EXHIBIT 10.1
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT to Loan Agreement ("Second Amendment") is made and
entered into as of the 21st day of October, 1996, by and between CONSOLIDATED
GRAPHICS, INC., a Texas corporation, with offices and place of business at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter called "Borrower") and
NATIONSBANK OF TEXAS, N.A., a national banking association, with offices and
banking quarters at ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter called
"Lender"). For and in consideration of the mutual covenants and agreements
herein contained, Borrower and Lender hereby amend as of the date of this Second
Amendment that certain Amended and Restated Loan Agreement between Borrower and
Lender dated the 7th day of November, 1994, as previously amended by the First
Amendment to Loan Agreement dated August 23, 1995 ( as amended, the "Loan
Agreement"), in the following respects:
Section 1. AMENDMENTS TO LOAN AGREEMENT.
A. Section 1.1 is deleted and the following is substituted
in its place:
1.1 INDEBTEDNESS. Upon the terms and conditions hereinafter set
forth, the Lender agrees to lend and Borrower agrees to borrow an
aggregate of up to $35,000,000.00, as evidenced by a Revolving Line of
Credit to be extended to the Borrower by the Lender in an amount up to
$35,000,000.00, as more specifically described in Section 1.3 hereof.
B. Section 1.2(a)(10) is deleted.
C. Section 1.2(a)(18) is deleted.
D. Section 1.2(a)(14A) is added as follows:
(14A) "EBITDA" shall mean earnings before interest, taxes,
depreciation and amortization. With respect to the calculation of EBITDA
with respect to newly acquired Subsidiaries, EBITDA may be adjusted on a
pro forma basis to include the EBITDA of such Subsidiary of the
applicable period prior to the date of the acquisition by Borrower as
more fully set forth in Sections 1.2(d) and 1.3 hereof.
E. Section 1.2(a)(19B) is added as follows:
(19B) "Funded Debt" shall mean the outstanding balance of
interest bearing indebtedness of Borrower and its Subsidiaries.
F. Section 1.2(a)(19C) is added as follows:
(19C) "Funded Debt to EBITDA Ratio" shall mean the ratio of the
outstanding principal balance of Funded Debt as of the end of each
fiscal quarter to the EBITDA of the Borrower and its Subsidiaries for
the quarter then ended plus the immediately preceding three (3) fiscal
quarters.
G. Section 1.2(a)(20) is deleted and the following is
substituted in its place:
(20) "Guarantor" shall mean all Subsidiaries of the Borrower
which conduct commercial printing activity as their primary line of
business which, as of the date of the Second Amendment to Loan
Agreement, are: Western Lithograph Company, a Texas corporation, ▇▇▇▇▇▇
Printing Company, a Texas corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Printing Company, a
Texas corporation, ▇▇▇▇ ▇. ▇▇▇▇▇ Company, a Texas corporation, Gulf
Printing Company, a Texas corporation, ▇▇▇▇▇-▇▇▇▇▇▇ Graphics, Inc., a
Colorado corporation, The ▇▇▇▇▇▇ Press, Inc., a Texas corporation,
▇▇▇▇▇▇▇▇ Printing Company, a Colorado corporation, Clear Visions, Inc.,
a Texas corporation, Bridgetown Printing Company, a Texas corporation,
Consolidated Eagle Press, Inc., a Texas corporation, Emerald City
Graphics, Inc., a Texas corporation, ▇▇▇▇▇▇ Printing Company, an Iowa
corporation, Heritage Graphics, Inc., a Texas corporation, and Precision
Litho, Inc., a Texas corporation. In addition, Consolidated Graphics
Management, Ltd., a Texas limited partnership, shall be a guarantor.
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H. Section 1.2(a)(22A) is added as follows:
(22A) "Interim Rate Determination Date shall have the meaning set
forth in Section 1.3(b).
I. Section 1.2(a)(25) is deleted.
J. Section 1.2(a)(35) is deleted and the following is substituted
in its place:
(35) "Prior Financial Statements" shall mean the audited
consolidated financial statements for the Borrower and its Subsidiaries
for the period ended March 31, 1996 and as at such date, as modified and
supplemented by Borrower prepared consolidated financial statements for
the period ending June 30, 1996 and as at such date.
K. Section 1.2(a)(38) is deleted and the following is substituted
in its place:
(38) "Revolving Note" shall mean the promissory note of the
Borrower in the original principal amount of $35,000,000.00 issued
pursuant to Section 1.3 of this Agreement in the form attached as
Exhibit "1.3" to the Second Amendment to Loan Agreement, together with
any amendments, renewals and extensions thereof.
L. Section 1.2(d) is added as follows:
(d) The preparation of proforma financial statements required
hereunder shall be generally in accordance with the requirements
established by the Securities and Exchange Commission for acquisition
accounting for reported acquisitions for public companies (i.e. (i)
directly attributable to the transaction, (ii) expected to have a
continuing impact on the Borrower and its Subsidiaries, and (iii)
factually supportable), whether or not the applicable transactions are
required to be publicly reported, and applying such requirements to make
such proforma financial statements reflect the accounting procedures
used in the preparation of the regular financial statements of Borrower
and its Subsidiaries unless otherwise approved in writing by Lender. The
application of the foregoing requirements with respect to the
preparation of proforma financial statements or financial statements
including proforma adjustments shall be subject to the approval of
Lender, provided that compliance with the requirements for Form
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8-k shall represent a minimum standard of Lender's evaluation.
M. Section 1.3(a) and (b) are deleted and the following are
substituted in their place:
1.3 REVOLVING LINE OF CREDIT. (a) The Lender, during the period
from the date of the Second Amendment to Loan Agreement until October
31, 1998, subject to the terms and conditions of this Agreement, and
subject to the condition that at the time of each borrowing hereunder,
no Default or Event of Default has occurred and is then continuing to
occur and, as to each borrowing which increases the principal amount
outstanding under the Revolving Note, that the representations and
warranties given by the Borrower in Section 2 as of the date of this
Agreement shall remain true and correct in all material respects (unless
such representation and warranty relates to an earlier date), agrees to
make loans to Borrower pursuant to a Revolving Line of Credit up to but
not in excess of an aggregate principal amount outstanding at any time
of $35,000,000.00 on the same Business Day upon receipt from Borrower on
or before 1:00 p.m. Houston time of written applications for loans
hereunder in the form attached as Exhibit "1.3.1". Each advance shall be
in an amount of not less than $50,000.00.
(b) The Borrower's obligation to repay the Revolving Line of
Credit shall be evidenced by a promissory note of the Borrower in
substantially the form attached as Exhibit "1.3.2" to the Second
Amendment to Loan Agreement, payable to the order of Lender. The
Revolving Note shall bear interest at the rates indicated below, but in
no event to exceed the maximum non-usurious interest rate permitted by
applicable law with the balance of principal plus accrued and unpaid
interest due and payable on or before October 31, 1998.
Applicable Interest Fees
Funded Debt/ Rate Unused
Ebitda Ratio Options Portion
------------ ------- -------
Less than or LIBOR + .625% or
equal to .75 Prime Rate .10%
Greater than .75 LIBOR + .875% or .175%
to 1.0 but less Prime Rate
than or equal to
1.5 to 1.0
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Greater than 1.5 LIBOR + 1.25% or .25%
to 1.0 but less Prime Rate
than or equal to
2.0 to 1.0
Greater than 2.0 LIBOR + 1.50% or .375%
to 1.0 but less Prime Rate + .25%
than or equal to
2.5 to 1.0
Greater than 2.5 LIBOR + 1.75% or .50%
to 2.5 to 1.0 Prime Rate + .25%
The adjustment in the interest rate options on the Revolving Note and
the fees charged pursuant to this Agreement shall be effective on (i)
the first of the month following receipt of a quarterly financial
statement and Compliance Certificate pursuant to Section 3.8 indicating
the Funded Debt to EBITDA Ratio, and no Default or Event of Default
exists, as more fully set forth in the Revolving Note and (ii) on an
Interim Rate Determination Date. As used herein, "Interim Rate
Determination Date" shall mean the effective date of the consummation of
a merger and acquisition either (i) requiring the approval of Lender
under the terms of this Agreement, or (ii) which does not require the
approval of Lender but as to which Borrower desires to add historical
EBITDA for the purposes of calculating compliance with financial
covenants hereunder. In such event Borrower shall deliver within sixty
(60) days following consummation of such merger or acquisition an
interim redetermination of the Funded Debt to EBITDA Ratio based upon
proforma financial statements which reflect such merger or acquisition,
which redetermination and the calculation related thereto shall be
subject to review and approval by Lender. The applicable interest rate
options on the Revolving Note and the fees charged pursuant to this
Agreement shall be adjusted effective as of the Interim Rate
Determination Date based upon such approved interim redetermination.
N. Section 1.3(c)(1)(ii) is amended by adding "one hundred twenty
(120)" following "ninety (90)" and by deleting "November 8, 1996 and replacing
it with "October 31, 1998."
O. Section 1.3(c)(3) is amended by adding the following at the end
of the Section: "provided that Borrower may prepay such
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amount upon the payment of a fee in the amount of one percent (1%) of the amount
prepaid, not to exceed $10,000."
P. Section 1.4 is deleted and the following is substituted in its
place:
1.4 FEES. (a) For the periods from the date of the Second
Amendment Borrower shall pay to Lender a commitment fee in an amount
equal to the percentage then applicable for the Unused Portion as set
forth in Section 1.3(b) per annum on the average daily unadvanced
portion of the Revolving Line of Credit, which fee shall be payable
quarterly on the 10th day of the month following the end of each fiscal
quarter and shall be payable for the period ending on October 31, 1998
on the 10th day of November, 1998.
(b) On the date of the Second Amendment to Loan Agreement
Borrower shall pay Lender a commitment fee in the amount of $15,000. On
the anniversary of the date of such Second Amendment, Borrower shall pay
Lender a commitment fee in the amount equal to $25,000. Borrower shall
have the right to terminate this Agreement upon written notice to Lender
at any time and upon the payment of the commitment fee which would have
been otherwise due upon the anniversary date of the Second Amendment.
Q. Section 3.1(a), 3.1(b), 3.1(c) and 3.9 are amended by adding
"senior vice president" immediately after "chief executive officer" in each
Section.
R. Section 3.1(i) is added as follows:
(i) In the event Borrower completes an acquisition
or merger and a proforma calculation of EBITDA is required under the
terms of this Agreement, Borrower agrees to provide Lender with such
information as Lender may reasonably request with respect to such
acquisition or merger and the proforma calculation of EBITDA, including
without limitation, the information necessary to calculate the Funded
Debt to EBITDA Ratio pursuant to Section 1.3.
S. Section 3.10 is deleted and the following is substituted in its
place:
3.10 SECURITY. Upon the occurrence of and during the continuance
of an Event of Default, the Indebtedness and obligations of the Borrower
and Guarantors under this Agreement and related documents shall, upon
the written
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request of Lender, be secured within ten (10) Business Days by the
following:
(a) A security interest in favor of Lender prior to any other
security interest (except as set forth in Section 4.4) in all of the
Borrower's and any Guarantor's right, title and interest in and to: (i)
all accounts receivable now or hereafter existing; (ii) all inventory
now owned or hereafter acquired; and (iii) the proceeds, products and
accessions of and to any and all of the foregoing.
In such event, the security agreements will be in substantially similar
form to the agreements which were executed in connection with the Prior
Loan Agreement, but in all events sufficient to grant a first and prior
security interest. In the event the Indebtedness has been secured in
accordance with the foregoing provisions and Event of Default exists
hereunder at such time and no Event of Default has existed during the
preceding fiscal quarter, the foregoing security interests shall, upon
the written request of Borrower, be released by Lender.
(b) The Indebtedness shall, as of the date of the Second
Amendment to Loan Agreement, be guaranteed by the following parties:
Consolidated Graphics Management, Ltd.
Western Lithograph Company
▇▇▇▇▇▇ Printing Company
▇▇▇▇▇▇ ▇▇▇▇▇▇ Printing Company
▇▇▇▇. ▇. ▇▇▇▇▇ Company
Gulf Printing Company
▇▇▇▇▇-▇▇▇▇▇▇ Graphics, Inc.
The ▇▇▇▇▇▇ Press, Inc.
▇▇▇▇▇▇▇▇ Printing Company
Clear Visions, Inc.
Bridgetown Printing Co.
Consolidated Eagle Press, Inc.
Emerald City Graphics, Inc.
▇▇▇▇▇▇ Printing Company
Heritage Graphics, Inc.
Precision Graphics, Inc.
In addition, in the event Borrower acquires after the date of the Second
Amendment to Loan Agreement additional Subsidiaries whose primary
business is the commercial printing business, such Subsidiaries shall
execute a Guaranty. In the event the acquisition causes an Interim Rate
Determination Date to occur, such Subsidiary shall execute the required
Guaranty immediately following acquisition by Borrower. If the
acquisition does not
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cause an Interim Rate Determination Date to occur, such Guaranty shall
be executed within thirty (30) days following such acquisition. Borrower
may have up to six (6) months following all acquisitions to insure the
execution of such Guaranty does not violate any agreements to which such
Subsidiary is subject.
T. Section 3.11 is deleted and the following is substituted
in its place:
3.11 BORROWING BASE. During any period the Revolving Line of
Credit is required to be secured pursuant to Section 3.10, the aggregate
indebtedness pursuant to the Revolving Line of Credit shall never exceed
the sum of (i) ninety percent (90%) of the Eligible Accounts Receivable
of (y) corporations whose securities are publicly traded with debt
ratings of "A" or better as determined by Lender based upon ▇▇▇▇▇'▇ or
Standard & Poor's classification and (z) the United States government
and any agency thereof; plus (ii) eighty percent (80%) of other Eligible
Accounts Receivable; plus (iii) (y) sixty percent (60%) of the book
value of unopened inventory plus (z) forty percent (40%) of book value
of other inventory, provided inventory shall not include work-in-process
and (iv) fifty percent (50%) of work-in-process, provided that the
amount determined under this subsection (iii) shall never exceed forty
percent (40%) of the Borrowing Base. In accordance with Section 3.1(d),
Borrower shall provide the Lender a calculation of the foregoing
Borrowing Base in the form attached as Exhibit "3.11" ("Borrowing Base
Report"). In the event the aggregate unpaid principal balance under the
Revolving Line of Credit exceeds the Borrowing Base calculated as
described above, the Borrower will promptly, but in any event no later
than within five (5) Business Days (no additional notice or cure period
being required prior to such failure becoming an Event of Default
hereunder), reduce the Indebtedness under the Revolving Line of Credit
until the amount owed is less than that calculated as described above.
In the event such required payment involves a LIBOR Portion, such amount
shall be prepaid without premium or restriction.
U. Section 4.1(f) and 4.1(g) are deleted and the following Section
4.1(f) is substituted in its place:
(f) indebtedness in an amount not to exceed $10,000,000 to Komori
America Corporation (or an affiliate thereof) utilized to purchase sheet
feed
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presses from Komori America Corporation, secured solely by such presses.
V. The following is added to Section 4.2:
Investments in the stock of Subsidiaries which do not guarantee the
Indebtedness (other than Consolidated Graphics Properties, Inc. and
Consolidated Graphics Properties, II, Inc.) and loans or advances to
Subsidiaries which do not guaranty the Indebtedness (other than
Consolidated Graphics Properties, Inc. and Consolidated Graphics
Properties, II, Inc.) shall not exceed one percent (1%) of Borrower's
consolidated Net Worth.
W. Section 4.3(c) is deleted and the following is substituted in its
place:
(a) a merger or acquisition by Borrower or any of Borrower's
Subsidiaries if the Borrower or the Subsidiary is the surviving entity,
and the total consideration paid in connection with such transaction
does not exceed $10,000,000 and the aggregate consideration paid for all
such transactions during any fiscal year does not exceed forty percent
(40%) of Borrower's consolidated Net Worth; and further provided that in
no event shall any such transaction permitted hereunder be a transaction
in which existing management is not cooperative with Borrower's
acquisition; and
X. The following is added to Section 4.3:
The total consideration and aggregate consideration paid for the
purposes of Section 4.3(a) shall be the sum of cash paid, liabilities
assumed, plus tangible assets transferred, but shall exclude the value
of common or preferred stock issued in connection with such
transactions.
Y. Section 4.4(e) is deleted and the following is substituted in its
place:
(e) liens securing the indebtedness described in Sections
4.1(b), 4.1(d) and 4.1(f) hereof insofar as such liens are not on
any of the Collateral;
Z. Section 4.6 is deleted and the following is substituted in its
place:
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4.6 FINANCIAL COVENANTS. The Borrower will not permit:
(a) its Funded Debt to EBITDA Ratio to be greater than 3.00 to
1.0;
(b) its Net Worth to be less than $46,512,000 plus (i) one
hundred percent (100%) of equity, whether common or preferred, issued
after June 30, 1996, and (ii) seventy-five percent (75%) of net income
for each fiscal year ending after the date of the Second Amendment;
provided that no more than fifty percent (50%) of the amount of Net
Worth can consist of intangible assets;
(c) its Fixed Charge Ratio to exceed 1.25 to 1.0.
Each of the covenants in (a), (b), and (c) above shall be
determined as of the end of each fiscal quarter. All terms not expressly
defined shall be defined in accordance with generally accepted
accounting principles. All determinations under this Agreement shall be
made in accordance with generally accepted accounting principles
consistently applied, on a consolidated basis, except where expressly
provided to the contrary. All references to a preceding period shall
mean the period ending as of the end of the month, quarter or fiscal
year for which the applicable report is delivered. All references to a
period immediately following shall mean the period beginning on the
first day of the month, quarter or fiscal year following the end of the
period for which the applicable report is delivered.
AA. Section 4.8 is added as follows:
4.8 DIVIDENDS AND REDEMPTIONS. The Borrower will not declare or pay
dividends (other than a dividend payable solely in stock of the
Borrower) or make any other distribution on account of, or purchase,
acquire, redeem or retire any stock of the Borrower.
AB. Exhibit 1.3.2 to the Loan Agreement is deleted and the Exhibit 1.3.2
attached hereto is substituted in its place.
AC. Exhibit 2.8 to the Loan Agreement is deleted and the Exhibit 2.8
attached hereto is substituted in its place.
AD. Exhibit 3.8 to the Loan Agreement is deleted and the Exhibit 3.8
attached hereto is substituted in its place.
AE. Exhibit 3.11 to the Loan Agreement is deleted and the Exhibit 3.11
attached hereto is substituted in its place.
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AF. Exhibit 4.4 to the Loan Agreement is deleted and the Exhibit 4.4
attached hereto is substituted in its place.
Section 2. CLOSING.
The closing of the transactions contemplated by this Amendment is
subject to the satisfaction of the following conditions.
2.1 COUNSEL TO LENDER. All legal matters incident to the transactions
herein contemplated shall be satisfactory to Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇,
L.L.P., counsel to the Lender.
2.2 REQUIRED DOCUMENTS.
(a) The Lender shall have received certified copies of resolutions of
the Board of Directors of the Borrower and each of the Guarantors in form and
substance satisfactory to Lender with respect to authorization of this
Amendment, the Ratification of Guaranty Agreements, the Guaranty Agreements, and
the other corporate instruments provided for herein, including a certificate of
the Secretary of the Borrower and the sole director of each of the Guarantors as
to the names of officers of such entity authorized to execute the loan documents
and the other instruments or certificates related hereto together with the true
signatures of such officers.
(b) The Lender shall have received fully executed copies of this
Amendment, the Revolving Note, the Ratifications of Guaranty, the Guaranty
Agreements, and such other documents as Lender may reasonably require.
2.3 OPINION OF COUNSEL. The Lender shall have received from ▇▇▇▇▇ &
▇▇▇▇▇, LLP, counsel to the Borrower, a written opinion, satisfactory to the
Lender and its counsel.
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Section 3. RATIFICATION.
Except as amended hereby, the Loan Agreement shall remain unchanged and
the terms, conditions, representations, warranties, and covenants of said Loan
Agreement, are true as of the date hereof (unless such representations and
warranties relate to an earlier date), are ratified and confirmed in all
respects and shall be continuing and binding upon the parties.
Section 4. DEFINED TERMS.
All terms used in this Amendment which are defined in the Loan Agreement
shall have the same meaning as in the Loan Agreement, except as otherwise
indicated in this Amendment.
Section 5. MULTIPLE COUNTERPARTS.
This Amendment may be executed by the parties hereto in several separate
counterparts, each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
Section 6. APPLICABLE LAW.
This Amendment shall be deemed to be a contract under and subject to,
and shall be construed for all purposes in accordance with the laws of the State
of Texas.
Section 7. FINAL AGREEMENT.
THE WRITTEN LOAN AGREEMENTS IN CONNECTION WITH THIS SECOND AMENDMENT
REPRESENT THE FINAL AGREEMENT BETWEEN THE BORROWER AND THE LENDER AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE BORROWER AND THE LENDER. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE LENDER AND THE BORROWER.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their duly authorized officers as of the _____ day of October, 1996.
CONSOLIDATED GRAPHICS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
NATIONSBANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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EXHIBIT "2.8"
SUBSIDIARIES
PRIMARY
NAME BUSINESS JURISDICTION
----------------------------------------- --------- ------
Western Lithograph Company ................... (1) Texas
▇▇▇▇▇▇ Printing Company ...................... (1) Texas
▇▇▇▇▇▇ ▇▇▇▇▇▇ Printing Company ............... (1) Texas
Consolidated Graphics Properties II, Inc. .... (2) Texas
▇▇▇▇. ▇. ▇▇▇▇▇ Company ....................... (1) Texas
Gulf Printing Company ........................ (1) Texas
Consolidated Graphics Properties, Inc. ....... (2) Texas
Superb Printing Company ...................... (1)(3) Texas
▇▇▇▇▇-▇▇▇▇▇▇ Graphics, Inc. .................. (1) Colorado
The ▇▇▇▇▇▇ Press, Inc. ....................... (1) Texas
▇▇▇▇▇▇▇▇ Printing Company .................... (1) Colorado
Consolidated Graphics Management, Inc. ....... (2) Texas
▇▇▇▇ ▇. ▇▇▇▇▇ Company, Inc. .................. (2) New York
Clear Visions, Inc. .......................... (1) Texas
Bridgetown Printing Co. ...................... (1) Texas
Consolidated Eagle Press, Inc. ............... (1) Texas
Emerald City Graphics, Inc. .................. (1) Texas
▇▇▇▇▇▇ Printing Company ...................... (1) Iowa
Heritage Graphics, Inc. ...................... (1) Texas
Precision Litho, Inc. ........................ (1) Texas
Tulsa Litho Company .......................... (1) Oklahoma
(1) Printing Operations
(2) Other
(3) Inactive
EXHIBIT "2.8"
SUBSIDIARIES
(Continued)
OWNERSHIP OPTIONS, WARRANTS
NAME NUMBER/% SUBSCRIPTS, ETC.
----------------------------------------- --------- ------
Western Lithograph Company ................... 100% None
▇▇▇▇▇▇ Printing Company ...................... 100% None
▇▇▇▇▇▇ ▇▇▇▇▇▇ Printing Company ............... 100% None
Consolidated Graphics Properties II, Inc. .... 100% None
▇▇▇▇. ▇. ▇▇▇▇▇ Company ....................... 100% None
Gulf Printing Company ........................ 100% None
Consolidated Graphics Properties, Inc. ....... 100% None
Superb Printing Company ...................... 100% None
Gritz ▇▇▇▇▇▇ Graphics, Inc. .................. 100% None
The ▇▇▇▇▇▇ Press, Inc. ....................... 100% None
▇▇▇▇▇▇▇▇ Printing Company .................... 100% None
Consolidated Graphics Management, Inc. ....... 100% None
▇▇▇▇ ▇. ▇▇▇▇▇ Company, Inc. .................. 100% None
Clear Visions, Inc. .......................... 100% None
Bridgetown Printing Co. ...................... 100% None
Consolidated Eagle Press, Inc. ............... 100% None
Emerald City Graphics, Inc. .................. 100% None
▇▇▇▇▇▇ Printing Company ...................... 100% None
Heritage Graphics, Inc. ...................... 100% None
Precision Litho, Inc. ........................ 100% None
Tulsa Litho Company .......................... 100% None
EXHIBIT "3.8"
CERTIFICATE OF COMPLIANCE
In accordance with Section 3.8 of the Amended and Restated Loan
Agreement ("Loan Agreement") dated November 7, 1994, as amended, between
NATIONSBANK OF TEXAS, N.A. ("Lender") and CONSOLIDATED GRAPHICS, INC., a Texas
corporation ("Borrower"), I, ,
of the Borrower do hereby certify that the following is
true and correct as of , 19 .
-------------- ----
1. To the best of my knowledge and belief, no Default or Event of
Default has occurred and is continuing under the Loan Agreement.
2. That the Borrower's financial condition for the quarter ending
is as follows:
FINANCIAL REQUIRED RATIO/ ACTUAL RATIO/
COVENANT AMOUNT AMOUNT
-------- ------ ------
Funded Debt/EBITDA Ratio 3.0 to 1.0
Net Worth [Per loan Agreement]
Fixed Charge Ratio 1.25 to 1.0
COLLATERAL LOCATION (ONLY APPLICABLE PER SECTION 3.10):
All inventory of Borrower and the Guarantors is located in Texas except
for inventory of:
Inventory
COMPANY LOCATION
------- --------
▇▇▇▇▇▇ ▇▇▇▇▇▇ Printing Company Colorado
▇▇▇▇▇-▇▇▇▇▇▇ Graphics, Inc. Colorado
▇▇▇▇▇▇▇▇ Printing Company Colorado
Consolidated Eagle Press, Inc. California
Emerald City Graphics, Inc. Washington
▇▇▇▇▇▇ Printing Company Iowa
Bridgetown Printing Co. Oregon
Heritage Graphics, Inc. Arizona
Precision Litho, Inc. California
The foregoing terms are used as defined in the Loan Agreement.
----------------------------------
(Signature of Certifying Officer)
EXHIBIT "3.11"
BORROWING BASE REPORT
FORM OF
BORROWING BASE CERTIFICATE
NO. ____________________ Dated ____________, 19_______
In accordance with a loan agreement dated November 7, 1994 (as amended
"Loan Agreement") between NATIONSBANK OF TEXAS, N.A. ("Lender") and CONSOLIDATED
GRAPHICS, INC. ("Borrower"), I, ____________________________ of the Borrower
hereby certify and warrant that the following schedule accurately states
Borrower's and the Guarantors' Eligible Accounts Receivables and Inventory and
Borrower's Borrowing Base as of the date hereof and that no Default or Event of
Default under the Loan Agreement has occurred and is continuing:
1. Total Accounts Receivable Control as of ______________________ $___________
2. Less: (A) Accounts 120 days from date of Invoice$_____________
(B) Affiliate Accounts $_____________
(C) Intercompany Accounts $_____________
(D) Disputed Accounts $_____________
(E) Bankrupt/Financially Distressed $_____________
(F) Foreign (No L/C) $_____________
3. ELIGIBLE Accounts Receivable [Line 1 minus Line 2] $____________
4. ELIGIBLE Accounts Receivable - Public/Governmental
(A) ELIGIBLE Accounts from "A" Rated
Public Companies $_____________
(B) ELIGIBLE Accounts from
U.S. Government $_____________
5. ELIGIBLE Accounts Receivable - Public/Governmental
[Line 4(A) plus Line 4(B) $____________
6. 90% of Line 5 $____________
7. Other ELIGIBLE Accounts Receivable
[Line 3 minus Line 5] $____________
8. 80% of Line 7 $____________
9. Total Account Receivable Borrowing Base [Line 6 plus Line 8] $____________
10. Unopened Paper and Ink Inventory $____________
11. 60% of Line 10 $____________
12. Opened Paper, Ink and Other Inventory $____________
13. 40% of Line 12 $____________
14. Work-In-Process at Cost $____________
15. 50% of Line 14 $____________
16. Total Inventory Borrowing Base [Line 11 plus Line 13 plus Line 15]$____________
17. Preliminary Borrowing Base [Line 9 plus Line 16] $____________
18. 40% of Line 17 $____________
19. Lesser of Line 16 and Line 18 $____________
20. Borrowing Base [Line 9 plus Line 19] $____________
21. Loan Balance this report $____________
22. Excess of Line 20 over line 21 $____________
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Signature of Certifying Officer
Title:________________________________
