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EXHIBIT 10.33
LOAN AGREEMENT
DATED AS OF JANUARY 31, 1997
This Loan Agreement is entered into as of the 31st day of
January, 1997, by and between DATA DOCUMENTS, INC., a Nebraska corporation
("Borrower"), and FIRST BANK NATIONAL ASSOCIATION (the "Bank").
ARTICLE I
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 1.01. THE ADVANCES.
(a) The Bank agrees, on the terms and conditions hereinafter set
forth, to make advances (the "Advances") to Borrower from time to
time during the period from the date hereof to and including July
15, 1999 (the "Termination Date") in an aggregate amount not to
exceed at any time outstanding $20,000,000 (the "Commitment").
Each Advance shall be in an amount not less than $100,000 or an
integral multiple thereof.
(b) Letters of Credit. Upon the request of Borrower, an Advance may
be made by virtue of the Bank issuing letter(s) of credit for the
account of Borrower (each a "Letter of Credit"), provided,
however the aggregate undrawn face amount of all such Letters of
Credit shall not exceed $2,000,000. Any such Advance by virtue of
the issuance of a Letter of Credit shall be preconditioned upon
Borrower executing and delivering any and all documents or
instruments customarily required by Bank in connection with
letters of credit and paying any and all fees customarily imposed
by Bank and as a result of the issuance of any such Letter of
Credit, Borrower agrees to pay all continuing fees or charges as
provided in such documents or instruments. Any such Advance shall
not bear interest until, and then only to the extent, any draw
under any such Letter of Credit is not immediately reimbursed or
paid by Borrower, however, the outstanding amount of all Letters
of Credit shall be considered as Advances for purposes of
Sections 1.01(d) and 1.07.
(c) Recordation of Amount of Advances. The books and records of the
Bank shall be prima facia evidence of the principal balance of
the Advances outstanding at any time and the amount of accrued
interest.
(d) Limitation on Advances and Borrowing Base. The Advances
outstanding at any time shall not exceed the lesser of
$20,000,000 or the amount of the Borrowing Base (as defined in
Section 1.02).
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SECTION 1.02. DEFINITIONS.
"Accounts" shall mean any right to payment for merchandise, goods or commodities
sold and delivered to any Person, which is not evidenced by an instrument or
chattel paper.
"Acquired Debt" means, with respect to any specified Person, Indebtedness of any
other Person existing at the time such other Person merged with or into or
became a Subsidiary of such specified Person, including Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or into
or becoming a Subsidiary of such specified Person.
"Acquisition Indebtedness" means Acquired Debt and Indebtedness incurred to
finance the acquisition by the Borrower or a Subsidiary thereof of another
entity, either through merger or acquisition of substantially all of its assets
or voting securities.
"Advances" is defined in Section 1.01(a).
"Annual Amount" is defined in Section 4.02(b).
"Asset Sale" means any sale, issuance, conveyance, transfer, lease, or voluntary
disposition, in one or a series of related transactions, of any assets of a Loan
Party; other than the sale of inventory or obsolete, damaged, worn-out or
unusable equipment in the ordinary course of business.
"Borrower Collateral" means the Collateral as defined in the Security Agreement.
"Borrowing Base" shall mean an amount equal to 80% of Borrower's and the
Guarantors' Eligible Accounts.
"Borrowing Base Certificate" shall mean a Borrowing Base Certificate in
substantially the form of Exhibit A attached hereto.
"Business Day" is defined in Section 1.09.
"Collateral" means the Borrower Collateral, the Incorporated Collateral, the
Emblem Collateral and the PBF Collateral.
"Commitment" is defined in Section 1.01(a).
"Default Rate" is defined in Section 1.05(b).
"Eligible Accounts" shall mean those Accounts which are part of the Collateral
and are the subject of a first perfected security interest in favor of the Bank
and are not Ineligible Accounts Receivable. Ineligible Accounts Receivable are
those Accounts which are: (i) in dispute or subject to an existing claim or set
off, to the extent of the dispute, claim or set off; (ii) owed
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by an account debtor located outside the United States, and not secured by a
bank letter of credit satisfactory to the Bank in its sole discretion; (iii)
owed by an account debtor which is the subject of a bankruptcy or insolvency
proceeding or who is insolvent or has made an assignment for the benefit of
creditors or who has failed, suspended or gone out of business; (iv) owed by any
Person who is, directly or indirectly, owned by, controlled by or influenced by
Borrower; (v) owed by any Government; (vi) unpaid 90 days after date of invoice;
(vii) owed by any Person obligated to pay any Account deemed an Ineligible
Account Receivable under subparagraph (vi) above if the ineligible portion of
the account receivable is 50% or more of the total amount due from such Person.
"Emblem" is defined in Section 2.01(c).
"Emblem Collateral" means the Collateral as defined in the Emblem Security
Agreement.
"Emblem Security Agreement" is defined in Section 2.01(e).
"First Bank Reference Rate" is defined in Section 1.05(a).
"Fixed Charge Coverage Ratio" has the meaning ascribed to it in the Indenture.
"Guarantor(s)" is defined in Section 2.01(c).
"Government" shall mean the United States of America or any department or agency
thereof and any state or any agency or political subdivision thereof.
"Incorporated" is defined in Section 2.01(c).
"Incorporated Collateral" means the Collateral as defined in the Incorporated
Security Agreement.
"Incorporated Security Agreement" is defined in Section 2.01(f).
"Indebtedness" means, with respect to any Person (without duplication): (i) all
indebtedness of such Person for borrowed money; (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments; (iii)
all obligations of such Person to pay the deferred purchase price of property or
services (other than trade payables arising in the ordinary course of business
and not more than 90 days past due unless the same is being contested in good
faith); (iv) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property); (v) all obligations of such Person as lessee under capital leases;
(vi) all obligations, contingent or otherwise, of such Person under bankers'
acceptance and letter of credit facilities; and (vii) all Indebtedness of others
guaranteed by such Person. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such
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date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date, provided that, in the case of each
of clauses (i), (ii) and (iii) above, the amount of such Indebtedness will be
the amount that would appear as a liability on the balance sheet of such Person
prepared in accordance with generally accepted accounting principles.
"Indenture" means the Indenture dated as of November 28, 1994 between Borrower
and the guarantors referred to therein and Nationsbank of Texas, N.A., as
trustee, as amended and supplemented to the date hereof.
"Ineligible Accounts Receivable" is defined in the definition of Eligible
Accounts.
"Intercreditor Agreement" is defined in Section 2.01(f).
"Letter of Credit" is defined in Section 1.01(b).
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction).
"Loan Document" is defined in Section 2.01(f).
"Loan Party" is defined in Section 2.01(c).
"Net Worth" is defined in Section 4.01(c).
"Note" is defined in Section 1.04.
"Outstanding Principal Amount" is defined in Section 1.04.
"PBF" is defined in Section 2.01(c).
"PBF Collateral" means the Collateral as defined in the PBF Security Agreement.
"PBF Security Agreement" is defined in Section 2.01(d).
"Permitted Liens" means: (i) Liens in favor of the Borrower and/or its
Subsidiaries; (ii) Liens on property of a Person existing at the time such
Person is acquired by, merged into or consolidated with the Borrower or any
Subsidiary of the Borrower; provided that such Liens were not created in
contemplation of, or as part of a transaction financing, such acquisition,
merger or consolidation; (iii) Liens on property existing at the time of
acquisition thereof by the
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Borrower or any Subsidiary of the Borrower; provided that such Liens were not
created in contemplation of such acquisition; (iv) Liens incurred in the
ordinary course of business to support hedging obligations or trade letters of
credit; (v) Liens to secure Indebtedness for borrowed money of a Loan Party to
another Loan Party; (vi) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary-course of business; (vii) Liens existing on
the date of this Agreement to the extent described in Exhibit B attached hereto;
(viii) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested or remedied in good faith by
appropriate proceedings promptly instituted and diligently concluded; (ix) Liens
arising by reason of any judgment, decree or order of any court with respect to
which the Borrower or any of its Subsidiaries shall then in good faith be
prosecuting an appeal or other proceedings for review; (x) encumbrances
consisting of zoning restrictions, survey exceptions, utility easements,
licenses, rights of way, easements of ingress or egress over property of the
Borrower or any of its Subsidiaries, rights or restrictions of record on the use
of real property, minor defects in title, landlord's and lessor's liens under
leases on property located on the premises rented, and similar encumbrances,
rights or restrictions on personal or real property not interfering in any
material respect with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries and any interest or title of a lessor in respect of any
capital lease; (xi) Liens and priority claims incidental to the conduct of
business or the ownership of properties incurred in the ordinary course of
business and not in connection with the borrowing of money or the obtaining of
advances or credit, including, without limitation, liens incurred or deposits
made in connection with mechanic's liens, workers' compensation, unemployment
insurance and other types of social security, or to secure the performance of
tenders, bids, government contracts and rights to assets of purchasers under
contracts to purchase such assets, entered into in the ordinary course of
business; and (xii) Liens securing Indebtedness which is incurred to refinance
Indebtedness which has been secured by a Lien permitted under this Agreement and
which has been incurred in accordance with the provisions of this Agreement.
"Person" shall mean any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
Government.
"Purchase Money Obligation" means Indebtedness representing, or incurred to
finance, the cost of acquiring or constructing any facilities or equipment in
the ordinary course of business of the Borrower or any of its Subsidiaries (or a
reasonably related business) (including Purchase Money Obligations of any other
Person at the time such other Person is merged with or into or is otherwise
acquired by the Borrower or any of the Subsidiaries of Borrower); provided that
(i) the principal amount of such Indebtedness does not exceed 100% of such cost
together with related transaction costs, (ii) any Lien securing such
Indebtedness does not extend to or cover any other asset or property other than
the asset or property being so acquired and (iii) such Indebtedness is incurred,
and any Liens with respect thereto are granted, within 180 days of the
acquisition of such property or asset by the Borrower or any of the Subsidiaries
of Borrower.
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"Purchase Money Liens" means (i) Liens to secure or securing Purchase Money
Obligations and (ii) Liens to secure Indebtedness incurred solely to refinance
Purchase Money Obligations.
"Security Agreement" is defined in Section 2.01(b).
"Subsidiary" means, with respect to any Person, any corporation, association or
other business entity of which more than 80% of the total voting power of shares
of capital stock entitled to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, but
such Person.
"Termination Date" is defined in Section 1.01(a).
SECTION 1.03. MAKING THE ADVANCES. Each Advance shall be made on notice from the
Borrower to the Bank no later than 12:00 noon on the date such Advance is
proposed to be made specifying the date (which shall be a Business Day, defined
herein) and amount of such Advance. Not later than 2:00 p.m. (Omaha, Nebraska
time) on the date of such Advance and upon fulfillment of the applicable
conditions set forth in Article II, the Bank will make such Advance available to
the Borrower in same day funds at the Bank's address referred to in Section
6.02.
SECTION 1.04. REPAYMENT. Borrower shall repay the aggregate unpaid principal
amount of all Advances outstanding on the Termination Date (the "Outstanding
Principal Amount") in accordance with the promissory note of Borrower, in
substantially the form of Exhibit C hereto (the "Note").
SECTION 1.05. INTEREST
(a) Interest Payments. Borrower shall pay interest on the unpaid
principal amount of each Advance from and including the date of
such Advance to but excluding the date such principal is paid in
full, payable on the first day of each month, at an interest rate
per annum equal to the First Bank Reference Rate (as defined
below) plus 0.75% with each change in the interest rate to take
effect simultaneously with the corresponding change in the First
Bank Reference Rate.
"First Bank Reference Rate," at the time of any determination
means the rate of interest per annum which has been publicly
announced by First Bank National Association in Minneapolis,
Minnesota ("FBNA") as its "reference rate", which may be a rate
at, above or below the rate or rates at which the Bank or FBNA
lends to other parties.
(b) Overdue Interest. On any overdue principal amount of any Advance,
the Borrower shall pay interest on demand at the Default Rate
from the date such amount becomes due until such amount is paid
in full. The "Default Rate" is a rate equal to the First Bank
Reference Rate plus 2.00%.
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SECTION 1.06. OPTIONAL PREPAYMENTS. Borrower may prepay the Note in whole or in
part at any time, provided, however, that each partial prepayment shall be in a
principal amount of not less than $100,000.
SECTION 1.07. COMMITMENT FEE. Borrower agrees to pay to Bank a commitment fee on
the average daily unused portion of the Commitment from the date hereof at the
rate of one-quarter (1/4) of 1% per annum payable in arrears on the last day of
each calendar quarter during the term of the Commitment.
SECTION 1.08. PAYMENTS AND COMPUTATIONS. Borrower shall make each payment under
any Loan Document (as hereinafter defined) not later than 2:00 p.m. (Omaha,
Nebraska time) on the day when due in lawful money of the United States of
America to the Bank at its address referred to in Section 6.02 in same day
funds. Borrower hereby authorizes the Bank, if and to the extent payment is not
made when due under any Loan Document, to charge from time to time against any
account of Borrower with the Bank any amount so due. All computations of
interest shall be made by the Bank on the basis of a year of 360 days, for the
actual number of days (including the first day but excluding the last day)
elapsed.
SECTION 1.09. PAYMENT ON NONBUSINESS DAYS. Whenever any payment to be made
hereunder or under the Note shall be stated to be due on a Saturday, Sunday or a
public or bank holiday or the equivalent for banks generally under the laws of
the State of Nebraska (any other day being a "Business Day"), such payment may
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest.
SECTION 1.10. EVIDENCE OF DEBT. The indebtedness of Borrower resulting from all
Advances made from time to time shall be evidenced by the Note delivered to the
Bank pursuant to Article II.
ARTICLE II
CONDITIONS OF LENDING
SECTION 2.01. CONDITION PRECEDENT TO INITIAL ADVANCE. The obligation of the Bank
to make its initial Advance is subject to the condition precedent that the Bank
shall have received on or before the day of such Advance the following in form
and substance satisfactory to Bank:
(a) The Note.
(b) The Commercial Security Agreement of Borrower (the "Security
Agreement") covering the Collateral (as defined in the Security
Agreement) in form and substance satisfactory to Bank together
with:
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(i) executed copies of proper Financing statements (Form UCC-1)
to be filed under the Uniform Commercial Code of all
jurisdictions as may be necessary or, in the Bank's sole
discretion, desirable to perfect the security interests
created by the Security Agreement, and
(ii) certified copies of Requests for Information or Copies
(Form UCC-11) or equivalent reports, of all effective
financing statements which name Borrower (under its present
name and any previous name) as debtor and which are filed
in the jurisdictions referred to in paragraph (i) above,
together with copies of such financing statements (none of
which shall cover the Collateral), other than (i) financing
statements naming Nationsbank of Texas, N.A. or the Bank of
New York as trustee for the holders of the Senior Secured
Notes (as defined in the Indenture) as secured party, (ii)
financing statements naming Congress Financial Corporation
(Western) as secured party that are to be terminated
reasonably promptly after the closing date, and (iii)
financing statements identified in the Uniform Commercial
Code search reports identified in Exhibit B which do not
cover the Collateral.
(c) The Commercial Guaranty (individually and collectively the
"Guaranty") of PBF Washington, Inc., a Washington corporation,
("PBF"), Cal Emblem Labels, Inc., a California corporation
("Emblem"), and Data Documents Incorporated, a Delaware
corporation ("Incorporated") (PBF, Emblem and Incorporated are
collectively sometimes hereinafter referred to as "Guarantors",
with each individually being a "Guarantor"; Borrower and
Guarantors are collectively referred to as "Loan Parties", with
each individually being a "Loan Party" each in form and
substance satisfactory to Bank.
(d) The Commercial Security Agreement of PBF (the "PBF Security
Agreement") covering the Collateral (as defined in the PBF
Security Agreement) in form and substance satisfactory to Bank
together with:
(i) executed copies of proper Financing statements (Form
UCC-1) to be filed under the Uniform Commercial Code of
all jurisdictions as may be necessary or, in the Bank's
sole discretion, desirable to perfect the security
interests created by the PBF Security Agreement, and
(ii) certified copies of Requests for Information or Copies
(Form UCC-11) or equivalent reports, of all effective
financing statements which name PBF (under its present
name and any previous name) as debtor and which are
filed in the jurisdictions referred to in paragraph (i)
above, together with copies of such financing statements
(none of which shall cover the Collateral, other than
(i) financing statements naming Nationsbank of Texas,
N.A. or the Bank of New York as trustee for
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the holders of the Senior Secured Notes (as defined in
the Indenture) as secured party, (ii) financing
statements naming Congress Financial Corporation
(Western) as secured party that are to be terminated
reasonably promptly after the closing date, and (iii)
financing statements identified in the Uniform
Commercial Code search reports identified in Exhibit B
which do not cover the Collateral.
(e) The Commercial Security Agreement of Emblem (the "Emblem
Security Agreement") covering the Collateral (as defined in the
Emblem Security Agreement) in form and substance satisfactory to
Bank together with:
(i) executed copies of proper Financing statements (Form
UCC-1) to be filed under the Uniform Commercial Code of
all jurisdictions as may be necessary or, in the Bank's
sole discretion, desirable to perfect the security
interests created by the Emblem Security Agreement, and
(ii) certified copies of Requests for Information or Copies
(Form UCC-11) or equivalent reports, of all effective
financing statements which name Emblem (under its
present name and any previous name) as debtor and which
are filed in the jurisdictions referred to in paragraph
(i) above, together with copies of such financing
statements (none of which shall cover the Collateral,
other than (i) financing statements naming Nationsbank
of Texas, N.A. or the Bank of New York as trustee for
the holders of the Senior Secured Notes (as defined in
the Indenture) as secured party, (ii) financing
statements naming Congress Financial Corporation
(Western) as secured party that are to be terminated
reasonably promptly after the closing date, and (iii)
financing statements identified in the Uniform
Commercial Code search reports identified in Exhibit B
which do not cover the Collateral.
(f) The Commercial Security Agreement of Incorporated (the
"Incorporated Security Agreement") covering the Collateral (as
defined in the Incorporated Security Agreement) in form and
substance satisfactory to Bank together with:
(i) executed copies of proper Financing statements (Form
UCC-1) to be filed under the Uniform Commercial Code of
all jurisdictions as may be necessary or, in the Bank's
sole discretion, desirable to perfect the security
interests created by the Incorporated Security
Agreement, and
(ii) certified copies of Requests for Information or Copies
(Form UCC-11) or equivalent reports, of all effective
financing statements which name Incorporated (under its
present name and any previous name) as debtor and which
are filed in the jurisdictions referred to in paragraph
(i) above, together with copies of such financing
statements (none of which
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shall cover the Collateral), other than (i) financing
statements naming Nationsbank of Texas, N.A. or the Bank
of New York as trustee for the holders of the Senior
Secured Notes (as defined in the Indenture) as secured
party, (ii) financing statements naming Congress
Financial Corporation (Western) as secured party that
are to be terminated reasonably promptly after the
closing date, and (iii) financing statements identified
in the Uniform Commercial Code search reports identified
in Exhibit B which do not cover the Collateral.
(g) An Intercreditor Agreement (the "Intercreditor Agreement" and
collectively with this Agreement, the Note, the Security
Agreement, the Guaranty, the PBF Security Agreement, the Emblem
Security Agreement, the Incorporated Security Agreement, the
"Loan Documents" and individually a "Loan Document") executed by
the trustee under the Indenture and Borrower in form and
substance satisfactory to Bank.
(h) A Lock Box Agreement with First National Bank of Omaha in form
and substance satisfactory to Bank.
(i) Certified copies of the resolutions of the Board of Directors of
the corporate Loan Parties approving each Loan Document to which
it is a party, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with
respect to such Loan Document.
(j) A certificate of the Secretary or an Assistant Secretary of each
Loan Party certifying the names and true signatures of the
officers of the Loan Party authorized to sign each Loan Document
to which it is a party and the other documents to be delivered
by it hereunder.
(k) A favorable opinion of the counsel for the Loan Parties, in form
and substance satisfactory to Bank and as to such matters as
Bank may reasonably request.
(l) A favorable opinion of Baird, Holm, McEachen, Pedersen, Hamann &
Xxxxxxxxx, counsel for the Bank, as to such matters as the Bank
may reasonably request.
SECTION 2.02. CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of the Bank
to make each Advance (including the initial Advance) shall be subject to the
further conditions precedent on the date of such Advance that the following
statements shall be true and the Bank shall have received a certificate signed
by a duly authorized officer of the Borrower, dated the date of such Advance,
stating that:
(a) The representations and warranties contained in Section 3.01 of
this Agreement, and in the Security Agreement, are correct in
all material
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respects on and as of the date of such Advance as though made on
and as of such date, and
(b) No event has occurred and is continuing, or would result from
such Advance, which constitutes an Event of Default or would
constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants as follows:
(a) Each Loan Party is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction
indicated.
(b) The execution, delivery and performance by each Loan Party of
each Loan Document to which it is a party is within such Loan
Party's corporate powers, have been duly authorized by all
necessary corporate action, do not contravene (i) such Loan
Party's charter or by-laws or (ii) law or (iii) any contractual
restriction binding on such Loan Party the breach of which would
have a material adverse effect on the Loan Parties taken as a
whole, and do not result in or require the creation of any lien,
security interest or other charge or encumbrance (other than
pursuant hereto) upon or with respect to any of its properties.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by
any Loan Party of any Loan Document to which it is a party.
(d) This Agreement is, and each other Loan Document to which each
Loan Party will be a party when delivered hereunder will be,
legal, valid and binding obligations of the Loan Party
enforceable against the Loan Party in accordance with their
respective terms.
(e) The balance sheets of Incorporated as of September 30, 1996, and
the related statements of income and retained earnings of
Incorporated for the fiscal period then ended, copies of which
have been furnished to the Bank, fairly present the consolidated
financial condition of Incorporated and its Subsidiaries and the
results of the operations of Incorporated and its Subsidiaries
for the period ended on such date, all in accordance with
generally accepted accounting principles consistently
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applied, and since September 30, 1996, there has been no
material adverse change in such condition or operations.
(f) There is no pending or threatened action or proceeding against
the Borrower before any court, governmental agency or
arbitrator, which could reasonably be expected to materially
adversely affect the financial condition or operations of the
Borrower or any other Loan Party or which purports to affect the
legality, validity or enforceability of this Agreement or any
Loan Document.
(g) No proceeds of any Advance will be used to acquire any security
in any transaction which is subject to Sections 13 and 14 of the
Securities Exchange Act of 1934.
(h) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System), and no proceeds of any Advance will
be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any
margin stock.
(i) The terms "hazardous waste," "hazardous substance," "disposal,"
"release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the "CERCLA,"
"XXXX," the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901, et seq., or other applicable state
or Federal laws, rules, or regulations adopted pursuant to any
of the foregoing. Except as disclosed to and acknowledged by
Bank in writing: (i) during the period of any Loan Party's
ownership of any of its properties, there has been no use,
generation, manufacture, storage, treatment, disposal, release
or threatened release of any hazardous waste or substance by any
Person on, under, or from any of the properties in violation of
any applicable law, except any such use, generation,
manufacture, storage, treatment, disposal, release or threatened
release that could not be reasonably expected to have a material
adverse effect on the Loan Parties, taken as a whole; (ii)
Borrower has no knowledge of, or reason to believe that there
has been (a) any use, generation, manufacture, storage,
treatment, disposal, release, or threatened release of any
hazardous waste or substance on, under, about or from the
properties by any prior owners or occupants of any of the
properties in violation of any applicable law, or (b) any actual
or threatened litigation or claims of any kind by any Person
relating to such matters, except with respect to either clause
(a) or clause (b) above, with respect to such matters that could
not be reasonably expected to have a material adverse effect on
the Loan Parties, taken as a whole; (iii) neither Borrower, nor
any other Loan Party, nor any tenant, contractor, agent or other
authorized user of any of the properties shall use, generate,
manufacture, store, treat, dispose of, or release any hazardous
waste or substance on, under, or from any of the properties in
any manner that is not in compliance with all applicable
federal, state, and local laws, regulations, and ordinances,
including
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without limitation those laws, regulations and ordinances
described above, except for any such matters that could not
reasonably expected to have a material adverse effect on the
Loan Parties, taken as a whole. The representations and
warranties contained herein are based on knowledge obtained by
Borrower and the other Loan Parties in the ordinary course of
operating their businesses.
(j) Each employee benefit plan as to which Borrower or any other
Loan Party may have any liability complies in all material
respects with all applicable requirements of law and
regulations, and (i) no Reportable Event nor Prohibited
Transaction (as defined in the Employee Retirement Income
Security Act of 1974, as amended) has occurred with respect to
any such plan, (ii) neither Borrower nor any other Loan Party
has withdrawn from any such plan or initiated steps to do so,
(iii) no steps have been taken to terminate any such plan, and
(iv) there are no unfunded liabilities other than those
previously disclosed to Bank in writing.
(k) All information heretofore or contemporaneously herewith
furnished by Borrower or any other Loan Party to Bank for the
purposes of or in connection with this Agreement or any
transaction contemplated hereby is, and all information
hereafter furnished by or on behalf of Borrower or any other
Loan Party to Bank will be, taken as a whole, true and accurate
in every material respect on the date as of which such
information is dated or certified; and such information is not
or will not be incomplete by omitting to state any material fact
necessary to make such information not misleading.
ARTICLE IV
COVENANTS OF THE BORROWER
SECTION 4.01. AFFIRMATIVE COVENANTS. So long as the Note shall remain unpaid or
the Bank shall have any Commitment hereunder, Borrower will and cause each other
Loan Party to, unless the Bank shall otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders, such
compliance to include, without limitation, paying before the
same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the
extent contested in good faith.
(b) Visitation Rights. At any reasonable time and from time to time,
permit the Bank or any agents or representatives thereof, to
examine and make copies of the abstracts from the records and
books of account of, and visit the properties of, the Borrower
or any other Loan Party, and to discuss the affairs, finances
and accounts of the Borrower or any other Loan Party with any of
its directors, officers or employees.
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(c) Net Worth. Have and maintain a Net Worth (as hereinafter
defined) of Incorporated on a consolidated basis of not less
than $27,000,000. "Net Worth" means the excess of total assets
over total liabilities, total assets and total liabilities each
to be determined in accordance with generally accepted
accounting principles consistently applied.
(d) Reporting Requirements. Furnish to the Bank: (i) as soon as
available and in any event within 45 days after the end of each
month of each fiscal year of Incorporated, balance sheets of
Incorporated as of the end of such month and statements of
income and retained earnings of Incorporated for the period
commencing at the end of the previous fiscal year and ending
with the end of such month certified by the chief financial
officer of Incorporated; (ii) as soon as available and in any
event within 120 days after the end of each fiscal year of
Incorporated, a copy of the annual report for such year for
Incorporated containing financial statements for such year
certified in a manner acceptable to the Bank by independent
public accountants acceptable to the Bank, as presenting fairly
the consolidated financial position of Incorporated and the
results of operations and the changes in financial position for
such year in conformity with generally accepted accounting
principles consistently applied; (iii) promptly after the
sending or filing thereof, copies of all reports which
Incorporated sends to any of its security holders, and copies of
all reports and registration statements which Incorporated files
with the Securities and Exchange Commission or any national
securities exchange; (iv) as soon as possible and in any event
within five days after the occurrence of each Event of Default
or event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default, continuing on the
date of such statement, a statement of the chief executive
officer of Incorporated setting forth details of such Event of
Default or event and the action which the Loan Parties propose
to take with respect thereto; (v) as soon as available but in no
event more than 90 days after the close of each of
Incorporated's fiscal years, a certificate of independent public
accountants to the effect that in making the examination
necessary for their audit they have obtained no knowledge of an
Event of Default or event, or if they have obtained knowledge of
any such Event of Default or event, disclosing the nature and
period of the existence of the same; (vi) monthly within (25)
days of the end of each month, a completed Borrowing Base
Certificate of Borrower executed by an Executive Officer of
Borrower; and (vii) such other information respecting the
current or expected condition or operations, financial or
otherwise, of the Borrower as the Bank may from time to time
reasonably request.
(e) Maintenance of Insurance. Maintain fire and other risk
insurance, public liability insurance, and such other insurance
as is customarily maintained by companies in the same business
as, or in businesses similar to the business of the Borrower. In
connection with all policies covering Collateral, Borrower will
provide Bank with such loss payable or other endorsements as
Bank may require.
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(f) Operations. Maintain executive personnel with substantially the
same qualifications and experience as the present executive
personnel; provide written notice to Bank of any change in
executive personnel; conduct its business affairs in a
reasonable and prudent manner and in material compliance with
all applicable federal, state and municipal laws, ordinances,
rules and regulations respecting its properties, charters,
businesses and operations, including without limitation,
compliance with the Americans With Disabilities Act and with all
minimum funding standards and other requirements of ERISA and
other laws applicable to Borrower's or any other Loan Party's
employee benefit plans.
SECTION 4.02. NEGATIVE COVENANTS. So long as the Note shall remain unpaid or the
Bank shall have any Commitment hereunder, Borrower will not and will not allow
any other Loan Party to, without the written consent of the Bank:
(a) Liens. Create, incur, assume or suffer to exist any Lien with
respect to any of the Collateral, except (i) Purchase Money
Liens, (ii) Liens securing Acquisition Indebtedness in an
aggregate amount not to exceed Five Million Dollars ($5,000,000)
at any one time outstanding, provided that -------- such Lien
does not extend to or cover any asset or property other than the
asset or property being acquired, or owned by the entity being
acquired, (iii) Liens securing Borrower's and its Subsidiaries'
obligations under or relating to the Indenture, (iv) Permitted
Liens and (v) Liens the subject of and described in the
Intercreditor Agreement.
(b) Indebtedness. Create or suffer to exist (collectively, "incur")
any Indebtedness, other than Permitted Indebtedness (as defined
in the Indenture), provided, however, that Borrower may incur
Indebtedness if the Fixed Charge Coverage Ratio (as defined in
the Indenture) for Borrower's most recently ended four full
fiscal quarters for which internal financial statements are
available immediately preceding the date on which such
additional Indebtedness is incurred would have been at least
equal to 2.75:1, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, as the case may be,
at the beginning of such four-quarter period. Notwithstanding
the foregoing, Borrower and its Subsidiaries may incur (x)
Acquisition Indebtedness in an aggregate amount outstanding at
any one time not to exceed Five Million Dollars ($5,000,000) and
(y) Indebtedness incurred in the ordinary course of business in
connection with Purchase Money Obligations, provided, that the
aggregate principal amount of Indebtedness incurred during any
period of twelve consecutive calendar months (a "12-month
period") pursuant to this clause (y) shall not exceed $4,000,000
(the "Annual Amount") except that Borrower may carry forward
from the previous 12-month period any unused portion of such
Annual Amount and may use all or a portion of the immediately
succeeding 12-month period's unused Annual Amount so long as the
aggregate principal amount of Indebtedness incurred in any
12-month period pursuant to this clause (y) shall not exceed
$6,000,000.
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(c) Dividends, Etc. Declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or
securities on account of any shares or any class of capital
stock of the Borrower or any other Loan Party, or purchase,
redeem or otherwise acquire for value (or permit any of its
Subsidiaries to do so) any shares of any class of capital stock
of the Borrower or any other Loan Party or any warrants, rights
or options to acquire any such shares, now or hereafter
outstanding, except that the Borrower or any other Loan Party
may make Restricted Payments as permitted under and in
accordance with Section 4.7 of the Indenture.
(d) Line of Business. Engage primarily in any line of business other
than (i) the business forms and labels business or (ii) lines of
business and services that are, in the reasonable judgment of
the Board of Directors of the Borrower, reasonably related to,
or complementary to and consistent with, the business forms and
labels business.
(e) Limitation on Fundamental Changes. Consolidate or merge with or
into (whether or not the Borrower is the surviving corporation),
or sell, assign, transfer, lease, convey or otherwise dispose of
all or substantially all of its properties or assets in one or
more related transactions to another Person unless:
(i) the Borrower is the surviving Person or the Person
formed by or surviving any such consolidation or merger
(if other than the Borrower) or to which such sale,
assignment, transfer, lease, conveyance or other
disposition has been made is a corporation organized or
existing under the laws of the United States, any state
thereof or the District of Columbia;
(ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Borrower or
to which such sale, assignment, transfer, lease,
conveyance or other disposition has been made (A)
assumes all the obligations of the Borrower, as
applicable, under this Agreement, and (B) takes all
action that may be necessary or reasonably requested by
the Bank to grant the Bank a valid, enforceable and
perfected first priority Lien on its assets, subject
only to liens permitted under this Agreement;
(iii) immediately after such transaction no Event of Default
exists;
(iv) the Borrower or any corporation formed by or surviving
any such consolidation or merger, or to which such sale,
assignment, transfer, lease, conveyance or other
disposition has been made, as applicable, will, at the
time of such transaction and after giving pro forma
effect thereto as if such transaction had occurred at
the beginning of the
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applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in Section
4.02(b) hereof.
(f) Limitation on Asset Sales. Neither Borrower nor any other Loan
Party will, or will permit any of its Subsidiaries to, make any
Asset Sale (provided that the sale, lease, conveyance or other
disposition of all or substantially all of the assets of the
Borrower shall be governed by the provisions of Section 4.02(e)
hereof), unless the Borrower (or the Subsidiary, as the case may
be) receives consideration at the time of such Asset Sale at
least equal to the fair market value of the assets sold or
otherwise disposed of.
ARTICLE V
EVENTS OF DEFAULT
SECTION 5.01. EVENTS OF DEFAULT. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any installment of principal of,
or interest on, the Note within three (3) days of the date when
due; or
(b) Any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when
made; or
(c) Any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part
to be performed or observed and any such failure shall remain
unremedied and unwaived for 10 days after written notice thereof
shall have been given to the Borrower by the Bank; or
(d) Any event or condition shall occur which results in the
acceleration of the maturity of any Indebtedness (other than
Indebtedness evidenced by the Note) of any Loan Party or enables
the holder of such Indebtedness to accelerate the maturity
thereof, if the aggregate principal amount of Indebtedness
(regardless of whether such Indebtedness arises in one or more
related or unrelated transactions) with respect to which such
events or conditions shall have occurred exceeds Two Hundred
Fifty Thousand Dollars ($250,000); or
(e) Any Loan Party shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by
or against any Loan Party seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief,
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or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or for
any substantial part of its property if such proceeding is not
dismissed within 90 days of its institution; or any Loan Party
shall take any corporate action to authorize any of the actions
set forth above in this subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$250,000 shall be rendered against any Loan Party or any of its
subsidiaries and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason
of a pending appeal or otherwise, shall not be in effect;
(g) The Security Agreement or any other collateral document after
delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to create a valid and
perfected first priority security interest in any of the
Collateral purported to be covered thereby;
(h) Any event of default under any other agreement between any Loan
Party and the Bank shall occur; or
(i) Any event of default under and as defined in the Security
Agreement shall have occurred and be continuing after the grace
period, if any, therefor;
then, and in any such event, the Bank (i) may, by notice to the Borrower,
declare its obligation to make Advances suspended or to be terminated, whereupon
the same shall forthwith terminate, (ii) may, by notice to the Borrower, declare
the Note, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Note, all such interest
and all such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower, (iii) may make demand upon the Borrower
to and forthwith upon such demand, the Borrower shall, pay to the Bank, in same
day funds at the Bank's office, for deposit in a special non-interest bearing
cash collateral account to be maintained at such office of the Bank, an amount
equal to the unused portion of all Letters of Credit, such cash collateral
account to be held for the benefit of the Bank for payment or reimbursement of
any and all draws under any Letter of Credit; and (iv) proceed to enforce all
its rights and remedies as provided in any Loan Document or by applicable law.
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ARTICLE VI
MISCELLANEOUS
SECTION 6.01. AMENDMENTS, ETC. No amendment or waiver of any provision of any
Loan Document nor consent to any departure by the Borrower therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Bank and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 6.02. NOTICES, ETC. All notices and other communications provided for
hereunder or any other Loan Document shall be in writing (including telegraphic
communication) and mailed, telegraphed, faxed or delivered, if to the Borrower,
at its address at 0000 Xxxxx 00xx Xxxxxx, Xxxxx, Xxxxxxxx, Attention: Chief
Financial Officer; and if to the Bank, at its address at 0000 Xxxxxx Xxxxxx,
Xxxxx, Xxxxxxxx 00000, Attention: Business Banking, or as to each party, at such
other address as shall be designated by such party in a written notice to the
other party. If notices or other communications are mailed, then they shall be
mailed by registered or certified mail, return receipt requested, or if sent by
telegraph, then receipt by the other party confirmed by the telegraph company.
All such notices and communications shall, when mailed, telegraphed or faxed, be
effective at the earlier of receipt or 3 days after deposit in the mails or
delivered to the telegraph company or transmitted by fax, respectively,
addressed as aforesaid, except that notices to the Bank pursuant to the
provisions of Article I hereof shall not be effective until received by the
Bank.
SECTION 6.03. NO WAIVER; REMEDIES. No failure on the part of the Bank to
exercise, and no delay in exercising, any right under any Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under any Loan Document preclude any other or further exercise thereof or
the exercise of any other right. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.
SECTION 6.04. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles as in effect on the date of this Agreement, except as otherwise
stated herein.
SECTION 6.05. COSTS, EXPENSES AND TAXES. Borrower agrees to pay on demand all
reasonable costs and expenses in connection with the preparation, execution,
delivery, filing, recording and administration of the Loan Documents and the
other documents to be delivered under the Loan Documents, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Bank, and local counsel who may be retained by said counsel, with respect
thereto and with respect to advising the Bank as to its rights and
responsibilities under the Loan Documents, and all costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with the
enforcement of the Loan Documents and the other documents to be delivered under
the Loan Documents; provided, however, that Borrower's maximum responsibility
with respect to the reasonable fees and out-of-pocket expenses of counsel for
the Bank in connection with the preparation of the Loan Documents shall be
limited to an amount equal to $15,000. In addition, the Borrower shall pay any
and all stamp and other taxes and fees payable or determined
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to be payable in connection with the execution, delivery, filing and recording
of the Loan Documents and the other documents to be delivered under the Loan
Documents, and agrees to save the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes and fees.
SECTION 6.06 RIGHT OF SET-OFF. Upon the occurrence and during the continuance of
any Event of Default, the Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Bank to or for the credit
or the account of the Loan Parties against any and all of the obligations of the
Loan Parties now or hereafter existing under any Loan Document, irrespective of
whether or not the Bank shall have made any demand under such Loan Document and
although such obligations may be unmatured. The Bank agrees promptly to notify
the Loan Parties after any such set-off and application, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Bank under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which the Bank may have.
SECTION 6.07. BINDING EFFECT; GOVERNING LAW. This Agreement shall be binding
upon and inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Bank. This Agreement and the Note shall be governed by, and
construed in accordance with, the laws of the State of Nebraska.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
DATA DOCUMENTS, INC., a Nebraska
corporation
By:____________________________
Title:_________________________
FIRST BANK NATIONAL ASSOCIATION
By:____________________________
Title:_________________________
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