,
the amount so payable to the Lender shall be increased to the extent necessary
to yield to the Lender (after payment of all Taxes and free and clear of all
liability in respect of such Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes. Whenever any Taxes are payable by the Company, the Company shall promptly
send to the Lender, a certified copy of an original official receipt showing
payment thereof. If the Company fails to pay Taxes when due to the appropriate
taxing authority or fails to remit to the Lender the required receipts or other
required documentary evidence, the Company shall indemnify the Lender for any
incremental taxes, interest or penalties that may become payable by the Lender
as a result of any such failure together with any expenses payable by the Lender
in connection therewith.
SECTION 3.10. Payments. All payments (including prepayments) to be made by
the Company on account of principal, interest, fees and reimbursement
obligations shall be made without set-off or counterclaim and shall be made to
the Lender, at the Payment Office of the Lender in Dollars in immediately
available funds. The Lender may, in its sole discretion, directly charge
principal and interest payments due in respect of the Loans to the Company's
accounts at the Payment Office or other office of the Lender. Except as
otherwise provided in the definition of "Interest Period", if any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with
23
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
SECTION 3.11. Disbursement of Loans. The Lender shall make each Loan to be
made by it hereunder available to the Company at the Payment Office by crediting
the account of the Company with such amount and in like funds; provided,
however, that if the proceeds of any Loan or any portion thereof are to be used
to prepay outstanding Loans, then the Lender shall apply such proceeds for such
purpose to the extent necessary and credit the balance, if any, to the Company's
account.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to extend
the credit herein provided for, the Company represents and warrants to the
Lender that:
SECTION 4.01. Organization, Powers. The Company (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, (b) has the corporate power and authority to own its properties and to
carry on its business as now being conducted, (c) is duly qualified to do
business in every jurisdiction wherein the conduct of its business or the
ownership of its properties are such as to require such qualification except
those jurisdictions in which the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect, and (d) has the corporate power
to execute, deliver and perform each of the Loan Documents to which it is a
party, including, without limitation, the power to obtain extensions of credit
hereunder and to execute and deliver the Notes. Each Subsidiary (a) is a
corporation, limited liability company or limited partnership duly organized,
validity existing and in good standing under the laws of its jurisdiction of
incorporation or formation, (b) has the requisite power and authority to own its
properties and to carry on its business as now being conducted, (c) is duly
qualified to do business in every jurisdiction wherein the conduct of its
business or the ownership of its properties are such as to require such
qualification except those jurisdictions in which the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect, and (d) to
the extent such Subsidiary is a Guarantor, has the requisite power to execute,
deliver and perform each of the Loan Documents to which it is a party.
SECTION 4.02. Authorization of Borrowing, Enforceable Obligations. The
execution, delivery and performance by the Company of this Agreement, and the
other Loan Documents to which it is a party, the borrowings and the other
extensions of credit to the Company hereunder and the execution, delivery and
performance by each Guarantor of each Loan Document to which it is a party (a)
have been duly authorized by all requisite action, (b) will not violate or
require any consent (other than consents as have been made or obtained and which
are in full force and effect) under (i) any provision of law applicable to the
Company or any Guarantor, any rule or regulation of any Governmental Authority,
or the Certificate of
24
Incorporation or By-laws of the Company or the Certificate of Incorporation or
By-laws (or other organizational documents) of any Guarantor or (ii) any order
of any court or other Governmental Authority binding on the Company or any
Guarantor or any indenture, agreement or other instrument to which the Company
or any Guarantor is a party, or by which the Company or any Guarantor or any of
its property is bound, and (c) will not be in conflict with, result in a breach
of or constitute (with due notice and/or lapse of time) a default under, any
such indenture, agreement or other instrument, or result in the creation or
imposition of any Lien, of any nature whatsoever upon any of the property or
assets of the Company or any Guarantor other than as contemplated by this
Agreement or the other Loan Documents. This Agreement and each other Loan
Document to which the Company or any Guarantor is a party constitutes a legal,
valid and binding obligation of the Company and each Guarantor, as the case may
be, enforceable against the Company and each Guarantor in accordance with its
terms except to the extent that enforcement may be limited by applicable
bankruptcy, reorganization, moratorium, insolvency and similar laws affecting
creditors' rights generally or by equitable principles of general application,
regardless of whether considered in a proceeding in equity or at law.
SECTION 4.03. Financial Condition. (a) The Company has heretofore furnished
to the Lender (i) the audited consolidated balance sheet of the Company and its
consolidated Subsidiaries and the related consolidated statements of income,
retained earnings and cash flow of the Company and its consolidated
Subsidiaries, audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent certified public
accountants, for the fiscal year ended September 30, 1998 and (ii) the unaudited
balance sheet of the Company and its consolidated Subsidiaries and the related
consolidated statements of income, retained earnings and cash flow of the
Company and its consolidated Subsidiaries for the six month period ended March
31, 1999. Such financial statements were prepared in conformity with Generally
Accepted Accounting Principles, applied on a consistent basis, and fairly
present the financial condition and the results of operations of the Company and
its consolidated Subsidiaries as of the date of such financial statements and
for the periods to which they relate and since September 30, 1998, no Material
Adverse Effect has occurred. The Company shall deliver to the Lender, a
certificate of the Chief Financial Officer of the Company to that effect on the
Closing Date. Other than obligations and liabilities arising in the ordinary
course of business since September 30, 1998, there are no obligations or
liabilities contingent or otherwise, of the Company or any of its consolidated
Subsidiaries which are not reflected or disclosed on such audited statements
other than obligations of the Company and of its consolidated Subsidiaries
incurred in the ordinary course of business (which shall be deemed to exclude
acquisitions by the Company or any consolidated Subsidiary of the business or
assets (including, without limitation, stock) of any Person).
(b) The Company, individually, and together with its consolidated
Subsidiaries, is Solvent and immediately after giving effect to each Loan and
each other extension of credit contemplated by this Agreement and the execution
of each Loan Document, will be Solvent.
(c) As of the Closing Date the assets of Global Payment Technologies
(Europe) Limited do not exceed five percent (5%) of the total consolidated
assets of the Company and its
25
Subsidiaries. The revenues of Global Payment Technologies (Europe) Limited for
the fiscal quarter ended June 30, 1999 and the six month period then ended did
not exceed five percent (5%) of the total consolidated revenues of the Company
and its Subsidiaries for such quarter and period. The earnings of Global Payment
Technologies (Europe) Limited for the fiscal quarter ended June 30, 1999 and the
six month period then ended did not exceed five percent (5%) of the total
consolidated earnings of the Company and its Subsidiaries for such quarter and
period.
SECTION 4.04. Taxes. All assessed deficiencies resulting from Internal
Revenue Service examinations of the federal income tax returns of the Company
and each of its Subsidiaries have been discharged or reserved against in
accordance with Generally Accepted Accounting Principles. The Company and each
of its Subsidiaries has filed or caused to be filed all federal, state and local
tax returns which are required to be filed, and has paid or has caused to be
paid all taxes as shown on said returns or on any assessment received by them,
to the extent that such taxes have become due, except taxes which are being
contested in good faith and which are reserved against in accordance with
Generally Accepted Accounting Principles.
SECTION 4.05. Title to Properties. The Company and each of its Subsidiaries
has good title to its properties and assets reflected on the financial
statements referred to in Section 4.03 hereof, except for such properties and
assets as have been disposed of since the date of such financial statements as
no longer used or useful in the conduct of their respective businesses or as
have been disposed of in the ordinary course of business, and all such
properties and assets of the Company and each Guarantor are free and clear of
all Liens other than Permitted Liens.
SECTION 4.06. Litigation. (a) There are no actions, suits or proceedings
(whether or not purportedly on behalf of the Company or any of its Subsidiaries)
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries at law or in equity or before or by any
Governmental Authority, which involve any of the transactions contemplated
herein or which, if adversely determined against the Company or any of its
Subsidiaries, could reasonably be expected to result in a Material Adverse
Effect; and (b) neither the Company nor any Subsidiary is in default with
respect to any judgment, writ, injunction, decree, rule or regulation of any
Governmental Authority which could reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.07. Agreements. Neither the Company nor any Subsidiary is a party
to any agreement or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree or regulation which
could reasonably be expected to have a Material Adverse Effect. Neither the
Company nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument to which it is a party, which default could reasonably
be expected to have a Material Adverse Effect.
SECTION 4.08. Compliance with ERISA. Each Plan is in compliance with ERISA;
no Plan is insolvent or in reorganization, no Plan or Plans have an Unfunded
Current Liability,
26
and no Plan has an accumulated or waived funding deficiency; neither the Company
nor any ERISA Affiliate nor any Subsidiary has incurred any liability to or on
account of a Plan pursuant to Section 515, 4062, 4063, 4064, 4201 or 4204 of
ERISA or reasonably expects to incur any liability under any of the foregoing
sections on account of the prior termination of participation in or
contributions to any such Plan; no proceedings have been instituted to terminate
any Plan; no condition exists which could reasonably be expected to present a
risk to the Company, any Subsidiary or any ERISA Affiliate of incurring a
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no lien imposed under the Code or ERISA on the assets of the
Company, any Subsidiary or any of its ERISA Affiliates exists or to the
knowledge of the Company is likely to arise on account of any Plan and the
Company and each Subsidiary may terminate contributions to any other employee
benefit plans maintained by it without incurring any material liability to any
Person interested therein.
SECTION 4.09. Federal Reserve Regulations; Use of Proceeds. (a) Neither the
Company nor any of its Subsidiaries is engaged principally in, nor has as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying any "margin stock" (as that term is defined in Regulation
U of the Board of Governors of the Federal Reserve System of the United States,
as amended from time to time).
(b) No part of the proceeds of any Loan and no other extension of credit
hereunder will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to extend credit to others for the purpose of
purchasing or carrying margin stock, or (ii) for any purpose which violates or
is inconsistent with the provisions of Regulation T,U, or X of the Board of
Governors of the Federal Reserve System.
(c) The proceeds of each Loan, and each other extension of credit hereunder
shall be used solely for the purposes permitted under Section 3.02.
(d) At the time of the incurrence of the Existing Indebtedness and at all
times thereafter until the repayment of such Existing Indebtedness, and after
giving effect to the payment in full of the Existing Indebtedness on the Closing
Date and to the making of each Loan hereunder, not more than 25% of the value of
the assets of the Company as determined by any reasonable method were, are or
will be margin securities (as that term is defined in Regulation U of the Board
of Governors of the Federal Reserve System, as amended, from time to time).
SECTION 4.10. Approvals. No registration with or consent or approval of, or
other action by, any Governmental Authority or any other Person is required in
connection with the execution, delivery and performance of this Agreement by the
Company or any Guarantor, or with the execution and delivery of other Loan
Documents to which it is a party or with respect to the Company, the borrowings
hereunder other than registrations, consents or approvals which have been made
or obtained and which are in full force and effect.
27
SECTION 4.11. Direct Affiliates. Attached hereto as Schedule V is a correct
and complete list of each of the Company's Subsidiaries as of the Closing Date
showing as to each Subsidiary, its name, the jurisdiction of its incorporation,
its shareholders or other owners of an interest in each Subsidiary and the
number of outstanding shares or other ownership interest owned by each
shareholder or other owner of an interest. The Subsidiaries asterisked on
Schedule V are those Subsidiaries which are Foreign Subsidiaries. Schedule V
also sets forth a correct and complete list of each of the Company's Existing
Direct Affiliates which are not Subsidiaries of the Company showing as to each
such Direct Affiliate, its name, the jurisdiction of its incorporation, its
shareholders or other owners of an interest in such Direct Affiliate and the
number of outstanding shares or other ownership interests owned by each
shareholder or other owner of an interest. The Direct Affiliates asterisked on
Schedule V are those Direct Affiliates which are not incorporated under the laws
of any state or territory of the United States of America.
SECTION 4.12. Hazardous Materials. The Company and each of its Subsidiaries
is in compliance in all material respects with all applicable Environmental Laws
and neither the Company nor any of its Subsidiaries has used Hazardous Materials
on, from, or affecting any property now owned or occupied or hereafter owned or
occupied by the Company or any of its Subsidiaries in any manner which violates
any applicable Environmental Law. No prior owner of any such property or any
tenant, subtenant, prior tenant or prior subtenant have used Hazardous Materials
on, from, or affecting such property in any manner which violates any applicable
Environmental Law.
SECTION 4.13. Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.14. No Default. No Default or Event of Default has occurred and
is continuing.
SECTION 4.15. Material Contracts. All Material Contracts are disclosed on
Schedule IV hereto. Each such Material Contract is in full force and effect and
is binding upon and enforceable against the Company and each of its
Subsidiaries, in each case, to the extent they are a party thereto, and, to the
Company's knowledge, all other parties thereto in accordance with its terms, and
there exists no default, in any material respect, under any Material Contract by
the Company or any of its Subsidiaries or by any other party thereto which has
not been fully cured or waived.
SECTION 4.16. Permits and Licenses. The Company and each of its
Subsidiaries has all permits, licenses, certifications, authorizations and
approvals required for it lawfully to own and operate their respective
businesses except those the failure of which to have could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
28
SECTION 4.17. Compliance with Law. The Company and each of its Subsidiaries
is in compliance, with all laws, rules, regulations, orders and decrees which
are applicable to the Company, or to any of its properties, which the failure to
comply with could, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
SECTION 4.18. Y2K. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the Company's or any of its
Subsidiaries' computer systems and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the Company's
or any of its Subsidiaries' systems interface, and the testing of all such
systems and equipment, as so reprogrammed, will be completed by August 15, 1999.
The cost to the Company and each of its Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequences of the year 2000 to the
Company and each of its Subsidiaries (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) will not
result in a Default or Event of Default or have a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of the Company
and each of its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue to be sufficient to permit the Company and its
Subsidiaries to conduct their respective business without having a Material
Adverse Effect.
SECTION 4.19. Disclosure. Neither this Agreement, any other Loan Document,
nor any other document, certificate or written statement furnished to the Lender
by or on behalf of the Company or any of its Subsidiaries for use in connection
with the transactions contemplated by this Agreement contains any untrue
statement of material fact or omits to state a material fact necessary in order
to make the statements contained herein or therein not misleading in light of
the circumstances in which they were made.
SECTION 4.20. Pledge Agreements. The Pledge Agreements executed by the
Company and each of its Domestic Subsidiaries shall constitute a valid and
continuing lien on and security interest in the collateral referred to in such
Pledge Agreements in favor of the Lender, which shall be prior to all other
Liens, claims and rights of all other persons.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01. Conditions to Initial Extension of Credit. The obligation of
the Lender to make the initial Loan hereunder is subject to the following
conditions precedent:
(a) Notes. On or prior to the Closing Date, the Lender shall have received
the Revolving Credit Note and the Term Note, each duly executed by the Company.
29
(b) Guaranties. On or prior to the Closing Date, the Lender shall have
received an Unlimited Corporate Guaranty duly executed by each direct or
indirect wholly-owned Domestic Subsidiary of the Company and a Limited
Corporate Guaranty from each other Domestic Subsidiary of the Company.
(c) Pledge Agreements. On or prior to the Closing Date, the Lender
shall have received Pledge Agreements with respect to each Foreign
Subsidiary of the Company duly executed by the Company, together with the
stock certificates evidencing the shares pledged thereunder and stock
powers duly executed in blank by the Company.
(d) Opinion of Counsel. On or prior to the Closing Date, the Lender
shall have received a written opinion of (i) counsel for the Company and
the Guarantors dated the Closing Date and addressed to the Lender,
substantially in the form of Exhibit E attached hereto, and (ii) local
counsel to each Foreign Subsidiary opining as to the enforceability of the
lien created under the Pledge Agreement and other matters customary and
usual for such an agreement.
(e) Supporting Documents. On or prior to the Closing Date, the Lender
shall have received (i) a certificate of good standing for the Company and
each of its Subsidiaries from the secretary of state of the state of its
organizational jurisdiction dated as of a recent date; (ii) certified
copies of the Certificate of Incorporation and By-laws of the Company and
each of its Subsidiaries; (iii) a certificate of the Secretary or an
Assistant Secretary of the Company and each of its Subsidiaries which is a
Guarantor dated the Closing Date and certifying: (x) that neither the
Certificates of Incorporation nor the By-laws of the Company and each of
its Subsidiaries has been amended since the date of their certification (or
if there has been any such amendment, attaching a certified copy thereof);
(y) with respect to the Company and each Subsidiary which is a Guarantor,
that attached thereto is a true and complete copy of resolutions adopted by
the Board of Directors of the Company or Guarantor, as the case may be,
authorizing the execution, delivery and performance of each Loan Document
to which it is a party and the borrowings and other extensions of credit
hereunder; and (z) with respect to the Company and each Subsidiary which is
a Guarantor, the incumbency and specimen signature of each officer of the
Company or Guarantor, as the case may be, executing each Loan Document to
which it is a party and any certificates or instruments furnished pursuant
hereto or thereto, and a certification by another officer of the Company as
to the incumbency and signature of the Secretary or Assistant Secretary of
the Company; and (iv) such other documents as the Lender may reasonably
request.
(f) Assets Free from Liens. Prior to the Closing Date, the Lender
shall have received UCC-1 financing statement, tax and judgment lien
searches evidencing that the Company's and each Guarantor's accounts
receivable, inventory, equipment and all other assets of the Company and
each Guarantor are free and clear of all Liens except (i) Permitted Liens
and (ii) liens to be satisfied on the Closing Date pursuant to the terms
hereof.
30
(g) Fees and Expenses. On or prior to the Closing Date, the Lender
shall have received the fees payable on the Closing Date pursuant to
Section 3.04(b) and reimbursement of expenses in accordance with Section
9.03(b).
(h) No Litigation. There shall exist no action, suit, investigation,
litigation or proceeding affecting the Company or any of its Subsidiaries
pending or, to the knowledge of the Company, threatened before any court,
governmental agency or arbiter that could reasonably be expected to be
adversely determined against the Company or any of its Subsidiaries and, if
so adversely determined, could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(i) Consents and Approvals. All governmental and third party consents
and approvals necessary in connection with the transactions contemplated by
this Agreement and the other Loan Documents shall have been obtained
(without the imposition of any conditions that are not acceptable to the
Lender) and shall remain in effect, and no law or regulation shall be
applicable in the judgment of the Lender that imposes materially adverse
conditions upon the transactions contemplated hereby.
(j) No Material Adverse Changes. There shall not have occurred any
material adverse change in the business, operations, properties, prospects
or condition (financial or otherwise) of the Company or of the Company and
its Subsidiaries, taken as a whole, since September 30, 1998.
(k) Joint Venture Agreements. Prior to the Closing Date, the Lender
shall have received true, correct and complete copies of all shareholder
agreements, joint venture agreements and all other agreements governing the
rights and obligations of the shareholders in the following entities:
Global Payment Technologies Holdings (Proprietary) Limited, Global Payment
Technologies Australia Pty. Ltd., CBV China Venture Limited, Global Payment
Technologies (Europe) Limited, Abacus Financial Management Systems Ltd.,
Abacus Financial Management Systems Ltd. USA, and such agreements shall be
in form and substance satisfactory to the Lender.
(l) Employment Agreements. Prior to the Closing Date, the Lender shall
have received true, correct and complete copies of each employment
agreement, if any, between the Company and its executive officers, and such
agreements shall be in form and substance satisfactory to the Lender.
(m) Insurance. On or prior to the Closing Date, the Lender shall have
received a certificate or certificates of insurance from an independent
insurance broker or brokers confirming the insurance required to be
maintained pursuant to Section 6.01 hereof.
(n) Other Information, Documentation. The Lender shall have received
such other and further information and documentation as it may require,
including, but not limited to,
31
any information or documentation relating to compliance by the Company with the
requirements of all Environmental Laws.
(o) Completion of Proceedings. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by the Loan Documents, shall be satisfactory in form
and substance to the Lender.
SECTION 5.02. Conditions to All Extensions of Credit. The obligation of the
Lender to make each Loan hereunder, including, without limitation, the initial
Loan, are subject to the conditions precedent set forth in Section 5.01 and the
following conditions precedent:
(a) Representations and Warranties. The representations and warranties by
the Company and each Guarantor pursuant to this Agreement and the other Loan
Documents to which each is a party shall be true and correct in all material
respects on and as of the Borrowing Date, with the same effect as though such
representations and warranties had been made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and be
continuing on the Borrowing Date or will result after giving effect to the Loan
requested.
(c) Availability. After giving effect to any requested Revolving Credit
Loan, the Aggregate Outstandings shall not exceed the Revolving Credit
Commitment then in effect. Each borrowing hereunder shall constitute a
representation and warranty of the Company that the statements contained in
clauses (a), (b), and (c) of Section 5.02 are true and correct on and as of the
Borrowing Date.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Lender that so long as the
Commitments remain in effect, or any of the principal of or interest on the
Notes or any other Obligations hereunder shall be unpaid it will, and will cause
each Guarantor to:
SECTION 6.01. Existence, Properties, Insurance. Do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights and franchises and comply with all laws applicable to it; at
all times maintain, preserve and protect all franchises and trade names and
preserve all of its property, and keep the same in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, replacements, betterments and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted in the ordinary course at all times; and at all times
maintain insurance covering its assets and its businesses with financially
32
sound and reputable insurance companies or associations in such amounts and
against such risks (including, without limitation, hazard, business
interruption, public liability and product liability) as are usually carried by
companies engaged in the same or similar business.
SECTION 6.02. Payment of Indebtedness and Taxes. (a) Pay all indebtedness
and obligations, now existing or hereafter arising, as and when due and payable,
and (b) pay and discharge or cause to be paid and discharged promptly all taxes,
assessments and government charges or levies imposed upon it or upon its income
and profits, or upon any of its property, real, personal or mixed, or upon any
part thereof, before the same shall become in default, as well as all lawful
claims for labor, materials and supplies or otherwise which, if unpaid, might
become a lien or charge upon such properties or any part thereof; provided,
however, that neither the Company nor any Guarantor shall be required to pay and
discharge or cause to be paid and discharged any such indebtedness or obligation
owing to a vendor in the ordinary course of business, tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings, and the Company or such Guarantor shall have set
aside on its books adequate reserves determined in accordance with Generally
Accepted Accounting Principles with respect to any such indebtedness,
obligation, tax, assessment, charge, levy or claim so contested; further,
provided (i) the aggregate of such indebtedness and obligations so contested
shall not exceed $250,000 at any one time outstanding, and (ii) that, subject to
the foregoing proviso, the Company and each Guarantor shall pay or cause to be
paid all such indebtedness, obligations, taxes, assessments, charges, levies or
claims upon the commencement of proceedings to foreclose any lien which has
attached as security therefor.
SECTION 6.03. Financial Statements, Reports, etc. Furnish to the Lender:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Company, (i) a copy of the audited consolidated balance
sheet of the Company as of the end of such year and the related audited
consolidated statements of income, shareholders equity and cash flow for such
year, setting forth in comparative form the respective figures as of the end of
and for the previous fiscal year, and accompanied by a report thereon of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP or other independent certified public accountants of recognized
standing selected by the Company and satisfactory to the Lender (the "Auditor"),
which report shall be unqualified and shall be to the effect that such
consolidated financial statements present fairly in all material respects the
financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with Generally
Accepted Accounting Principles consistently applied, and (ii) a copy of the
comparative consolidating financial statements of the Company and its
consolidated Subsidiaries, prepared in accordance with Generally Accepted
Accounting Principles, consistently applied, which support the financial
statements delivered pursuant to clause (i);
(b) as soon as available, but in any event not later than 45 days after the
end of each quarterly period of each fiscal year of the Company, (i) a copy of
the unaudited interim consolidated balance sheet of the Company as of the end of
each such quarter and the related
33
unaudited interim consolidated statements of income, shareholders equity and
cash flow for such quarter and the portion of the fiscal year through such date
and setting forth in each case in comparative form the respective figures for
the corresponding date and period in the previous fiscal year, in each case
prepared by the Chief Financial Officer and accompanied by a certificate
executed by the Chief Financial Officer to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with Generally Accepted
Accounting Principles consistently applied, subject to normal year-end
adjustments and the absence of footnotes, and (ii) a copy of the comparative
consolidating financial statements of the Company and its consolidated
Subsidiaries, prepared in accordance with Generally Accepted Accounting
Principles, consistently applied, which support the financial statements
delivered pursuant to clause (i);
(c) a certificate prepared and signed by the Chief Financial Officer with
each delivery required by clause (a) and (b), as to whether or not, as of the
close of such preceding period and at all times during such preceding period,
the Company and its Subsidiaries were in compliance with all the provisions in
this Agreement, showing computation of financial covenants and quantitative
negative covenants, and if the Chief Financial Officer shall have obtained
knowledge of any default in such compliance or notice of such default, it shall
disclose in such certificate such default or defaults or notice thereof and the
nature thereof, whether or not the same shall constitute a Default or an Event
of Default hereunder;
(d) a certificate prepared and signed by the Auditor with each delivery
required by clause (a) above stating whether they obtained knowledge during the
course of their examination of such financial statements of any Default or Event
of Default (which certificate may be limited to the extent required by any
accounting rules or guidelines binding upon the Auditors);
(e) at all times indicated in clause (a) above a copy of the management
letter, if any, prepared by the Auditor;
(f) promptly after filing thereof, copies of all regular and periodic
financial information, proxy materials and other information and reports which
the Company or any of its Subsidiaries shall file with the Securities and
Exchange Commission;
(g) promptly after submission to any government or regulatory agency, all
documents and information furnished to such government or regulatory agency
other than such documents and information prepared in the normal course of
business and which could not reasonably be expected to result in any materially
adverse action to be taken by such agency; and
(h) promptly, from time to time, such other information regarding the
operations, business affairs and condition (financial or otherwise) of the
Company or any of its Subsidiaries as the Lender may reasonably request.
34
SECTION 6.04. Books and Records; Access to Premises. Keep adequate records
and proper books of record and account in which complete entries will be made in
a manner to enable the preparation of financial statements in accordance with
Generally Accepted Accounting Principles, and which shall reflect all financial
transactions of the Company and each Guarantor. At any time, and from time to
time (and provided that no Default or Event of Default has occurred and is
continuing, upon reasonable prior notice) permit the Lender or any agents or
representatives thereof, to examine and make copies of any abstracts from the
books and records of such information which the Lender deems is necessary or
desirable (including, without limitation, the financial records of the Company)
and to visit the properties of the Company or any Guarantor and to discuss the
affairs, finances and accounts of the Company and the Guarantor with any of
their executive officers or the Company's independent accountants.
SECTION 6.05. Notice of Adverse Change. Promptly notify the Lender in
writing of (a) any change in the business or the operations of the Company or
any Guarantor which could reasonably be expected to have a Material Adverse
Effect, and (b) any information which indicates that any financial statements
which are the subject of any representation contained in this Agreement, or
which are furnished to the Lender pursuant to this Agreement, fail, in any
material respect, to present fairly, as of the date thereof and for the period
covered thereby, the financial condition and results of operations purported to
be presented therein, disclosing the nature thereof.
SECTION 6.06. Notice of Default. Promptly notify the Lender of any Default
or Event of Default which shall have occurred, which notice shall include a
written statement as to such occurrence, specifying the nature thereof and the
action (if any) which is proposed to be taken with respect thereto.
SECTION 6.07. Notice of Litigation. Promptly notify the Lender of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined against the
Company or any Guarantor on the basis of the allegations and information set
forth in the complaint or other notice of such action, suit or proceeding, or in
the amendments thereof, if any, could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.08. Notice of Default in Other Agreements. Promptly notify the
Lender of any default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument to which the Company or any Guarantor is a party which default could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.09. Notice of ERISA Event. Promptly deliver to the Lender a
certificate of the Chief Financial Officer of the Company setting forth details
as to such occurrence and such action, if any, which the Company, any Guarantor,
or such ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the Company,
such Guarantor, ERISA Affiliate, the PBGC, a Plan participant or the Plan
35
administrator, with respect thereto: that a Reportable Event has occurred with
respect to a Plan, that an accumulated funding deficiency has been incurred or
an application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan, that a Plan has been terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA, that one
or more Plans have an Unfunded Current Liability giving rise to a Lien under
ERISA, that proceedings may be or have been instituted to terminate a Plan, that
a proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan, or that the Company, any Guarantor or any
ERISA Affiliate will incur any liability (including any contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan
under Section 4062, 4063, 4064, 4201 or 4204 of ERISA. The Company will deliver
to the Lender a complete copy of the annual report (Form 5500) of each Plan that
is a single employer Plan (within the meaning of Section 4001(a)(15) of ERISA),
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Lender pursuant to the first sentence hereof, copies of
annual reports and any other notices received by the Company or any Guarantor
required to be delivered to the Lender hereunder shall be delivered to the
Lender no later than ten days after the later of the date such report or notice
has been filed with the Internal Revenue Service or the PBGC, given to Plan
participants or received by the Company or any Guarantor.
SECTION 6.10. Notice of Environmental Law Violations. Promptly notify the
Lender of the receipt of any notice of an action, suit, and proceeding before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending against the Company or any
Guarantor relating to any alleged violation of any Environmental Law which could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.11. Notice Regarding Material Contracts. Promptly notify the
Lender of (a) any termination (prior to the end of its stated term), material
amendment, material supplement or other material modification of any Material
Contract and (b) the occurrence of a default in any material respect by the
Company, any Guarantor or by any other party to any Material Contract of which
the Company is aware.
SECTION 6.12. Compliance with Applicable Laws. Comply with the requirements
of all applicable laws, rules, regulations and orders of any Governmental
Authority, the breach of which could reasonably be expected to have a Material
Adverse Effect.
SECTION 6.13. Direct Affiliates. Give the Lender prompt written notice of
the creation, establishment or acquisition, in any manner, of any Subsidiary of
the Company and cause to be delivered to the Lender within thirty days of the
creation, establishment or acquisition of such Subsidiary (i) a duly executed
Unlimited Corporate Guaranty with respect to each direct or indirect
wholly-owned Domestic Subsidiary, and (ii) a duly executed Limited Corporate
Guaranty with respect to any other Domestic Subsidiary. The Company or its
Domestic Subsidiaries, as applicable, shall further execute and deliver to the
Lender within such thirty day period a Pledge
36
Agreement with respect to 65% of the outstanding shares of capital stock or
other ownership interest of each such Subsidiary (or, if less, the aggregate
shares or interests owned by the Company and its Domestic Subsidiaries) which is
a Foreign Subsidiary, (in each case, together with certificates and powers with
respect to such interest duly endorsed in blank, and in the event of
uncertificated interest, UCC-1 financing statements identifying such interest
and executed by the Company or such Domestic Subsidiary). Together with the
delivery of such Guaranty and/or Pledge Agreement, the Company shall provide to
the Lender (i) the supporting documents identified in clauses (i), (ii) and
(iii) of Section 5.01(e) in each case with respect to such Subsidiary, (ii) a
favorable written opinion of counsel in the form attached hereto as Exhibit E
and with respect to the documents required to be executed by each Subsidiary
pursuant to this Section 6.13, and (iii) a favorable written opinion of local
counsel to each Foreign Subsidiary, which opinion shall be consistent in
substance and as to the matters opined to in the opinion of local counsel
delivered pursuant to Section 5.01(d) on the Closing Date; further, give the
Lender prompt written notice of the creation, establishment or acquisition in
any manner of any New Direct Affiliate which is not a Subsidiary of the Company.
SECTION 6.14. Environmental Laws.
Comply in all material respects with the requirements of all Environmental
Laws, provide to the Lender all documentation in connection with such compliance
that the Lender may reasonably request, and defend, indemnify, and hold harmless
the Lender and its respective employees, agents, officers, and directors, from
and against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs, or expenses of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of, or in any way related to, (a) the
presence, disposal, or release of any Hazardous Materials on any property at any
time owned or occupied by the Company or any Subsidiary of the Company; (b) any
personal injury (including wrongful death) or property damage (real or personal)
arising out of or related to such Hazardous Materials; (c) any lawsuit brought
or threatened, settlement reached, or government order relating to such
Hazardous Materials, and/or (d) any violation of applicable Environmental Laws,
including, without limitation, reasonable attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation expenses.
SECTION 6.15. Legal Charge. In the event that (i) the assets of Global
Payment Technologies (Europe) Limited as of the last day of any fiscal quarter
of the Company exceeds 10% of the total consolidated assets of the Company and
its Subsidiaries as of such date, (ii) the revenues of Global Payment
Technologies (Europe) Limited for any period consisting of four consecutive
fiscal quarters of the Company exceeds 10% of the total consolidated revenues of
the Company and its Subsidiaries for such period, or (iii) the earnings of
Global Payment Technologies (Europe) Limited for any period consisting of four
consecutive fiscal quarters of the Company exceeds 10% of the total consolidated
earnings of the Company and its Subsidiaries for such period, the Company will
take such actions as are necessary to create in favor of the Lender a legal
charge (as that term is understood under the laws of the United Kingdom) with
respect to 65% of the issued and outstanding shares of Global Payment
Technologies (Europe) Limited,
37
including, without limitation, the delivery of a charge agreement substantially
in the form previously delivered to the Company. On or prior to August 15, 1999,
the Company shall deliver to the Lender a consent executed by each shareholder
of Global Payment Technologies (Europe) Limited (other than the Company) wherein
such shareholder consents to the granting by the Company of a legal charge on
its shares of Global Payment Technologies (Europe) Limited in favor of the
Lender and to the transfer by the Lender of such shares to any third party
without any claim of a right of first refusal, preemptive right or other similar
right or restriction.
ARTICLE VII
NEGATIVE COVENANTS
The Company covenants and agrees with the Lender that so long as the
Commitments remain in effect or any of the principal of or interest on any Note
or any other Obligations hereunder shall be unpaid, it will not, and will not
cause or permit any Guarantor, directly or indirectly to:
SECTION 7.01. Liens. Incur, create, assume or suffer to exist any Lien on
any of its assets now or hereafter owned, other than:
(a) Liens existing on the date hereof as set forth on Schedule I attached
hereto including any renewals or extensions thereof; provided that no such Lien
is extended to cover any additional property and that the amount of Indebtedness
secured thereby is not increased;
(b) Liens for taxes, assessments or other governmental charges or levies
not yet delinquent or which are being contested in good faith by appropriate
proceedings, provided, however, that adequate reserves with respect thereto are
maintained on the books of the Company in accordance with Generally Accepted
Accounting Principles;
(c) carriers', warehousemens', mechanics', suppliers' or other like Liens
arising in the ordinary course of business and not overdue for a period of more
than 30 days or which, if so overdue, are being contested in good faith by
appropriate proceedings in a manner which will not jeopardize or diminish the
interest of the Lender;
(d) Liens incurred or deposits to secure the performance of tenders, bids,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety, performance and appeal bonds, and other obligations of similar nature
incurred in the ordinary course of business;
(e) easements, rights of way, restrictions and other similar charges or
encumbrances which in the aggregate do not interfere in any material respect
with the occupation, use and enjoyment by the Company or any Guarantor of the
property or assets encumbered thereby in the normal course of their respective
business or impair the value of the property subject thereto;
38
(f) deposits under workmen's compensation, unemployment insurance and
social security laws;
(g) Liens granted to the Lender;
(h) purchase money Liens for fixed or capital assets including obligations
with respect to Capital Leases; provided in each case (i) no Default or Event of
Default shall have occurred and be continuing at the time of creation of such
Lien or shall occur after giving effect to such Lien, (ii) the obligation
secured by such purchase money Lien does not exceed 100% of the purchase price
of the asset and such Lien encumbers only, the asset acquired, and (iii) such
purchase money Lien does not secure any Indebtedness other than in respect of
the purchase price of the asset acquired; and
(i) Judgment and other similar Liens arising in connection with court
proceedings, provided, however, that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings.
SECTION 7.02. Indebtedness. Incur, create, assume or suffer to exist or
otherwise become liable in respect of any Indebtedness, other than:
(a) Indebtedness incurred prior to the date hereof as described in Schedule
II attached hereto, including any renewals or extensions thereof; provided such
renewal or extension does not result in an increase in the aggregate principal
amount of such Indebtedness;
(b) Indebtedness to the Lender;
(c) Indebtedness for trade payables incurred in the ordinary course of
business; provided, subject to Section 6.02, such payables shall be paid or
discharged when due;
(d) Indebtedness consisting of guarantees and loans permitted pursuant to
Sections 7.03 and 7.06, respectively, or consisting of Liens permitted pursuant
to Section 7.01 (other than Section 7.01(h));
(e) Subordinated Indebtedness; provided, however, that no Default or Event
of Default shall have occurred and be continuing at the time of incurrence of
such Subordinated Indebtedness or would occur after giving effect to the
incurrence of such Subordinated Indebtedness; and
(f) Indebtedness secured by purchase money liens (including Capital Leases)
as permitted under Section 7.01(h); provided such Indebtedness incurred in any
fiscal year of the Company shall not exceed $250,000 in the aggregate with
respect to the Company and the Guarantors and, further, provided no Default or
Event of Default shall have occurred and be
39
continuing at the time of incurrence of such Indebtedness or would occur after
giving effect to the incurrence of such Indebtedness.
SECTION 7.03. Guaranties. Guarantee, endorse, become surety for, or
otherwise in any way become or be responsible for the Indebtedness or
obligations of any Person, whether by agreement to maintain working capital or
equity capital or otherwise maintain the net worth or solvency of any Person or
by agreement to purchase the Indebtedness of any other Person, or agreement for
the furnishing of funds, directly or indirectly, through the purchase of goods,
supplies or services for the purpose of discharging the Indebtedness of any
other Person or otherwise, or enter into or be a party to any contract for the
purchase of merchandise, materials, supplies or other property if such contract
provides that payment for such merchandise, materials, supplies or other
property shall be made regardless of whether delivery of such merchandise,
supplies or other property is ever made or tendered except:
(a) guaranties executed prior to the date hereof as described on Schedule
III attached hereto but not including any renewals or extension
thereof;
(b) endorsements of negotiable instruments for collection or deposit in
the ordinary course of business;
(c) guaranties of any Indebtedness owing to the Lender; and
(d) guaranties by the Company of the obligations of its New Direct
Affiliates provided (x) the aggregate outstanding obligations of any
single New Direct Affiliate guaranteed by the Company shall not exceed
$500,000 less the sum of the aggregate outstanding principal amount of
all loans and capital contributions to such New Direct Affiliate
permitted pursuant to Sections 7.06(c) and (y) the aggregate
outstanding obligations of all such New Direct Affiliates guaranteed
by the Company shall not exceed $1,500,000 less the sum of (i) the
aggregate outstanding principal amount of loans and capital
contributions to all New Direct Affiliates permitted pursuant to
Section 7.06(c) and (ii) the aggregate purchase price of all assets
and businesses acquired pursuant to acquisitions permitted pursuant to
Section 7.12.
(e) guaranties by the Company of the obligations of its Existing Direct
Affiliates provided that the aggregate outstanding obligations of any
single Existing Direct Affiliate guaranteed by the Company shall not
exceed (x) the amount set forth opposite such Existing Direct
Affiliate's name on Schedule VI, less (y) the aggregate outstanding
loans and capital contributions made to such Existing Direct Affiliate
pursuant to Section 7.06(d).
40
SECTION 7.04. Sale of Assets. Sell, lease, transfer or otherwise dispose of
its properties and assets, whether or not pursuant to an order of a federal
agency or commission, except for (a) the sale of inventory disposed of in the
ordinary course of business, and (b) the sale or other disposition of properties
or assets no longer used or useful in the conduct of its business.
SECTION 7.05. Sales of Receivables. Sell, transfer, discount or otherwise
dispose of notes, accounts receivable or other obligations owing to the Company
or any Guarantor with or without recourse, except for collection in the ordinary
course of business; provided, however, nothing in this Section 7.05 shall be
deemed to limit the Company or any Guarantor from granting discounts and rebates
to its customers or compromising or otherwise accepting less than the full
amount of any receivable due from the customer, in each case, in the ordinary
course of the Company's or such Guarantor's business, consistent with past
practice.
SECTION 7.06. Loans and Investments. Make or commit to make any advance,
loan, extension of credit, or capital contribution to, or purchase or hold
beneficially any stock or other securities or evidence of Indebtedness of, or
purchase or acquire all or a substantial part of the assets of, or make or
permit to exist any interest whatsoever in, any other Person except (a)
investments consisting of Eligible Investments, (b) purchases by the Company of
its outstanding capital stock from time to time; provided, however, (x) the
aggregate purchase price of all such stock purchased during the term of this
Agreement shall not exceed $1,000,000 and (y) the aggregate number of shares of
such stock purchased by the Company during the term of this Agreement shall not
exceed 100,000 (adjusted as appropriate in the event of any split,
reclassification or other adjustment to the capital stock of the Company after
the date hereof), (c) loans and capital contributions by the Company to its New
Direct Affiliates provided (x) the sum of (I) the aggregate outstanding
principal amount of all loans to any such New Direct Affiliate, (II) the
aggregate outstanding capital contributions to any such New Direct Affiliate,
and (III) the aggregate outstanding obligations of such New Direct Affiliate
guaranteed by the Company as permitted by Section 7.03 shall not exceed $500,000
at any time, (y) the sum of (I) the aggregate outstanding principal amount of
all loans to all such New Direct Affiliates, (II) the aggregate outstanding
capital contributions to all such New Direct Affiliates, and (III) the aggregate
outstanding obligations of all such New Direct Affiliates guaranteed by the
Company as permitted pursuant to Section 7.03 shall not exceed at any time an
amount equal to $1,500,000 less the aggregate purchase price of all assets and
businesses acquired pursuant to acquisitions permitted pursuant to Section 7.12,
and (z) each New Direct Affiliate is engaged in a business similar in all
material respects to the business of the Company, (d) Existing Direct Affiliate
Investments and (e) transactions permitted pursuant to Section 7.12.
Notwithstanding the foregoing, no investment permitted pursuant to the preceding
clauses (b), (c), (d) or (e) shall be made if a Default or Event of Default
shall have occurred or be continuing or would occur after giving effect to such
loan or investment.
SECTION 7.07. Nature of Business. Change or alter, in any material respect,
the nature of its business from the nature of the business engaged in by it on
the date hereof.
41
SECTION 7.08. Sale and Leaseback. Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property,
whether real or personal, used or useful in its business, whether now owned or
hereafter acquired, of it, if at the time of such sale or disposition it intends
to lease or otherwise acquire the right to use or possess (except by purchase)
such property or like property for a substantially similar purpose.
SECTION 7.09. Federal Reserve Regulations. Permit any Loan or the proceeds
of any Loan to be used for any purpose which violates or is inconsistent with
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
SECTION 7.10. Accounting Policies and Procedures. Permit any change in the
accounting policies and procedures of the Company or any Guarantor, including a
change in fiscal year, provided, however, that any policy or procedure required
to be changed by the Financial Accounting Standards Board (or other board or
committee thereof) in order to comply with Generally Accepted Accounting
Principles may be so changed.
SECTION 7.11. Hazardous Materials. Cause or permit any of its properties or
assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce or process Hazardous Materials, except in
compliance, in all material respects, with all applicable federal, state and
local laws or regulations, or cause or permit, as a result of any intentional or
negligent act or omission on the part of the Company or any Guarantor, a release
of Hazardous Materials onto such property or asset or onto any other property in
violation, in any material respect, of any applicable Environmental Law.
SECTION 7.12. Limitations on Fundamental Changes. Merge or consolidate
with, or sell, assign, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets (whether
now or hereafter acquired) to, any Person, or, acquire all of the stock or all
or substantially all of the assets or the business of any Person or liquidate,
wind up or dissolve or suffer any liquidation or dissolution. Notwithstanding
the foregoing, the Company may acquire all or substantially all of the assets or
the business of any Person provided (a) the aggregate purchase price of any
single acquisition or series of related acquisitions shall not exceed $500,000,
(b) the aggregate purchase price of all such acquisitions shall not exceed an
amount equal to $1,500,000 less the sum of (i) the aggregate outstanding loans
and investments in New Direct Affiliates permitted pursuant to Section 7.06(c)
and (ii) the aggregate outstanding obligations of New Direct Affiliates
guaranteed by the Company as permitted pursuant to Section 7.03(d), (c) no
Default or Event of Default shall have occurred and be continuing prior to or,
would occur after giving effect to, the proposed acquisition, (d) the assets or
business acquired are used or useful in the Company's existing lines of business
and (e) in the event of the acquisition of stock or other equity interest, such
acquisition is not opposed by the board of directors or other governing body of
such Person.
42
SECTION 7.13. Financial Covenants.
(a) Tangible Net Worth. Permit at any time Tangible Net Worth to be less
than the amount set forth below opposite the applicable period:
Period Amount
------ ------
Closing Date through September 29, 1999 $12,900,000
September 30, 1999 through
September 29, 2000 Actual Tangible Net Worth at September
30, 1998 plus 25% of Net Income (but not
less than zero) for the fiscal year ended
1999.
September 30, 2000 through
September 29, 2001 Actual Tangible Net Worth at September
30, 1999 plus 25% of Net Income (but not
less than zero) for the fiscal year ended
2000.
September 30, 2001 through
September 29, 2002 Actual Tangible Net Worth at September
30, 2000 plus 25% of Net Income (but not
less than zero) for the fiscal year ended
2001.
September 30, 2002 through
September 29, 2003 Actual Tangible Net Worth at September
30, 2001 plus 25% of Net Income (but not
less than zero) for the fiscal year ended
2002.
September 30, 2003 through
the Term Loan Maturity Date Actual Tangible Net Worth at September
30, 2002 plus 25% of Net Income (but not
less than zero) for the fiscal year ended
2003.
(b) Interest Coverage Ratio. Permit at any time the Interest Coverage Ratio
to be less than 1.85:1.00.
(c) Total Unsubordinated Liabilities to EBITDA. Permit at any time the
ratio of Total Unsubordinated Liabilities to EBITDA to be greater than
2.25:1.00.
43
SECTION 7.14. Subordinated Debt. Directly or indirectly prepay, defease,
purchase, redeem, or otherwise acquire any Subordinated Debt (other than in
accordance with the subordination provisions thereof which provisions were
approved by the Lender in accordance with the definition of "Subordinated Debt")
or amend, supplement or otherwise modify any of the terms thereof without the
prior written consent or approval of the Lender.
SECTION 7.15. Dividends. Declare any dividend on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund for the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of stock of the Company or any Guarantor or any warrant to purchase
any class of stock of the Company or any Guarantor, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash, securities or property or in obligations of the
Company or any Guarantor or in any combination thereof, or permit any Subsidiary
to make any payment on account of, or purchase or otherwise acquire, any shares
of any class of the stock of the Company or any Guarantor or any warrant to
purchase any class of stock of the Company or any Guarantor from any Person.
Notwithstanding the foregoing (a) the Company may redeem, repurchase or retire
shares of any class of its capital stock to the extent permitted by Section
7.06(b), (b) each wholly-owned Guarantor of the Company may declare or pay
dividends to any other wholly-owned Guarantor of the Company or to the Company,
and (c) the Company may declare and pay dividends in an aggregate amount not to
exceed $250,000 in any fiscal year; provided, however, in each case of (a) and
(c) no Default or Event of Default shall have occurred and be continuing prior
to or after giving effect to the declaration or payment of such dividend.
SECTION 7.16. Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate, except in the ordinary course
of and pursuant to the reasonable requirements of the Company's or Guarantor's
business and upon fair and reasonable terms no less favorable to the Company or
relevant Guarantor than they would obtain in a comparable arms-length
transaction with a Person not an Affiliate; provided, however, the Company may
extend loans to the Company's Direct Affiliates at below market interest rates
provided the aggregate outstanding principal amount of all such indebtedness
accruing interest at such rates shall not exceed $50,000 at any one time.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. Events of Default. In the case of the happening of any of the
following events (each an "Event of Default"):
(a) failure to pay the principal of or interest on any Loan, or any fees
under this Agreement as and when due and payable and, with respect to interest
and fee payments only, such failure shall continue unremedied for a period of
three Business Days;
44
(b) default shall be made in the due observance or performance of (i)
any covenant, condition or agreement set forth in Section 6.01, 6.02, 6.11,
6.12 or 6.14 if such default shall continue unremedied for a period of 30
days or (ii) any other covenant, condition or agreement of the Company to
be performed pursuant to this Agreement or of the Company or any Guarantor
to be performed pursuant to any other Loan Document (other than those
specified in clause (a) of this Section 8.01);
(c) any representation or warranty made or deemed made in this
Agreement or any other Loan Document or in any report, certificate,
financial statement or other instrument furnished in connection with this
Agreement or any other Loan Document or the borrowings hereunder shall
prove to be false or misleading in any material respect when made or when
deemed made;
(d) default in the performance or compliance in respect of any
agreement or condition relating to any Indebtedness of the Company or any
Guarantor in excess of $50,000 individually or in the aggregate (other than
the Notes) if the effect of such default is to accelerate the maturity of
such Indebtedness or to permit the holder or obligee thereof (or a trustee
on behalf of such holder or obligee) to cause such Indebtedness to become
due prior to the stated maturity thereof, or, except as otherwise expressly
permitted pursuant to Section 6.02, any such Indebtedness shall not be paid
when due;
(e) the Company or any Guarantor shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code or any other federal or state bankruptcy, insolvency or similar
law, (ii) consent to the institution of, or fail to controvert in a timely
and appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the employment of a receiver,
trustee, custodian, sequestrator or similar official for the Company or any
Guarantor or for a substantial part of its property; (iv) file an answer
admitting the material allegations of a petition filed against it in such
proceeding, (v) make a general assignment for the benefit of creditors,
(vi) take corporate action for the purpose of effecting any of the
foregoing; or (vii) become unable or admit in writing its inability or fail
generally to pay its debts as they become due; or any of the actions
identified in the preceding clauses (i) through (vii) shall have occurred
with respect to any Guarantor;
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Company or any Guarantor or of a substantial part
of its property, under Title 11 of the United States Code or any other
federal or state bankruptcy insolvency or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator or similar official for the
Company or any Guarantor or for a substantial part of their property, or
(iii) the winding-up or liquidation of the Company or any Guarantor and in
any such case such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall
continue unstayed and in effect for 60 days;
45
(g) one or more orders, judgments or decrees for the payment of money in
excess of $50,000 in the aggregate shall be rendered against the Company or any
Guarantor and the same shall not have been paid in accordance with such
judgment, order or decree or settlement and either (i) an enforcement proceeding
shall have been commenced by any creditor upon such judgment, order or decree,
or (ii) there shall have been a period of thirty (30) days during which a stay
of enforcement of such judgment, order or decree, by reason of pending appeal or
otherwise, was not in effect;
(h) any Plan shall fail to maintain the minimum funding standard required
for any Plan year or part thereof or a waiver of such standard or extension of
any amortization period is applied for or granted under Section 412 of the Code,
any Plan is terminated by the Company, any Guarantor or any ERISA Affiliate or
the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a Reportable Event shall have occurred with respect
to a Plan or the Company, or any ERISA Affiliate shall have incurred a liability
to or on account of a Plan under Section 515, 4062, 4063, 4201 or 4204 of ERISA,
and there shall result from any such event or events the imposition of a lien
upon the assets of the Company or any Guarantor, the granting of a security
interest on such assets, or a liability to the PBGC or a Plan or a trustee
appointed under ERISA or a penalty under Section 4971 of the Code;
(i) any material provision of any Loan Document shall for any reason cease
to be in full force and effect in accordance with its terms or the Company or
any Guarantor shall so assert in writing;
(j) a Change of Control shall have occurred;
(k) any Guarantor shall fail to perform or observe any term or provision of
the Guaranty (subject, with respect to Section 4(b) of the Guaranty, to the same
grace period, if any, as would apply under this Section 8.01 to the Company's
performance or observance of the applicable covenant) or any representation or
warranty made by any Guarantor in connection with such Guarantor's Guaranty
shall prove to have been incorrect in any material respect when made or deemed
made; or
(l) any of the Liens purported to be granted pursuant to the Pledge
Agreement shall cease for any reason to be legal, valid and enforceable Liens on
the collateral purported to be covered thereby or have the priority purported to
be created thereby;
then, at any time thereafter during the continuance of any such event, the
Lender may, in its sole discretion, by written or telephonic notice to the
Company, take either or both of the following actions, at the same or different
times, (a) terminate the Commitments and (b) declare (i) the Notes, both as to
principal and interest, and (ii) all other Obligations, to be forthwith due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, anything contained herein or in the Notes to
the contrary notwithstanding; provided, however, that if an event specified in
Section 8.01(e) or (f) shall have occurred, the
46
Commitments shall automatically terminate and interest, principal and amounts
referred to in the preceding clauses (i) and (ii) shall be immediately due and
payable without presentment, demand, protest, or other notice of any kind, all
of which are expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including
telecopy), and unless otherwise expressly provided herein, shall be conclusively
deemed to have been received by a party hereto and to be effective on the day on
which delivered by hand to such party or one Business Day after being sent by
overnight mail to the address set forth below, or, in the case of telecopy
notice, when acknowledged as received, or if sent by registered or certified
mail, three (3) Business Days after the day on which mailed in the United
States, addressed to such party at such address:
(a) if to the Lender, at
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Relationship Manager for
Global Payment Technologies, Inc.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, at
Global Payment Technologies, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President & Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
- and -
47
(c) as to each such party at such other address as such party
shall have designated to the other in a written notice
complying as to delivery with the provisions of this Section
9.01.
SECTION 9.02. Effectiveness; Survival. This Agreement shall become
effective on the date on which all parties hereto shall have signed a
counterpart copy hereof and shall have delivered the same to the Lender. All
representations and warranties made herein and in the other Loan Documents and
in the certificates delivered pursuant hereto or thereto shall survive the
making by the Lender of the Loans, in each case, as herein contemplated and the
execution and delivery to the Lender of the Notes evidencing the Loans and shall
continue in full force and effect so long as the Obligations hereunder are
outstanding and unpaid and the Commitments are in effect. The obligations of the
Company pursuant to Section 3.07, Section 3.08, Section 3.10 and Section 9.03
shall survive termination of this Agreement and payment of the Obligations.
SECTION 9.03. Expenses. The Company agrees (a) to indemnify, defend and
hold harmless the Lender and its officers, directors, employees, and affiliates
(each, an "indemnified person") from and against any and all losses, claims,
damages, liabilities or judgments to which any such indemnified person may be
subject and arising out of or in connection with the Loan Documents, the
financings contemplated hereby, the use of any proceeds of such financings or
any related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any of such indemnified persons
is a party thereto, and to reimburse each of such indemnified persons upon
demand for any reasonable, legal or other expenses incurred in connection with
the investigation or defending any of the foregoing; provided that the foregoing
indemnity will not, as to any indemnified person, apply to losses, claims,
damages, liabilities, judgments or related expenses to the extent arising from
the wilful misconduct or gross negligence of such indemnified person, (b) to pay
or reimburse the Lender for all its reasonable out-of-pocket costs and expenses
incurred in connection with the preparation and execution of and any amendment,
supplement or modification to this Agreement, the Notes any other Loan
Documents, and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including without limitation, the reasonable fees and disbursements of ▇▇▇▇▇▇▇
▇▇▇▇▇, P.C., counsel to the Lender, and (c) to pay or reimburse the Lender for
all their costs and expenses incurred in connection with the enforcement and
preservation of any rights under this Agreement, the Notes, the other Loan
Documents, and any other documents prepared in connection herewith or therewith,
including, without limitation, the reasonable fees and disbursements of counsel
(including, without limitation, in-house counsel) to the Lender, including all
such out-of-pocket expenses incurred during any work-out, restructuring or
negotiations in respect of the Obligations.
SECTION 9.04. Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the Lender, all future holders of the Notes and their respective
successors and assigns,
48
except that the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Lender.
(b) The Lender reserves the right to sell participations in or to sell and
assign its rights, duties or obligations with respect to the Loans or the
Commitments to such banks, lending institutions or other financial institutions
as it may choose and without the consent of the Company. The Lender may furnish
any information concerning the Company in its possession from time to time to
any assignee or participant (or proposed assignee or participant). The Lender
may at any time pledge or assign or grant a security interest in all or any part
of its rights under this Agreement and its Notes to a Federal Reserve Bank,
provided that no such assignment shall release the transferor Lender from its
Commitments or its obligations hereunder or substitute any such pledgee or
assignee for the Lender as a party to this Agreement.
SECTION 9.05. No Waiver; Cumulative Remedies. Neither any failure nor any
delay on the part of the Lender in exercising any right, power or privilege
hereunder or under any Note or any other Loan Document shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any other right, power or privilege. The rights, remedies,
powers and privileges herein provided or provided in the other Loan Documents
are cumulative and not exclusive of any rights, remedies powers and privileges
provided by law.
SECTION 9.06. APPLICABLE LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
SECTION 9.07. SUBMISSION TO JURISDICTION; JURY WAIVER. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ OF NASSAU OR COUNTY OF SUFFOLK IN
ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, AND TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH FEDERAL OR
STATE COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER DOCUMENT OR INSTRUMENT
REFERRED TO HEREIN OR THEREIN OR THE SUBJECT MATTER HEREOF THEREOF MAY NOT BE
LITIGATED IN OR BY SUCH FEDERAL OR STATE COURTS. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY AGREES NOT TO (i) SEEK AND
49
HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH FEDERAL OR
STATE COURT BY ANY FEDERAL OR STATE COURT OF ANY OTHER NATION OR JURISDICTION
WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT OR (ii) ASSERT
ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR PROCEEDING UNLESS SUCH COUNTERCLAIM
CONSTITUTES A COMPULSORY COUNTERCLAIM UNDER APPLICABLE RULES OF CIVIL PROCEDURE.
THE COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR
REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS AGREEMENT OR ANY
METHOD AUTHORIZED BY THE LAWS OF NEW YORK. EACH PARTY HERETO WAIVES ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY
OTHER LOAN DOCUMENT.
SECTION 9.08. Severability. In case any one or more of the provisions
contained in this Agreement, any Note or any other Loan Document should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.
SECTION 9.09. Right of Setoff. If an Event of Default shall have occurred
and be continuing, the Lender and each of its Affiliates are hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Lender or any Affiliate of the Lender to or for the credit or the account
of the Company against any and all of the Obligations of the Company now and
hereafter existing under this Agreement and the Notes held by the Lender,
irrespective of whether or not the Lender shall have made any demand under this
Agreement or any Note and although such obligations may be unmatured. The rights
of the Lender and each Affiliate of the Lender under this Section 9.09 are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which they may have.
SECTION 9.10. Headings. Section headings used herein are for convenience of
reference only and are not to affect the construction of or be taken into
consideration in interpreting this Agreement.
SECTION 9.11. Construction. This Agreement is the result of negotiations
between, and has been reviewed by, each of the Company, the Lender and their
respective counsel. Accordingly, this Agreement shall be deemed to be the
product of each party hereto, and no ambiguity shall be construed in favor of or
against either the Company or the Lender.
SECTION 9.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
taken together, shall constitute one and the same instrument.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the Company and the Lender have caused this Agreement
to be duly executed by their duly authorized officers, as of the day and year
first above written.
GLOBAL PAYMENT TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Operating Officer
THE CHASE MANHATTAN BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
51