DICTAPHONE CORPORATION
FOURTH AMENDMENT TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is dated
as of November 14, 1997 and entered into by and among DICTAPHONE CORPORATION
(formerly Dictaphone Acquisition Inc.), a Delaware corporation ("COMPANY"), and
the financial institutions listed on the signature pages hereof ("LENDERS"), and
is made with reference to that certain Credit Agreement dated as of August 7,
1995, as amended to the date hereof (as so amended, the "CREDIT AGREEMENT"), by
and among Company, Lenders, NationsBank, N.A. (Carolinas), as documentation
agent for Lenders, and Bankers Trust Company, as administrative agent for
Lenders. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.
R E C I T A L S
WHEREAS, Company, Lenders and Agents have entered into the Credit
Agreement pursuant to which Company currently has outstanding Indebtedness and
Contingent Obligations in respect of Loans and Letters of Credit;
WHEREAS, the Obligations of Loan Parties under the Credit Agreement
and the other Loan Documents are secured by first priority Liens on (i) 100% of
the capital stock of all Domestic Subsidiaries, (ii) 66% of the capital stock of
all direct Foreign Subsidiaries of Company and its Domestic Subsidiaries, and
(ii) substantially all of the other personal property and certain of the real
property of Company and its Domestic Subsidiaries;
WHEREAS, Company also currently has outstanding Indebtedness to BTCo
pursuant to that certain Convertible Promissory Note Due January 30, 1998
between Company and BTCo dated as of July 31, 1997 (the "LIQUIDITY LOAN");
WHEREAS, Stonington Fund has agreed to provide Company with
$35,000,000 in new cash equity contributions, the proceeds of which will be used
by Company to prepay the Liquidity Loan in full and to prepay outstanding
Revolving Loans with no corresponding reduction in the Revolving Loan
Commitments;
WHEREAS, Company desires to enter into a new credit agreement (the
"NEW CREDIT AGREEMENT") under which Company intends to incur $62,750,000 of
Indebtedness in the form of term loans (the "NEW TERM LOANS") from certain
lenders (the "NEW LENDERS") for the purpose of prepaying the Tranche A Term
Loans in full and certain scheduled principal installments in respect of the
Tranche B Term Loans;
WHEREAS, Company desires to secure the New Term Loans with Liens on
all Collateral other than (i) the Closing Date Mortgaged Properties (as defined
in subsection 4.1K of the Credit Agreement) and (ii) any Collateral under the
Collateral Account Agreement (all such non-excluded Collateral being the "SHARED
COLLATERAL"), in each case pursuant to amendments and restatements of the
applicable Collateral Documents (the "SHARED COLLATERAL DOCUMENTS") and an
intercreditor agreement (the "INTERCREDITOR AGREEMENT") providing for a pro rata
sharing of the Shared Collateral by Lenders and New Lenders;
WHEREAS, Company and its Subsidiaries also desire (i) to dispose of
the Closing Date Mortgaged Properties and certain other real property assets
pursuant to sale or sale and lease-back transactions, and/or to obtain mortgage
financing with respect thereto, (ii) to retain a portion of the proceeds thereof
for working capital and general corporate purposes, and (iii) to use the
remainder of the proceeds thereof to prepay certain scheduled principal
installments in respect of the Tranche B Term Loans; and
WHEREAS, Company and Lenders wish to amend the Credit Agreement to
permit Company to enter into the transactions described above on the terms and
conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SUBSECTION 1.1: CERTAIN DEFINED TERMS
A. AMENDMENTS TO EXISTING DEFINITIONS. Certain definitions contained in
subsection 1.1 of the Credit Agreement are hereby amended as follows:
(i) The definition of "CONSOLIDATED NET WORTH" is hereby amended by
deleting it in its entirety and substituting therefor the following:
"CONSOLIDATED NET WORTH" means, as at any date of determination, (i)
the sum of the capital stock and additional paid-in capital plus retained
earnings (or minus accumulated deficits) plus (ii) an amount equal to any
write-downs taken to the item designated as "Intangibles" on the
consolidated balance sheet of Company and its Subsidiaries during the
period from the Fourth Amendment Effective Date to and including December
31, 1998 plus (iii) an amount equal to any asset write-downs associated
with any Asset Sale constituting a Specified Asset Sale/Financing, in each
case net of any capital gains realized in respect of the assets that are
the subject of such Asset Sale minus (iv) any loans to shareholders or
other items which would properly be excluded in the calculation of net
worth, all of the foregoing as determined on a consolidated basis for
Company and its Subsidiaries in conformity with GAAP.
(ii) Each of the definitions of "COMPANY PLEDGE AGREEMENT", "COMPANY
SECURITY AGREEMENT", "SUBSIDIARY PLEDGE AGREEMENT", "SUBSIDIARY SECURITY
AGREEMENT", "SUBSIDIARY TRADEMARK SECURITY AGREEMENT" and "SUBSIDIARY PATENT
SECURITY AGREEMENT" is hereby amended by adding the phrase "(including pursuant
to any amendment and restatement thereof (or to the form thereof), in the form
attached to the Fourth Amendment, pursuant to which Collateral Agent is made the
secured party thereunder)" immediately after the phrase "otherwise modified from
time to time" contained therein.
(iii) The definition of "LOAN DOCUMENTS" is hereby amended by deleting
it in its entirety and substituting therefor the following:
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Subsidiary Guaranty, the
Collateral Documents and the Intercreditor Agreement.
(iv) The definition of "SUBSIDIARY GUARANTY" is hereby amended by
adding the phrase "(including pursuant to any amendment and restatement thereof,
in the form attached to the Fourth Amendment, pursuant to which Collateral Agent
is made the agent for and representative of Existing Lenders, New Lenders and
certain other parties thereunder)" immediately after the phrase "otherwise
modified from time to time" contained therein.
B. ADDITION OF NEW DEFINITIONS. Subsection 1.1 of the Credit Agreement is
hereby further amended by adding thereto the following definitions which shall
be inserted in proper alphabetical order:
"CLOSING DATE MORTGAGED PROPERTY" has the meaning assigned to that
term in subsection 4.1K.
"CLOSING DATE MORTGAGES" has the meaning assigned to that term in
subsection 4.1K.
"COLLATERAL AGENT" means BTCo, in its capacity as Collateral Agent
under the Subsidiary Guaranty, the Shared Collateral Documents and the
Intercreditor Agreement, and also means and includes any successor
Collateral Agent appointed in accordance with the terms
of the Intercreditor Agreement.
"EXISTING LENDERS' SHARE" means, as at any date of determination (i)
prior to such time as the Tranche B Term Loans and the New Term Loans have
been paid in full, a fraction the numerator of which is the aggregate
outstanding principal balance of the Tranche B Term Loans and the
denominator of which is the sum of the aggregate outstanding principal
balance of the Tranche B Term Loans plus the aggregate outstanding
principal balance of the New Term Loans, and (ii) from and after such time
as the Tranche B Term Loans and the New Term Loans have been paid in full,
a percent equal to 100%.
"FOURTH AMENDMENT" means that certain Fourth Amendment to Credit
Agreement dated as of November 14, 1997 by and among Company and Lenders.
"FOURTH AMENDMENT EFFECTIVE DATE" has the meaning assigned to that
term in the Fourth Amendment.
"HEADQUARTERS ASSET SALE" means an Asset Sale with respect to the
Headquarters Facility.
"HEADQUARTERS FACILITY" means the Closing Date Mortgaged Property
located in Stratford, Connecticut.
"HEADQUARTERS FINANCING" means Indebtedness in an original principal
amount equal to not less than 70% of the appraised value of the
Headquarters Facility secured solely by a Lien on the Headquarters
Facility; provided that, subject to customary exceptions for non-recourse
real estate financings, the holders of such Indebtedness shall have
recourse solely to such security and no personal recourse may be had
against Company or any of its Subsidiaries for the payment of the principal
of or interest or premium on such Indebtedness.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement,
dated of even date with the Fourth Amendment and substantially in the form
of Annex __ attached to the Fourth Amendment, by and among Administrative
Agent, New Agent, Collateral Agent, Loan Parties (by way of acknowledgment)
and the other Persons that may from time to time become parties thereto in
accordance with the terms thereof, as such Intercreditor Agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"LIQUIDITY LOAN" means the Indebtedness evidenced by that certain
Convertible Promissory Note Due January 30, 1998 between Company and BTCo
dated as of July 31, 1997.
"MELBOURNE ASSET SALE" means an Asset Sale with respect to (i) the
Closing Date Mortgaged Property located in Melbourne, Florida and the other
assets and operations of Company associated therewith, or (ii) the stock of
a newly-created Subsidiary of Company to which such Closing Date Mortgaged
Property and other assets and operations have been transferred in
contemplation of such Asset Sale.
"NEW AGENT" means BTCo or its successor acting as administrative agent
under the New Credit Agreement.
"NEW CREDIT AGREEMENT" means that certain Credit Agreement dated as of
November 14, 1997 by and among Dictaphone Corporation, New Lenders, Xxxxxx
Xxxxxxx Senior Funding, Inc., as syndication agent, and BTCo, as
administrative agent and collateral agent for New Lenders, as in effect on
the Fourth Amendment Effective Date and as it may thereafter be amended,
supplemented or otherwise modified from time to time.
"NEW EQUITY" means not less than $35,000,000 in new equity
contributions made to Company by the Stonington Fund on the Fourth
Amendment Effective Date.
"NEW LENDERS" means the financial institutions party to the New Credit
Agreement as lenders.
"NEW LENDERS' SHARE" means, as at any date of determination, a
fraction the numerator of which is the aggregate outstanding principal
balance of the New Term Loans and the denominator of which is the sum of
the aggregate outstanding principal balance of the Tranche B Term Loans
plus the aggregate outstanding principal balance of the New Term Loans.
"NEW TERM LOANS" means loans made by New Lenders to Company pursuant
to the New Credit Agreement in an aggregate principal amount not to exceed
$62,750,000 at any time outstanding.
"SHARED COLLATERAL DOCUMENTS" means the Collateral Documents other
than the Collateral Account Agreement and the Closing Date Mortgages.
"SPECIFIED ASSET SALE/FINANCING" means each of the Headquarters Asset
Sale, the Headquarters Financing, the Melbourne Asset Sale and/or the Swiss
Asset Sale.
"SWISS ASSET SALE" means an Asset Sale with respect to any real
property assets owned by Swiss Sub as of the Fourth Amendment Effective
Date.
1.2 AMENDMENTS TO SUBSECTION 2.1A: COMMITMENTS.
A. CLEAN-DOWN OF REVOLVING LOANS. Subsection 2.1A(iii) of the Credit
Agreement is hereby amended by deleting the second paragraph thereof in its
entirety and substituting therefor the following:
"Anything contained in this Agreement to the contrary notwithstanding,
the Revolving Loans and the Revolving Loan Commitments shall be subject to
the limitation that in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments then in
effect."
B. CLEAN-DOWN OF SWING LINE LOANS. Subsection 2.1A(iv) of the Credit
Agreement is hereby amended by deleting the second paragraph thereof in its
entirety and substituting therefor the following:
"Anything contained in this Agreement to the contrary notwithstanding,
the Swing Line Loans and the Swing Line Loan Commitment shall be subject to
the limitation that in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments then in
effect."
1.3 AMENDMENTS TO SUBSECTION 2.4B: PREPAYMENTS AND
REDUCTIONS IN COMMITMENTS
A. MANDATORY PREPAYMENT EVENTS. Subsection 2.4B(iii) of the Credit
Agreement is hereby amended by deleting it in its entirety and substituting
therefor the following:
"(iii) Mandatory Prepayments and Mandatory Reductions of Revolving
Loan Commitments.
(a) Prepayments From New Equity and New Term Loans. On the Fourth
Amendment Effective Date, (1) Company shall apply the proceeds of the
New Equity first to prepay the Liquidity Loan in full and second, to
the full extent of the remaining amount of such proceeds, to prepay
all outstanding Revolving Loans (but not to reduce the Revolving Loan
Commitments in connection therewith), and (2) Company shall apply the
proceeds of the New Term Loans (x) to prepay the Tranche A Term Loans
in full and (y) to prepay $3,000,000 in outstanding principal amount
of the Tranche B Term Loans, such prepayment to be applied to the next
four remaining scheduled installments of principal of the Tranche B
Term Loans set forth in subsection 2.4A(ii) in forward order of
maturity.
(b) Prepayments and Reductions from Specified Asset
Sale/Financings. On the date of receipt by Company or any of its
Subsidiaries of any Cash Proceeds of an Asset Sale constituting a
Specified Asset Sale/Financing or the Cash proceeds of any
Headquarters Financing, Company shall prepay the Tranche B Term Loans
in an amount (each a "NET SASF PROCEEDS AMOUNT") equal to the Net Cash
Proceeds of such Asset Sale or the Cash proceeds (net of reasonable
costs and expenses associated therewith, including without limitation
reasonable legal fees and expenses) of such Headquarters Financing, as
the case may be; provided that, anything contained herein to the
contrary notwithstanding, (1) Company shall be entitled to retain
(without any corresponding prepayment under this subsection
2.4B(iii)(b)) 100% of all Net SASF Proceeds Amounts until such time as
the sum (the "AGGREGATE RETAINED AMOUNT") of all such retained Net
SASF Proceeds Amounts equals $10,000,000, and (2) from and after such
time as the Aggregate Retained Amount equals $10,000,000, Company
shall be entitled to retain (without any corresponding prepayment
under this subsection 2.4B(iii)(b)) 50% of any Net SASF Proceeds
Amounts not included in the Aggregate Retained Amount. Any prepayments
of the Tranche B Term Loans pursuant to this subsection 2.4B(iii)(b)
shall be applied to the remaining scheduled installments of principal
of the Tranche B Term Loans set forth in subsection 2.4A(ii) in
forward order of maturity.
(c) Prepayments and Reductions from Other Asset Sales. On the
date of receipt by Company or any of its Subsidiaries of any Cash
Proceeds of any Asset Sale not constituting a Specified Asset
Sale/Financing, (1) Company shall prepay the Tranche B Term Loans in
an amount equal to Existing Lenders' Share of the Net Cash Proceeds of
such Asset Sale and (2) to the extent Existing Lenders' Share of the
Net Cash Proceeds of such Asset Sale exceeds the aggregate outstanding
principal amount of the Tranche B Term Loans, Company shall prepay in
an amount equal to such excess first the Swing Line Loans to the full
extent thereof and second the Revolving Loans, and the Revolving Loan
Commitments shall be permanently reduced, in an amount equal to such
excess; provided that, anything contained herein to the contrary
notwithstanding, to the extent any portion of New Lenders' Share of
any Net Cash Proceeds of any such Asset Sale are not applied to prepay
the New Term Loans, Company shall promptly make an additional
prepayment of the Tranche B Term Loans, Swing Line Loans or Revolving
Loans, as the case may be (and, if applicable, the Revolving Loan
Commitments shall be permanently reduced), in the manner described
above in an amount equal to such portion not so applied to prepay the
New Term Loans.
(d) Prepayments and Reductions Due to Issuance of Other Debt or
Equity Securities. On the date of receipt by Company or any of its
Subsidiaries of the Cash proceeds (any such proceeds, net of
underwriting discounts and commissions and other reasonable costs and
expenses associated therewith, including without limitation reasonable
legal fees and expenses, being "NET SECURITIES PROCEEDS") from the
issuance of any debt or equity Securities of Company or any of its
Subsidiaries after the Fourth Amendment Effective Date (other than
Cash proceeds of any Headquarters Financing or any other Indebtedness
permitted under subsection 7.1), (1) Company shall prepay the Tranche
B Term Loans in an amount equal to Existing Lenders' Share of such Net
Securities Proceeds and (2) to the extent Existing Lenders' Share of
such Net Securities Proceeds exceeds the aggregate outstanding
principal amount of the Tranche B Term Loans, Company shall prepay in
an amount equal to such excess first the Swing Line Loans to the full
extent thereof and second the Revolving Loans, and the Revolving Loan
Commitments shall be permanently reduced, in an amount equal to such
excess; provided that to the extent any portion of New Lenders' Share
of any such Net Securities Proceeds are not applied to prepay the New
Term Loans, Company shall promptly make an additional prepayment of
the Tranche B Term Loans, Swing Line Loans or Revolving Loans, as the
case may be (and, if applicable, the Revolving Loan Commitments shall
be permanently reduced), in the manner described above in an amount
equal to such portion not so applied to prepay the New Term Loans.
(e) Prepayments and Reductions from Receivables Programs. On the
date of receipt by Company or any of its Subsidiaries of any Cash
Proceeds of Receivables Program, (1) Company shall prepay the Tranche
B Term Loans in an amount equal to Existing Lenders' Share of the Net
Cash Proceeds of such Receivables Program and (2) to the extent
Existing Lenders' Share of the Net Cash Proceeds of such Receivables
Program exceeds the aggregate outstanding principal amount of the
Tranche B Term Loans, Company shall prepay in an amount equal to such
excess first the Swing Line Loans to the full extent thereof and
second the Revolving Loans, and the Revolving Loan Commitments shall
be permanently reduced, in an amount equal to such excess; provided
that to the extent any portion of New Lenders' Share of any Net Cash
Proceeds of any Receivables Program are not applied to prepay the New
Term Loans, Company shall promptly make an additional prepayment of
the Tranche B Term Loans, Swing Line Loans or Revolving Loans, as the
case may be (and, if applicable, the Revolving Loan Commitments shall
be permanently reduced), in the manner described above in an amount
equal to such portion not so applied to prepay the New Term Loans.
(f) Prepayments and Reductions Due to Reversion of Surplus Assets
of Pension Plans. On the date of return to Company or any of its
Subsidiaries of any surplus assets of any pension plan of Company or
any of its Subsidiaries, (1) Company shall prepay the Tranche B Term
Loans in an amount equal to Existing Lenders' Share of an amount (the
"NET REVERSION AMOUNT") equal to 100% of such returned surplus assets,
net of transaction costs and expenses incurred in obtaining such
return, including incremental taxes payable as a result thereof, and
(2) to the extent Existing Lenders' Share of the Net Reversion Amount
exceeds the aggregate outstanding principal amount of the Tranche B
Term Loans, Company shall prepay in an amount equal to such excess
first the Swing Line Loans to the full extent thereof and second the
Revolving Loans, and the Revolving Loan Commitments shall be
permanently reduced, in an amount equal to such excess; provided that
to the extent any portion of New Lenders' Share of any Net Reversion
Amount is not applied to prepay the New Term Loans, Company shall
promptly make an additional prepayment of the Tranche B Term Loans,
Swing Line Loans or Revolving Loans, as the case may be (and, if
applicable, the Revolving Loan Commitments shall be permanently
reduced), in the manner described above in an amount equal to such
portion not so applied to prepay the New Term Loans.
(g) Prepayments and Reductions from Consolidated Excess Cash
Flow. No later than the date occurring ninety (90) days after the end
of each Fiscal Year, commencing with Fiscal Year 1997, (1) Company
shall prepay the Tranche B Term Loans in an amount (the "EXCESS CASH
FLOW REPAYMENT AMOUNT") equal to Existing Lenders' Share of 75% of
Consolidated Excess Cash Flow and (2) to the extent the Excess Cash
Flow Repayment Amount exceeds the aggregate outstanding principal
amount of the Tranche B Term Loans, Company shall prepay in an amount
equal to such excess first the Swing Line Loans to the full extent
thereof and second the Revolving Loans, and the Revolving Loan
Commitments shall be permanently reduced, in an amount equal to such
excess; provided that to the extent any portion of New Lenders' Share
of 75% of Consolidated Excess Cash Flow for any Fiscal Year is not
applied to prepay the New Term Loans, Company shall promptly make an
additional prepayment of the Tranche B Term Loans, Swing Line Loans or
Revolving Loans, as the case may be (and, if applicable, the Revolving
Loan Commitments shall be permanently reduced), in the manner
described above in an amount equal to such portion not so applied to
prepay the New Term Loans.
(h) Calculations of Net Proceeds Amounts; Additional Prepayments
and Reductions Based on Subsequent Calculations. Concurrently with any
prepayment of the Loans and/or reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(b)-(g), Company shall
deliver to Agent an Officers' Certificate demonstrating the
calculation of the amount (the "NET PROCEEDS AMOUNT") of the
applicable Net SASF Proceeds Amount, Net Cash Proceeds of Asset Sale,
Net Securities Proceeds, Net Cash Proceeds of Receivables Program, Net
Reversion Amount or Excess Cash Flow Repayment Amount, as the case may
be, that gave rise to such prepayment and/or reduction (and, if
applicable, the calculation of Existing Lenders' Share thereof). In
the event that Company shall subsequently determine that the actual
Net Proceeds Amount was greater than the amount set forth in such
Officers' Certificate, Company shall promptly make an additional
prepayment of the Loans (and/or, if applicable, the Revolving Loan
Commitments shall be permanently reduced), in the manner described
above in the applicable subsection of this subsection 2.4B(iii), in an
amount equal to the amount of such excess (or, if applicable, Existing
Lenders' Share thereof), and Company shall concurrently therewith
deliver to Agent an Officers' Certificate demonstrating the derivation
of the additional Net Proceeds Amount resulting in such excess (and,
if applicable, the calculation of Existing Lenders' Share thereof).
(i) Prepayments Due to Reductions or Restrictions of Revolving
Loan Commitments. Company shall from time to time prepay first the
Swing Line Loans and second the Revolving Loans to the extent
necessary so that the Total Utilization of Revolving Loan Commitments
shall not at any time exceed the Revolving Loan Commitments then in
effect.
(j) Reductions of Revolving Loan Commitments Not Limited to
Amount of Revolving Loans Outstanding. The amount of any required
reduction of the Revolving Loan Commitments pursuant to any provision
of this subsection 2.4B(iii) shall not be affected by the fact that
the outstanding principal amount of Revolving Loans at the time of
such reduction is less than the amount of such reduction."
B. APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Subsection 2.4B(iv)(b) of
the Credit Agreement is hereby amended by deleting it in its entirety and
substituting therefor the following:
"(b) Application of Certain Mandatory Prepayments of Tranche B
Term Loans to the Scheduled Installments of Principal Thereof. Any
mandatory prepayments of the Tranche B Term Loans pursuant to
subsections 2.4B(iii)(c)-(g) (and any related such mandatory
prepayments pursuant to subsection 2.4B(iii)(h)) shall be applied to
reduce the remaining scheduled installments of principal of the
Tranche B Term Loans set forth in subsection 2.4A(ii) in inverse order
of maturity."
1.4 AMENDMENT TO SUBSECTION 5.1E: COLLATERAL DOCUMENTS.
Subsection 5.1E of the Credit Agreement is hereby amended by deleting
it in its entirety and substituting therefor the following:
"E. COLLATERAL DOCUMENTS. The security interests created in favor
of Administrative Agent or Collateral Agent, as the case may be, under
the Collateral Documents will at all times from and after the Closing
Date constitute, as security for the obligations purported to be
secured thereby, a legal, valid and enforceable security interest in
and Lien on all of the Collateral referred to therein in favor of
Administrative Agent or Collateral Agent, as the case may be, for the
benefit of Lenders (and, in the case of the Shared Collateral
Documents, New Lenders), perfected and prior to the rights of all
third persons (subject to Liens consented to in writing by
Administrative Agent or Collateral Agent, as the case may be, with
respect to such Collateral and other Liens permitted by subsection
7.2) in accordance with the requirements of all applicable Collateral
Documents. No consents, filings or recordings are required in order to
perfect (or maintain the perfection or priority of) the security
interests purported to be created by any of the Collateral Documents,
other than such as have been obtained and which remain in full force
and effect and Uniform Commercial Code financing statements to be
filed, or delivered to Administrative Agent or Collateral Agent, as
the case may be, for filing, on the Closing Date and periodic Uniform
Commercial Code continuation filings or as otherwise specified by the
terms of any applicable Collateral Document."
1.5 AMENDMENTS TO SUBSECTION 6.9: EXECUTION OF SUBSIDIARY GUARANTY
AND COLLATERAL DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE
SUBSIDIARIES.
Subsection 6.9A of the Credit Agreement is hereby amended by deleting
it in its entirety and substituting therefor the following:
A. EXECUTION OF SUBSIDIARY GUARANTY, COLLATERAL DOCUMENTS AND
ACKNOWLEDGMENT TO INTERCREDITOR AGREEMENT. In the event that any Domestic
Subsidiary existing as of the date hereof (other than U.S. Dictaphone)
hereafter owns or acquires assets with an aggregate fair market value
(without netting such fair market value against any liability of such
Subsidiary) exceeding $150,000, or in the event that any Person becomes a
Domestic Subsidiary after the date hereof, Company will promptly notify
Administrative Agent and Collateral Agent of that fact and cause such
Subsidiary to execute and deliver to Collateral Agent (i) a counterpart of
the Subsidiary Guaranty, (ii) a Subsidiary Pledge Agreement, a Subsidiary
Security Agreement, a Subsidiary Trademark Security Agreement, a Subsidiary
Patent Security Agreement and (if applicable) Additional Mortgages, and
(iii) an acknowledgment to the Intercreditor Agreement and to take all such
further action and execute all such further documents and instruments as
may be reasonably required to grant and perfect in favor of Collateral
Agent, for the benefit of Lenders and New Lenders, a first-priority
security interest (subject to Permitted Encumbrances) in all of the Real
Property Assets and all of the personal property assets of such Subsidiary
described in the applicable Collateral Documents."
1.6 AMENDMENTS TO SUBSECTIONS 6.10 AND 6.11:
ADDITIONAL MORTGAGES; ASSIGNABILITY AND
RECORDING OF LEASE AGREEMENTS.
Each of subsections 6.9B, 6.10 and 6.11 of the Credit Agreement is
hereby amended by deleting each reference to the term "Administrative Agent"
contained therein and substituting therefor the term "Collateral Agent".
1.7 AMENDMENTS TO SUBSECTION 7.1: INDEBTEDNESS.
Subsection 7.1 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of subsection 7.1(vii), by renumbering subsection
7.1(viii) as subsection 7.1(x), and by adding new subsections 7.1(viii) and
7.1(ix) thereto as follows:
"(viii) Company may become and remain liable with
respect to Indebtedness in respect of the New Term Loans;
(ix) Company may become and remain liable with
respect to the Headquarters Financing; and"
1.8 AMENDMENTS TO SUBSECTION 7.2A: PROHIBITION ON LIENS.
Subsection 7.2 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of subsection 7.2(v), by renumbering subsection
7.2(vi) as subsection 7.2(vii), and by adding a new subsection 7.2(vi) thereto
as follows:
"(vi) Liens encumbering the Headquarters Facility
to secure the Headquarters Financing; and"
1.9 AMENDMENTS TO SUBSECTION 7.3: INVESTMENTS.
Subsection 7.3(viii) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"(viii) Company may make loans to members of senior management of
Company, in an aggregate principal amount not to exceed $1,700,000 at any
time outstanding, the proceeds of which are used solely to purchase Company
Common Stock; "
1.10 AMENDMENTS TO SUBSECTION 7.4: CONTINGENT OBLIGATIONS.
Subsection 7.4(x) of the Credit Agreement is hereby amended by
deleting the reference to "$1,500,000" contained therein and substituting
therefor "$3,000,000".
1.11 AMENDMENTS TO SUBSECTION 7.6: FINANCIAL COVENANTS
A. MAXIMUM LEVERAGE RATIO. Subsection 7.6A of the Credit Agreement is
hereby amended by deleting the table set forth therein in its entirety and
substituting therefor the following:
PERIOD MAXIMUM LEVERAGE RATIO
October 1, 1997 - December 31, 1997 9.40:1.00
January 1, 1998 - March 31, 1998 9.40:1.00
April 1, 1998 - June 30, 1998 8.60:1.00
July 1, 1998 - September 30, 1998 8.50:1.00
October 1, 1998 - December 31, 1998 7.90:1.00
January 1, 1999 - March 31, 1999 7.70:1.00
April 1, 1999 - June 30, 1999 7.50:1.00
July 1, 1999 - September 30, 1999 7.20:1.00
October 1, 1999 - December 31, 1999 6.90:1.00
January 1, 2000 - March 31, 2000 6.80:1.00
April 1, 2000 - June 30, 2000 6.70:1.00
July 1, 2000 - September 30, 2000 6.50:1.00
October 1, 2000 - December 31, 2000 6.30:1.00
January 1, 2001 - March 31, 2001 6.10:1.00
April 1, 2001 - June 30, 2001 5.90:1.00
July 1, 2001 - September 30, 2001 5.60:1.00
October 1, 2001 - December 31, 2001 5.30:1.00
January 1, 2002 - March 31, 2002 5.10:1.00
April 1, 2002 - June 30, 2002 4.90:1.00
July 1, 2002 - September 30, 2002 4.70:1.00
October 1, 2002 - December 31, 2002 4.40:1.00
B. MINIMUM CONSOLIDATED EBITDA. Subsection 7.6B of the Credit Agreement is
hereby amended by deleting the table set forth therein in its entirety and
substituting therefor the following:
MINIMUM CONSOLIDATED
DATE EBITDA
December 31, 1997 39,000,000
March 31, 1998 40,000,000
June 30, 1998 44,000,000
September 30, 1998 46,000,000
December 31, 1998 48,000,000
March 31, 1999 49,000,000
June 30, 1999 50,000,000
September 30, 1999 52,000,000
December 31, 1999 55,000,000
March 31, 2000 56,000,000
June 30, 2000 57,000,000
September 30, 2000 58,000,000
December 31, 2000 60,000,000
March 31, 2001 62,000,000
June 30, 2001 64,000,000
September 30, 2001 67,000,000
December 31, 2001 70,000,000
March 31, 2002 72,000,000
June 30, 2002 74,000,000
September 30, 2002 77,000,000
December 31, 2002 80,000,000
C. MINIMUM CONSOLIDATED NET WORTH. Subsection 7.6C of the Credit Agreement
is hereby amended by deleting the table set forth therein in its entirety and
substituting therefor the following:
MINIMUM
PERIOD CONSOLIDATED NET WORTH
October 1, 1997 - December 31, 1997 120,000,000
January 1, 1998 - March 31, 1998 120,000,000
April 1, 1998 - June 30, 1998 120,000,000
July 1, 1998 - September 30, 1998 125,000,000
October 1, 1998 - December 31, 1998 130,000,000
January 1, 1999 - March 31, 1999 133,000,000
April 1, 1999 - June 30, 1999 136,000,000
July 1, 1999 - September 30, 1999 140,000,000
October 1, 1999 - December 31, 1999 145,000,000
January 1, 2000 - March 31, 2000 150,000,000
April 1, 2000 - June 30, 2000 155,000,000
July 1, 2000 - September 30, 2000 160,000,000
October 1, 2000 - December 31, 2000 165,000,000
January 1, 2001 - March 31, 2001 170,000,000
April 1, 2001 - June 30, 2001 175,000,000
July 1, 2001 - September 30, 2001 180,000,000
October 1, 2001 - December 31, 2001 190,000,000
January 1, 2002 - March 31, 2002 200,000,000
April 1, 2002 - June 30, 2002 210,000,000
July 1, 2002 - September 30, 2002 220,000,000
October 1, 2002 - December 31, 2002 230,000,000
D. MINIMUM INTEREST COVERAGE RATIO. Subsection 7.6D of the Credit Agreement
is hereby amended by deleting the table set forth therein in its entirety and
substituting therefor the following:
MINIMUM INTEREST
PERIOD COVERAGE RATIO
October 1, 1997 - December 31, 1998 0.70:1.00
January 1, 1999 - March 31, 1999 0.75:1.00
April 1, 1999 - June 30, 1999 0.80:1.00
July 1, 1999 - September 30, 1999 0.90:1.00
October 1, 1999 - June 30, 2000 1.00:1.00
July 1, 2000 - September 30, 2000 1.03:1.00
October 1, 2000 - December 31, 2000 1.05:1.00
January 1, 2001 - March 31, 2001 1.40:1.00
April 1, 2001 - June 30, 2001 1.35:1.00
July 1, 2001 - December 31, 2001 1.30:1.00
January 1, 2002 - March 31, 2002 1.35:1.00
April 1, 2001 - June 30, 2002 1.45:1.00
July 1, 2002 - September 30, 2002 1.55:1.00
October 1, 2001 - December 31, 2002 1.70:1.00
1.12 AMENDMENTS TO SUBSECTION 7.7: RESTRICTION ON FUNDAMENTAL
CHANGES; ASSET SALES AND ACQUISITIONS.
A. MERGERS. Subsection 7.7(i) of the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor the following:
"(i) any Subsidiary of Company may be merged with or into Company or any
wholly-owned Subsidiary of Company, or be liquidated, wound up or dissolved,
or all or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a series
of transactions, to Company or any wholly-owned Subsidiary of Company;
provided that, in the case of such a merger, Company or such wholly-owned
Subsidiary (or, in the case of a merger of Company with and into U.S.
Dictaphone, U.S. Dictaphone) shall be the continuing or surviving corporation;
provided further that, in the case of any such merger of a Domestic Subsidiary
and a Foreign Subsidiary, the Domestic Subsidiary shall be the surviving
corporation; provided further that U.S. Dictaphone may only merge with
Company; and provided further that, in the case of a merger of Company with
U.S. Dictaphone, (a) in the event U.S. Dictaphone is the continuing or
surviving corporation in such merger, U.S. Dictaphone shall expressly assume,
pursuant to documentation satisfactory in form and substance to Administrative
Agent and its counsel, all of the Obligations of Company under this Agreement
and the other Loan Documents, and (b) in any event the continuing or surviving
corporation in such merger shall enter into (and, if applicable, cause to be
filed or recorded with all relevant governmental authorities) all such
amendments to the Collateral Documents (including without limitation any
Mortgages to which Dictaphone or U.S. Dictaphone is a party at the time of
consummation of such merger but excluding the Company Pledge Agreement), and
take all such other actions, as may reasonably be deemed necessary or
advisable by Collateral Agent in order to insure that the Collateral under
such Collateral Documents continues to secure payment of all applicable
Secured Obligations (as such term is defined in the Intercreditor Agreement);"
B. ASSET SALES. Subsection 7.7(vii) of the Credit Agreement is hereby
amended by deleting it in its entirety and substituting therefor the
following:
"(vii) subject to subsection 7.13, Company and its Subsidiaries (a) may
make Asset Sales constituting Specified Asset Sale/Financings and (b) may make
other Asset Sales of assets having a fair market value not in excess of
$2,000,000 in the aggregate during the term of this Agreement; provided that
(x) the consideration received for the assets that are the subject of any such
Asset Sale described in the foregoing clause (a) or (b) shall be in an amount
at least equal to the fair market value thereof; (y) at least 80% of the
consideration received shall be cash; and (z) the proceeds of such Asset Sales
shall be applied as required by subsection 2.4B(iii)(b) or subsection
2.4B(iii)(c), as the case may be."
1.13 AMENDMENT TO SUBSECTION 7.8: CONSOLIDATED CAPITAL EXPENDITURES.
Subsection 7.8 of the Credit Agreement is hereby amended by deleting it
in its entirety and substituting therefor the following:
"7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any Fiscal Year indicated below,
in an aggregate amount in excess of the corresponding amount (the "MAXIMUM
CONSOLIDATED CAPITAL EXPENDITURES AMOUNT") set forth below opposite such
Fiscal Year; provided that the Maximum Consolidated Capital Expenditures
Amount for any Fiscal Year commencing with Fiscal Year 1998 shall be increased
by an amount equal to the excess, if any, (but in no event more than
$2,000,000) of the Maximum Consolidated Capital Expenditures Amount for the
previous Fiscal Year (as adjusted in accordance with this proviso) over the
actual amount of Consolidated Capital Expenditures for such previous Fiscal
Year:
MAXIMUM CONSOLIDATED
FISCAL YEAR CAPITAL EXPENDITURES
1997 15,000,000
1998 25,000,000
1999 25,000,000
2000 25,000,000
2001 25,000,000
2002 25,000,000"
1.14 AMENDMENT TO SUBSECTION 7.9: RESTRICTION ON LEASES.
Subsection 7.9 of the Credit Agreement is hereby amended by adding the
following proviso immediately after the table set forth therein:
"; provided that, notwithstanding anything to the contrary contained in this
subsection 7.9, Company may enter into a lease (whether an Operating Lease or
a Capital Lease) with respect to the Headquarters Facility following an Asset
Sale of the Headquarters Facility constituting a Specified Asset
Sale/Financing; provided that the Consolidated Rental Payments in respect of
such lease do not exceed $2,000,000 in any Fiscal Year during the term of this
Agreement.
1.15 AMENDMENT TO SUBSECTION 8.13: FAILURE OF SECURITY.
Subsection 8.13 of the Credit Agreement is hereby amended by adding the
phrase "or Collateral Agent, as the case may be," immediately after each
reference to the term "Administrative Agent" contained therein.
1.16 AMENDMENT TO SUBSECTION 9.6: COLLATERAL DOCUMENTS
AND GUARANTIES.
Subsection 9.6 of the Credit Agreement is hereby amended by deleting it
in its entirety and substituting therefor the following:
"9.6 COLLATERAL DOCUMENTS AND GUARANTIES.
A. APPOINTMENT OF ADMINISTRATIVE AGENT IN RESPECT OF INTERCREDITOR
AGREEMENT AND CERTAIN COLLATERAL DOCUMENTS. Each Lender hereby further
authorizes Administrative Agent to enter into the Intercreditor Agreement and
each Collateral Document (other than the Shared Collateral Documents) as agent
and/or secured party on behalf of and for the benefit of Lenders, and each
Lender agrees to be bound by the terms of the Intercreditor Agreement and each
such Collateral Document; provided that, subject to any provision of
subsection 10.6 requiring the consent of any additional Lenders,
Administrative Agent shall not enter into or consent to any amendment,
modification, termination or waiver of any provision contained in the
Intercreditor Agreement or any such Collateral Document without the prior
consent of Requisite Lenders; and provided, further that Administrative Agent
may release any Lien covering any items of Collateral under any such
Collateral Document that are the subject of a sale or other disposition of
assets permitted by this Agreement or to which Requisite Lenders have
consented.
B. APPOINTMENT OF COLLATERAL AGENT IN RESPECT OF SUBSIDIARY GUARANTY,
INTERCREDITOR AGREEMENT AND SHARED COLLATERAL DOCUMENTS. Each Lender hereby
further authorizes and directs Collateral Agent (i) to act as agent for and
representative of Lenders and New Lenders under the Subsidiary Guaranty in the
form attached as Annex A to the Fourth Amendment and (ii) to enter into the
Intercreditor Agreement and each Shared Collateral Document, in the forms
attached as Annex B through Annex H to the Fourth Amendment, as secured party
on behalf of and for the benefit of Lenders and New Lenders, and each Lender
agrees to be bound by the terms of the Subsidiary Guaranty, the Intercreditor
Agreement and each Shared Collateral Document.
C. LIMITATIONS ON LENDERS' RIGHTS IN RESPECT OF SUBSIDIARY GUARANTY AND
COLLATERAL DOCUMENTS. Anything contained in any of the Loan Documents to the
contrary notwithstanding, each Lender agrees that no Lender shall have any
right individually to realize upon any of the Collateral under any Collateral
Document (including without limitation through the exercise of a right of
set-off against call deposits of such Lender in which any funds on deposit in
the Collateral Account may from time to time be invested) or to enforce the
Subsidiary Guaranty, it being understood and agreed that all rights and
remedies under the Collateral Documents and the Subsidiary Guaranty may be
exercised solely by Administrative Agent or Collateral Agent, as the case may
be, for the benefit of Lenders (and, in the case of the Subsidiary Guaranty
and the Shared Collateral Documents, New Lenders) in accordance with the terms
thereof and (in the case of the Subsidiary Guaranty and the Shared Collateral
Documents) the terms of the Intercreditor Agreement."
1.17 AMENDMENT TO EXHIBIT VIII-A: FORM OF COMPLIANCE
CERTIFICATE (MONTHLY).
Exhibit VIII-A annexed to the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor a new form of Exhibit
VIII-A in the form of Annex I attached hereto.
1.18 AMENDMENTS TO EXHIBIT VIII-B: FORM OF COMPLIANCE
CERTIFICATE (QUARTERLY/ANNUAL).
Exhibit VIII-B annexed to the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor a new form of Exhibit
VIII-B in the form of Annex J attached hereto.
1.19 AMENDMENTS TO EXHIBIT XXII: FORM OF MORTGAGE.
Exhibit XXII annexed to the Credit Agreement is hereby amended by
deleting it in its entirety and substituting therefor a new form of Exhibit XXII
in the form of Annex K attached hereto.
SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon the prior or
concurrent satisfaction, on or before November 30, 1997, of all of the following
conditions (the date of satisfaction of such conditions being referred to herein
as the "FOURTH AMENDMENT EFFECTIVE DATE"):
A. COMPANY DOCUMENTS. On or before the Fourth Amendment Effective Date,
Company shall deliver to Lenders (or to Administrative Agent for Lenders with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) the following, each, unless otherwise noted, dated the Fourth
Amendment Effective Date:
1. Resolutions of its Board of Directors approving and authorizing the
execution, delivery, and performance of this Amendment, the Intercreditor
Agreement and the amendments and restatements contemplated hereby with respect
to the Shared Collateral Documents to which it is a party, certified as of the
Fourth Amendment Effective Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or amendment;
2. Signature and incumbency certificates of its officers executing
this Amendment, the Intercreditor Agreement and the amendments and restatements
of such Shared Collateral Documents; and
3. Executed copies of this Amendment, the Intercreditor Agreement and
the amendments and restatements of such Shared Collateral Documents.
B. SUBSIDIARY GUARANTOR DOCUMENTS. On or before the Fourth Amendment
Effective Date, Company shall deliver or cause to be delivered to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to each Subsidiary Guarantor, each, unless otherwise noted, dated the Fourth
Amendment Effective Date:
1. Resolutions of its Board of Directors approving and authorizing the
execution, delivery, and performance of the Intercreditor Agreement and the
amendments and restatements contemplated hereby with respect to the Shared
Collateral Documents to which it is a party, certified as of the Fourth
Amendment Effective Date by its corporate secretary or an assistant secretary as
being in full force and effect without modification or amendment;
2. Signature and incumbency certificates of its officers executing the
amendments and restatements of such Shared Collateral Documents; and
3. Executed copies of the amendments and restatements of such Shared
Collateral Documents and of an acknowledgement to the Intercreditor Agreement.
C. RECEIPT OF NEW EQUITY FROM STONINGTON FUND. Stonington Fund shall have
contributed the New Equity in cash in an aggregate amount of not less than
$35,000,000, the proceeds of which shall have been applied to the prepayment of
the Liquidity Loan and the Revolving Loans pursuant to subsection 2.4B(iii)(a)
of the Credit Agreement as amended by this Agreement (the "AMENDED AGREEMENT").
D. CLOSING AND FUNDING OF NEW CREDIT AGREEMENT. Company, New Lenders and
New Agent shall have executed and delivered the New Credit Agreement, all
conditions to funding thereunder shall have been satisfied or waived with the
consent of Requisite Lenders, the New Term Loans shall have been made and the
proceeds thereof shall have been applied as provided in subsection 2.4B(iii)(a)
of the Amended Agreement.
E. EXECUTION OF INTERCREDITOR AGREEMENT AND SHARED COLLATERAL DOCUMENTS
BY ADMINISTRATIVE AGENT, NEW AGENT AND COLLATERAL AGENT. Collateral Agent,
Administrative Agent and New Agent shall have executed and delivered the
Intercreditor Agreement. Collateral Agent shall have entered into the amendments
and restatements of the Shared Collateral Documents contemplated hereby.
F. PAYMENT OF AMENDMENT FEE. Company shall have paid to Administrative
Agent, for distribution to each Lender that executes and delivers a counterpart
of this Amendment to Administrative Agent at or prior to 5:00 P.M. (New York
time) on November 14, 1997, an amendment fee in an amount equal to the sum of
(i) 1.00% multiplied by the Tranche B Term Loan Exposure of such Lender plus
(ii) 0.25% multiplied by the Revolving Loan Exposure of such Lender.
G. OPINION OF COMPANY'S COUNSEL. Lenders shall have received originally
executed copies of one or more favorable written opinions of Shearman & Sterling
and Xxx Xxxx, Esq., counsel for Company, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Fourth
Amendment Effective Date and setting forth substantially the matters in the
opinions designated in Annex L-1 and Annex L-2 attached hereto respectively and
as to such other matters as Administrative Agent acting on behalf of Lenders may
reasonably request, together with evidence satisfactory to Administrative Agent
that Company has requested such counsel to deliver such opinion to Lenders.
H. OTHER PROCEEDINGS. On or before the Fourth Amendment Effective Date,
all corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent, acting on behalf of
Lenders, and its counsel shall be satisfactory in form and substance to
Administrative Agent and such counsel, and Administrative Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent may reasonably request.
SECTION 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, Company represents and warrants
to each Lender that the following statements are true, correct and complete:
A. CORPORATE POWER AND AUTHORITY. Company has all requisite corporate power
and authority to enter into this Amendment and to carry out the transactions
contemplated by, and perform its obligations under, the Amended Agreement.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment and the other Loan Documents contemplated hereby, and the performance
of the Amended Agreement and such other Loan Documents have been duly authorized
by all necessary corporate action on the part of Company.
C. NO CONFLICT. The execution and delivery by Company of this Amendment
and the other Loan Documents contemplated hereby, and the performance by Company
of the Amended Agreement and such other Loan Documents do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to Company or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws of Company or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government binding on Company
or any of its Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than Liens created under any
of the Loan Documents in favor of Agents on behalf of Lenders), or (iv) require
any approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by Company of this
Amendment and the other Loan Documents contemplated hereby, and the performance
by Company of the Amended Agreement and such other Loan Documents 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.
E. BINDING OBLIGATION. This Amendment and the other Loan Documents
contemplated hereby have been duly executed and delivered by Company, and this
Amendment, the Amended Agreement and such other Loan Documents are the legally
valid and binding obligations of Company, enforceable against Company in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT AGREEMENT.
The representations and warranties contained in Section 5 of the Credit
Agreement are and will be true, correct and complete in all material respects on
and as of the Fourth Amendment Effective Date to the same extent as though made
on and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of Default.
SECTION 4. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the Fourth Amendment Effective Date, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Amended Agreement.
(ii) Except as specifically amended as contemplated by this Amendment,
the Credit Agreement and the other Loan Documents shall remain in full force
and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any provision
of, or operate as a waiver of any right, power or remedy of Agent or any
Lender under, the Credit Agreement or any of the other Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all costs, fees and
expenses as described in subsection 10.2 of the Credit Agreement incurred by
Administrative Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of
Company.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK).
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment (other than the provisions of Section 1
hereof, the effectiveness of which is governed by Section 2 hereof) shall become
effective upon the execution of a counterpart hereof by Company, by Requisite
Lenders and by Requisite Class Lenders of Lenders having Tranche B Term Loan
Exposure and upon receipt by Company and Administrative Agent of written or
telephonic notification of such execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
DICTAPHONE CORPORATION
By: /s/ Xxxxxx Xxxxxxxxxx
------------------------------------
Title: Senior Vice President and Chief
Financial Officer
--------------------------------
LENDERS:
BANKERS TRUST COMPANY
By: /s/ Xxxx Xx Xxxxx
-----------------------------------
Title: Assistant Vice President
--------------------------------
NATIONSBANK, N.A. (CAROLINAS)
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Title: Vice President
---------------------------------
DK ACQUISITION PARTNERS, L.P.
by X.X. Xxxxxxxx & Co.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------------
Title:
---------------------------------
THE CHASE MANHATTAN BANK
By: /s/ A. Xxxx Xxxxxx
-------------------------------------
Title: Vice President
----------------------------------
THE BANK OF NOVA SCOTIA
By: /s/ A.T.D. Xxxxxx
------------------------------------
Title: Senior Manager
---------------------------------
BEAR XXXXXXX INVESTMENT PRODUCTS, INC.
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Title: Vice President
---------------------------------
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Title: Assistant Portfolio Manager
--------------------------------
XXXXXXX XXXXX SENIOR
FLOATING RATE FUND, INC.
By: /s/ Xxx Xxxxxxxx
-------------------------------------
Title:
----------------------------------
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By: /s/ Xxx Xxxxxxxx
----------------------------------------
Title:
-------------------------------------
XXXXXXX XXXXX DEBT STRATEGIES
PORTFOLIO, INC.
By: /s/ Xxx Xxxxxxxx
---------------------------------------
Title:
------------------------------------
ML CBO IV (CAYMAN) LTD.
By Protective Asset Management Company
as Collateral Manager
By: /s/ Xxxx X. Xxxxx, CFA
-------------------------------------------
Title: Executive Vice President
----------------------------------------
PAMCO CAYMAN LTD.
By Protective Asset Management Company
as Collateral Manager
By: /s/ Xxxx X. Xxxxx, CFA
---------------------------------------
Title: Executive Vice President
------------------------------------
FIRST SOURCE FINANCIAL LLP
BY: First Source Financial, Inc., its Agent/Manager
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------
Title: Senior Vice President
----------------------------------
XXXXXX XXXXXXX SENIOR FUNDING, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------------------
Title: Vice President
------------------------------------
FRANKLIN MUTUAL ADVISORS, INC.
By: /s/ Xxx Xxxxxx
-------------------------------------
Title: Vice President
----------------------------------
XXXXXXX XXXXX XXXXXX,
XXXXXX & XXXXX INCORPORATED
By: /s/ Xxxx Xxxxxxx
----------------------------------------
Title: Director
-------------------------------------
