EXHIBIT 10.5
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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF NOVEMBER 14, 1997
AMONG
GLOBAL IMAGING SYSTEMS INC.
AND THE OTHER BORROWERS NAMED HEREIN
collectively, as Borrower,
PPM AMERICA, INC.
as Agent,
and
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY,
as Lender
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TABLE OF CONTENTS
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Page
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SECTION 1: CREDIT FACILITIES.............................................. 2
1.1 Loans........................................................... 2
(A) Revolving Loans............................................. 2
(B) Manner of Making Revolving Loans............................ 2
(1) Revolving Loan Advances................................ 2
(2) Notice of Revolving Loan Borrowings.................... 3
(3) Disbursement of Revolving Loans........................ 3
(C) Term Loans.................................................. 3
(1) Initial Term Loan...................................... 3
(2) Additional Term Loans.................................. 3
(3) Notice of Additional Term Loan Borrowings.............. 4
(4) Disbursement of Additional Term Loans.................. 4
(5) Payment of Term Loans.................................. 4
(D) Notes....................................................... 5
1.2 Interest and Related Fees....................................... 5
(A) Interest.................................................... 5
(B) Unused Line Fee............................................. 6
(C) Computation of Interest and Related Fees.................... 6
(D) Default Rate of Interest.................................... 6
(E) Excess Interest............................................. 6
1.3 Expenses and Attorneys Fees..................................... 6
1.4 Payments........................................................ 7
1.5 Mandatory Prepayments and Other Payments........................ 7
(A) Prepayments from Excess Cash Flow........................... 7
(B) Maximum Loan Balance Compliance............................. 8
(C) Prepayments in Excess of Maximum Debt....................... 8
(D) Issuances and Sales of Capital Stock........................ 8
(E) Asset Sales................................................. 9
(F) Optional Prepayments........................................ 9
1.6 Term of the Agreement........................................... 9
1.7 Prepayment Fee.................................................. 9
1.8 Borrower's Loan Account......................................... 11
1.9 Collection of Accounts.......................................... 11
1.10 Joint and Several Liability; Rights of Contribution............. 12
1.11 Use of Proceeds................................................. 12
1.12 Ratification.................................................... 13
SECTION 2: AFFIRMATIVE COVENANTS.......................................... 13
2.1 Compliance With Laws............................................ 13
2.2 Maintenance of Properties; Insurance............................ 15
2.3 Inspection; Lender Meetings..................................... 16
2.4 Corporate Existence, etc........................................ 16
2.5 Interest Rate Protection........................................ 16
2.6 Further Assurances.............................................. 17
SECTION 3: NEGATIVE COVENANTS............................................. 17
3.1 Indebtedness.................................................... 17
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3.2 Liens and Related Matters....................................... 18
(A) No Liens.................................................... 18
(B) No Negative Pledges......................................... 19
(C) No Restrictions on Subsidiary Distributions to Borrower..... 19
3.3 Investments: Joint Ventures..................................... 20
3.4 Contingent Obligations.......................................... 20
3.5 Restricted Junior Payments...................................... 21
3.6 Restriction on Fundamental Changes.............................. 21
3.7 Disposal of Assets or Subsidiary Stock.......................... 21
3.8 Transactions With Affiliates.................................... 22
3.9 Management Fees and Compensation................................ 22
3.10 Conduct of Business............................................. 22
3.11 Changes Relating to Indebtedness................................ 22
3.12 Fiscal Year..................................................... 23
3.13 Press Release: Public Offering Materials........................ 23
3.14 Subsidiaries.................................................... 23
3.15 Bank Accounts................................................... 23
3.16 Acquisitions.................................................... 23
SECTION 4: FINANCIAL COVENANTS/REPORTING.................................. 25
4.1 Capital Expenditure Limits...................................... 25
4.2 Leverage Ratio.................................................. 25
4.3 Pro Forma EBITDA................................................ 26
4.4 Fixed Charge Coverage........................................... 26
4.5 Interest Expense Coverage....................................... 27
4.5A Maintenance of Financial Covenants.............................. 27
4.6 Financial Statements and Other Reports.......................... 27
(A) Monthly Financials.......................................... 28
(B) Year-End Financials......................................... 28
(C) Borrower Compliance Certificate............................. 28
(D) Accountants' Reliance Letter................................ 29
(E) Accountants' Reports........................................ 29
(F) Availability and Borrowing Base Certificates................ 29
(G) Management Report........................................... 29
(H) Appraisals.................................................. 30
(I) Projections................................................. 30
(J) SEC Filings and Press Releases.............................. 30
(K) Events of Default, etc...................................... 30
(L) Litigation.................................................. 30
(M) Supplemental Schedules; Notice of Organizational Changes.... 31
(N) Casualty Losses............................................. 31
(0) Change in Corporate Management.............................. 31
(P) Other Information........................................... 31
4.7 Accounting Terms: Utilization of GAAP for Purposes
of Calculations Under Agreement................................. 31
SECTION 5: REPRESENTATIONS AND WARRANTIES................................. 32
5.1 Disclosure...................................................... 32
5.2 No Material Adverse Effect...................................... 32
5.3 No Default: Governmental Consents............................... 32
5.4 Organization, Powers, Capitalization and Good Standing.......... 33
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(A) Organization and Powers..................................... 33
(B) Capitalization.............................................. 33
(C) Binding Obligation.......................................... 33
(D) Qualification............................................... 33
5.5 Financial Statements............................................ 34
5.6 Intellectual Property........................................... 34
5.7 Investigations Audits, Etc...................................... 34
5.8 Employee Matters................................................ 34
5.9 Solvency........................................................ 35
5.10 Environmental Compliance........................................ 35
5.11 Litigation...................................................... 36
5.12 ERISA........................................................... 36
SECTION 6: DEFAULT, RIGHTS AND REMEDIES................................... 36
6.1 Event of Default................................................ 36
(A) Payment..................................................... 36
(B) Default in Other Agreements................................. 36
(C) Breach of Certain Provisions................................ 37
(D) Breach of Warranty.......................................... 37
(E) Other Defaults Under Loan Documents......................... 37
(F) Involuntary Bankruptcy; Appointment of Receiver, etc........ 37
(G) Voluntary Bankruptcy: Appointment of Receiver, Etc.......... 37
(H) Governmental Liens.......................................... 38
(I) Judgment and Attachments.................................... 38
(J) Material Adverse Effect..................................... 38
(K) Dissolution................................................. 38
(L) Solvency.................................................... 38
(M) Injunction.................................................. 38
(N) ERISA: Pension Plans........................................ 38
(0) Environmental Issues........................................ 39
(P) Invalidity of Loan Documents................................ 39
(Q) Damages, Strike, Casualty................................... 39
(R) Licenses and Permits........................................ 39
(S) Failure of Security......................................... 39
(T) Change in Control........................................... 39
6.2 Suspension of Commitment........................................ 39
6.3 Acceleration.................................................... 40
6.4 Performance by Agent............................................ 40
SECTION 7: CONDITIONS TO LOANS............................................ 40
7.1 Conditions to All Loans......................................... 40
7.2 Conditions to Funding Additional Term Loans . .................. 41
(A) Use of Proceeds............................................. 41
(B) Due Diligence Package....................................... 41
(C) Evidence of Perfected First Priority Security
Interests of the Lenders in Assets.......................... 41
(D) Maximum Availability........................................ 42
(E) Other Documents............................................. 42
SECTION 8: ASSIGNMENT AND PARTICIPATION................................... 42
SECTION 9: MISCELLANEOUS.................................................. 42
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9.1 Indemnities..................................................... 42
9.2 Amendments and Waivers.......................................... 42
9.3 Notices......................................................... 43
9.4 Failure or Indulgence Not Waiver: Remedies
Cumulative...................................................... 44
9.5 Marshalling, Payments Set Aside................................. 44
9.6 Severability.................................................... 44
9.7 Headings........................................................ 44
9.8 Applicable Law.................................................. 45
9.9 Successors and Assigns.......................................... 45
9.10 No Fiduciary Relationship....................................... 45
9.11 Construction.................................................... 45
9.12 Confidentiality................................................. 45
9.13 Consent to Jurisdiction and Service of Process.................. 45
9.14 Waiver of Jury Trial............................................ 46
9.15 Survival of Warranties and Certain Agreements................... 46
9.16 Entire Agreement................................................ 46
9.17 Counterparts.................................................... 47
SECTION 10: DEFINITIONS................................................... 47
10.1 Certain Defined Terms........................................... 47
10.2 Other Definitional Provisions................................... 62
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EXHIBITS
Exhibit 1.1 Borrowing Loan Request - See 1996 Loan Agreement
Exhibit 4.6 (C) Compliance Certificate - See 1996 Loan Agreement
Exhibit 4.6(F) Availability Certificate - See 1996 Loan Agreement
Exhibit 4.6 (F-l) Borrowing Base Certificate - See 1996 Loan Agreement
Exhibit l.l (D-l) Form of Revolving Credit Note
Exhibit l.l(D-2) Form of Term Note
Exhibit 8 Form of Agent Agreement - See 1996 Loan Agreement
SCHEDULES
Schedule 2.2(B) Insurance
Schedule 3.1 Indebtedness
Schedule 3.2(A) (11) Liens
Schedule 3.4 Contingent Obligations
Schedule 3.8 Affiliate Transactions
Schedule 3.9 Management Fees and Compensation
Schedule 3.10 Business Description
Schedule 3.16 Due Diligence Package
The Exhibits and Schedules to this Amended and Restated Credit Agreement are not
included with this Registration Statement on Form S-1. Global will provide these
exhibits and schedules upon the request of the Securities and Exchange
Commission.
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AMENDED AND RESTATED CREDIT AGREEMENT
This CREDIT AGREEMENT (the "Agreement") is dated as of August 14, 1996
and as amended and restated as of November 14, 1997, is entered into by and
among GLOBAL IMAGING SYSTEMS INC., a Delaware corporation ("Global"), GLOBAL
IMAGING OPERATIONS, INC., a Delaware corporation ("Operations"), GLOBAL IMAGING
FINANCE COMPANY, a Delaware corporation ("Finance"), COPY SERVICE & SUPPLY,
INC., a North Carolina corporation ("Copy Service"), OFFICE FURNITURE CONCEPTS,
INC., a North Carolina corporation ("Office Concepts"), CSS LEASING, LLC, a
North Carolina limited liability company ("CSS Leasing"), FELCO OFFICE SYSTEMS,
INC., a Texas corporation ("Felco"), ▇▇▇▇▇▇, INC., an Alabama corporation
("▇▇▇▇▇▇"), ▇▇▇▇▇▇ OFFICE PRODUCTS, INC. a New Hampshire corporation ("▇▇▇▇▇▇"),
AMERICAN PHOTOCOPY EQUIPMENT COMPANY OF PITTSBURGH, a Delaware corporation
("AMCOM"), SOUTHERN COPY SYSTEMS, INC., an Alabama corporation ("Southern
Copy"), BUSINESS EQUIPMENT UNLIMITED, a Maine corporation ("Business
Equipment"), CAMERON OFFICE PRODUCTS, INC., a Massachusetts corporation
("Cameron"), SOUTHERN BUSINESS COMMUNICATIONS, INC., a Georgia corporation
("Southern Business"), ELECTRONIC SYSTEMS, INC., a Virginia corporation
("Electronic Systems"), EASTERN COPY PRODUCTS, INC., a New York corporation
("Eastern Copy"), QUALITY BUSINESS SYSTEMS, INC., a Washington corporation
("Quality Business"), DUPLICATING SPECIALTIES, INC., an Oregon corporation
("Duplicating Specialties") (Global, Operations, Finance, Copy Service, Office
Concepts, CSS Leasing, Felco, Berney, Conway, AMCOM, Southern Copy, Business
Equipment, Cameron, Southern Business, Electronic Systems, Eastern Copy, Quality
Business and Duplicating Specialties are each individually and collectively
referred to herein as "Borrower"), ▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE COMPANY, a
Michigan insurance corporation, ("▇▇▇▇▇▇▇" or "Lender" and collectively with all
other Lenders, if any, the "Lenders") and PPM AMERICA, INC., a Delaware
corporation, as Agent for the Lenders (the "Agent").
R E C I T A L S:
WHEREAS, the Borrower, the Lender and the Agent are parties to a Credit
Agreement dated as of August 14, 1996, as amended (as so amended, the "1996 Loan
Agreement"), pursuant to which the Lender made revolving loans to the Borrower
from time to time in an amount not to exceed $3,500,000 and term loans to the
Borrower in the original principal amount not to exceed $76,500,000;
WHEREAS, the Borrower has requested and the Lender has agreed, to amend
and restate the 1996 Loan Agreement, in its entirety, to, among other things,
increase the Revolving Loan Commitment to $6,000,000 and the Term Loan
Commitment to $114,000,000;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders and Agent agree as
follows:
SECTION 1
CREDIT FACILITIES
1.1 Loans. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Borrower contained
herein:
(A) Revolving Loans. Pursuant to the 1996 Loan Agreement, the
Lenders have made Revolving Loans to the Borrower which Loans shall be repaid
pursuant to the terms of this Agreement. Subject to the terms and conditions
herein set forth, each Lender agrees, severally and not jointly, to continue to
lend to Borrower from the Closing Date to the Expiry Date, its Pro Rata Share of
Revolving Loans not in excess of the lesser of (i) the Borrowing Base and (ii)
the Revolving Loan Commitment. As used herein, the "Borrowing Base" shall mean
an amount as of any time of determination equal to the sum of:
(x) Eighty (80%) percent of Eligible Accounts, plus
(y) Forty-five (45%) percent of Eligible Inventory.
Revolving Loans may be repaid and reborrowed. If at any time
Revolving Loans exceed the Maximum Revolving Loan Balance, Revolving Loans must
be repaid immediately in an amount sufficient to eliminate any excess. No Lender
shall have any obligation to make advances hereunder to the extent any requested
advance would cause the principal balance of the Revolving Loans then
outstanding to exceed the Maximum Revolving Loan Balance or the Maximum Loan
Balance; provided that the Requisite Lenders may, in their sole discretion,
elect from time to time to make Revolving Loans in excess of the Maximum
Revolving Loan Balance. If Revolving Loans in excess of the Maximum Revolving
Loan Balance are made pursuant to the approval of the Requisite Lenders as set
forth in the proviso to the preceding sentence, then the Maximum Revolving Loan
Balance shall be deemed increased by such amount but only for so long as the
Requisite Lenders allow such Loans to be outstanding.
(B) Manner of Making Revolving Loans.
(1) Revolving Loan Advances. Revolving Loans shall be made
and repaid on any two Business Days of each week; provided, however: (i)
Borrower may only engage in two transactions each week, (ii) Borrower may only
engage in one transaction on any given Business Day and (iii) Borrower must
provide Agent with one day prior notice before engaging in any such transaction.
The Revolving Loans may be repaid and the principal amount thereof reborrowed
from time to time prior to the Expiry Date subject to
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all the terms and conditions hereof. Each Revolving Loan shall be made and
repaid in the aggregate amount of $100,000 or any greater amount that is an
integral multiple of $50,000.
(2) Notice of Revolving Loan Borrowings. The Borrower
shall give telephonic, telex or telecopy notice to the Agent in the form of the
Borrowing Request set forth as Exhibit 1.1 hereto (which notice shall be
irrevocable once given and, if by telephone, shall be confirmed in writing
within one Business Day of such telephonic notice) by no later than 10:30 A.M.
C.S.T. on the date that is at least one Business Day prior to the date of each
requested Revolving Loan. Each such notice from the Borrower shall specify: (a)
the date of the requested Revolving Loan and (b) the amount of the requested
Revolving Loan. The Borrower agrees that the Agent may rely on any such
telephonic, telex or telecopy notice given by any Person it in good faith
believes is an authorized representative of the Borrower without the necessity
of independent investigation, and in the event any notice by telephone conflicts
with the Borrower's written confirmation, such written confirmation shall govern
and prevail. The Borrower shall also give telephonic, telex or telecopy notice
to Agent at least one Business Day prior to the date of any repayment of the
Revolving Loans.
(3) Disbursement of Revolving Loans. Not later than 1:00
P.M. C.S.T. on the date of any Revolving Loan, each Lender, severally and not
jointly, subject to the terms and conditions hereof, shall make available its
Pro Rata Share of the requested Revolving Loan (determined on the basis of such
Lender's Revolving Loan Commitment) in funds immediately available at such bank
and to such account as shall be specified by an authorized representative of the
Borrower in writing to the Lenders.
(C) Term Loans.
(1) Initial Term Loan. Pursuant to the terms of the 1996
Loan Agreement, the Lenders have made Term Loans to the Borrower in the
aggregate principal amount of $74,479,600 (the "Initial Term Loans") which loans
remain outstanding and shall be repaid in accordance with the terms of this
Agreement.
(2) Additional Term Loans. Each Lender agrees, severally
and not jointly, to lend to Borrower, its Pro Rata Share of each additional Term
Loan during the period from the Closing Date through the Expiry Date, for the
purpose of financing Acquisitions and the purchase of rental pool equipment (the
"Additional Term Loans") . The aggregate amount of all Term and Revolving Loan
Commitments shall not exceed the Maximum Loan Commitment. No Lender shall have
any obligation to make advances under this subsection 1.1(C) (2) unless all of
the conditions set forth in subsections 7.1 and 7.2 have been satisfied or to
the extent any requested advance would cause the principal balance of all Loans
then outstanding to exceed the Maximum Loan Balance or at the time of such
request Revolving Loans outstanding exceed the Maximum Revolving Loan Balance.
Loan Availability shall be
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determined not less than monthly based on the most recent Loan Availability
Certificate delivered to Agent as provided in subsection 4.6(F). If at any time
the Term Loans together with all other Loans exceed the Maximum Loan Balance,
Term Loans must be repaid immediately in an amount sufficient to eliminate any
excess.
(3) Notice of Additional Term Loan Borrowings. The
Borrower shall give telephonic, telex or telecopy notice to the Agent in the
form of the Borrowing Request set forth as Exhibit 1.1 hereto (which notice
shall be irrevocable once given and, if by telephone, shall be confirmed in
writing within one Business Day of such telephonic notice) by no later than
10:30 A.M. C.S.T. on the date that is at least three Business Days prior to the
date of each requested Additional Term Loan. Each such notice from the Borrower
shall specify: (a) the date of the requested Additional Term Loan (b) the amount
of the requested Additional Term Loan and (c) the sources and uses of the
proceeds of such requested Additional Term Loan. The Borrower agrees that the
Agent may rely on any such telephonic, telex or telecopy notice given by any
Person it in good faith believes is an authorized representative of the Borrower
without the necessity of independent investigation, and in the event any notice
by telephone conflicts with the Borrower's written confirmation, such written
confirmation shall govern and prevail. The Borrower shall also give telephonic,
telex or telecopy notice to Agent at least two Business Days prior to the date
of any repayment of the Term Loans.
(4) Disbursement of Additional Term Loans. Not later than
1:00 P.M. C.S.T. on the date of any Additional Term Loan, each Lender, severally
and not jointly, subject to the terms and conditions hereof, shall make
available its Pro Rata Share of the requested Additional Term Loan (determined
on the basis of such Lender's Term Loan Commitment) in funds immediately
available at such bank and to such account as shall be specified by an
authorized representative of the Borrower in writing to the Lenders.
(5) Payment of Term Loans. Borrower shall repay the Term
Loans through periodic repayments on the dates and in amounts equal to the
percentages indicated below of the aggregate principal amount of all Term Loans
("Scheduled Installments").
Percent of the Aggregate Principal
Date Amount of All Term Loans
---- ----------------------------------
January 31, 2000 7%
July 31, 2000 7%
January 31, 2001 9.5%
July 31, 2001 9.5%
January 31, 2002 9.5%
July 31, 2002 9.5%
January 31, 2003 12%
July 31, 2003 12%
January 31, 2004 12%
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Scheduled Maturity Date 12%
Notwithstanding the foregoing, in the event Additional Term Loans are made after
January 31, 2000, the Scheduled Installments due after such date shall be
recalculated to increase the percentages set forth above, pro rata, to ensure
that the entire principal balance of all Term Loans is repaid in accordance with
the above percentages in each of the remaining years taking into consideration
the Scheduled Installments previously paid. Scheduled Installments paid by
Borrower may not be reborrowed except to the extent such payments were made
pursuant to subsections 1.5(A), (B) or (C) and solely for the purpose of
financing Acquisitions pursuant to the terms herein.
(D) Notes. Borrower shall execute and deliver to each Lender:
(i) an amended and restated revolving note to evidence the Revolving Loans, such
revolving note to be in the principal amount of the Revolving Loan Commitment of
such Lender and with other appropriate insertions; and (ii) an amended and
restated term note to evidence the Term Loans such term note to be in the
principal amount of the Term Loan Commitment of such Lender and with other
appropriate insertions. In the event of an assignment pursuant to the Lender
Addition Agreement, Borrower shall, upon surrender of the assigning Lender's
Notes, issue new Notes to reflect the new Commitments of the assigning Lender
and its assignee.
1.2 Interest and Related Fees.
(A) Interest. Except as otherwise set forth in the last
paragraph of this subsection 1.2(A), from the date the Loans are made and the
other Obligations become due, the Obligations shall bear interest as follows:
(1) The Term Loans shall bear interest at the sum of
the LIBOR Rate plus three and one-quarter of one percent (3.25%) per annum.
(2) The Revolving Loans shall bear interest at the sum of
the LIBOR Rate plus three percent (3%) per annum.
The LIBOR Rate applicable to each Loan during each Interest
Period shall be established on the second to last Business Day of the preceding
Interest Period except that the applicable rate with respect to: (i) the first
Interest Period shall be established on the second Business Day preceding the
Closing Date; and (ii) Additional Term Loans shall be established at the same
rate in effect with respect to outstanding Term Loans on the closing date of
each Acquisition to be financed with the proceeds of such Additional Term Loan.
The Agent shall notify the Borrower of the interest rate applicable to the Loan
for each Interest Period as soon as practicable, provided, however, that the
failure of the Agent to provide such notice shall not affect the interest rate
applicable to the Loan during such Interest Period. The Agent's good faith
determination of the applicable interest rate
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shall be conclusive and binding except in the case of manifest error or willful
misconduct.
If the introduction of or the interpretation of any law, rule, or
regulation would increase the reserve requirement and as a result there would be
an increase in the cost of making or maintaining a LIBOR Rate Loan (a Regulatory
Change"), then Agent shall submit a certificate demonstrating the impact of the
increased cost and require payment thereof within ten (10) days from the
Borrower. There are no limitations on the number of times such certificate may
be submitted. If the Agent requests compensation from the Borrower pursuant to
the provisions of this paragraph the Borrower may, at its option, effective at
the end of the current Interest Period, upon at least two Business Days prior
written notice to the Agent, elect to convert the interest rate applicable to
the obligations to the Base Rate plus 1.50% until the Agent has notified the
Borrower that the Regulatory Change giving rise to such request is no longer in
effect.
(B) Unused Line Fee. From the Original Closing Date, Borrower shall
pay to Agent, for the ratable benefit of Lenders, a fee in an amount equal to
(i) the sum of the Revolving Loan Commitment less the sum of (x) the average
daily balance of the Revolving Loans during the preceding month multiplied by
(ii) one-quarter percent (.25%) per annum. Such fee is payable monthly in
arrears on the last Business Day of each Interest Period for the entire Interest
Period.
(C) Computation of Interest and Related Fees. Interest on all Loans
and any other Obligations and the related fees set forth in this subsection 1.2
shall be calculated daily on the basis of a three hundred sixty (360) day year
for the actual number of days elapsed in the period during which it accrues.
Interest on all Loans is payable to Agent, for the benefit of Lenders, on the
last Business Day of the applicable Interest Period and on the Expiry Date,
whether by acceleration or otherwise.
(D) Default Rate of Interest. At the election of Agent, after the
occurrence of an Event of Default and for so long as it continues, the Loans and
other Obligations shall bear interest at a rate that is two percent (2%) in
excess of the rates otherwise payable under this Agreement. Agent shall notify
Borrower promptly after Agent's imposition of interest at the default rate as
specified herein.
(E) Excess Interest. In no event shall charges constituting interest
payable by Borrower hereunder exceed the maximum amount or the rate permitted
under any applicable law or regulation, and if any part or provision of this
Agreement is in contravention of any such law or regulation, such part or
provision shall be deemed amended to conform thereto.
1.3 Expenses and Attorneys Fees. Borrower agrees to promptly pay all fees,
costs and expenses (including reasonable fees, costs
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and expenses of attorneys) incurred by Agent and Lenders in connection with any
matters contemplated by or arising out of the Loan Documents, in connection with
the examination, review, due diligence investigation, documentation, negotiation
and closing of the transactions contemplated herein and in connection with the
continued administration of the Loan Documents including any amendments,
modifications, and waivers. Borrower agrees to promptly pay all fees, costs and
expenses (including fees, costs and expenses of attorneys) incurred by Agent and
Lenders in connection with any action to enforce any Loan Document or to collect
any payments due from Borrower. All fees, costs and expenses for which Borrower
is responsible under this subsection 1.3 shall be deemed part of the Obligations
when incurred, payable on demand and secured by the Collateral.
1.4 Payments. All payments by Borrower of the Obligations shall be
made in same day funds and delivered to Agent by wire transfer to the following
account or such other place as Agent may from time to time designate:
Northern Trust CHGO
ABA No. : ▇▇▇▇-▇▇▇▇-▇
Account Number: 5186041000
For Further Credit
to Account Number: 26-91241
Account Name: ▇▇▇▇▇▇▇ National Life Insurance
Company
Reference: Global Imaging Systems Inc.
Date of Payment, principal and
interest breakdown
Attention: Income Collections
Borrower shall receive credit for such funds if received by 2:00 p.m. CST on
such day. In the absence of timely notice and receipt, such funds shall be
deemed to have been paid on the next Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
the payment may be made on the next succeeding Business Day and such extension
of time shall be included in the computation of the amount of interest and fees
due hereunder.
Borrower hereby authorizes Agent to make a Revolving Loan for the
payment of interest, unused line fees, closing fees and increased costs as a
result of any Regulatory Change. Prior to an Event of Default, other fees, costs
and expenses (including those of attorneys) reimbursable to Agent and Lenders
pursuant to subsection 1.3 or elsewhere in any Loan Document may be debited to
the Revolving Loans after fifteen (15) days notice. After an Event of Default,
no notice is required.
1.5 Mandatory Prepayments and Other Payments.
(A) Prepayments from Excess Cash Flow. Within ninety (90) days
after the end of each of its Fiscal Years, Borrower shall
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prepay the Loans in an amount equal to seventy percent (70%) of the Excess Cash
Flow for such Fiscal Year together with unpaid interest accrued on such amount
to the date of such payment. The first prepayment shall be for the Fiscal Year
ending March 31, 1998. The calculation of Excess Cash Flow shall be based on the
audited financial statements for the Borrower and its Subsidiaries. Borrower may
voluntarily prepay any portion of the remaining thirty percent (30%) of Excess
Cash Flow for any Fiscal Year together with accrued interest. Any prepayments
made from Excess Cash Flow shall not be subject to the Prepayment Fee. All such
prepayments, whether mandatory or voluntary pursuant to this subsection 1.5
(A), shall be applied: first, pro-rata to the Scheduled Installments; and
second, to the outstanding principal balance of the Revolving Loans. Borrower
may reborrow Revolving Loans and Term Loans repaid pursuant to this subsection
1.5(A); provided, however, Term Loans may only be reborrowed for the purpose of
financing an Acquisition in accordance with the terms hereof and provided
further all Loans outstanding do not exceed the Maximum Loan Balance and all
Revolving Loans outstanding do not exceed the Maximum Revolving Loan Balance.
(B) Maximum Loan Balance Compliance. If at any time there
remain outstanding Revolving Loans and/or Term Loans in excess of the Maximum
Loan Balance, Borrower shall immediately repay Revolving Loans and/or Term Loans
to eliminate such excess.
(C) Prepayments in Excess of Maximum Debt. If at any time the
Indebtedness of Borrower and its Subsidiaries exceeds the applicable Maximum
Debt, Borrower shall immediately repay Revolving Loans and/or Term Loans in an
amount sufficient to eliminate any such excess. Borrower may reborrow Revolving
Loans and Term Loans paid pursuant to this subsection 1.5(C) at such time as
Borrower is in compliance with the applicable Maximum Debt after giving effect
to such reborrowing but, with respect to Term Loans, solely for the purpose of
financing Acquisitions in accordance with the terms of this Agreement.
(D) Issuances and Sales of Capital Stock. In the event
Borrower issues or sells any of its capital stock after the Original Closing
Date in accordance with the terms of this Agreement and with the Agent's
consent, the entire amount of the net proceeds received by the Borrower in
connection with such sale or issuance, at Agent's option, shall be paid to the
Lenders together with unpaid interest accrued on such amount to the date of such
payment to prepay the Term Loans. Agent shall advise Borrower whether or not it
shall require such prepayment at the time it consents to such issuance or sale.
All such prepayments shall be applied to the Obligations in the order set forth
in subsection 1.5(A) and shall not be subject to the Prepayment Fee. Borrower
may not reborrow Term Loans paid pursuant to this subsection 1.5(D) .
Notwithstanding the foregoing, any issuance or sale of capital stock shall not
be subject to the prepayment provisions of this subsection 1.5(D) if such
issuance or sale is to (i) existing management of a business acquired by
Borrower in connection with an
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Acquisition; provided, however, such sale or issuance is consummated within one
month of the closing date of such Acquisition; (ii) GTCR IV pursuant to the
terms of the GTCR Equity Purchase Agreement; or (iii) Green ▇▇▇▇▇▇▇ & Bunch with
respect to the sale of 1,354.17 shares of Class A common stock and 240.13 shares
of Class B common stock of Global.
(E) Asset Sales. In the event Borrower, with the consent of
Agent, sells, transfers, leases or otherwise disposes of any of its properties,
business or assets in excess of the amounts permitted under subsection 3.7, the
net proceeds of such sale, transfer, lease or other disposition shall be paid to
the Lenders to prepay the Term Loans together with unpaid interest accrued on
such amount to the date of such payment and the applicable Prepayment Fee. All
such prepayments shall be applied to the Obligations in the order set forth in
subsection 1.5(A) and may not be reborrowed.
(F) Optional Prepayments. Except as set forth herein, any
prepayment of the Term Loans shall be subject to the Prepayment Fee and may not
be reborrowed.
1.6 Term of the Agreement. This Agreement and the other Loan
Documents shall become effective as of the date set forth on the first page
hereof and shall continue in full force and effect until the Scheduled Maturity
Date, unless sooner terminated pursuant to the terms hereof. All of the
Obligations shall become due and payable as otherwise set forth herein, but in
any event, all of the remaining Obligations shall become due and payable on the
Expiry Date. Upon such date and following repayment in full of the Obligations,
this Agreement will terminate. Notwithstanding any such termination, until all
Obligations have been fully paid and satisfied, Agent shall be entitled to
retain the security interests in the Collateral granted under the Security
Documents and the ability to exercise all rights and remedies available to Agent
under the Loan Documents and applicable laws.
1.7 Prepayment Fee.
(A) If for any reason this Agreement is terminated prior to
the Scheduled Maturity Date or, except as otherwise provided herein, Borrower
prepays a portion of the Term Loan Balance, in view of the impracticality and
extreme difficulty of ascertaining actual damages and by mutual agreement of the
parties as to a reasonable calculation of Lenders' lost profits as a result
thereof, Borrower agrees to pay to Agent for the ratable benefit of Lenders,
upon the effective date of such termination or such prepayment, a fee in the
amount set forth below (the "Prepayment Fee") if such termination or prepayment
is effective in the period indicated:
Amount Period
------ ------
(i) 5.0% of the Term Loan First 12 month period
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Balance following the Original
Closing Date
(ii) 4.0% of the Term Loan Second 12 month period
Balance following the Original
Closing Date
(iii) 3.0% of the Term Loan Third 12 month period
Balance following the Original
Closing Date
(iv) 2.0% of the Term Loan Fourth 12 month period
Balance following the Original
Closing Date
(v) 1.0% of the Term Loan Fifth and Sixth 12 month
Balance periods following the
Original Closing Date
Such Prepayment Fee shall be presumed to be the amount of damages sustained by
Lenders as a result of such early termination or prepayment and Borrower agrees
that it is reasonable under the circumstances currently existing. The Prepayment
Fee shall be included in the Obligations.
(B) Notwithstanding the foregoing subsection 1.7(A): (i) in
the event that Borrower completes an initial public offering of its stock and
registers such shares on a recognized securities exchange or the NASDAQ system
and prepays in full all of the Obligations upon completion of such public
offering, then in such event, Borrower shall only be required to pay a
prepayment fee in an amount equal to the lesser of $250,000 or 1% of the Term
Loan Balance; or (ii) the Requisite Lenders decline to make an Additional Term
Loan with respect to an Acquisition which complies with all of the requirements
set forth under subsection 3.16 and would be approved by the Requisite Lenders
except that such Additional Term Loan would result in all Loans exceeding the
Maximum Loan Commitment and the Requisite Lenders do not elect to increase the
Maximum Loan Commitment or the Agent, with the consent of the Required Lenders,
is unable to locate other suitable Lenders to purchase an interest in the Loans
equal to such excess, Borrower shall not be required to pay the Prepayment Fee.
(C) In addition to the exceptions set forth in subsection
1.7(B), if: (i) the Term Loan Balance is at least $105 million; (ii) Borrower
has requested an increase in the Maximum Loan Commitment because in its good
faith judgment Borrower reasonably believes that the Maximum Loan Commitment is
insufficient to finance its prospective Acquisitions for the following six
months and the Lenders do not elect to increase such Commitment; (iii) Borrower
refinances the Obligations and the obligations under such refinancing exceed
$120 million within six months of the termination of this Agreement and such
amount was utilized by Borrower solely to retire the Obligations and to
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finance Acquisitions, then, in such event, Borrower shall not be required to pay
the Prepayment Fee pursuant to subsection 1.7 (A); provided, however,
Borrower deposits into escrow, with an escrow agent selected by Agent pursuant
to the terms and conditions of an escrow agreement in form and substance
satisfactory to Agent, the Prepayment Fee required to be paid under subsection
1.7(A) to assure compliance with this provision.
1.8 Borrower's Loan Account. Agent will maintain loan account records
for (a) all Loans, interest charges and payments thereof, (b) the charging and
payment of all fees, costs and expenses and (c) all other debits and credits
pursuant to this Agreement. The balance in the loan accounts shall be
presumptive evidence of the amounts due and owing to Lenders, provided that any
failure to so properly debit or credit the loan amounts shall not limit or
affect the Borrower's obligation to pay. Periodically, Agent shall provide to
Borrower a statement for each loan account setting forth the principal of each
account and interest due thereon. Borrower must deliver a written objection
within sixty (60) days after receipt of the statement or the statement will be
presumed as binding evidence of the obligation absent manifest error. During the
continuance of an Event of Default, Borrower irrevocably waives the right to
direct the application of any and all payments and Borrower hereby irrevocably
agrees that Agent shall have the continuing exclusive right to apply and reapply
payments in any manner it deems appropriate.
1.9 Collection of Accounts. At any time that an Event of Default has
occurred and is continuing, at Agent's request, Borrower shall establish and
maintain, at its expense, lockboxes and related blocked accounts ("Blocked
Accounts"), as Agent may specify, with such banks as are acceptable to Lender
into which Borrower shall promptly deposit and direct its account debtors to
directly remit all payments on account and all payments constituting proceeds of
Inventory or other Collateral in the identical form in which such payments are
made, whether by cash, check or other manner. The banks at which the Blocked
Accounts are established shall enter into an agreement, in form and substance
satisfactory to Agent, providing that all items received or deposited in the
Blocked Accounts are the property of Agent or Co-Agent, as applicable, for the
ratable benefit of Lenders, that the depository bank has no lien upon, or right
to setoff against, the Blocked Accounts (other than for customary bank fees and
uncollected deposits), the items received for deposit therein, or the funds
from time to time on deposit therein and that the depository bank will wire, or
otherwise transfer, in immediately available funds, on a daily basis, all funds
received or deposited into the Blocked Accounts to such bank account of Agent or
Co-Agent as Agent or Co-Agent may from time to time designate for such purpose
("Payment Account"). Borrower agrees that all payments made to such Blocked
Accounts or other funds received and collected by Agent or Co-Agent, whether on
the Accounts or as proceeds of Inventory or other Collateral or otherwise shall
be the property of
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Agent, or Co-Agent, as applicable, for the ratable benefit of the Lenders to be
applied to the Obligations.
1.10 Joint and Several Liability; Rights of Contribution.
(A) Each Borrower states and acknowledges that: (i) pursuant
to this Agreement, Borrowers desire to utilize their borrowing potential on a
consolidated basis to the same extent possible if they were merged into a single
corporate entity; (ii) it has determined that it will benefit specifically and
materially from the advances of credit contemplated by this Agreement; (iii) it
is both a condition precedent to the obligations of Agent and Lenders hereunder
and a desire of Borrowers that each Borrower execute and deliver to Agent and
Lenders this Agreement; and (iv) Borrowers have requested and bargained for the
structure and terms of security for the advances contemplated by this Agreement.
(B) Each Borrower hereby irrevocably and unconditionally: (i)
agrees that it is jointly and severally liable to Agent and Lenders for the full
and prompt payment of all the Obligations and the full and prompt performance of
all obligations of any Borrower under this Agreement or any other Loan Document,
notwithstanding anything herein or in any other Loan Document specifying that a
particular Borrower is responsible for a given payment or performance; (ii)
agrees to fully and promptly perform all of its obligations hereunder with
respect to each advance of credit hereunder as if such advance had been made
directly to it; and (iii) agrees as a primary obligation to indemnify Agent and
each Lender on demand for and against any loss incurred by Agent or such Lender
as a result of any of the obligations of any of the Borrowers being or becoming
void, voidable, unenforceable or ineffective for any reason whatsoever, whether
or not known to Agent or Lenders or any Person, the amount of such loss being
the amount which Agent or such Lender would otherwise have been entitled to
recover from any Borrower.
(C) Notwithstanding anything herein to the contrary, it is
the desire and intent of each Borrower, the Lenders and the Agent that this
Agreement shall be enforced against each Borrower to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. If, however, and to the extent that, the
obligations of a Borrower under this Agreement shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation, because
of any applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Obligations of such Borrower shall be deemed
to be reduced and such Borrower shall pay the maximum amount of the Obligations
which would be permissible under applicable law.
1.11 Use of Proceeds. Borrower shall use the proceeds of the Loans,
other than Additional Term Loans, only for: (a) capital expenditures, (b) costs,
expenses and fees in connection with the preparation, negotiation, execution and
delivery of this Agreement
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and the other Loan Documents and (c) general operating working capital. All
proceeds of Additional Term Loans shall be used by Borrower only for
Acquisitions, transaction costs directly related to such Acquisitions and the
purchase of rental pool equipment. None of the proceeds will be used, directly
or indirectly, for the purpose of purchasing or carrying any margin security or
for the purposes of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose which
might cause any of the Loans to be considered a "purpose credit" within the
meaning of Regulation G of the Board of Governors of the Federal Reserve System,
as amended.
1.12 Ratification. Except to the extent expressly provided to the
contrary herein, the terms and provisions of the Loan Documents are not affected
in any way hereby and shall remain in full force and effect and are hereby
ratified and confirmed. Each of the Borrowers acknowledges and agrees that the
term "Obligations" as used herein, in the Security Documents and in the other
Loan Documents, includes, without limitation, the Borrowers' obligations
hereunder as well as under the Amended and Restated Term Note and the Amended
and Restated Revolving Note.
SECTION 2
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that so long as the Revolving Loan
Commitment and the Term Loan Commitment are in effect and until payment in full
of all Obligations unless the Requisite Lenders shall otherwise give their prior
written consent, Borrower shall perform and comply with, and shall cause each of
the other Loan Parties to perform and comply with, all covenants in this Section
2 applicable to such Person.
2.1 Compliance With Laws.
(A) Borrower will (i) comply with and will cause each of its
Subsidiaries to comply with all material requirements of all applicable laws,
rules, regulations and orders of any governmental authority (including, without
limitation, laws, rules, regulations and orders relating to taxes, employer and
employee contributions, securities, employee retirement and welfare benefits,
environmental protection matters, including all Environmental Laws, and employee
health and safety) as now in effect and which may be imposed in the future in
all jurisdictions in which Borrower or its Subsidiaries are now doing business
or may hereafter be doing business, and (ii) maintain or obtain and will cause
each of its Subsidiaries to maintain or obtain, all material licenses and
permits now held or hereafter required by Borrower and its Subsidiaries. This
subsection 2.1(A) shall not preclude the Borrower or any Subsidiary from
contesting any taxes or other payments, if they are being diligently contested
in good faith and if appropriate expense provisions have been recorded in
conformity with GAAP. Borrower
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represents and warrants that as of the date hereof, it: (i) is in material
compliance and each of its Subsidiaries is in compliance with the requirements
of all applicable laws, rules, regulations and orders of any governmental
authority as now in effect, and (ii) maintains and each of its Subsidiaries
maintains all material licenses and permits referred to above.
(B) Borrower shall and shall cause each of its Subsidiaries
to establish and maintain, at its expense, a system to assure and monitor its
continued material compliance with all Environmental Laws in all of its
operations, which system shall include annual reviews of such compliance by
employees or agents of Borrower and its Subsidiaries who are familiar with the
requirements of the Environmental Laws. Copies of all environmental surveys,
audits, assessments, feasibility studies and results of remedial investigations
shall be promptly furnished, or caused to be furnished, by Borrower to Agent.
Borrower and each of its Subsidiaries shall take prompt and appropriate action
to respond to any non-compliance with any of the Environmental Laws and shall
regularly report to Agent on such response.
(C) Borrower shall and shall cause each of its Subsidiaries to
give both oral and written notice to Agent immediately upon Borrower's or such
Subsidiary's receipt of any notice of, or Borrower's or such Subsidiary's
otherwise obtaining knowledge of either (i) the occurrence of any event
involving the release, spill or discharge, threatened or actual, of any
Hazardous Material or (ii) any investigation, proceeding, complaint, order,
directive, claims, citation or notice with respect to: (a) any noncompliance
with or violation of any Environmental Law by Borrower or any of its
Subsidiaries, (b) the release, spill or discharge, threatened or actual, of any
Hazardous Material, (c) the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous Materials or (d)
any other environmental, health or safety matter, which affects Borrower, any of
its Subsidiaries or their respective businesses, operations or assets or any
properties at which Borrower or any of its Subsidiaries transported, stored or
disposed of any Hazardous Materials.
(D) Without limiting the generality of the foregoing, whenever
Agent reasonably determines that there is non-compliance, or any condition which
requires any action by or on behalf of Borrower or any of its Subsidiaries in
order to avoid any material non-compliance with any Environmental Law, Borrower
shall, at Agent's request and Borrower's expense: (i) cause an independent
environmental engineer acceptable to Agent to conduct such tests of the site
where non-compliance or alleged non-compliance with such Environmental Laws has
occurred as to such non-compliance and prepare and deliver to Agent a report as
to such non-compliance setting forth the results of such tests, a proposed plan
for responding to any environmental problems described therein, and an estimate
of the costs thereof and (ii) provide to Agent a supplemental report of such
engineer whenever the scope of such
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non-compliance, or Borrower's response thereto or the estimated costs thereof,
shall change in any material respect.
(E) Borrower shall indemnify and hold harmless Agent and each
Lender, their respective directors, officers, employees, agents, invitees,
representatives, successors and assigns, from and against any and all losses,
claims, damages, liabilities, costs, and expenses (including attorneys' fees and
legal expenses) directly or indirectly arising out of or attributable to the
use, generation, manufacture, reproduction, storage, release, threatened
release, spill, discharge, disposal or presence of a Hazardous Material,
including, without limitation, the costs of any required or necessary repair,
clean-up or other remedial work with respect to any property of Borrower or any
of its Subsidiaries and the preparation and implementation of any closure,
remedial or other required plans. All representations, warranties, covenants and
indemnifications in this subsection 2.1 shall survive the payment of the
Obligations and the termination or non-renewal of this Agreement.
2.2 Maintenance of Properties; Insurance.
(A) Borrower will maintain or cause to be maintained in good
repair, working order and condition, in accordance with past practices, all
material properties used in the business of Borrower and its Subsidiaries and
will make or cause to be made all appropriate repairs, renewals and replacements
thereof.
(B) Except as set forth on Schedule 2.2(B), Borrower will
maintain or cause to be maintained, with financially sound and reputable
insurers rated A, Class 15 or better by A.M. Best, public liability and property
damage insurance and all other insurance with respect to its business and
properties and the business and properties of its Subsidiaries against loss or
damage of the kinds customarily carried or maintained by corporations of
established reputation engaged in similar businesses and in amounts reasonably
acceptable to Agent and will deliver evidence thereof to Agent. The policies of
workmen's compensation insurance set forth on Schedule 2.2(B) shall be replaced
upon expiration or cancellation with policies issued by insurance carriers rated
at least A, Class 15 or better by A.M. Best provided the coverage, cost and
other material aspects of such insurance is reasonable in the judgment of
Borrower and Lender. In no event shall policies of insurance be replaced with
policies issued by an insurance carrier rated less than the existing ratings of
the insurance carriers on the Borrower's existing policies as of the Original
Closing Date or with respect to policies issued by Riscorp Insurance Company,
rated A+, Class 6 or better. Notwithstanding the foregoing, ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇'▇
compensation coverage may continue to be part of a pool provided such coverage
is issued by a financially sound and reputable insurer. Borrower shall cause
Agent to be named as loss payee (in the case of casualty), and additional
insured (in all other cases) on all insurance policies pursuant to appropriate
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endorsements in form and substance reasonably satisfactory to Agent.
(C) Borrower will maintain with an insurer satisfactory to
Agent, a key-man life insurance policy covering ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive
Officer of the Borrower, in an amount of at least $5,000,000 with the Agent
named as the beneficiary thereof. The proceeds of such policy shall be used by
Agent to repay the Obligations or, at the election of the Requisite Lenders, to
locate and employ a successor chief executive officer. Any proceeds used to
repay the Obligations shall not be subject to the Prepayment Fee and may not be
reborrowed.
(D) Borrower represents and warrants that it and each of its
Subsidiaries currently maintains all material properties as set forth above and
maintains all insurance described above. Borrower shall notify Agent immediately
of any change in any policy of insurance or any termination or cancellation of
any policy (whether by lapse for non-payment of premiums or otherwise).
2.3 Inspection; Lender Meetings. Borrower shall permit any
authorized representatives of Agent or any Lender to visit and inspect any of
the properties of Borrower or any of its Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and business with its
and their officers and certified public accountants, at such reasonable times
during normal business hours and as often as may be reasonably requested.
2.4 Corporate Existence, etc. Except as otherwise permitted by
subsection 3.6, Borrower will, and will cause each of its Subsidiaries to, at
all times preserve and keep in full force and effect its corporate existence and
all rights and franchises material to its business.
2.5 Interest Rate Protection. The Borrower has previously entered
into a plus or minus 2% interest rate collar or other similar agreements
(collectively, the "Rate Protection Agreements"), on terms and conditions
satisfactory to the Agent, in order that the effective cost of borrowing to the
Borrower on an amount of not less than $23,525,000 of the outstanding Term Loans
is fixed for not less than three (3) years from the effective date of such
agreements. Within thirty days from the date hereof, Borrower shall enter into
an additional Rate Protection Agreement or amend its existing Rate Protection
Agreements in order that the cost of borrowing to the Borrower on an aggregate
amount of $50,000,000 of the outstanding Term Loans is fixed on substantially
the same terms and conditions as the existing Rate Protection Agreements;
provided, however, that the terms and cost of such additional interest rate
protection agreements are comparable (i.e., not cost prohibitive but not
necessarily equal) to the agreements entered into by the Borrower pursuant to
the preceding sentence.
-16-
2.6 Further Assurances.
(A) Borrower shall and shall cause each Loan Party to, from
time to time, execute such guaranties, financing statements, documents, security
agreements and reports as Agent at any time may reasonably request to evidence,
perfect or otherwise implement the guaranties and security for repayment of the
Obligations provided for in the Loan Documents.
(B) Borrower shall cause any Subsidiaries of Borrower promptly
to become a co-borrower hereunder or, at Agent's request, to guaranty the
Obligations and to grant to Agent, for the benefit of Lenders, a security
interest in the real, personal and mixed property of such Subsidiary to secure
the Obligations on terms and conditions satisfactory to the Agent in its sole
discretion.
SECTION 3
NEGATIVE COVENANTS
Borrower covenants and agrees that so long as the Revolving Loan
Commitment and Term Loan Commitment are in effect and until payment in full of
all Obligations unless the Requisite Lenders shall otherwise give its prior
written consent, Borrower shall comply with and shall cause each of the other
Loan Parties to comply with all covenants in this Section 3 applicable to such
Person.
3.1 Indebtedness. Borrower will not and will not permit any of its
Subsidiaries, directly or indirectly, to create, incur, assume, guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness except:
(A) the Obligations;
(B) intercompany Indebtedness among Global and its
wholly-owned Subsidiaries; provided that the obligations of each obligor of such
Indebtedness shall be: (i) unsecured and subordinated in right of payment to the
Obligations from and after such time as any portion of the Obligations shall
become due and payable (whether at stated maturity, by acceleration or
otherwise); and (ii) reflected on Borrower's books and records;
(C) Indebtedness set forth on Schedule 3.1;
(D) Indebtedness not to exceed $2,000,000 in the aggregate at
any time outstanding in connection with any obligation owed for all or any part
of the deferred purchase price of Inventory if the purchase price is due more
than six (6) months from the date the obligation is incurred;
-17-
(E) Indebtedness not to exceed $1,000,000 in the aggregate at
any time outstanding secured by purchase money Liens or with respect to capital
leases; and
(F) Indebtedness in connection with an Acquisition.
3.2 Liens and Related Matters.
(A) No Liens. Borrower will not and will not permit any of its
Subsidiaries directly or indirectly to create, incur, assume or permit to exist
any Lien on or with respect to any property or asset (including any document or
instrument with respect to goods or accounts receivable) of Borrower or any of
its Subsidiaries, whether now owned or hereafter acquired, or any income or
profits therefrom, except Permitted Encumbrances. "Permitted Encumbrances"
means the following:
(1) Liens for taxes, assessments or other governmental-
charges not yet due and payable or those being contested in good
faith by appropriate proceedings promptly instituted and diligently
conducted which stay enforcement of such Liens and if a reserve or
other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been established;
(2) statutory Liens of landlords, carriers, warehousemen,
mechanics, materialmen and other similar liens imposed by law, which
are incurred in the ordinary course of business for sums not more
than thirty (30) days delinquent or which are being contested in
good faith; provided that a reserve or other appropriate provision
shall have been established and the aggregate amount of such Liens
is less than $250,000;
(3) Liens (other than any Lien imposed by the Employee
Retirement Income Security Act of 1974 or any rule or regulation
promulgated thereunder) incurred or deposits made in the ordinary
course of business in connection with workers, compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety,
stay, customs and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of
borrowed money);
(4) deposits, in an aggregate amount not to exceed
$250,000, made in the ordinary course of business to secure
liability to insurance carriers;
(5) Liens for purchase money obligations; provided
that: (a) the purchase of the asset subject to any such Lien is
permitted under subsection 4.1; (b) the Indebtedness secured by any
such Lien is permitted under subsection 3.1 (E); and (c) any such
Lien encumbers only the asset so purchased;
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(6) leases or subleases granted to others not interfering in
any material respect with the business of Borrower or any of its
Subsidiaries;
(7) easements, rights of way, restrictions, and other
similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of Borrower or any
of its Subsidiaries;
(8) any interest or title of a lessor or sublessor
under any lease permitted by subsection 4.1;
(9) Liens in favor of Agent, for the benefit, of
Lenders;
(10) any attachment or judgment Lien not constituting
an Event of Default under subsection 6.1(I); provided Borrower is
diligently pursuing its remedies with respect to such Lien and such
Lien is removed from record within 60 days after its attachment or
judgment has been rendered with respect thereto; and
(11) Liens: (i) existing on the date hereof and
renewals and extensions thereof, which Liens are set forth on
Schedule 3.2(A) (11) hereto; and (ii) Liens arising out of vendor
financing for the deferred purchase price of Inventory; provided
that with respect to (i) and (ii) above the sum of the aggregate
amount of the obligations secured by such Liens and the Indebtedness
permitted to be outstanding under Section 3.1(D) shall not at any
time exceed $5,000,000 in the aggregate and provided further that
(x) an aggregate of 80% of the obligations secured by such Liens is
paid within 45 days of the incurrence of the obligations giving rise
to such Liens, (y) any extension or renewal of any such Liens only
covers the property originally covered by such Liens and (z) no
Default or Event of Default has occurred or is continuing.
(B) No Negative Pledges. Borrower will not and will not permit
any of its Subsidiaries directly or indirectly to enter into or assume any
agreement (other than the Loan Documents) prohibiting the creation or assumption
of any Lien upon its properties or assets, whether now owned or hereafter
acquired.
(C) No Restrictions on Subsidiary Distributions to Borrower.
Except as provided herein, Borrower will not and will not permit any of its
Subsidiaries directly or indirectly to create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Subsidiary to: (i) pay dividends or make any other
distribution on any of such Subsidiary's capital stock owned by Borrower or any
Subsidiary of Borrower; (ii) subject to subordination provisions in favor of
Lenders, pay any Indebtedness owed to Borrower or any other Subsidiary; (iii)
make loans or advances to
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Borrower or any other Subsidiary; or (iv) transfer any of its property or assets
to Borrower or any other Subsidiary.
3.3 Investments: Joint Ventures. Borrower will not and will not
permit any of its Subsidiaries directly or indirectly to make or own any
Investment in any Person except:
(A) Borrower and its Subsidiaries may make and own Investments
in Cash Equivalents; provided that such Cash Equivalents are not subject to
setoff rights in favor of the issuing bank arising from any banking relationship
of Borrower or its Subsidiaries;
(B) Borrower and its Subsidiaries may make intercompany loans
and Investments to the extent permitted under subsection 3.1;
(C) Borrower and its Subsidiaries may make loans and advances
to employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $300,000 in the aggregate at any time
outstanding;
(D) Investments in connection with Acquisitions permitted
hereunder;
3.4 Contingent Obligations. Borrower will not and will not permit
any of its Subsidiaries directly or indirectly to create or become or be liable
with respect to any Contingent Obligation except those:
(A) resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
(B) existing on the Closing Date and described in Schedule 3.4
annexed hereto;
(C) arising with respect to customary indemnification and hold
harmless agreements entered in connection with any Acquisition closed prior to
the date hereof or otherwise permitted to be consummated hereunder;
(D) incurred in the ordinary course of business with respect
to surety and appeal bonds, performance and return-of-money bonds and other
similar obligations not exceeding at any time outstanding $500,000 in aggregate
liability;
(E) incurred with respect to Indebtedness permitted by
subsection 3.1;
(F) arising under indemnity agreements to title insurers to
cause such title insurers to issue to Agent mortgagee title insurance policies;
(G) arising with respect to customary indemnification and
purchase price adjustment obligations incurred in connection
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with Asset Dispositions made pursuant to the terms of this Agreement; and
(H) not permitted by clauses (A) through (G) above, so long as
any such Contingent Obligations, in the aggregate at any time outstanding, do
not exceed $400,000.
3.5 Restricted Junior Payments. Borrower will not and will not permit any
of its Subsidiaries directly or indirectly to declare, order, pay, make or set
apart any sum for any Restricted Junior Payment except Subsidiaries of Global
may make Restricted Junior Payments with respect to their common stock to the
extent necessary to permit Global to pay the Obligations and to pay expenses
incurred in the ordinary course of business.
3.6 Restriction on Fundamental Changes.
(A) Borrower will not and will not permit any of its Subsidiaries
directly or indirectly to: (i) amend, modify or waive any term or provision of
its articles of incorporation or by-laws unless required by law; (ii) enter into
any transaction of merger or consolidation except (a) in connection with an
Acquisition permitted hereunder and (b) any Subsidiary of Borrower may be merged
with or into Borrower (provided that Borrower is the surviving entity) or any
other Subsidiary of Borrower; (iii) liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution) ; or (iv) acquire by purchase or
otherwise all or any substantial part of the business or assets or stock of any
other Person other than in connection with an Acquisition or other Investment
permitted hereunder.
(B) Borrower will not, and will not permit any of its Subsidiaries,
to issue, sell, assign, pledge, convey, dispose or otherwise encumber any shares
of capital stock, in Borrower or any such Subsidiary or the right to receive any
dividend or distribution on account thereof or grant any options, warrants, or
purchase rights .
3.7 Disposal of Assets or Subsidiary Stock. Borrower will not and will not
permit any of its Subsidiaries directly or indirectly to: convey, sell, lease,
sublease, transfer or otherwise dispose of, or grant any Person an option to
acquire, in one transaction or a series of related transactions any of its
property, business or assets, or the capital stock of or other equity interests
in any of its Subsidiaries, whether now owned or hereafter acquired except for
(a) bona fide sales of Inventory to customers for fair value in the ordinary
course of business, bona fide sales of rental pool equipment for fair value in
the ordinary course of business and dispositions of obsolete equipment not used
or useful in the business and (b) other Asset Dispositions if all of the
following conditions are met: (i) the market value of assets sold or otherwise
disposed of in any single transaction or series of related transactions does not
exceed $250,000 and the aggregate market value of assets sold or otherwise
disposed of in any Fiscal
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Year of Borrower does not exceed $500,000; (ii) consideration received is at
least equal to the fair market value of such assets; (iii) the sole
consideration received is in cash or personal property provided such personal
property is used in Borrower's business and the Agent obtains a security
interest in such property so acquired; (iv) after giving effect to the sale or
other disposition of the assets included within the Asset Disposition and the
repayment of Indebtedness with the cash proceeds thereof, Borrower is in
compliance on a pro forma basis with the covenants set forth in Section 4
recomputed for the most recently ended month for which information is available
and is in compliance with all other terms and conditions contained in this
Agreement; (v) no Default or Event of Default shall result from such sale or
other disposition; and (vi) Borrower has notified Agent of any indemnification
or purchase price adjustment obligations to be incurred by Borrower in
connection with such Asset Disposition.
3.8 Transactions With Affiliates. Borrower will not and will not permit
any of its Subsidiaries directly or indirectly to enter into or permit to exist
any transaction (including the purchase, sale, lease or exchange of any property
or the rendering of any service) with any Affiliate or with any director,
officer or employee of any Loan Party, except (a) as set forth on Schedule 3.8
or (b) transactions in the ordinary course of and pursuant to the reasonable
requirements of the business of Borrower or any of its Subsidiaries and upon
fair and reasonable terms which are fully disclosed to Agent and are no less
favorable to Borrower or such Subsidiary than would be obtained in a comparable
arm's length transaction with a Person that is not an Affiliate. Notwithstanding
the foregoing, no payments may be made with respect to any items set forth on
Schedule 3.8 upon the occurrence and during the continuation of a Default or
Event of Default.
3.9 Management Fees and Compensation. Borrower will not and will not
permit any of its Subsidiaries directly or indirectly to pay any management,
consulting, placement or similar fees to any Affiliate or to any director,
officer or employee of any Loan Party except payments for, or on account of,
actual services rendered or except as set forth on Schedule 3.9. Notwithstanding
the foregoing, no payments may be made with respect to items set forth on
Schedule 3.9 upon the occurrence and during the continuation of a Default or
Event of Default. During the continuation of a Default or Event of Default,
payments not so made shall accrue, and may not be paid by Borrower until no
Default or Event of Default is outstanding.
3.10 Conduct of Business. Borrower will not and will not permit any of its
Subsidiaries directly or indirectly to engage in any business other than
businesses of the type described on Schedule 3.10.
3.11 Changes Relating to Indebtedness. Borrower will not and will not
permit any of its Subsidiaries directly or indirectly to change or amend the
terms of any Indebtedness if the effect of such amendment is to: (a) increase
the interest rate on such
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Indebtedness or change the subordination provisions thereof (or the
subordination terms of any guaranty thereof); or (b) change or amend any other
item (including without limitation change the dates upon which payments or
principal or interest are due on such Indebtedness,change any event of default
or add any covenant with respect to such Indebtedness or change the prepayment
provisions of such Indebtedness) if such change or amendment would increase the
obligations of the obligor or confer additional material rights on the holder of
such Indebtedness in a manner adverse to Borrower, any of its Subsidiaries,
Agent or any of the Lenders.
3.12 Fiscal Year. Neither Borrower nor any Subsidiary of Borrower will
change its Fiscal Year.
3.13 Press Release: Public Offering Materials. Borrower will not and will
not permit any Loan Party to disclose the name of Agent or any Lender in any
press release or in any prospectus, proxy statement or other materials filed
with any governmental entity relating to a public offering of the capital stock
of any Loan Party without Agent's or such Lender's prior written consent, which
shall not be unreasonably withheld, unless such disclosure is required by law or
legal process, in which event neither Agent nor any Lender shall have the right
to approve or consent to the same provided Borrower delivers, or causes to be
delivered, to Agent a copy of the proposed release, prospectus, proxy statement
or other materials prior to the issuance, filing or release thereof.
3.14 Subsidiaries. Borrower will not and will not permit any of its
Subsidiaries directly or indirectly to establish, create or acquire any new
Subsidiary other than in connection with an Acquisition or Investment permitted
hereunder; provided, in each instance, at Agent's or Requisite Lenders' request,
such Subsidiary becomes a co-borrower hereunder or guaranties the Obligations of
Borrower to Agent and Lenders under the Loan Documents and secures such guaranty
or its obligations under the Loan Documents by pledging to Agent, for the
benefit of Lenders, all of its assets.
3.15 Bank Accounts. Borrower will not and will not permit any of its
Subsidiaries to establish any new bank accounts without prior written notice to
Agent and provided such account is subject to a bank agreement in form and
substance satisfactory to the Agent.
3.16 Acquisitions. Except as otherwise provided in Section 3.16(c), the
following procedure shall apply with respect to all Acquisitions:
(A) When Borrower desires to make an Acquisition, Borrower shall
deliver, or cause to be delivered, to Agent a due diligence package, including
the information set forth on Schedule 3.16. Such information shall be delivered
to Agent as soon as it is available and shall be subject to the provisions of
subsection 9.12. Borrower shall keep Agent fully informed of its ongoing due
diligence and Agent may, at its request, visit the entity to be
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acquired. Without limiting the Requisite Lenders' ability, in their sole
discretion, to accept or reject any request by Borrower that Borrower be
permitted to consummate an Acquisition, the Lenders will consider a particular
request if with respect to the proposed Acquisition: (i) prior to and after
giving effect to the consummation of such Acquisition, no Default or Event of
Default exists or would exist, (ii) if the Acquisition is in the form of a stock
purchase, the Borrower acquires all of the capital stock of the entity acquired,
(iii) in connection with such Acquisition, any portion of the purchase price to
be paid with Indebtedness shall be issued by Borrower in favor of the seller of
such stock or assets and shall be on terms and conditions satisfactory to the
Lenders and shall be fully subordinate and junior in right of payment to the
Obligations, (iv) after giving effect to the consummation of such Acquisition,
Borrower's total Indebtedness shall not exceed the applicable Maximum Debt and
Borrower shall be in compliance with all of the financial covenants set forth in
Section 4 both on a historical basis and on a pro forma basis, and (v) the
business proposed to be acquired shall not have any Contingent Obligation or
other contingent liability which could reasonably be expected to have a Material
Adverse Effect. In computing Pro Forma Operating Cash Flow with respect to each
Acquisition, any add backs attributable to such Acquisition shall be approved by
the Agent.
(B) Within five (5) Business Days after receipt of the complete due
diligence package Agent will notify Borrower if it or any Lender reasonably
requires any additional information with respect to the proposed Acquisition. No
later than the later of (x) ten (10) Business Days after Lender's receipt of the
complete due diligence package and (y) ten (10) Business Days after receipt of
such additional information as Agent or any Lender shall reasonably request,
Agent will notify Borrower, in writing, whether or not the Requisite Lenders
approve or disapprove of the proposed Acquisition on the terms set forth in the
due diligence package. Any failure on the part of Requisite Lenders either to
approve or disapprove, in writing, the proposed Acquisition within said ten (10)
Business Day period, as applicable, shall constitute approval by Requisite
Lenders of such Acquisition on the terms and conditions set forth in the
acquisition summary. If there is any material change to the terms of the
proposed Acquisition, including any material change to the purchase agreement
relating to such Acquisition, or any adverse change to the entity which is the
subject of such proposed Acquisition, Borrower shall notify Agent of the same
and the Requisite Lenders' further approval will be required, which approval
will be granted or denied within ten (10) Business Days of receipt of written
notice of such material change. Any failure on the part of the Requisite Lenders
either to approve or disapprove within said ten (10) Business Day period shall
constitute Requisite Lenders' approval of such Acquisition.
(C) Notwithstanding the foregoing, the Borrower need not obtain the
approval of the Requisite Lenders with respect to Acquisitions which do not
exceed $2,000,000, individually, and $5,000,000 in the aggregate during any
fiscal year of the Borrower
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("Small Acquisitions"); provided, however, the Borrower has complied with the
provisions of Section 3.16(A)(i) through (v) and at least 2 Business Days prior
to consummation of any such Acquisition, the Borrower has delivered to the Agent
the letter of intent and a summary of acquisition highlights which represent
such Acquisition, as well as an Availability Certificate. With respect to all
Acquisitions, including Small Acquisitions, without the consent of the Agent,
Borrower shall continue its practice of retaining Ernst & Young or another "Big
6" public accounting firm to conduct financial due diligence with respect to all
Acquisitions.
The foregoing provisions are not intended to affect the conditions to
Lenders' obligations to fund Additional Term Loans as provided in Section 7
hereof; provided, however, with respect to Small Acquisitions the Borrower shall
deliver the materials required by Section 7.2(B) within 30 days following the
consummation of such Acquisition.
SECTION 4
FINANCIAL COVENANTS/REPORTING
Borrower covenants and agrees that so long as the Revolving Loan Commitment
and the Term Loan Commitment remains in effect and until payment in full of all
Obligations unless Requisite Lenders shall otherwise give their prior written
consent, Borrower shall comply with and shall cause each of the other Loan
Parties to comply with all covenants in this Section 4 applicable to such
Person.
4.1 Capital Expenditure Limits. The aggregate amount of capital
expenditures of Borrower and its Subsidiaries during the Fiscal Year ending
March 31, 1998 and each Fiscal Year thereafter will not exceed the following
amounts:
(a) with respect to Rental Pool Capital Expenditures, the amount
approved annually by the Agent for each Fiscal Year plus an additional
amount, if any, approved by the Agent with respect to each company
subsequently acquired by the Borrower during such Fiscal Year.
(b) With respect to General Capital Expenditures, 7% of Pro Forma
EBITDA for the twelve (12) month period preceding the date of determination
which shall be measured monthly.
4.2 Leverage Ratio. Borrower shall not permit (i) Indebtedness of Borrower
and its Subsidiaries divided by (ii) the sum of Pro Forma EBITDA less General
Capital Expenditures for the rolling four quarters ending on the dates set forth
below to exceed the ratio set forth opposite each such date.
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Rolling Four Quarters Ending Ratio
---------------------------- -----
09/30/97 5.0 to 1
12/31/97 5.0 to 1
03/31/98 5.0 to 1
06/30/98 4.8 to 1
09/30/98 4.8 to 1
12/31/98 4.8 to 1
03/31/99 4.8 to 1
06/30/99 4.2 to 1
09/30/99 4.2 to 1
12/31/99 4.2 to 1
03/31/00 4.2 to 1
Thereafter 3.0 to 1
4.3 Pro Forma EBITDA. Borrower shall not permit Pro Forma EBITDA for
Borrower and its Subsidiaries to be less than the amounts set forth below for
the rolling four quarters ending on the dates specified below:
Rolling Four
Quarters Ending Amount
--------------- ------
09/30/97 $16,747,800.
12/31/97 1.5% in excess of the amount
required to be maintained in
the immediately preceding
rolling four quarters measured
plus 85% of Acquisition EBITDA
for the current rolling four
quarters.
03/31/98 1.5% in excess of the amount
required to be maintained in
the immediately preceding
rolling four quarters measured
plus 85% of Acquisition EBITDA
for the current rolling four
quarters.
06/30/98 and each 2.1875% in excess of the
quarter thereafter amount required to
be maintained in the
immediately preceding rolling
four quarters measured plus
85% of Acquisition EBITDA for
the current rolling four
quarters.
4.4 Fixed Charge Coverage. Borrower shall not permit the ratio of (x)
EBITDA less Total Capital Expenditures to (y) Fixed Charges for the rolling four
quarters ending on the dates set forth below to be less than the ratio set
forth opposite each such date.
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Rolling Four Quarters Ending Ratio
---------------------------- -----
09/30/97 1.30 to 1
12/31/97 1.30 to 1
03/31/98 1.30 to 1
06/30/98 1.30 to 1
09/30/98 1.30 to 1
12/31/98 1.30 to 1
03/31/99 1.30 to 1
06/30/99 1.30 to 1
09/30/99 1.30 to 1
12/31/99 1.30 to 1
03/31/00 1.20 to 1
Thereafter 1.05 to 1
4.5 Interest Expense Coverage Ratio. Borrower will not permit the ratio of
EBITDA to Interest Expense of the Borrower and its Subsidiaries for the rolling
four quarters ending on the dates set forth below to be less than the ratio set
forth opposite each such date.
Four Rolling Quarters Ending Ratio
---------------------------- -----
12/31/96 2.60 to 1
03/31/97 2.60 to 1
06/30/97 2.75 to 1
09/30/97 2.75 to 1
12/31/97 2.75 to 1
03/31/98 2.75 to 1
06/30/98 2.90 to 1
09/30/98 2.90 to 1
12/31/98 2.90 to 1
03/31/99 2.90 to 1
06/30/99 3.20 to 1
09/30/99 3.20 to 1
12/31/99 3.20 to 1
03/31/00 3.20 to 1
Thereafter 4.00 to 1
4.5A Maintenance of Financial Covenants. Borrower will not consummate any
Acquisition, if after giving effect to such Acquisition, the Borrower is not in
compliance with the covenants set forth in subsections 4.1 through 4.5 above.
4.6 Financial Statements and Other Reports. Borrower will maintain, and
cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP (it being understood
that quarterly financial statements are not required to have footnote
disclosures). Borrower will deliver to Agent and each Lender each of the
financial statements and other reports described below.
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(A) Monthly Financials. As soon as available and in any event within
thirty (30) days after the end of each month, Borrower will deliver (i) the
consolidated and consolidating balance sheet of Borrower and its Subsidiaries,
as at the end of such month and the related consolidated and consolidating
statements of income, stockholders, equity and cash flow for such month and for
the period, from the beginning of the then current fiscal year of Borrower and
its Subsidiaries to the end of such month all in reasonable detail and stating
the corresponding figures from the consolidated budget of the Borrower and its
subsidiaries for such period, (ii) a schedule of the outstanding Indebtedness
for borrowed money of Borrower and its Subsidiaries describing in reasonable
detail each such debt issue or loan outstanding and the principal amount and
amount of accrued and unpaid interest in excess of an aggregate amount of
$250,000 with respect to such debt issues or loans and (iii) a schedule
indicating the amount of Rental Pool Capital Expenditures agreed to by the Agent
and the Rental Pool Capital Expenditures incurred to date.
(B) Year-End Financials. As soon as available and in any event within
ninety (90) days after the end of each fiscal year, Borrower will deliver: (i)
the consolidated and consolidating balance sheet of Borrower and its
Subsidiaries as at the end of such year and the related consolidated and
consolidating statements of income, stockholders, equity and cash flow for such
fiscal year, together with the notes thereto, all in reasonable detail and
stating in comparative form (a) the respective audited consolidated and
consolidating figures as of the end of and for the previous fiscal year and (b)
the corresponding figures from the consolidated budget of the Borrower and its
Subsidiaries for such fiscal year, (ii) a schedule of the outstanding
Indebtedness for borrowed money of Borrower and its Subsidiaries describing in
reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest in excess of an aggregate
amount of $250,000 with respect to such debt issues or loans, (iii) a report
with respect to the financial statements from a firm of Certified Public
Accountants selected by Borrower and reasonably acceptable to Agent, which
report shall be prepared in accordance with Statement of Auditing Standards No.
58 (the "Statement") entitled "Reports on Audited Financial Statements" and such
report shall be "Unqualified" (as such term is defined in such Statement), and
(iv) a management letter regarding internal controls issued by such Certified
Public Accountants and addressed to the Borrower, prepared in conjunction with
the Borrower's annual audit.
(C) Borrower Compliance Certificate. Together with each delivery of
financial statements of Borrower and its Subsidiaries pursuant to subsections
4.6(A) and 4.6(B) above, Borrower will deliver a fully and properly completed
Compliance Certificate (in substantially the same form as Exhibit 4.6 (C))
signed by Borrower's chief executive officer or chief financial officer.
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(D) Accountants' Reliance Letter. Together with each delivery of
consolidated financial statements pursuant to subsection 4.6(B), Borrower will
deliver a copy of a letter addressed to Borrower's certified public accountants
informing such accountants that a primary intent of Borrower was for the
professional services such accountants provided to Borrower in preparing their
audit report was to benefit or influence Lenders and their successors or
assigns, and identifying Lenders as a party that Borrower has indicated intends
to rely on such professional services provided to Borrower by such accountants.
(E) Accountants' Reports. Promptly upon receipt thereof, Borrower
will deliver copies of all significant reports submitted by Borrower's firm of
certified public accountants in connection with each annual, interim or special
audit or review of any type of the financial statements or related internal
control systems of Borrower made by such accountants, including any comment
letter submitted by such accountants to management in connection with their
services.
(F) Availability and Borrowing Base Certificates. As soon as
available and in any event at (i) the time any Revolving Loan hereunder is
requested; (ii) within thirty (30) Business Days after the end of each month;
and (iii) upon the consummation of each Acquisition, Borrower will deliver to
Agent an Availability Certificate (in substantially the same form as Exhibit
4.6(F)) as at the last day of such month, or as at the last date for which all
applicable data is available in the case of a Acquisition. Borrower shall also
deliver to the Agent not later than ten Business Days following the last
Business Day of each calendar month, a borrowing base certificate in the form of
Exhibit 4.6(F-l) showing the Borrower's Borrowing Base as of the close of
business on the last Business Day of the immediately preceding calendar month.
(G) Management Report. Together with each delivery of financial
statements of Borrower and its Subsidiaries pursuant to subsections 4.6(A) and
4.6(B), Borrower will deliver a management report (i) describing the operations
and financial condition of Borrower and its Subsidiaries for the month then
ended and the portion of the current fiscal year then elapsed (or for the fiscal
year then ended in the case of year-end financials), (ii) setting forth in
comparative form the corresponding figures for the corresponding periods of the
previous fiscal year and the corresponding figures from the most recent
Projections for the current fiscal year delivered to Agent pursuant to
subsection 4.6(I), and (iii) discussing the reasons for any significant
variations. The information above shall be presented in reasonable detail and
shall be certified by the chief financial officer of Borrower to the effect
that, to the best of such officers knowledge, such information fairly presents
in all material respects the results of operations and financial condition of
Borrower and its Subsidiaries as at the dates and for the periods indicated.
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(H) Appraisals. From time to time, if Agent determines that obtaining
appraisals is necessary in order to comply with applicable laws or regulations,
Agent will obtain, at Borrower's expense, appraisal reports in form and
substance and from appraisers satisfactory to Agent stating the then current
fair market values of all or any portion of the real estate owned by Borrower or
any of its Subsidiaries.
(I) Projections. As soon as available and in any event no later than
the last day of Borrower's Fiscal Year, Borrower will deliver Projections of
Borrower and its Subsidiaries for the forthcoming three Fiscal Years, year by
year, and for the forthcoming Fiscal Year, month by month including a three year
business plan relating to such Projections and any quarterly updates or other
additional information reasonably requested by Agent. Such Projections shall be
updated after the consummation of each Acquisition.
(J) SEC Filings and Press Releases. Promptly upon their becoming
available, Borrower will deliver copies of (i) all financial statements,
reports, notices and proxy statements sent or made available by Borrower or any
of its Subsidiaries to their security holders, (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Borrower or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, and (iii) all press releases and other statements made available by
Borrower or any of its Subsidiaries to the public concerning developments in the
business of any such Person.
(K) Events of Default, etc. Promptly upon any officer of Borrower
obtaining knowledge of any of the following events or conditions, Borrower shall
deliver copies of all notices given or received by Borrower with respect to any
such event or condition and a certificate of Borrower's chief executive officer
specifying the nature and period of existence of such event or condition and
what action Borrower has taken, is taking and proposes to take with respect
thereto: (i) any condition or event that constitutes an Event of Default or
Default; (ii) any notice that any Person has given to Borrower or any of its
Subsidiaries or any other action taken with respect to a claimed default or
event or condition of the type referred to in subsection 6.1(B); or (iii) any
event or condition that would reasonably be expected to result in any Material
Adverse Effect.
(L) Litigation. Promptly upon any officer of Borrower obtaining
knowledge of: (i) the institution of any action, suit, proceeding, governmental
investigation or arbitration against or affecting any Loan Party or any property
of any Loan Party not previously disclosed by Borrower to Agent or (ii) any
material development in any action, suit, proceeding, governmental investigation
or arbitration at any time pending against or affecting any Loan Party or any
property of any Loan Party which in
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each case, would reasonably be expected to have a Material Adverse Effect,
Borrower will promptly give notice thereof to Agent and provide such other
information as may be reasonably available to them to enable Agent and its
counsel to evaluate such matter.
(M) Supplemental Schedules; Notice of Organizational Changes.
Annually, concurrently with Borrower's delivery of the Projections required by
subsection 4.6(I), Borrower shall supplement in writing and deliver to Agent
revisions of the Schedules annexed to this Agreement to the extent necessary to
disclose new or changed facts or circumstances after the Original Closing Date;
provided that subsequent disclosures shall not constitute a cure or waiver of
any Default or Event of Default resulting from the matters disclosed. Borrower
shall provide written notice to Agent of: (i) all jurisdictions in which a Loan
Party becomes qualified after the Original Closing Date to transact business,
(ii) any material change after the Original Closing Date in the authorized and
issued capital stock or other equity interests of any Loan Party or any of their
respective Subsidiaries or any other material amendment to their charter, by-
laws or other organization documents, and (iii) any Subsidiary created or
acquired by any Loan Party after the Original Closing Date, such notice, in each
case, to identify the applicable jurisdictions, capital structures or
Subsidiaries, as applicable.
(N) Casualty Losses. Borrower shall notify Lender promptly upon the
occurrence of any property casualty loss with respect to any of its assets or
the assets of any of its subsidiaries in excess of $250,000.
(O) Change in Corporate Management. Global shall notify Lender
promptly of any change or expected change in the corporate management of Global
or any change in the senior corporate, sales or service management of any of its
Subsidiaries.
(P) Other Information. With reasonable promptness, Borrower will
deliver such other information and data with respect to any Loan Party or any
Subsidiary of any Loan Party as from time to time may be reasonably requested by
Agent.
4.7 Accounting Terms: Utilization of GAAP for Purposes of Calculations
Under Agreement. For purposes of this Agreement, all accounting terms not
otherwise defined herein shall have the meanings assigned to such terms in
conformity with GAAP. Financial statements and other information furnished to
Agent or any Lender pursuant to subsection 4.6 shall be prepared in accordance
with GAAP as in effect at the time of such preparation. No Accounting Changes
(as defined below) shall affect financial covenants, standards or terms in this
Agreement; provided, that Borrower shall prepare footnotes to each Compliance
Certificate and the financial statements required to be delivered hereunder that
show the differences between the financial statements delivered (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance (without reflecting such Accounting
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Changes). "Accounting Changes" means: (a) changes in accounting principles
required by GAAP and implemented by Borrower; (b) changes in accounting
principles recommended by Borrower's certified public accountants and
implemented by Borrower; and (c) changes in carrying value of Borrower's or any
of its Subsidiaries assets, liabilities or equity accounts resulting from (i)
the application of purchase accounting principles (A.P.B. 16 and/or 17 and EITF
88-16 and FASB 109) to the Related Transactions or (ii) other adjustments that,
in each case, were applicable to, but not included in, the Pro Forma. All such
adjustments resulting from expenditures made subsequent to the Original Closing
Date (including, but not limited to, capitalization of costs and expenses or
payment of pre-Original Closing Date liabilities) shall be treated as expenses
in the period the expenditures are made so as to assure a consistent application
of all accounting principles implemented by Borrower.
SECTION 5
REPRESENTATIONS AND WARRANTIES
In order to induce Agent and Lenders to enter into this Agreement and to
make Loans, Borrower represents and warrants to Agent and Lenders that the
following statements are true, correct and complete:
5.1 Disclosure. No representation or warranty of any Loan Party contained
in this Agreement, the financial statements referred to in subsection 5.5, the
other Related Transactions Documents or any other document, certificate or
written statement furnished to Agent or Lenders by or on behalf of any such
Person for use in connection with the Loan Documents or the Related Transactions
Documents contains any untrue statement of a material fact or omitted, omits or
will omit 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 the same were made.
5.2 No Material Adverse Effect. Since March 31, 1996 there have been no
events or changes in facts or circumstances affecting any Loan Party which
individually or in the aggregate have had or would reasonably be expected to
have a Material Adverse Effect and that have not been disclosed herein or in the
attached Schedules.
5.3 No Default: Governmental Consents.
(A) The consummation of the Related Transactions does not and will not
violate, conflict with, result in a breach of, or constitute a default (with due
notice or lapse of time or both) under any contract of any Loan Party except if
such violations, conflicts, breaches or defaults have been waived on or before
the Closing Date and are disclosed on Schedule 5.3.
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(B) The execution, delivery and performance by each Loan Party of each
Related Transactions Document to which it is a party, and the consummation of
the Related Transactions do not and will not require any registration with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body except for
filings required in connection with the perfection of security interests granted
pursuant to the Loan Documents, and other filings, authorizations, consents and
approvals, all of which have been made or obtained.
5.4 Organization, Powers, Capitalization and Good Standing.
(A) Organization and Powers. Each of the Loan Parties is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation (which jurisdiction is set forth on Schedule 5.4
(A)) , Each of the Loan Parties has all requisite corporate power and authority
to own and operate its properties, to carry on its business as now conducted and
proposed to be conducted, to enter into each Related Transactions Document to
which it is a party and to carry out the Related Transactions.
(B) Capitalization. The authorized capital stock of each of the Loan
Parties is as set forth on Schedule 5.4(B). All issued and outstanding shares of
capital stock of each of such Loan Parties are duly authorized and validly
issued, fully paid, nonassessable, free and clear of all Liens other than those
in favor of Agent, for the benefit of Lenders, and such shares were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities. The capital stock of each of such Loan Parties is owned by the
stockholders and in the amounts set forth on Schedule 5.4(B). As of the Closing
Date, no shares of the capital stock of any such Loan Party, other than those
described above, are issued and outstanding. As of the Closing Date, except as
provided in any agreement executed in connection with the issuance to Lenders of
equity securities of any Loan Party, there are no preemptive or other
outstanding rights, options, warrants, conversion rights or similar agreements
or understandings for the purchase or acquisition from any Loan Party of any
shares of capital stock or other securities of any such entity.
(C) Binding Obligation. This Agreement is, and the other Related
Transactions Documents when executed and delivered will be, the legally valid
and binding obligations of the applicable Loan Parties, each enforceable against
the Loan Parties, as applicable, in accordance with their respective terms.
(D) Qualification. Each of the Loan Parties is duly qualified and in
good standing wherever necessary to carry on its business and operations, except
in jurisdictions in which the failure to be qualified and in good standing could
not reasonably be expected to have a Material Adverse Effect. All jurisdictions
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in which each Loan Party is qualified to do business are set forth on
Schedule 5.4(D).
5.5 Financial Statements. All financial statements concerning Borrower and
its Subsidiaries which have been or will hereafter be furnished by Borrower and
its Subsidiaries to Agent pursuant to this Agreement, including those listed
below, have been or will be prepared in accordance with GAAP consistently
applied (except as disclosed therein) for and do or will present fairly in all
material respects the financial condition of the corporations covered thereby as
at the dates thereof and the results of their operations for the periods then
ended.
(A) The consolidated and consolidating balance sheet at March 31, 1997
and the related statement of income of Borrower and its Subsidiaries, for the
fiscal year then ended, certified by Ernst & Young.
(B) The unaudited consolidated and consolidating balance sheet at
September 30, 1997 and the related unaudited statement of income of Borrower and
its Subsidiaries for the six (6) months then ended.
5.6 Intellectual Property. Borrower and each of its Subsidiaries owns, is
licensed to use or otherwise has the right to use, all patents, trademarks,
trade names, copyrights, technology, know-how and processes used in or necessary
for the conduct of its business as currently conducted that are material to the
condition (financial or other) , business or operations of Borrower or its
Subsidiaries (collectively called "Intellectual Property") and is registered,
filed or issued, where applicable, in the appropriate office and jurisdictions
for such registrations, filing or issuances. All patents, trademarks, trade
names and copyrights are identified on Schedule 5.6. Except as disclosed in
Schedule 5.6, the use of Intellectual Property by Borrower and its Subsidiaries,
does not and has not been alleged by any Person to infringe on the rights of any
Person.
5.7 Investigations Audits, Etc. Except as set forth on Schedule 5.7,
neither Borrower, nor any of its Subsidiaries are the subject of any review or
audit by the Internal Revenue Service or any governmental investigation
concerning the violation or possible violation of any law.
5.8 Employee Matters. Except as set forth on Schedule 5.8, as of the
Closing Date: (a) no Loan Party nor any of their respective employees is subject
to any collective bargaining agreement, (b) no petition for certification or
union election is pending with respect to the employees of any Loan Party and no
union or collective bargaining unit has sought such certification or recognition
with respect to the employees of any Loan Party, and (c) there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
Borrower after due inquiry, threatened between any Loan Party and its respective
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employees, other than employee grievances arising in the ordinary course of
business which would not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect. Except as set forth on Schedule
5.8, neither Borrower nor any of its Subsidiaries is subject to an employment
contract.
5.9 Solvency. As of and from and after the date of this Agreement and after
giving effect to the consummation of the Related Transactions, Borrower and its
Subsidiaries: (a) own and will own assets the fair saleable value of which, on a
going concern basis, are (i) greater than the total amount of liabilities
(including contingent liabilities) of Borrower and its Subsidiaries and (ii)
greater than the amount that will be required to pay the probable liabilities of
Borrower's then existing debts as they become absolute and matured considering
all financing alternatives and potential asset sales reasonably available to
Borrower and its Subsidiaries; (b) have capital that is not unreasonably small
in relation to their respective businesses as presently conducted or any
contemplated or undertaken transaction; and (c) do not intend to incur and do
not believe that they will incur debts beyond their ability to pay such debts as
they become due.
5.10 Environmental Compliance.
(A) Except as set forth on Schedule 5.10 hereto, neither Borrower nor
any of its Subsidiaries has generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials, on or
off its premises (whether or not owned by it) in any manner which at any time
violates any applicable Environmental Law or any license, permit, certificate,
approval or similar authorization thereunder and the operations of Borrower
complies in all material respects with all Environmental Laws and all licenses,
permits, certificates, approvals and similar authorizations thereunder.
(B) Except as set forth on Schedule 5.10 hereto, there has been no
investigation, proceeding, complaint, order, directive, claim, citation or
notice by any governmental authority or any other person nor is any pending or
to the best of Borrower's knowledge threatened, with respect to any
non-compliance with or violation of the requirements of any Environmental Law by
Borrower or any of its Subsidiaries or the release, spill or discharge,
threatened or actual, of any Hazardous Material or the generation, use, storage,
treatment, transportation, manufacture, handling, production or disposal of any
Hazardous Materials or any other environmental, health or safety matter, which
affects Borrower or any of its Subsidiaries or their respective businesses,
operations or assets or any properties at which Borrower or any Subsidiary has
transported, stored or disposed of any Hazardous Materials.
(C) Neither Borrower nor any of its Subsidiaries has any material
liability (contingent or otherwise) in connection with a release, spill or
discharge, threatened or actual, of any Hazardous Materials or the generation,
use, storage, treatment,
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transportation, manufacture, handling, production or disposal of any
Hazardous Materials.
(D) Borrower and each of its Subsidiaries has all licenses, permits,
certificates, approvals or similar authorizations required to be obtained or
filed in connection with the operations of Borrower under any Environmental Law
and all of such licenses, permits, certificates, approvals or similar
authorizations are valid and in full force and effect.
5.11 Litigation. There are no material actions, suits, proceedings, orders,
investigations or claims pending or, to the best of the Borrower's knowledge,
threatened against or affecting the Borrower or any of its Subsidiaries at law
or in equity, or before or by any governmental department, commission, board,
bureau, agency or instrumentality; neither the Borrower nor any of its
Subsidiaries is subject to any arbitration proceedings or, to the best of the
Borrower's knowledge, any material governmental investigations or inquiries
(including inquiries as to the qualification to hold or receive any license or
permit) ; and, to the best of the Borrower's knowledge, there is no basis for
any of the foregoing. Neither the Borrower nor any of its Subsidiaries, has
received any opinion or memorandum or legal advice from legal counsel to the
effect that it or its Subsidiaries is exposed, from a legal standpoint, to any
liability or disadvantage which may be material to its business.
5.12 ERISA. The Borrower's 401(k) Retirement Plan complies in all material
respects with all applicable laws, rules, regulations and orders of all
governmental authorities.
SECTION 6
DEFAULT, RIGHTS AND REMEDIES
6.1 Event of Default. "Event of Default" shall mean the occurrence or
existence of any one or more of the following:
(A) Payment. (i) Failure of Borrower to pay when due any of the
Obligations other than the payment of interest; and (ii) failure of Borrower to
pay, within five (5) days after the due date, any interest on any of the Loans;
(B) Default in Other Agreements. (i) Failure of Borrower or any of its
Subsidiaries to pay when due or within any applicable grace period any principal
or interest on Indebtedness (other than the Loans) or any Contingent Obligations
or (ii) breach or default of Borrower or any of its Subsidiaries with respect to
any Indebtedness (other than the Loans) or any Contingent Obligations, if the
effect of such failure to pay, default or breach is to permit the holder or
holders then to cause, Indebtedness and/or Contingent Obligations having an
individual principal amount in excess of $250,000 or having an aggregate
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principal amount in excess of $500,000 to become or be declared due prior to
their stated maturity;
(C) Breach of Certain Provisions. Failure of Borrower to perform or comply
with any term or condition contained in: (i) the portion of subsection 2.2
relating to Borrower's obligation to maintain insurance; or (ii) subsection 2.3,
Section 3 or Section 4;
(D) Breach of Warranty. Any representation, warranty, certification or
other statement made by any Loan Party in any Loan Document or in any statement
or certificate at any time given by such Person in writing pursuant or in
connection with any Loan Document is false in any material respect on the date
made;
(E) Other Defaults Under Loan Documents. Borrower or any other Loan Party
defaults in the performance of or compliance with any term contained in this
Agreement or the other Loan Documents and such default is not remedied or waived
within fifteen (15) days after receipt by Borrower of notice from Agent of such
default (other than occurrences described in other provisions of this subsection
6.1 for which a different grace or cure period is specified or which constitute
immediate Events of Default);
(F) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court
enters a decree or order for relief with respect to Borrower or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code, which decree or
order is not stayed or other similar relief is not granted under any applicable
federal or state law; or (ii) the continuance of any of the following events for
sixty (60) days unless dismissed, bonded or discharged: (a) an involuntary case
is commenced against Borrower or any of its Subsidiaries, under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect; or (b) a
decree or order of a court for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
Borrower or any of its Subsidiaries, or over all or a substantial part of its
property, is entered; or (c) an interim receiver, trustee or other custodian is
appointed without the consent of Borrower or any of its Subsidiaries, for all or
a substantial part of the property of Borrower or any such Subsidiary;
(G) Voluntary Bankruptcy: Appointment of Receiver, Etc. (i) An order for
relief is entered with respect to Borrower or any of its Subsidiaries or
Borrower or any of its Subsidiaries commences a voluntary case under the
Bankruptcy Code, or consents to the entry of an order for relief in an
involuntary case or to the conversion of an involuntary case to a voluntary case
under any such law or consents to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or (ii) Holdings, Borrower or any of its Subsidiaries makes any
assignment for the benefit of creditors; or (iii) the Board of Directors of
Holdings, Borrower or any of its Subsidiaries adopts any resolution or otherwise
authorizes action
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to approve any of the actions referred to in this subsection 6.1 (G);
(H) Governmental Liens. Any lien, levy or assessment is filed or recorded
with respect to or otherwise imposed upon all or any part of the Collateral or
the assets of Borrower or any of its Subsidiaries by the United States or any
department or instrumentality thereof or by any state, county, municipality or
other governmental agency (other than Permitted Encumbrances);
(I) Judgment and Attachments. Any money judgment, writ or warrant of
attachment, or similar process (other than those described in subsection 6.1(H))
involving (i) an amount in any individual case in excess of $200,000 or (ii) an
amount in the aggregate at any time in excess of $400,000 (in either case not
adequately covered by insurance as to which the insurance company has
acknowledged coverage) is entered or filed against Borrower or any of its
Subsidiaries or any of their respective assets and remains undischarged,
unvacated, unbonded or unstayed for a period of thirty (30) days or in any event
later than five (5) Business Days prior to the date of any proposed sale
thereunder;
(J) Material Adverse Effect. A Material Adverse Effect shall have occurred;
(K) Dissolution. Any order, judgment or decree is entered against Borrower
or any of its Subsidiaries decreeing the dissolution or split up of Borrower or
that Subsidiary and such order remains undischarged or unstayed for a period in
excess of fifteen (15) days;
(L) Solvency. A Borrower on any of its Subsidiaries ceases to be solvent or
admits in writing its present or prospective inability to pay its debts as they
become due;
(M) Injunction. Borrower or any of its Subsidiaries is enjoined, restrained
or in any way prevented by the order of any court or any administrative or
regulatory agency from conducting all or any material part of its business and
such order continues for more than fifteen (15) days;
(N) ERISA: Pension Plans. (i) Any Loan Party fails to make full payment
when due of all amounts which, under the provisions of any employee pension
benefit plan (as defined in Section 3 (2) of ERISA) or any applicable provisions
of the Internal Revenue Code as amended from time to time ("IRC"), any Loan
Party is required to pay as contributions thereto and such failure results in or
is likely to result in a Material Adverse Effect; or (ii) an accumulated funding
deficiency or withdrawal liability in excess of $250,000 occurs or exists,
whether or not waived, with respect to any employee pension benefit plan or
multi-employer plan; or (iii) any employee pension benefit plan loses its status
as a qualified plan under the IRC and such event results in
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or would reasonably be expected to result in a Material Adverse Effect;
(O) Environmental Issues. Failure to: (i) obtain or maintain any
material operating licenses or permits required by environmental authorities;
(ii) begin, continue or complete any remediation activities as required by any
environmental authorities; (iii) store or dispose of any hazardous materials in
accordance with applicable environmental laws and regulations; or (iv) comply
with any other material environmental laws;
(P) Invalidity of Loan Documents. Any of the Loan Documents ceases to
be in full force and effect in all material respects due to any action or
omission of any Loan Party or is declared to be null and void, or any Loan Party
denies that it has any further liability under any Loan Documents to which it is
party, or gives notice to such effect;
(Q) Damages, Strike, Casualty. Any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy, or
other casualty which causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities at any
facility of Borrower or any of its Subsidiaries if any such event or
circumstance described in this clause (Q) could reasonably be expected to have a
Material Adverse Effect;
(R) Licenses and Permits. The loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
Borrower or any of its Subsidiaries, if such loss, suspension, revocation or
failure to renew would reasonably be expected to have a Material Adverse Effect;
(S) Failure of Security. Agent, for the benefit of Lenders, does not
have or ceases to have a valid and perfected first priority security interest in
the Collateral (subject to Permitted Encumbrances), in each case, for any
reason other than the failure of Agent to take any action within its control;
(T) Change in Control. (i) GTCR ceases to beneficially own and control,
directly or indirectly, at least fifty-one percent (51%) of the issued and
outstanding shares of each class of capital stock of Global entitled (without
regard to the occurrence of any contingency) to vote for the election of a
majority of the members of the board of directors of Borrower, or (ii) GTCR IV
ceases to beneficially own and control all of the shares of each class of
capital stock of Global owned by GTCR IV on the Closing Date.
6.2 Suspension of Commitment. Upon the occurrence of any Default or Event
of Default, Agent or Lenders, without notice or demand, may immediately cease
making additional Loans and the Revolving Loan Commitment, Term Loan Commitment
shall be suspended; provided that, in the case of a Default, if the subject
condition
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or event is waived, cured or removed by the Requisite Lenders within any
applicable grace or cure period, the Revolving Loan Commitment and Term Loan
Commitment shall be reinstated. Requisite Lenders, in their sole discretion, may
alternatively suspend only a portion of the Revolving Loan Commitment and Term
Loan Commitment.
6.3 Acceleration. Upon the occurrence of any Event of Default described in
the foregoing subsections 6.1(F) or 6.1(G), the unpaid principal amount of and
accrued interest and fees on the Term Loans and the Revolving Loans and all
other Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other requirements of any kind, all of which are hereby
expressly waived by Borrower, and the Revolving Loan Commitment and Term Loan
Commitment shall thereupon terminate. Upon the occurrence and during the
continuance of any other Event of Default, Agent may, and upon demand by
Requisite Lenders, Agent shall, by written notice to Borrower declare all or any
portion of the Loans and all or some of the other Obligations to be, and the
same shall forthwith become, immediately due and payable together with accrued
interest thereon, and the Revolving Loan Commitment and Term Loan Commitment
shall thereupon terminate. Any such declaration made by Agent may be rescinded
by Agent, in its sole discretion, or upon the demand of the Requisite Lenders.
6.4 Performance by Agent. If Borrower shall fail to perform any covenant,
duty or agreement contained in any of the Loan Documents, Agent may perform or
attempt to perform such covenant, duty or agreement on behalf of Borrower after
the expiration of any cure or grace periods set forth herein. In such event,
Borrower shall, at the request of Agent, promptly pay any amount reasonably
expended by Agent in such performance or attempted performance to Agent,
together with interest thereon at the rate of interest in effect upon the
occurrence of an Event of Default as specified in subsection 1.2(E) from the
date of such expenditure until paid. Notwithstanding the foregoing, it is
expressly agreed that Agent shall not have any liability or responsibility for
the performance of any obligation of Borrower under this Agreement or any other
Loan Document.
SECTION 7
CONDITIONS TO LOANS
The obligations of each Lender to make Loans are subject to satisfaction of
all of the applicable conditions set forth below.
7.1 Conditions to All Loans. The obligations of each Lender to make Loans
on any date ("Funding Date") are subject to the conditions precedent set forth
below.
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(A) Agent shall have received, in accordance with the provisions of
subsection 1.1, a notice requesting an advance of a Revolving Loan or an
Additional Term Loan.
(B) The representations and warranties contained in Section 5 of this
Agreement and elsewhere herein and in the Loan Documents shall be (and each
request by Borrower for a Loan shall constitute a representation and warranty by
Borrower that such representations and warranties are) true, correct and
complete in all material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except for any representation or
warranty limited by its terms to a specific date and taking into account any
amendments to the Schedules or Exhibits as a result of any disclosures made in
writing by Borrower to Agent after the Closing Date and approved by Agent.
(C) No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated that would constitute an Event of
Default or a Default.
(D) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain Agent or any Lender
from making any Loans.
7.2 Conditions to Funding Additional Term Loans.
The obligations of each Lender to make Additional Term Loans on each
Funding Date are subject to the further conditions precedent set forth below.
(A) Use of Proceeds. The proceeds of Additional Term Loans shall be
used solely to finance all or a portion of the purchase price of an Acquisition
and all transaction costs directly associated with such Acquisition or to
acquire rental pool equipment and to the extent such proceeds are used to
acquire rental pool equipment Borrower shall deliver to Agent the schedule
required pursuant to Section 4.6(A) (iii) herein.
(B) Due Diligence Package. The Acquisition shall be permitted hereunder
and with respect to Acquisitions other than Small Acquisitions, Agent shall have
received, in accordance with the provisions of subsection 3.16, the due
diligence package. With respect to Small Acquisitions, Borrower shall deliver
such due diligence package within 30 days after consummation of such
Acquisition.
(C) Evidence of Perfected First Priority Security Interests of the
Lenders in Assets. With respect to the entity to be acquired and prior to the
funding of such Loan, Agent shall have received evidence of the proper filing in
all required filing offices of duly executed UCC financing statements with
respect to such Acquisition in form reasonably satisfactory to Agent and
perfecting first priority security interests of Agent, on behalf of the Lenders,
in all of the assets of the entity to be acquired.
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(D) Maximum Availability. After giving effect to such Additional Term
Loan, the outstanding Loans will not exceed the Maximum Loan Balance.
(E) Other Documents. The due execution and delivery of the documents
set forth on Schedule 7.1 and such other documents as Agent may reasonably
request.
SECTION 8
ASSIGNMENT AND PARTICIPATION
▇▇▇▇▇▇▇ may assign its rights and delegate its obligations under this
Agreement and further may assign, or sell participations in all or any part of
its Loans or its Revolving Loan Commitment and/or Term Loan Commitment. The
rights and responsibilities as between the Agent and the Lenders are subject to
and set forth in the Agent Agreement, a copy of which is attached hereto as
Exhibit 8.
SECTION 9
MISCELLANEOUS
9.1 Indemnities. Borrower agrees to indemnify, pay, and hold Agent, each
Lender and their respective officers, directors, employees, agents, and
attorneys (the "Indemnitees") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits and claims of
any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against the Indemnitee as a result of being a party to this Agreement; provided
that Borrower shall have no obligation to an Indemnitee hereunder with respect
to liabilities arising from the gross negligence or willful misconduct of that
Indemnitee, as determined by a court of competent jurisdiction. This subsection
9.1 shall survive the termination of this Agreement.
9.2 Amendments and Waivers. No amendment, modification, or termination, or
waiver of any provision of this Agreement or any Loan Documents, shall be
effective unless the same shall be in writing and signed by Requisite Lenders or
Agent, as applicable (or less if permitted by the Agent Agreement or the
applicable Lender Addition Agreement) and the applicable Loan Party; provided
that, except to the extent permitted by the Agent Agreement or the applicable
Lender Addition Agreement, no amendment, modification, termination or waiver
shall, unless in writing and signed by all Lenders, do any of the following: (a)
increase the Commitment of any Lender; (b) reduce the principal of, rate of
interest on or fees payable with respect to any Loan; (c) extend the final
scheduled maturity date of the principal amount of the Loans; (d) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans, or the percentage of Lenders which
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shall be required for Lenders or any of them to take any action hereunder; (e)
release Collateral (except if the sale or disposition of such Collateral is
permitted under the Assignment and Participation Agreement or any other Loan
Document); (f) amend or waive this subsection 9.2 or the definitions of the
terms used in this subsection 9.2 insofar as the definitions affect the
substance of this subsection 9.2; or (g) consent to the assignment or other
transfer by any Loan Party of any of its rights and obligations under any Loan
Document; and provided further than no amendment, modification, termination or
waiver affecting the rights or duties of Agent under any Loan Document shall in
any event be effective, unless in writing and signed by Agent, in addition to
Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on Borrower or any other Loan
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 9.2 shall be binding upon each
holder of the Notes at the time outstanding, each future holder of the Notes,
and, if signed by a Loan Party, on such Loan Party.
9.3 Notices. Any notice or other communication required shall be in writing
addressed to the respective party as set forth below and may be personally
served, telecopied, sent by telex, sent by overnight courier service or U.S.
mail and shall be deemed to have been given: (a) if delivered in person, when
delivered; (b) if delivered by telecopy or telex, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. CST; (c) if delivered by
reputable overnight courier for overnight delivery, one (1) Business Day after
delivery to courier properly addressed, or (d) if delivered by U.S. mail, four
(4) Business Days after deposit with postage prepaid and properly addressed.
Notices shall be addressed as follows:
If to Borrower: GLOBAL IMAGING SYSTEMS INC.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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With copies to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
ATTN: ▇. ▇▇▇▇▇ ▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent
or ▇▇▇▇▇▇▇: PPM AMERICA, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Private Placements
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ KILL & OLICK, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: J. ▇▇▇▇▇▇ ▇▇▇▇, ▇▇., Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
9.4 Failure or Indulgence Not Waiver: Remedies Cumulative. No failure or
delay on the part of Agent or any Lender to exercise, or any partial exercise
of, any power, right, or privilege hereunder or under any other Loan Documents
shall impair such power, right, or privilege or be construed to be a waiver of
any Default or Event of Default. All rights and remedies existing hereunder or
under any other Loan Document are cumulative to and not exclusive of any rights
or remedies otherwise available.
9.5 Marshalling, Payments Set Aside. Neither Agent nor any Lender shall be
under any obligation to ▇▇▇▇▇▇▇▇ any assets in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment(s) or Agent and/or
any Lender enforce their Liens or exercise its right of set-off, and such
payment(s) or the proceeds of such enforcement or set off is subsequently
invalidated, declared to be fraudulent or preferential, set aside, or required
to be repaid by anyone, then to the extent of such recovery, the Obligations or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as if
such payment had not been made or such enforcement or set off had not occurred.
9.6 Severability. The invalidity, illegality, or unenforceability in any
jurisdiction of any provision under the Loan Documents shall not affect or
impair the remaining provisions in the Loan Documents.
9.7 Headings. Section and subsection headings are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes or be given substantive effect.
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9.8 Applicable Law. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND ANY DISPUTE ARISING OUT OF THE
RELATIONSHIP BETWEEN THE PARTIES HERETO, WHETHER IN CONTRACT, TORT, EQUITY OR
OTHERWISE, SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.
9.9 Successors and Assigns. Subject to the provisions of Section 8, this
agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns except that Borrower may not assign
its rights or obligations hereunder.
9.10 No Fiduciary Relationship. No provision in the Loan Documents and no
course of dealing between the parties shall be deemed to create any fiduciary
duty by Agent, any Lender to Borrower.
9.11 Construction. Agent, each Lender and Borrower acknowledge that each of
them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review the Loan Documents with its legal counsel and
that the Loan Documents shall be constructed as if jointly drafted by Agent,
each Lender and Borrower.
9.12 Confidentiality. Each Lender agrees to exercise its best efforts to
keep any non public information delivered pursuant to the Loan Documents,
confidential from Persons other than those employed by or engaged by such Lender
in evaluating, approving, structuring or administering the Loans and those
employed by or engaged by such Lender's assignees or participants, or potential
assignees or participants.
9.13 Consent to Jurisdiction and Service of Process.
(A) BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW
YORK CITY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF AGENT OR ANY
LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST AGENT OR ANY
LENDER OR ANY AFFILIATE INVOLVING DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN NEW YORK, NEW YORK.
(B) BORROWER DESIGNATES AND APPOINTS CT CORPORATION SYSTEM AND SUCH
OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY
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BORROWER WHICH IRREVOCABLY AGREE IN WRITING TO SO SERVE AS ITS AGENT TO RECEIVE
ON ITS BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY BORROWER TO BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO SERVED SHALL BE MAILED
BY REGISTERED MAIL TO BORROWER AT ITS ADDRESS PROVIDED IN SUBSECTION 9.3 EXCEPT
THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY
SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY
BORROWER REFUSES TO ACCEPT SERVICE, BORROWER HEREBY AGREES THAT SERVICE UPON IT
BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
9.14 Waiver of Jury Trial. BORROWER AND EACH LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. BORROWER, AGENT AND EACH
LENDER ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT
FOR THIS WAIVER, BE REQUIRED OF LENDERS. THE SCOPE OF THIS WAIVER IS INTENDED TO
BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND
THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. BORROWER, AGENT AND EACH LENDER ACKNOWLEDGE
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
BORROWER, AGENT AND EACH LENDER FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE LOAN DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9.15 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans and the execution and
delivery of the Notes. Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of Borrower set forth in subsections 1.3 and
9.1 shall survive the payment of the Loans and the termination of this
Agreement.
9.16 Entire Agreement. This Agreement, the Notes and the other Loan
Documents referred to herein embody the final, entire agreement among the
parties hereto and supersede any and all prior commitments, agreements,
representations, understandings, whether
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oral or written, relating to the subject matter hereof and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto.
9.17 Counterparts. This Agreement may be executed in several counterparts,
all of which shall be deemed to be an original but all of which counterparts
collectively shall constitute one agreement.
SECTION 10
DEFINITIONS
10.1 Certain Defined Terms. The terms defined below are used in this
Agreement as so defined. Terms defined in the preamble and recitals to this
Agreement are used in this Agreement as so defined.
"1996 Loan Agreement" shall have the meaning set forth in the Recitals
hereto.
"Accounts" mean all present and future rights of Borrower to payment
for goods sold or leased or for services rendered, which are not evidenced by
instruments or chattel paper, and whether or not earned by performance.
"Acquisition" means the direct or indirect purchase or other
acquisition, with the prior written consent of the Requisite Lenders, whether by
asset acquisition, stock acquisition, merger or otherwise, of a distinct
business to be operated by Borrower or any of its Subsidiaries.
"Acquisition EBITDA" means EBITDA attributable to each Acquisition
during the one (1) year period preceding the date of determination for the
number of months immediately preceding the consummation of the applicable
Acquisition for which acceptable financial statements of Borrower have been
delivered to Agent pursuant to Subsection 4.6(a), plus Allowable Adjustments
and, for purposes of Section 4.3, plus EBITDA attributable to each Acquisition
for the period from the consummation of the applicable Acquisition through the
date of determination; provided, however, such amounts have not been included in
EBITDA.
"Additional Term Loans" shall have the meaning set forth in subsection
1.1(C)(2).
"Affiliate" means any Person (other than Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control with,
Borrower; (b) directly or indirectly owning or holding five percent (5%) or more
of any equity interest in Borrower; or (c) five percent (5%) or more of whose
voting stock or other equity interest is directly or indirectly owned or held by
Borrower. For purposes of this definition, "control" (including
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with correlative meanings, the terms "controlling", "controlled by" and
"under common control with") means the possession directly or indirectly of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or by contract or
otherwise.
"Agent" means PPM America, Inc. in its capacity as Agent for the
Lenders under this Agreement and any successor in such capacity appointed
pursuant to the Agent Agreement.
"Agent Agreement" shall have the meaning set forth in Section 8.
"Agreement" means this Credit Agreement (including all schedules,
exhibits, annexes and appendices hereto).
"Allowable Adjustments" means with respect to any business acquired by
Borrower, the estimated monthly amount of cost savings (net of the estimated
monthly amount of cost increases) attributable to operational efficiencies
expected to be created by Borrower with respect to such business for the twelve
(12) month period following the consummation of such business acquired, as
calculated by Borrower and acceptable to Agent in its discretion, for the number
of months which have not elapsed during the 12 month period (i) commencing on
the last day of the month preceding the consummation of the Acquisition for
which financial statements were available and (ii) ending on the first
anniversary of the date determined pursuant to clause (i).
"Asset Disposition" means the disposition whether by sale, lease,
transfer, loss, damage, destruction, condemnation or otherwise of any of the
following: (a) any of the stock, of any of Borrower's Subsidiaries or (b) any or
all of the assets of Borrower or any of its Subsidiaries other than sales of
Inventory in the ordinary course of business.
"Assignment and Participation Agreement" shall have the meaning set
forth in Section 8.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended from time to time or any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect and all rules and
regulations promulgated thereunder.
"Base Rate" means a variable rate of interest equal to the average
published variable rate of interest per annum which is announced from time to
time by Bankers Trust Company or The Chase Manhattan Bank, N.A. as the "prime
rate," "reference rate," "base rate," or other similar rate. The Base Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer by any Lender.
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"Blocked Accounts" shall have the meaning set forth in subsection 1.9.
"Borrower" shall mean and include each of Global and its Subsidiaries
who are signatories hereto. All representations contained herein shall be deemed
individually made by each "Borrower" and each of the covenants, agreements, and
obligations set forth herein shall be deemed to be the joint and separate
covenants, agreements, and obligations of the Borrowers. For purposes of
subsection 6.1 of this Agreement, references to the "Borrower" shall be deemed
to mean and include each of Global and its Subsidiaries who are signatories
hereto or all of them. Any notice, request, consent, report or other information
or agreement delivered to Agent or any Lender by any Borrower shall be deemed to
be ratified by, consented to, and also delivered by the other Borrowers. Each of
the Borrowers recognize and agree that each covenant and agreement of "Borrower"
or "Borrowers" in this Agreement and in the other Loan Documents shall create a
joint and several obligation of such entities, which may be enforced against
such entities jointly, or against each entity separately. Without limiting the
terms of this Agreement, and the other Loan Documents, the security interests
granted under the Loan Documents in properties, assets, and collateral of
"Borrower" shall include and extend to the properties, interests, assets, and
collateral of such entities, and any of them. Similarly, the term "Obligations"
shall include, without limitation, all obligations, liabilities, and
indebtedness of such entities, or any of them, to Agent and Lenders, whether
such obligations, liabilities, and indebtedness shall be joint, several, joint
and several, or individual.
"Borrowing Base" shall have the meaning set forth in subsection
1.1(A).
"Borrowing Base Certificate" shall have the meaning set forth in
subsection 4.6(F) .
"Business Day" means (a) for all purposes other than as covered by
clause (b) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of Illinois, or is a day on which
banking institutions located in any such state are closed; and (b) with respect
to all notices, determinations, fundings and payments in connection with Loans
bearing interest at the LIBOR Rate, any day that is a Business Day described in
clause (a) above and that is also a day for trading by and between banks in
Dollar deposits in the applicable interbank LIBOR market.
"Cash Equivalent" means: (i) marketable direct obligations issued
directly or unconditionally guarantied by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year from the date of acquisition
thereof; (ii) commercial paper maturing no more than one (1) year from the date
issued and, at the time of acquisition, having a rating of at
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least A-l from Standard & Poor's Corporation or at least P-l from ▇▇▇▇▇'▇
Investors Service, Inc.; (iii) certificates of deposit or bankers' acceptances
maturing within one (1) year from the date of issuance thereof issued by, or
overnight reverse repurchase agreements from, any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia having combined capital and surplus of not less than
$500,000,000; and (iv) time deposits maturing no more than thirty (30) days from
the date of creation thereof with commercial banks having membership in the
Federal Deposit Insurance Corporation in amounts not exceeding the lesser of
$100,000 or the maximum amount of insurance applicable to the aggregate amount
of Borrower's deposits at such institution.
"Closing Date" means November 14, 1997.
"Co-Agent" means PPM Finance, Inc. in its capacity as Co-Agent for the
Lenders.
"Collateral" means, collectively: (a) all capital stock, and other
property pledged pursuant to the Security Documents; (b) all "Collateral" as
defined in the Security Documents; (c) all real property mortgaged pursuant to
the Security Documents; and (d) any property or interest provided in addition to
or in substitution for any of the foregoing.
"Commitment" or "Commitments" means the commitment or commitments of a
Lender or Lenders to make the Loans described in subsection 1.1.
"Contingent Obligation", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person: (i) with respect to
any indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto; (ii) with
respect to any letter of credit issued for the account of that Person or as to
which that Person is otherwise liable for reimbursement of drawings; or (iii)
under any foreign exchange contract, currency swap agreement, interest rate swap
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates.
Contingent Obligations shall include (a) the direct or indirect guaranty,
including, keep ▇▇▇▇▇ endorsement (other than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement, and (c) any liability of such Person
for the obligations of another through any agreement to
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purchase, repurchase or otherwise acquire such obligation or any property
constituting security therefor, to provide funds for the payment or discharge of
such obligation or to maintain the solvency, financial condition or any balance
sheet item or level of income of another. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum amount
so guaranteed.
"Default" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default if that condition or event
were not cured or removed within any applicable grace or cure period.
"EBITDA" means, for any period, net income (or loss) of Borrower and
its Subsidiaries on a consolidated basis determined in accordance with GAAP, but
excluding: (a) the income (or loss) of any Person (other than Subsidiaries of
Borrower) in which Borrower or any of its Subsidiaries has an ownership interest
unless received by Borrower or its Subsidiary in a cash distribution; (b) the
income (or loss) of any Person accrued prior to the date it became a Subsidiary
of Borrower or is merged into or consolidated with Borrower or that Person's
assets are acquired by Borrower or any of its Subsidiaries, plus (i) any
provision for (or less any benefit from) income and franchise taxes included in
the determination of net income; (ii) interest expense deducted in the
determination of net income including interest rate protection amortization to
the extent not included in (iii) herein; (iii) amortization and depreciation
deducted in determining net income; (iv) expenses of the Related Transactions
included in the determination of net income provided that such expenses were
included in the Pro Forma, or disclosed in the notes thereto; (v) non-cash
extraordinary losses (as defined under GAAP) net of related tax effects; less
(a) expenditures pursuant to the last sentence of subsection 4.7 applicable to,
but not included in, the Pro Forma; including expenditures during the period
made in connection with the Related Transactions and payment of liabilities
existing on the Closing Date, (b) gains from Asset Dispositions (other than
Asset Dispositions which do not exceed in the aggregate $100,000) or gains from
other non-cash items in excess of $100,000 in the aggregate included in the
determination of net income, and (c) extraordinary gains, as defined under GAAP,
net of related tax effects; plus any management fees paid to GTCR deducted in
determining EBITDA. All amounts taken into consideration hereunder shall be
without duplication including, but not limited to, the Related Transaction
expenses.
"Eligible Accounts" means Accounts created by Borrower which are and
continue to be acceptable to Lender based on the criteria set forth below.
Accounts shall be Eligible Accounts if:
(a) such Accounts arise from the actual and bona fide sale and
delivery of goods by Borrower or rendition of services by Borrower in the
ordinary course of its business which
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transactions are completed in accordance with the terms and provisions contained
in any documents related thereto;
(b) such Accounts are not unpaid more than ninety (90) days after
the date of the original invoice or shipping date for them less any reserves
established by Borrower, not otherwise established hereunder;
(c) such Accounts do not arise from sales on consignment,
guaranteed sale, sale and return, sale on approval, or other terms under which
payment by the account debtor may be conditional or contingent;
(d) the chief executive office of the account debtor with respect
to such Accounts is located in the United States of America, or, at Agent's
option, if either: (i) the account debtor has delivered to Borrower an
irrevocable letter of credit issued or confirmed by a bank satisfactory to
Agent, sufficient to cover such Account, in form and substance satisfactory to
Agent and, if required by Agent, the original of such letter of credit has been
delivered to Agent and the issuer thereof notified of the assignment of the
proceeds of such letter of credit to Agent, or (ii) such Account is otherwise
acceptable in all respects to Agent (subject to such lending formula with
respect thereto as Agent may determine);
(e) such Accounts do not consist of progress ▇▇▇▇▇▇▇▇, ▇▇▇▇ and
hold invoices or retain invoices, except as to ▇▇▇▇ and hold invoices, if Agent
shall have received an agreement in writing from the account debtor, in form and
substance satisfactory to Agent, confirming the unconditional obligation of the
account debtor to take the goods related thereto and pay such invoice;
(f) the account debtor with respect to such Accounts has not
asserted a counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to, any right of setoff against such
Accounts;
(g) there are no facts, events or occurrences which would impair
the validity, enforceability or collectibility of such Accounts or reduce the
amount payable or delay payment thereunder;
(h) such Accounts are subject to the first priority, valid and
perfected security interest of Lenders and any goods giving rise thereto are
not, and were not at the time of the sale thereof, subject to any liens except
those permitted in this Agreement;
(i) neither the account debtor nor any officer or employee of the
account debtor with respect to such Accounts is an officer, employee or agent of
or affiliated with Borrower directly or indirectly by virtue of family
membership, ownership, control, management or otherwise;
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(j) (i) the account debtors with respect to such Accounts are not
any foreign government; or (ii) Accounts in excess of $250,000 of an account
debtor and in the aggregate of $500,000 of all account debtors that are the
United States of America, any State, political subdivision, department, agency
or instrumentality thereof, unless with respect to such Accounts (in excess of
such levels) the Federal Assignment of Claims Act of 1940, as amended or any
similar State or local law, if applicable, has been complied with in a manner
satisfactory to Agent;
(k) there are no proceedings or actions which are threatened or
pending against the account debtors with respect to such Accounts which might
result in any material adverse change in any such account debtor's financial
condition;
(1) such Accounts of a single account debtor or its affiliates do
not constitute more than seven and one-half (7.5%) percent of all otherwise
Eligible Accounts (but the portion of the Accounts not in excess of such
percentage may be deemed Eligible Accounts);
(m) such Accounts are owed by account debtors whose total
indebtedness to Borrower does not exceed the credit limit with respect to such
account debtors as determined by Agent from time to time (but the portion of the
Accounts not in excess of such credit limit may still be deemed Eligible
Accounts); and
(n) such Accounts are owed by account debtors deemed creditworthy
at all times by Agent, as determined by Agent.
"Eligible Inventory" means Inventory, valued at the lower of cost
(determined on a first-in, first-out or average basis) or market value,
consisting of photocopiers, facsimile equipment, automated office equipment,
office furniture and related parts and supplies held for resale in the ordinary
course of the business of Borrower and net of inventory reserves established for
slow moving, obsolete inventory. Eligible Inventory shall not include (i)
packaging and shipping materials; (ii) supplies used or consumed in Borrower's
business; (iii) Inventory at premises other than those owned and controlled by
Borrower, except if Lender shall have received an agreement in writing from the
person in possession of such Inventory and/or the owner or operator of such
premises in form and substance satisfactory to Agent acknowledging Lenders'
first priority security interest in the Inventory, waiving security interests
and claims by such person against the Inventory and permitting Agent access to,
and the right to remain on, the premises so as to exercise Agent's rights and
remedies and otherwise deal with the Collateral; (iv) Inventory subject to a
security interest or lien in favor of any person other than Lender; (v) ▇▇▇▇ and
hold goods; (vi) unserviceable, obsolete or slow moving Inventory in excess of
corresponding reserves previously established; (vii) Inventory which is not
subject to the first priority, valid and perfected security interest of Lenders;
(viii) returned, damaged and/or defective Inventory; and (ix) Inventory
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purchased or sold on consignment. General criteria for Eligible Inventory may be
established and revised from time to time by Lender in good faith. Any Inventory
which is not Eligible Inventory shall nevertheless be part of the Collateral.
"Environmental Laws" means all federal, state, district, local and
foreign laws, rules, regulations, ordinances, and consent decrees relating to
health, safety, hazardous substances, pollution and environmental matters, as
now or at any time hereafter in effect, applicable to Borrower's business and
facilities (whether or not owned by it), including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or hazardous, toxic or dangerous substances, materials or wastes into
the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals, or
hazardous, toxic or dangerous substances, materials or wastes.
"Equity Purchase Agreement" means that certain Equity Purchase
Agreement dated as of June 9, 1994 by and among Global, GTCR IV and certain
other parties thereto, as amended by Amendment No. 1 dated as of the date
hereof.
"Excess Cash Flow" means, for any Fiscal Year, without duplication,
EBITDA for such Fiscal Year, minus the sum of (a) Total Capital Expenditures
made during such Fiscal Year in accordance with Section 4.1 (to the extent made
in cash and not financed by Indebtedness other than the Revolving Loans), (b)
payments of the principal amount of any Indebtedness (other than Indebtedness
represented by the Revolving Loans) actually paid during such Fiscal Year, (c)
the purchase price paid by the Borrower with respect to Acquisitions and all
costs directly associated with such Acquisitions to the extent such purchase
price and costs are not financed by an Additional Term Loan or a Revolving Loan,
(d) Interest Expense, to the extent actually paid in cash during such Fiscal
Year, and (e) taxes based on or measured by net income, required to be paid
during such Fiscal Year, all as determined for the Borrower and its Subsidiaries
on a consolidated basis in accordance with GAAP.
"Expiry Date" means the earlier of (a) the suspension (subject to
reinstatement) of the Revolving Loan Commitment and/or Term Loan Commitment
pursuant to subsection 6.2, (b) the acceleration of the Obligations pursuant to
subsection 6.3 or (c) the Scheduled Maturity Date.
"Fiscal Year" means each year ending March 31.
"Fixed Charges" means for any period, without duplication, Interest
Expense for such period, plus (i) scheduled payments of principal of all
Indebtedness of the Borrower and its
-54-
Subsidiaries during such period (to the extent required to be made during such
period after giving effect to the application of any prepayments of principal
prior to such measurement period, pursuant to the applicable governing
instruments), (ii) without duplication, Restricted Junior Payments made in cash
in compliance with subsection 3.5, and (iii) income and franchise taxes due and
payable for such period of the Borrower and its Subsidiaries.
"Funding Date" shall have the meaning set forth in subsection 7.1.
"GAAP" means generally accepted accounting principles as set forth in
statements from Auditing Standards No. 69 entitled "The Meaning of Present
Fairly in Conformance with Generally Accepted Accounting Principles in the
Independent Auditors Reports" issued by the Auditing Standards Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination.
"General Capital Expenditures" means the expenditures of any Person
which should be capitalized on the balance sheet of such Person in accordance
with GAAP and which are made in connection with the purchase, construction or
improvement of items properly classified on such balance sheet as property,
plant, equipment or other fixed assets or intangibles including Maintenance
Capital Expenditures but excluding Rental Pool Capital Expenditures.
"Global" means Global Imaging Systems Inc. a Delaware corporation.
"GTCR" means Golder, Thoma, Cressey, Rauner, Inc.
"GTCR IV" means Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV Limited
Partnership.
"Hazardous Materials" means any hazardous, toxic or dangerous
substances, materials and wastes, including, without limitation, hydrocarbons
(including naturally occurring or man-made petroleum and hydrocarbons) ,
flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, biological substances, polychlorinated biphenyls, pesticides,
herbicides and any other kind and/or type of pollutants or contaminants
(including, without limitation, materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances,
materials, or wastes and including any other substances, materials or wastes
that are or become regulated under any Environmental Law (including, without
limitation any that are or become classified as hazardous or toxic under any
Environmental Law).
"Indebtedness", as applied to any Person, means: (a) all indebtedness
for borrowed money including all fees, costs and expenses relating to such
indebtedness; (b) that portion of
-55-
obligations with respect to capital leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (c) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money; (d) any obligation owed for all or any part of
the deferred purchase price of property or services (e) the maximum amount of
any obligation of Borrower (including without limitation, obligations owed under
non-compete agreements, promissory notes, earn-outs, consulting agreements or
other similar agreements) to the sellers of businesses heretofore acquired by
Borrower or acquired by Borrower pursuant to the terms of this Agreement to the
extent such amount is reflected on the balance sheet of Borrower in accordance
with GAAP; and (f) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person; and (g) the items set forth on Schedule 3.1. Notwithstanding
anything herein to the contrary, Indebtedness shall not include trade payables
arising out of vendor financing for the deferred purchase price of Inventory
provided such payables are paid (or by their terms payable) within 60 days of
the invoice date, provided, however, no Default or Event of Default has occurred
or is continuing.
"Indemnitees" shall have the meaning set forth in subsection 9.1.
"Initial Term Loan" shall have the meaning set forth in subsection
1.1(C) (1).
"Intellectual Property" shall have the meaning set forth in subsection
5.6.
"Interest Expense" means, for any period, total interest expense paid
or accrued with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries, including, without limitation, that portion of any capitalized
lease obligations attributable to interest expense in accordance with GAAP,
interest rate protection amortization, debt issuance costs and capitalized
interest paid during such period, interest on the Loans (including the Unused
Line Fee), all commissions, discounts and other fees and charges owed with
respect to letters of credit, all as determined for the Borrower and its
Subsidiaries on a consolidated basis for such period in accordance with GAAP.
"Interest Period" means the period commencing on and including the
last Business Day of a calendar month and ending on but excluding the last
Business Day of the next calendar month. In no event shall an Interest Period
extend beyond the Expiry Date.
"Inventory" means all of Borrower's now owned and hereafter existing
photocopiers, facsimile equipment, automated office equipment, office furniture
and related parts and supplies held for resale or lease, or to be furnished
under contracts of
-56-
service, and all other inventory of whatsoever kind or nature, wherever located.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of the assets or any
beneficial interest in, including stock, partnership interest or other equity
securities of, any other Person (other than a Person that prior to the relevant
purchase or acquisition was a Subsidiary of Borrower) or (ii) any direct or
indirect loan, advance or capital contribution by Borrower or any of its
Subsidiaries to any other Person (other than a Subsidiary of Borrower),
including all keepwells, indebtedness and accounts receivable from that other
Person that are not current assets or did not arise from sales to that other
Person in the ordinary course of business. The amount of any Investment shall be
the original cost of such Investment plus the cost of all additions thereto less
the return of capital with respect thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ National Life Insurance Company.
"Lender" or "Lenders" means ▇▇▇▇▇▇▇ National Life Insurance Company
together with its successors and assigns.
"Lender Addition Agreement" means an agreement among Agent, a Lender
and such Lender's assignee regarding their respective rights and obligations
with respect to assignments of the Loans, the Commitments and other interests
under this Agreement and the other Loan Documents.
"LIBOR Rate" means, for each Interest Period, or any portion thereof, the
offered rate per annum for deposits of U.S. Dollars for a period equal to the
Interest Period that appears on Telerate Page 3750 as of 11:00 A.M. G.M.T. two
Business Days prior to the commencement of such Interest Period (and with
respect to the initial Interest Period, two Business Days prior to the Closing
Date). If no such offered rate exists, the rate in respect of such Interest
Period will be the rate of interest per annum, as determined by the Agent
(rounded upwards, if necessary, to the nearest 1/16 of 1%) at which deposits of
U.S. Dollars in immediately available and freely transferable funds are offered
at for a one-month period 11:00 A.M. G.M.T. two Business Days prior to the
commencement of such Interest Period by major financial institutions reasonably
satisfactory to the Agent in the London interbank market for a period equal to
such Interest Period and for an amount equal or comparable to the principal
amount of the Term Loan or the Revolving Loan to be made in connection therewith
(as the case may be).
"LIBOR Rate Loans" means Loans bearing interest at rates determined by
reference to the LIBOR Rate.
-57-
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary, (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Loan" or "Loans" means an advance or advances under the Term Loan
Commitment or the Revolving Loan Commitment.
"Loan Availability" means "Pro Forma Operating Cash Flow" on the date
of determination, multiplied by the applicable Maximum Debt for such period.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Agent Agreement and all other instruments, documents and
agreements executed by or on behalf of any Loan Party and delivered concurrently
herewith or at any time hereafter to or for the benefit of Agent or any Lender
in connection with the Loans and other transactions contemplated by this
Agreement, all as amended, supplemented or modified from time to time.
"Loan Party" means, collectively, Borrower, Borrower's Subsidiaries
and any other Person (other than Agent or any Lender) which is or becomes a
party to any Loan Document.
"Maintenance Capital Expenditures" means the expenditures of any
Person which should be capitalized on the balance sheet of such Person in
accordance with GAAP and which are made in connection with replacing or
repairing existing equipment other than such Person's rental pool of equipment.
"Material Adverse Effect" means (a) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of any Loan Party taken as a whole or (b) the impairment of the ability of any
Loan Party to perform its obligations under any Loan Document to which it is a
party or of Agent or any Lender to enforce any Loan Document or collect any of
the Obligations. In determining whether any individual event would result in a
Material Adverse Effect, notwithstanding that such event does not of itself have
such effect, a Material Adverse Effect shall be deemed to have occurred if the
cumulative effect of such event and all other then existing events would result
in a Material Adverse Effect.
"Maximum Debt" means Pro Forma Operating Cash Flow of Borrower and its
Subsidiaries for the periods set forth below multiplied by the debt multiple set
forth opposite each such period.
Rolling 12 Month
Period Ended Debt Multiple
---------------- -------------
July 31, 1997 4.50
July 31, 1998 4.50
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July 31, 1999 4.17
July 31, 2000 3.84
July 31, 2001 3.51
July 31, 2002 3.18
July 31, 2003 2.85
July 31, 2004 -0-
"Maximum Loan Balance" means, as of any date, an amount equal to the
lesser of: (i) the Maximum Loan Commitment and (ii) Loan Availability less all
outstanding Term Loans and Revolving Loans.
"Maximum Loan Commitment" means $120,000,000 less all Scheduled
Installments paid by Borrower which may not be reborrowed pursuant to the terms
of this Agreement.
"Maximum Revolving Loan Balance" means the lesser of: (i) the
Borrowing Base and (ii) $6,000,000.
"Note" or "Notes" means one or more of the amended and restated notes
of Borrower substantially in the form of Exhibits l.l(D-l) or l.l(D-2), or any
combination thereof.
"Obligations" means all obligations, liabilities and indebtedness of
every nature of each Loan Party from time to time owed to Agent or any Lender
under the Loan Documents including, without limitation, the principal amount of
all debts, claims and indebtedness, accrued and unpaid interest and all fees,
costs and expenses, whether primary, secondary, direct, contingent, fixed or
otherwise, heretofore, now and/or from time to time hereafter owing, due or
payable whether before or after the filing of a proceeding under the Bankruptcy
Code by or against Borrower or its Subsidiaries.
"Original Closing Date" means August 14, 1996.
"Payment Account" shall have the meaning set forth in subsection 1.9.
"Permitted Encumbrances" shall have the meaning set forth in
subsection 3.2(A).
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions thereof
and their respective permitted successors and assigns (or in the case of a
governmental person, the successor functional equivalent of such Person).
"Prepayment Fee" shall have the meaning set forth in subsection 1.7.
-59-
"Pro Forma" means the unaudited consolidated balance sheet of Borrower
and its Subsidiaries prepared in accordance with GAAP as of the Closing Date
after giving effect to the Related Transactions. The Pro Forma is annexed hereto
as Schedule 10.1(A).
"Pro Forma EBITDA" means EBITDA for the twelve (12) month period
ending on the date of determination, plus Acquisition EBITDA.
"Pro Forma Operating Cash Flow" means Pro Forma EBITDA for the twelve
(12) month period preceding the date of determination minus "Maintenance Capital
Expenditures" which for purposes of this calculation shall be equal to 4% of Pro
Forma EBITDA for the twelve (12) month period preceding the date of
determination, plus management fees paid to GTCR during the twelve (12) month
period preceding the date of determination, if any, to the extent not already
deducted in determining EBITDA.
"Projections" means Borrower's forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, all prepared on a division by division and Subsidiary
by Subsidiary basis on a consistent basis with Borrower's historical financial
statements, together with appropriate supporting details and a statement of
underlying assumptions. The Projections represent and will represent as of the
date thereof the good faith estimate of Borrower and its senior management
concerning the most probable course of its business.
"Pro Rata Share" means (a) with respect to matters relating to a
particular Commitment of a Lender (including the making or repayment of Loans
pursuant to that Commitment), the percentage obtained by dividing (i) such
Commitment of that Lender by (ii) all such Commitments of all Lenders and (b)
with respect to all other matters, the percentage obtained by dividing (i) the
Maximum Loan Commitment of a Lender by (ii) the Maximum Loan Commitments of all
Lenders, in either case as such percentage may be adjusted by assignments
permitted pursuant to Section 8.
"Related Transactions" means the execution and delivery of the Related
Transactions Documents, the funding of all Loans on the Closing Date, the
repayment of any Indebtedness identified on Schedule 10.1(B) which is to be paid
in full on the Closing Date, and the payment of all fees, costs and expenses
associated with all of the foregoing.
"Related Transactions Documents" means the Loan Documents, the Stock
Purchase Agreement and all other agreements, instruments and documents executed
or delivered in connection with the Related Transactions.
"Rental Pool Capital Expenditures" means the expenditures of any
Person which shall be capitalized on the balance sheet of such Person in
accordance with GAAP and which are made in
-60-
connection with the acquisition, replacement or repair of any equipment that
will be revenue producing and rented to existing or new customers; provided,
however, at least 85% of such equipment is subject to an existing lease or
rental agreement and all new equipment to be purchased is purchased as a result
of a new lease or rental agreement entered into by Borrower and a new or
existing customer.
"Requisite Lenders" means Lenders having (a) 51% or more of the
Maximum Loan Commitments or, (b) if the Maximum Loan Commitments have been
terminated, 51% or more of the sum of the Revolving Loan Commitments and the
aggregate outstanding principal amount of the Term Loans, if any, or (c) if all
Commitments have been terminated, 51% or more of the aggregate outstanding
principal amount of the Revolving Loans and Term Loans,
"Restricted Junior Payment" means: (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Borrower or any of its Subsidiaries now or hereafter outstanding except a
dividend payable solely in shares of a class of stock to holders of that class;
(ii) any redemption, conversion, exchange, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock, of Borrower or any of its Subsidiaries now or
hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock, of Borrower or any of its Subsidiaries now or
hereafter outstanding; and (iv) any payment or pre-payment of interest on,
principal of, premium, if any, redemption, conversion, exchange, purchase,
retirement, defeasance, sinking fund on similar payment with respect to any
Indebtedness the payment of which is subordinated to the Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the commitment
of such Lender to make Revolving Loans as set forth on the signature page of
this Agreement opposite such Lender's signature or in the most recent Lender
Addition Agreement, if any, executed by such Lender and (b) as to all Lenders,
the aggregate commitment of all Lenders to make Revolving Loans not to exceed
$6,000,000.
"Revolving Loans" means all advances made by Lenders pursuant to
subsection 1.1(A) herein and subsection 1.1(A) of the 1996 Loan Agreement and
any amounts added to the aggregate principal balance of the Revolving Loans
pursuant to this Agreement .
"Scheduled Installments" shall have the meaning set forth in
subsection 1.1(C) (5).
"Scheduled Maturity Date" means August 14, 2004.
-61-
"Security Documents" means all instruments, documents and agreements
executed by or on behalf of any Loan Party to guaranty or provide collateral
security with respect to the Obligations including, without limitation, any
security agreement or pledge agreement, any guaranty of the Obligations, any
mortgage, and all instruments, documents and agreements executed pursuant to the
terms of the foregoing.
"Stock Purchase Agreement" means the Stock Purchase Agreement, dated
as of August 14, 1996, between the Borrower and ▇▇▇▇▇▇▇, as such agreement may
hereafter from time to time be amended, modified or supplemented in accordance
with the terms hereof and thereof.
"Stockholders' Agreement" means the Stockholders Agreement, dated as
of August 14, 1996, among Borrower and its stockholders, as such agreement may
hereafter from time to time be amended, modified or supplemented in accordance
with the terms hereof and thereof.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which more than fifty
percent (50%) of the total voting power of shares of stock (or equivalent
ownership or controlling interest) entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees (or
power to direct or cause the direction of the management and policies) thereof
is at the time owned or controlled, directly or indirectly, by that Person or
one or more of the other Subsidiaries of that Person or a combination thereof.
"Term Loans" means all advances made by Lenders pursuant to
subsections 1.1(C) and (2) and shall include the Initial Term Loans and all
Additional Term Loans.
"Term Loan Balance" means, as of any date, the aggregate outstanding
principal amount of the Term Loans.
"Term Loan Commitment" means (a) as to any Lender, the commitment of
such Lender to make Term Loans as set forth on the signature page of this
Agreement opposite such Lender's signature or in the most recent Lender Addition
Agreement, if any, executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Term Loans.
"Total Capital Expenditures" means General Capital Expenditures and
Rental Pool Capital Expenditures.
10.2 Other Definitional Provisions. References to "Section", "subsections",
"Exhibits" and "Schedules" shall be to Sections, subsections, Exhibits and
Schedules, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 10.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
-62-
reference. In this Agreement, "whereof", "wherein", "whereto", "hereunder" and
the like mean and refer to this Agreement as a whole and not merely to the
specific section, paragraph or clause in which the respective word appears;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography and other means of reproducing words in a
tangible visible form; the words "including" "include" and "include" shall be
deemed to be followed by the words "without limitation"; references to
agreements and other contractual instruments shall be deemed to include
subsequent amendments, assignments, and other modifications thereto, but only to
the extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement or any other Loan Document; references
to Persons include their respective permitted successors and assigns or, in the
case of governmental Persons, Persons succeeding to the relevant functions of
such Persons; and all references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-63-
Witness the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
GLOBAL IMAGING SYSTEMS INC.
GLOBAL IMAGING OPERATIONS, INC.
GLOBAL IMAGING FINANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
COPY SERVICE AND SUPPLY, INC.
OFFICE FURNITURE CONCEPTS, INC.
FELCO OFFICE SYSTEMS, INC.
▇▇▇▇▇▇, INC.
▇▇▇▇▇▇ OFFICE PRODUCTS, INC.
AMERICAN PHOTOCOPY EQUIPMENT COMPANY
OF PITTSBURGH
SOUTHERN COPY SYSTEMS, INC.
BUSINESS EQUIPMENT UNLIMITED
CAMERON OFFICE PRODUCTS, INC.
SOUTHERN BUSINESS COMMUNICATIONS, INC.
ELECTRONIC SYSTEMS, INC.
EASTERN COPY PRODUCTS, INC.
QUALITY BUSINESS SYSTEMS, INC.
DUPLICATING SPECIALTIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman
CSS LEASING, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager and President
-64-
COMMITMENTS: ▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE
COMPANY, as Lender
Revolving Loan
Commitment: $ 6,000,000 By: PPM America, Inc.,
Attorney-in-Fact
Term Loan
Commitment: $114,000,000 By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------ --------------------------
Total Title: Managing Director
Commitment: $120,000,000
PPM AMERICA, INC., as Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Title: Managing Director
-65-
FIRST AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT AND LOAN DOCUMENTS
-----------------------------------
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND LOAN
DOCUMENTS (this "Amendment") is made and entered into as of December 23, 1997,
by and among GLOBAL IMAGING SYSTEMS INC., a Delaware corporation ("Global"),
GLOBAL IMAGING OPERATIONS, INC., a Delaware corporation ("Operations"), GLOBAL
IMAGING FINANCE COMPANY, a Delaware corporation ("Finance"), COPY SERVICE &
SUPPLY, INC., a North Carolina corporation ("Copy Service"), OFFICE FURNITURE
CONCEPTS, INC., a North Carolina corporation ("Office Concepts"), CSS LEASING,
LLC, a North Carolina limited liability company ("CSS Leasing"), FELCO OFFICE
SYSTEMS, INC., a Texas corporation ("Felco"), ▇▇▇▇▇▇, INC., an Alabama
corporation ("▇▇▇▇▇▇"), ▇▇▇▇▇▇ OFFICE PRODUCTS, INC. a New Hampshire corporation
("▇▇▇▇▇▇"), AMERICAN PHOTOCOPY EQUIPMENT COMPANY OF PITTSBURGH, a Delaware
corporation ("AMCOM"), SOUTHERN COPY SYSTEMS, INC., an Alabama corporation
("Southern Copy"), BUSINESS EQUIPMENT UNLIMITED, a Maine corporation ("Business
Equipment"), CAMERON OFFICE PRODUCTS, INC., a Massachusetts corporation
("Cameron"), SOUTHERN BUSINESS COMMUNICATIONS, INC., a Georgia corporation
("Southern Business"), ELECTRONIC SYSTEMS, INC., a Virginia corporation
("Electronic Systems"), EASTERN COPY PRODUCTS, INC., a New York corporation
("Eastern Copy"), QUALITY BUSINESS SYSTEMS, INC., a Washington corporation
("Quality Business"), DUPLICATING SPECIALTIES, INC., an Oregon corporation
("Duplicating Specialties"), ELECTRONIC SYSTEMS OF RICHMOND, INC., a Virginia
corporation ("ESR") (Global, Operations, Finance, Copy Service, Office Concepts,
CSS Leasing, Felco, Berney, Conway, AMCOM, Southern Copy, Business Equipment,
Cameron, Southern Business, Electronic Systems, Eastern Copy, Quality Business
and Duplicating Specialties are each individually and collectively referred to
herein as "Original Borrower"; Original Borrower and ESR are herein individually
and collectively referred to herein as "Borrower"), ▇▇▇▇▇▇▇ NATIONAL LIFE
INSURANCE COMPANY, a Michigan insurance corporation, ("▇▇▇▇▇▇▇" or "Lender" and
collectively with all other Lenders, if any, the "Lenders") and PPM AMERICA,
INC., a Delaware corporation, as Agent for the Lenders (the "Agent").
PRELIMINARY STATEMENTS
----------------------
A. Original Borrower, Lenders and Agent are parties to that certain Credit
Agreement, dated as of August 14, 1996 and as amended and restated as of
November 14, 1997 (the "Credit Agreement").
B. Electronic Systems wishes to acquire all of the issued and outstanding
capital stock of ESR (the "ESR Acquisition") pursuant to the terms and
conditions of that certain Stock Purchase Agreement dated as of December 23,
1997 (the "ESR
Purchase Agreement") by and among Global, Electronic Systems, ESR and certain
shareholders of ESR (the "Sellers").
C. Pursuant to the terms of the Credit Agreement, the Requisite Lenders'
approval is required to consummate the ESR Acquisition.
D. In order to finance the ESR Acquisition, Borrower has requested that
the Lenders make an Additional Term Loan (as defined in the Credit Agreement) to
the Borrower in accordance with the terms of the Credit Agreement in the
principal amount of approximately $8,460,000 and a Revolving Loan in the
aggregate principal amount of $540,000 (the "ESR Revolving Loan").
E. Each of the Borrowers, including ESR, acknowledges that as a direct or
indirect wholly-owned subsidiary of Global, it will receive substantial direct
and indirect benefits by reason of the making of the Additional Term Loan and
the ESR Revolving Loan provided for hereunder.
F. Original Borrower, ESR, Agent and Lenders desire to amend the Credit
Agreement and the other Loan Documents (as defined in the Credit Agreement) as
hereinafter set forth in order to, among other things, include ESR as a borrower
thereunder.
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
AGREEMENT
---------
ARTICLE I.
Definitions
-----------
1.01 Capitalized terms used in this Amendment are defined in the Credit
Agreement, as amended hereby, unless otherwise stated.
ARTICLE II.
Amendments to Credit Agreement
------------------------------
2.01 Amendments Generally and References to Borrower. The Credit Agreement
-----------------------------------------------
is hereby amended to include ESR as a Borrower thereunder and all references in
the Credit Agreement to Borrower or Borrowers shall include, individually and
collectively, ESR, including the definition of "Borrower" in Section 10 of the
Credit Agreement with the same force and effect as if ESR had executed the
Credit Agreement.
-2-
2.02 Amendments to Section 10 - Definitions. Section 10 of the Credit
--------------------------------------
Agreement is hereby amended by adding the following definitions thereto in
alphabetical order:
"First Amendment Agreement" shall mean that certain First Amendment to
-------------------------
Amended and Restated Credit Agreement and Loan Documents, dated December
23, 1997, by and among Agent, Lender and Borrower.
"ESR" shall mean Electronic Systems of Richmond, Inc., a Virginia
---
corporation.
ARTICLE III.
Amendments to Notes
-------------------
3.01 Amendment to Revolving Note. Effective as of the date hereof, the
---------------------------
Amended and Restated Revolving Note dated August 14, 1996, as amended and
restated as of November 14, 1997, in the principal amount of $6,000,000 executed
by the Original Borrowers in favor of ▇▇▇▇▇▇▇ is hereby amended to include ESR
as an obligor thereunder with the same force and effect as if ESR had executed
such Note.
3.02 Amendment to Term Note. Effective as of the date hereof, the Term
----------------------
Note dated August 14, 1996, as amended and restated as of November 14, 1997, in
the principal amount of $114,000,000 executed by the Original Borrowers in favor
of ▇▇▇▇▇▇▇ is hereby amended to include ESR as an obligor thereunder with the
same force and effect as if ESR had executed such Note.
ARTICLE IV.
Representations and Warranties
Relating to the Acquisitions
----------------------------
4.01 Borrower hereby represents and warrants to Agent and Lenders that:
(a) The ESR Purchase Agreement and the transactions contemplated
thereunder have been duly executed, delivered and performed in accordance
with their terms by the respective parties thereto in all respects,
including the fulfillment (not merely the waiver, except as may be
disclosed to Agent and consented to in writing by Agent) of all
conditions precedent set forth therein.
(b) After giving effect to the terms of the ESR Purchase Agreement,
Electronic Systems acquired and has good and marketable title to all of
the
-3-
issued and outstanding capital stock of ESR, free and clear of all
claims, liens, pledges and encumbrances of any kind, except as disclosed
in writing to Agent.
(c) All actions and proceedings required by the ESR Purchase Agreement,
applicable law or regulation (including, but not limited to, compliance
with the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act of 1976, as
amended) have been taken and the transactions required thereunder have
been duly and validly taken and consummated.
(d) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of any of
the transactions described in the ESR Purchase Agreement and no
governmental or other action or proceeding has been threatened or
commenced, seeking any injunction, restraining order or other order which
seeks to void or otherwise modify any of the transactions described in
the ESR Purchase Agreement.
(e) As of and from and after the date of this Amendment and after
giving effect to the consummation of the ESR Acquisition, Borrower and
its Subsidiaries: (a) own and will own assets the fair saleable value of
which, on a going concern basis, are (i) greater than the total amount of
liabilities (including contingent liabilities) of Borrower and its
Subsidiaries and (ii) greater than the amount that will be required to
pay the probable liabilities of Borrower's then existing debts as they
become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to Borrower and its
Subsidiaries; (b) have capital that is not unreasonably small in relation
to their respective businesses as presently conducted or any contemplated
or undertaken transaction; and (c) do not intend to incur and do not
believe that they will incur debts beyond their ability to pay such debts
as they become due.
(f) Attached hereto as Exhibit A is a capitalization schedule setting
forth the ownership of Global's capital stock on a fully diluted basis,
after giving effect to the consummation of the ESR Acquisition.
ARTICLE V.
Approval of the Acquisitions, Additional Term
---------------------------------------------
Loan and Revolving Loan
-----------------------
5.01 Pursuant to Section 3.16 of the Credit Agreement, the Requisite
Lenders have approved the ESR Acquisition. Subject to the terms and conditions
set forth herein and in the Credit Agreement, in order to finance the ESR
Acquisition, the Lenders agree to make an Additional Term Loan in the principal
amount of approximately $8,460,000.
-4-
5.02 The Borrowers shall repay to the Lenders, within ten days from the
date hereof, the ESR Revolving Loan.
ARTICLE VI.
Conditions
----------
6.01 Conditions to Effectiveness. The effectiveness of this Agreement is
---------------------------
subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Lender:
(a) Agent shall have received, in form and substance satisfactory to
Agent:
(i) this Amendment, duly executed by each Borrower;
(ii) the ESR Security Agreement, in the form of Exhibit B attached
---------
hereto, duly executed by ESR;
(iii) a Pledge Agreement in the form of Exhibit C hereto duly
---------
executed by Electronic Systems accompanied by stock
certificate(s) evidencing the capital stock of ESR purchased
pursuant to the ESR Purchase Agreement with duly executed
stock power(s) and an Irrevocable Proxy;
(iv) a Collateral Assignment of Rights under Agreement duly
executed by ESR and Global, the Sellers and the Escrow Agent
in the form of Exhibit D hereto;
---------
(v) a Collateral Assignment of Patents, Trademarks and Copyrights
(Security Agreement) in the form of Exhibit E hereto duly
---------
executed by ESR;
(vi) an Intercreditor Agreement in form and substance satisfactory
to Agent duly executed by Deutsche Financial Services
Corporation and acknowledged by ESR;
(vii) duly executed copies of the ESR Purchase Agreement and all
schedules and exhibits thereto;
(viii) a closing certificate signed by a senior officer of Borrower,
dated as of the date of this Amendment, stating that (A) the
representations and warranties set forth in the Credit
Agreement are true and correct as of such date, (B) Borrower
is on such date in compliance with all the terms and
provisions set
-5-
forth in the Credit Agreement, as amended by this Amendment,
and (C) on such date no Event of Default or event or
condition which, with notice or passage of time or both,
would constitute an Event of Default, has occurred or is
continuing;
(ix) a company general certificate certified by the Secretary of
each of the Borrowers (A) that its Board of Directors has
adopted and ratified resolutions which authorize the
execution, delivery and performance by it of all Loan
Documents to which it is or is to be a party, and (B) the
names of the officers authorized to sign this Amendment and
each of the other Loan Documents to which it is or is to be a
party, together with specimen signatures of such officers;
(x) UCC-1 financing statements duly executed by ESR;
(xi) an Availability Certificate dated as of the date hereof
indicating sufficient Loan Availability for Lenders to make
the Additional Term Loan and the ESR Revolving Loan; and
(xii) an opinion of counsel to the Borrower, in form and substance
satisfactory to Lender, with respect to the Purchase
Agreement, this First Amendment Agreement and the security
interests and liens of Agent with respect to the Collateral
and such other matters as Lender may request.
(xiii) evidence of insurance by ESR and endorsements thereto naming
Agent as loss payee and additional insured.
(xiv) a financial condition certificate dated as of the date hereof
in the form of Exhibit G attached hereto.
---------
(xv) an Assignment of Deposit Accounts and Bank Agency Agreement
in the form of Exhibit H hereto with respect to all bank
---------
accounts established by or on behalf of ESR.
(xvi) such additional documents, instruments and information as
Agent or its legal counsel may request.
(b) The representations and warranties contained herein, in the Credit
Agreement and in the other Loan Documents, shall be true and correct as of the
date hereof, as if made on the date hereof.
(c) No Event of Default or event or condition which, with notice or
passage of time or both, would constitute an Event of Default, shall have
occurred and be
-6-
continuing, unless such event, condition or Event of Default has been
specifically waived in writing by Agent or Lenders.
(d) Agent shall have received evidence that Agent has a valid first
priority security interest in the assets of ESR subject only to Permitted
Encumbrances.
6.02 Subsequent Deliveries. Within ninety (90) days of the date hereof,
---------------------
Electronic Systems shall have delivered to the Agent a landlord waiver
satisfactory in form and substance to the Agent, with respect to its property
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
ARTICLE VIII.
No Waiver
---------
Nothing contained in this Amendment shall be construed as a waiver by Agent
or any Lender of any covenant or provision of the Credit Agreement or the other
Loan Documents or of any other contract or instrument between Borrower and any
Lender or Agent, and the failure of any Lender or Agent at any time or times
hereafter to require strict performance by Borrower of any provision thereof
shall not waive, affect or diminish any right of Lenders or Agent to thereafter
demand strict compliance therewith. Lenders and Agent hereby reserve all rights
granted under the Credit Agreement, the other Loan Documents and any other
contract or instrument between Borrower and any Lender or Agent.
ARTICLE VIII.
Ratifications, Representations and Warranties
---------------------------------------------
8.01 Ratifications. The terms and provisions set forth in this Amendment
-------------
shall modify and supersede all inconsistent terms and provisions set forth in
the Credit Agreement and the other Loan Documents, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement and the other Loan Documents are ratified and confirmed and
shall continue in full force and effect. Borrower, Agent and Lenders agree that
the Credit Agreement and the other Loan Documents, as amended hereby, shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms.
8.02 Representations and Warranties. Borrower hereby represents and
------------------------------
warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will not violate the Articles of Incorporation or
Bylaws of Borrower; (b) the representations and warranties contained in the
Credit Agreement, as amended hereby, and any other Loan Documents are true and
-7-
correct on and as of the date hereof and on and as of the date of execution
hereof as though made on and as of each such date; (c) no Event of Default or
event or condition which, with notice or passage of time or both, would
constitute an Event of Default under the Credit Agreement, as amended hereby,
has occurred and is continuing; and (d) Borrower is in full compliance with all
covenants and agreements contained in the Credit Agreement and the other Loan
Documents, as amended hereby.
ARTICLE IX.
Miscellaneous Provisions
------------------------
9.01 Survival of Representations and Warranties. All representations and
------------------------------------------
warranties made in the Credit Agreement or any other Loan Document, including,
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agent or any Lender or any closing shall
affect the representations and warranties or the right of Agent or Lenders to
rely upon them.
9.02 Reference to Credit Agreement. Each of the Credit Agreement and the
-----------------------------
other Loan Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof or pursuant
to the terms of the Credit Agreement, as amended hereby, are hereby amended so
that any reference in the Credit Agreement and such other Loan Documents to the
Credit Agreement or any such Loan Documents shall mean a reference to the Credit
Agreement and the other Loan Documents as amended hereby.
9.03 Expenses of Agent. As provided in the Credit Agreement, Borrower
-----------------
agrees to pay on demand all reasonable costs and expenses incurred by Agent in
connection with the preparation, negotiation and execution of this Amendment and
the other Loan Documents executed pursuant hereto, and any and all amendments,
modifications, and supplements thereto, including, without limitation, the
reasonable costs and fees of Agent's legal counsel.
9.04 Severability. Any provision of this Amendment held by a court of
------------
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
9.05 Successors and Assigns. This Amendment is binding upon and shall
----------------------
insure to the benefit of Agent, Lenders and Borrower and their respective
successors and assigns, except that Borrower may not assign or transfer any of
its
-8-
rights or obligations hereunder without the prior written consent of Agent and
Lenders.
9.06 Counterparts. This Amendment may be executed in one or more
------------
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
9.07 Effect of Waiver. No consent or waiver, express or implied, by Agent
----------------
or Lender to or for any breach of or deviation from any covenant or condition by
Borrower shall be deemed a consent to or waiver of any other breach of the same
or any other covenant, condition or duty.
9.08 Headings. The headings, captions, and arrangements used in this
--------
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
9.09 Applicable Law. THIS AMENDMENT AND ALL OTHER AGREEMENTS EXECUTED
--------------
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW).
9.10 Final Agreement. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS,
---------------
EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER, AGENT
AND LENDERS.
-9-
Witness the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
GLOBAL IMAGING SYSTEMS INC.
GLOBAL IMAGING OPERATIONS, INC.
GLOBAL IMAGING FINANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
COPY SERVICE AND SUPPLY, INC.
OFFICE FELCO CONCEPTS, INC.
FELCO OFFICE SYSTEMS, INC.
▇▇▇▇▇▇, INC.
▇▇▇▇▇▇ OFFICE PRODUCTS, INC.
AMERICAN PHOTOCOPY EQUIPMENT
COMPANY OF PITTSBURGH
SOUTHERN COPY SYSTEMS, INC.
BUSINESS EQUIPMENT UNLIMITED
CAMERON OFFICE PRODUCTS, INC.
SOUTHERN BUSINESS COMMUNICATIONS,
INC.
ELECTRONIC SYSTEMS, INC.
EASTERN COPY PRODUCTS, INC.
QUALITY BUSINESS SYSTEMS, INC.
DUPLICATING SPECIALTIES, INC.
ELECTRONIC SYSTEMS OF RICHMOND, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman
CSS LEASING, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager and President
-10-
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE
COMPANY, as Lender.
By: PPM America, Inc.,
Attorney-in-Fact
By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Managing Director
PPM AMERICA, INC., as Agent
By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Managing Director
-11-
SECOND AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT AND LOAN DOCUMENTS
--------------------------------------------
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND LOAN
DOCUMENTS (this "Amendment") is made and entered into as of January 9, 1998, by
and among GLOBAL IMAGING SYSTEMS INC., a Delaware corporation ("Global"), GLOBAL
IMAGING OPERATIONS, INC., a Delaware corporation ("Operations"), GLOBAL IMAGING
FINANCE COMPANY, a Delaware corporation ("Finance"), COPY SERVICE & SUPPLY,
INC., a North Carolina corporation ("Copy Service"), OFFICE FURNITURE CONCEPTS,
INC., a North Carolina corporation ("Office Concepts"), CSS LEASING, LLC, a
North Carolina limited liability company ("CSS Leasing"), FELCO OFFICE SYSTEMS,
INC., a Texas corporation ("Felco"), ▇▇▇▇▇▇, INC., an Alabama corporation
("▇▇▇▇▇▇"), ▇▇▇▇▇▇ OFFICE PRODUCTS, INC. a New Hampshire corporation ("▇▇▇▇▇▇"),
AMERICAN PHOTOCOPY EQUIPMENT COMPANY OF PITTSBURGH, a Delaware corporation
("AMCOM"), SOUTHERN COPY SYSTEMS, INC., an Alabama corporation ("Southern
Copy"), BUSINESS EQUIPMENT UNLIMITED, a Maine corporation ("Business
Equipment"), CAMERON OFFICE PRODUCTS, INC., a Massachusetts corporation
("Cameron"), SOUTHERN BUSINESS COMMUNICATIONS, INC., a Georgia corporation
("Southern Business"), ELECTRONIC SYSTEMS, INC., a Virginia corporation
("Electronic Systems"), EASTERN COPY PRODUCTS, INC., a New York corporation
("Eastern Copy"), QUALITY BUSINESS SYSTEMS, INC., a Washington corporation
("Quality Business"), DUPLICATING SPECIALTIES, INC., an Oregon corporation
("Duplicating Specialties"), ELECTRONIC SYSTEMS OF RICHMOND, INC., a Virginia
corporation ("ESR"), CONNECTICUT BUSINESS SYSTEMS, INC., a Connecticut
corporation ("CBS"), (Global, Operations, Finance, Copy Service, Office
Concepts, CSS Leasing, Felco, Berney, Conway, AMCOM, Southern Copy, Business
Equipment, Cameron, Southern Business, Electronic Systems, Eastern Copy, Quality
Business, Duplicating Specialties and ESR are each individually and collectively
referred to herein as "Original Borrower"; Original Borrower and CBS are herein
individually and collectively referred to herein as "Borrower"), ▇▇▇▇▇▇▇
NATIONAL LIFE INSURANCE COMPANY, a Michigan insurance corporation, ("▇▇▇▇▇▇▇" or
"Lender" and collectively with all other Lenders, if any, the "Lenders") and PPM
AMERICA, INC., a Delaware corporation, as Agent for the Lenders (the "Agent").
PRELIMINARY STATEMENTS
----------------------
A. Original Borrower, Lenders and Agent are parties to that Amended and
Restated Credit Agreement, dated as of August 14, 1996 and as amended and
restated as of November 14, 1997 and as further amended pursuant to that certain
First Amendment to Amended and Restated Credit Agreement and Loan Documents
dated as of December 23, 1997 (the "Credit Agreement").
B. Global entered into a contract to acquire all of the issued and
outstanding capital stock of CBS (the "CBS Acquisition") pursuant to the terms
and conditions of that certain Stock
Purchase Agreement dated as of December 31, 1997 (the "CBS Purchase Agreement")
by and among Global, CBS and certain shareholders of CBS (the "Sellers").
C. Prior to the consummation of the CBS Acquisition, Global assigned its
interests in the CBS Purchase Agreement to its wholly-owned subsidiary, CBSI
Acquisition Corp ("Acquisition Corp.").
D. Immediately after the closing of the transactions contemplated by the
CBS Purchase Agreement, Acquisition Corp. shall merge with and into CBS (the
"Merger").
E. Pursuant to the terms of the Credit Agreement, the Requisite Lenders'
approval is required to consummate the CBS Acquisition.
F. In order to finance the CBS Acquisition, Borrower has requested that
the Lenders make an Additional Term Loan (as defined in the Credit Agreement) to
the Borrower in accordance with the terms of the Credit Agreement in the
principal amount of approximately $10,152,000 and a Revolving Loan in the
aggregate principal amount of $648,000 (the "CBS Revolving Loan").
G. Each of the Borrowers, including CBS, acknowledges that as a direct or
indirect wholly-owned subsidiary of Global, it will receive substantial direct
and indirect benefits by reason of the making of the Additional Term Loan and
the CBS Revolving Loan provided for hereunder.
H. Original Borrower, CBS, Agent and Lenders desire to amend the Credit
Agreement and the other Loan Documents (as defined in the Credit Agreement) as
hereinafter set forth in order to, among other things, include CBS as a borrower
thereunder.
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
AGREEMENT
---------
ARTICLE I.
Definitions
-----------
1.01 Capitalized terms used in this Amendment are defined in the Credit
Agreement, as amended hereby, unless otherwise stated.
-2-
ARTICLE II.
Amendments to Credit Agreement
------------------------------
2.01 Amendments Generally and References to Borrower. The Credit
-----------------------------------------------
Agreement is hereby amended to include CBS as a Borrower thereunder and all
references in the Credit Agreement to Borrower or Borrowers shall include,
individually and collectively, CBS, including the definition of "Borrower" in
Section 10 of the Credit Agreement with the same force and effect as if CBS had
executed the Credit Agreement.
2.02 Amendments to Section 10 - Definitions. Section 10 of the Credit
--------------------------------------
Agreement is hereby amended by adding the following definitions thereto in
alphabetical order:
"Second Amendment Agreement" shall mean that certain Second Amendment to
--------------------------
Amended and Restated Credit Agreement and Loan Documents, dated January 9,
1997, by and among Agent, Lender and Borrower."
"CBS" shall mean Connecticut Business Systems, Inc., a Connecticut
corporation.
ARTICLE III.
Amendments to Notes
-------------------
3.01 Amendment to Revolving Note. Effective as of the date hereof, the
---------------------------
Amended and Restated Revolving Note dated August 14, 1996, as amended and
restated as of November 14, 1997, in the principal amount of $6,000,000 executed
by the Original Borrowers in favor of ▇▇▇▇▇▇▇ is hereby amended to include CBS
as an obligor thereunder with the same force and effect as if CBS had executed
such Note.
3.02 Amendment to Term Note. Effective as of the date hereof, the Term
----------------------
Note dated August 14, 1996, as amended and restated as of November 14, 1997, in
the principal amount of $114,000,000 executed by the Original Borrowers in favor
of ▇▇▇▇▇▇▇ is hereby amended to include CBS as an obligor thereunder with the
same force and effect as if CBS had executed such Note.
ARTICLE IV.
Representations and Warranties
Relating to the Acquisitions
----------------------------
4.01 Borrower hereby represents and warrants to Agent and Lenders that:
(a) The CBS Purchase Agreement and the transactions contemplated
thereunder have been duly executed, delivered and performed in accordance
with their terms by the
-3-
respective parties thereto in all respects, including the fulfillment (not
merely the waiver, except as may be disclosed to Agent and consented to in
writing by Agent) of all conditions precedent set forth therein.
(b) After giving effect to the terms of the CBS Purchase Agreement and
the Merger, Global acquired and has good and marketable title to all of the
issued and outstanding capital stock of CBS, free and clear of all claims,
liens, pledges and encumbrances of any kind, except as disclosed in writing to
Agent.
(c) The Merger is valid and effective in accordance with the terms of the
Merger Agreement dated as of the date hereof by and between Acquisition Corp and
CBS (the "Merger Agreement") and the corporate statutes of the state of
Connecticut and CBS is the surviving corporation pursuant to the Merger.
(d) All actions and proceedings required by the CBS Purchase Agreement,
applicable law or regulation (including, but not limited to, compliance with the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act of 1976, as amended) have been
taken and the transactions required thereunder have been duly and validly taken
and consummated.
(e) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of any of the
transactions described in the CBS Purchase Agreement and no governmental or
other action or proceeding has been threatened or commenced, seeking any
injunction, restraining order or other order which seeks to void or otherwise
modify any of the transactions described in the CBS Purchase Agreement.
(f) As of and from and after the date of this Amendment and after giving
effect to the consummation of the CBS Acquisition, Borrower and its
Subsidiaries: (a) own and will own assets the fair saleable value of which, on a
going concern basis, are (i) greater than the total amount of liabilities
(including contingent liabilities) of Borrower and its Subsidiaries and (ii)
greater than the amount that will be required to pay the probable liabilities of
Borrower's then existing debts as they become absolute and matured considering
all financing alternatives and potential asset sales reasonably available to
Borrower and its Subsidiaries; (b) have capital that is not unreasonably small
in relation to their respective businesses as presently conducted or any
contemplated or undertaken transaction; and (c) do not intend to incur and do
not believe that they will incur debts beyond their ability to pay such debts as
they become due.
(g) Attached hereto as Exhibit A is a capitalization schedule setting
forth the ownership of Global's capital stock on a fully diluted basis, after
giving effect to the consummation of the CBS Acquisition.
-4-
ARTICLE V.
Approval of the Acquisitions, Additional Term Loan and Revolving Loan
---------------------------------------------------------------------
5.01 Pursuant to Section 3.16 of the Credit Agreement, the Requisite
Lenders have approved the CBS Acquisition. Subject to the terms and conditions
set forth herein and in the Credit Agreement, in order to finance the CBS
Acquisition, the Lenders agree to make an Additional Term Loan in the principal
amount of approximately $10,152,000.
5.02 The Borrowers shall repay to the Lenders, within ten days from the
date hereof, the CBS Revolving Loan.
ARTICLE VI.
Conditions
----------
6.01 Conditions to Effectiveness. The effectiveness of this Agreement is
---------------------------
subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Lender:
(a) Agent shall have received, in form and substance satisfactory to
Agent:
(i) this Amendment, duly executed by each Borrower;
(ii) the CBS Security Agreement, in the form of Exhibit B attached
---------
hereto, duly executed by CBS;
(iii) an Amendment to Pledge Agreement in the form of Exhibit C
---------
hereto duly executed by Global accompanied by stock
certificate(s) evidencing the capital stock of CBS purchased
pursuant to the CBS Purchase Agreement with duly executed
stock power(s) and an Irrevocable Proxy;
(iv) a Collateral Assignment of Rights under Agreement duly
executed by Global, the Sellers and the Escrow Agent in the
form of Exhibit D hereto;
---------
(v) a Collateral Assignment of Patents, Trademarks and Copyrights
(Security Agreement) in the form of Exhibit E hereto duly
---------
executed by CBS;
(vi) duly executed copies of the CBS Purchase Agreement and the
Merger Agreement and all schedules and exhibits thereto;
(vii) a closing certificate signed by a senior officer of Borrower,
dated as of the date of this Amendment, stating that (A) the
representations and warranties set forth in the Credit
Agreement are true and correct as of such date, (B) Borrower
is on such date in compliance with all the terms and
-5-
provisions set forth in the Credit Agreement, as amended by
this Amendment, and (C) on such date no Event of Default or
event or condition which, with notice or passage of time or
both, would constitute an Event of Default, has occurred or
is continuing;
(viii) a company general certificate certified by the Secretary of
each of the Borrowers (A) that its Board of Directors has
adopted and ratified resolutions which authorize the
execution, delivery and performance by it of all Loan
Documents to which it is or is to be a party, and (B) the
names of the officers authorized to sign this Amendment and
each of the other Loan Documents to which it is or is to be a
party, together with specimen signatures of such officers;
(ix) UCC-1 financing statements duly executed by CBS;
(x) an Availability Certificate dated as of the date hereof
indicating sufficient Loan Availability for Lenders to make
the Additional Term Loan and the CBS Revolving Loan; and
(xi) an opinion of counsel to the Borrower, in form and substance
satisfactory to Lender, with respect to the Purchase
Agreement and this Second Amendment and such other matters as
Lender may request.
(xii) evidence of insurance by CBS and endorsements thereto naming
Agent as loss payee and additional insured.
(xiii) a financial condition certificate dated as of the date hereof
in the form of Exhibit F attached hereto.
---------
(xiv) an Assignment of Deposit Accounts and Bank Agency Agreement
in the form of Exhibit G hereto with respect to all bank
---------
accounts established by or on behalf of CBS.
(xv) a landlord waiver satisfactory in form and substance to the
Agent with respect to all real property leased by CBS.
(xvi) such additional documents, instruments and information as
Agent or its legal counsel may request.
(b) The representations and warranties contained herein, in the Credit
Agreement and in the other Loan Documents, shall be true and correct as of the
date hereof, as if made on the date hereof.
(c) No Event of Default or event or condition which, with notice or
passage of time or both, would constitute an Event of Default, shall have
occurred and be continuing, unless such event, condition or Event of Default has
been specifically waived in writing by Agent or Lenders.
-6-
(d) Agent shall have received evidence that Agent has a valid first
priority security interest in the assets of CBS subject only to Permitted
Encumbrances.
6.02 Subsequent Deliveries. Within seven (7) days of the date hereof, CBS
---------------------
shall deliver to Agent a certified copy of the Certificate of Merger evidencing
the Merger.
ARTICLE VII.
No Waiver
---------
Nothing contained in this Amendment shall be construed as a waiver by Agent
or any Lender of any covenant or provision of the Credit Agreement or the other
Loan Documents or of any other contract or instrument between Borrower and any
Lender or Agent, and the failure of any Lender or Agent at any time or times
hereafter to require strict performance by Borrower of any provision thereof
shall not waive, affect or diminish any right of Lenders or Agent to thereafter
demand strict compliance therewith. Lenders and Agent hereby reserve all rights
granted under the Credit Agreement, the other Loan Documents and any other
contract or instrument between Borrower and any Lender or Agent.
ARTICLE VIII.
Ratifications, Representations and Warranties
----------------------------------------------
8.01 Ratifications. The terms and provisions set forth in this Amendment
-------------
shall modify and supersede all inconsistent terms and provisions set forth in
the Credit Agreement and the other Loan Documents, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement and the other Loan Documents are ratified and confirmed and
shall continue in full force and effect. Borrower, Agent and Lenders agree that
the Credit Agreement and the other Loan Documents, as amended hereby, shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms.
8.02 Representations and Warranties. Borrower hereby represents and
------------------------------
warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will not violate the Articles of Incorporation or
Bylaws of Borrower; (b) the representations and warranties contained in the
Credit Agreement, as amended hereby, and any other Loan Documents are true and
correct on and as of the date hereof and on and as of the date of execution
hereof as though made on and as of each such date; (c) no Event of Default or
event or condition which, with notice or passage of time or both, would
constitute an Event of Default under the Credit Agreement, as amended hereby,
has occurred and is continuing; and (d) Borrower is in full compliance with all
covenants and agreements contained in the Credit Agreement and the other Loan
Documents, as amended hereby.
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ARTICLE IX.
Miscellaneous Provisions
------------------------
9.01 Survival of Representations and Warranties. All representations and
------------------------------------------
warranties made in the Credit Agreement or any other Loan Document, including,
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by Agent or any Lender or any closing shall
affect the representations and warranties or the right of Agent or Lenders to
rely upon them.
9.02 Reference to Credit Agreement. Each of the Credit Agreement and the
-----------------------------
other Loan Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof or pursuant
to the terms of the Credit Agreement, as amended hereby, are hereby amended so
that any reference in the Credit Agreement and such other Loan Documents to the
Credit Agreement or any such Loan Documents shall mean a reference to the Credit
Agreement and the other Loan Documents as amended hereby.
9.03 Expenses of Agent. As provided in the Credit Agreement, Borrower
-----------------
agrees to pay on demand all reasonable costs and expenses incurred by Agent in
connection with the preparation, negotiation and execution of this Amendment and
the other Loan Documents executed pursuant hereto, and any and all amendments,
modifications, and supplements thereto, including, without limitation, the
reasonable costs and fees of Agent's legal counsel.
9.04 Severability. Any provision of this Amendment held by a court of
------------
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
9.05 Successors and Assigns. This Amendment is binding upon and shall
----------------------
insure to the benefit of Agent, Lenders and Borrower and their respective
successors and assigns, except that Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of Agent
and Lenders.
9.06 Counterparts. This Amendment may be executed in one or more
------------
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument
9.07 Effect of Waiver. No consent or waiver, express or implied, by Agent
----------------
or Lender to or for any breach of or deviation from any covenant or condition by
Borrower shall be deemed a consent to or waiver of any other breach of the same
or any other covenant, condition or duty.
9.08 Headings. The headings, captions, and arrangements used in this
--------
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
-8-
9.09 Applicable Law. THIS AMENDMENT AND ALL OTHER AGREEMENTS EXECUTED
--------------
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW).
9.10 Final Agreement. THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS,
---------------
EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER, AGENT
AND LENDERS.
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Witness the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
GLOBAL IMAGING SYSTEMS INC.
GLOBAL IMAGING OPERATIONS, INC.
GLOBAL IMAGING FINANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
COPY SERVICE AND SUPPLY, INC.
OFFICE FURNITURE CONCEPTS, INC.
FELCO OFFICE SYSTEMS, INC.
▇▇▇▇▇▇, INC.
▇▇▇▇▇▇ OFFICE PRODUCTS, INC.
AMERICAN PHOTOCOPY EQUIPMENT COMPANY
OF PITTSBURGH
SOUTHERN COPY SYSTEMS, INC.
BUSINESS EQUIPMENT UNLIMITED
CAMERON OFFICE PRODUCTS, INC.
SOUTHERN BUSINESS COMMUNICATIONS, INC.
ELECTRONIC SYSTEMS, INC.
EASTERN COPY PRODUCTS, INC.
QUALITY BUSINESS SYSTEMS, INC.
DUPLICATING SPECIALTIES, INC.
ELECTRONIC SYSTEMS OF RICHMOND, INC.
CONNECTICUT BUSINESS SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chairman
CSS LEASING, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Manager and President
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▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE
COMPANY, as Lender
By: PPM America, Inc.,
Attorney-in-Fact
By: /s/ ▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: Managing Director
PPM AMERICA, INC., as Agent
By: /s/ ▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: Managing Director
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