FIFTH AMENDMENT TO CREDIT
AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this
“ Amendment ”) is made and entered into as of
July 30, 2009 (the “ Effective Date ”) by
and among CONSOLIDATED GRAPHICS, INC., a Texas corporation (the
“ Borrower ”); each of the Lenders which is or
may from time to time become a party to the Credit Agreement (as
defined below) (individually, a “ Lender ” and,
collectively, the “ Lenders ”), and JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION, acting as administrative agent
for the Lenders (in such capacity, together with its successors in
such capacity, the “ Administrative Agent
”).
A. The Borrower, the Lenders and the
Administrative Agent executed and delivered that certain Credit
Agreement dated as of October 6, 2006, as amended by
instruments dated as of January 2, 2007, November 9,
2007, March 13, 2008 and August 4, 2008. Said Credit
Agreement, as amended, supplemented and restated, is herein called
the “ Credit Agreement ”. Any capitalized term
used in this Amendment and not otherwise defined shall have the
meaning ascribed to it in the Credit Agreement.
B. The Borrower, the Lenders and the
Administrative Agent desire to amend the Credit Agreement in
certain respects.
NOW, THEREFORE, in consideration of the premises
and the mutual agreements, representations and warranties herein
set forth, and further good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Borrower, the
Lenders and the Administrative Agent do hereby agree as
follows:
SECTION 1.
Amendments to Credit Agreement .
(a) The definition of “ Applicable
Percentage ” set forth in Section 1.1 of the
Credit Agreement is hereby amended to read in its entirety as
follows:
“ Applicable Percentage ”
shall mean, for any day, the rate per annum set forth below
opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans which
are Alternate Base Rate Loans shall be the percentage set forth
under the column “Alternate Base Rate Margin for Revolving
Loans”, (ii) Revolving Loans which are LIBOR Rate Loans
shall be the percentage set forth under the column “LIBOR
Rate Margin for Revolving Loans and Letter of Credit Fee”,
(iii) the Commitment Fee shall be the percentage set forth
under the column “Commitment Fee” and (iv) the
Letter of Credit Fee shall be the percentage set forth under the
column “LIBOR Rate Margin for Revolving Loans and Letter of
Credit Fee”:
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LIBOR Rate Margin
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Alternate Base Rate
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for Revolving Loans
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Leverage
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Margin for
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and Letter of
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Commitment
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Level
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Ratio
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Revolving Loans
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Credit Fee
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Fee
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I
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<
1.00 to 1.0
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0.125%
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1.625%
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0.25%
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II
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< 1.50 to 1.0 but
³
1.00 to 1.0
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0.25%
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1.75%
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0.25%
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III
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< 2.00 to 1.0 but
³
1.50 to 1.0
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0.50%
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2.00%
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0.25%
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IV
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< 2.50 to 1.0 but
³
2.00 to 1.0
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0.75%
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2.25%
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0.375%
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V
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< 3.00 to 1.0 but
³
2.50 to 1.0
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1.00%
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2.50%
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0.375%
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VI
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< 3.50 to 1.0 but
³
3.00 to 1.0
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1.25%
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2.75%
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0.50%
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VII
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³
3.50 to 1.0
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1.50%
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3.00%
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0.50%
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The Applicable
Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on
which the Administrative Agent has received from the Borrower the
quarterly financial information and certifications required to be
delivered to the Administrative Agent and the Lenders in accordance
with the provisions of Sections 5.1(b) and
5.2(b) (each an “ Interest Determination Date
”). Such Applicable Percentage shall be effective from such
Interest Determination Date until the next such Interest
Determination Date. After the Closing Date, if the Borrower shall
fail to provide the quarterly financial information and
certifications in accordance with the provisions of
Sections 5.1(b) and 5.2(b) , the Applicable
Percentage from such Interest Determination Date shall, on the date
five (5) Business Days after the date by which the Borrower
was so required to provide such financial information and
certifications to the Administrative Agent and the Lenders, be
based on Level VII until such time as such information and
certifications are provided, whereupon the Level shall be
determined by the then current Leverage Ratio.
(b) The definition of “
Consolidated EBITDA ” set forth in
Section 1.1 of the Credit Agreement is hereby amended
to read in its entirety as follows:
“ Consolidated EBITDA ” shall
mean, for any period, the sum of (i) Consolidated Net Income for
such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been
deducted for (A) Consolidated Interest Expense, (B) total
federal, state, local and foreign income taxes and other similar
taxes, (C) losses (or minus gains) on the sale or
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disposition of
assets outside the ordinary course of business and (D)
depreciation, amortization expense and other non-cash charges, all
as determined in accordance with GAAP. Non-cash charges that are
added back to Consolidated Net Income in subsection (D), but are
ultimately paid in cash will be deducted from Consolidated EBITDA
at the time cash payments are made (other than the litigation
charges in the amount of $17,000,000 specified and described in the
December 31, 2008 Form 10k filing by the Borrower, which
shall continue to be excluded from the calculation of Consolidated
EBITDA in the event it is paid).
(c) The definition of “ Issuing
Lender ” set forth in Section 1.1 of the
Credit Agreement is hereby amended to read in its entirety as
follows:
“ Issuing Lender ” means
either of JPM Chase or Wells Fargo Bank, National Association (at
Borrower’s election), in its capacity as the issuer of
Letters of Credit hereunder.
(d) A new clause (xi) is hereby
added to the definition of “ Permitted Liens ”
set forth in Section 1.1 of the Credit Agreement, such
new clause to read in its entirety as follows:
(xi) Liens securing Indebtedness permitted
under Section 6.1(i) .
(e) Section 2.3(a) of the
Credit Agreement is hereby amended to read in its entirety as
follows:
(a) Issuance . Subject to the terms and
conditions hereof and of the LOC Documents, if any, and any other
terms and conditions which the Issuing Lender may reasonably
require consistent with customary practice at such time, during the
Commitment Period the Issuing Lender shall issue, and the Lenders
shall participate in, Letters of Credit for the account of the
Borrower from time to time upon request in a form acceptable to the
Issuing Lender; provided , however , that
(i) the aggregate amount of LOC Obligations shall not at any
time exceed THIRTY MILLION DOLLARS ($30,000,000) (the
“ LOC Committed Amount ”), (ii) the sum of
the aggregate amount of Revolving Loans plus Swingline Loans
plus LOC Obligations shall not at any time exceed the
aggregate Revolving Committed Amount, (iii) all Letters of
Credit shall be denominated in U.S. Dollars and (iv) Letters of
Credit shall be issued for the purpose of supporting tax-advantaged
variable rate demand note financing and for other lawful corporate
purposes and may be issued as standby letters of credit, including
in connection with workers’ compensation and other insurance
programs, and trade letters of credit. Except as otherwise
expressly agreed upon by all the Lenders, no Letter of Credit shall
have an original expiry date more than twelve (12) months from
the date of issuance; provided , however , so long as
no Default or Event of Default has occurred and is continuing and
subject to the other terms and conditions to the issuance of
Letters of Credit hereunder, the expiry dates of Letters of Credit
may be extended annually or periodically from time to time on the
request of the Borrower or by operation of the terms of
the
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applicable
Letter of Credit to a date not more than twelve (12) months
from the date of extension; provided , further , that
no Letter of Credit, as originally issued or as extended, shall
have an expiry date extending beyond the Maturity Date. Each Letter
of Credit shall comply with the related LOC Documents. The issuance
and expiry date of each Letter of Credit shall be a Business Day.
Any Letters of Credit issued hereunder shall be in a minimum
original face amount of $10,000 or such other amount as agreed by
the Administrative Agent and the Borrower. JPM Chase or Wells Fargo
Bank, National Association shall be the Issuing Lender on all
Letters of Credit issued after July 30, 2009.
(f) Section 5.9 of the Credit
Agreement is hereby amended to read in its entirety as
follows:
Section 5.9 Financial Covenants
.
The Borrower shall, and shall cause each other
Credit Party to, comply with the following financial
covenants:
(a) Leverage Ratio . The Leverage Ratio
shall be less than or equal to (i) as of the last day of each
fiscal quarter of the Borrower and its Subsidiaries during the
period from and after July 30, 2009 through and including
March 31, 2010, 3.75 to 1.00, (ii) as of the last day of
each fiscal quarter of the Borrower and its Subsidiaries during the
period from and after April 1, 2010 through and including
September 30, 2010, 3.50 to 1.00, (iii) as of the last
day of each fiscal quarter of the Borrower and its Subsidiaries
during the period from and after October 1, 2010 through and
including March 31, 2011, 3.00 to 1.00, and (iv) as of
the last day of each fiscal quarter of the Borrower and its
Subsidiaries thereafter, 2.75 to 1.0.
(b) Interest Coverage Ratio . The
Interest Coverage Ratio, as of the last day of each fiscal quarter
of the Borrower and its Subsidiaries occurring from and after
July 30, 2009, shall be greater than or equal to 2.00 to
1.0.
(c) Consolidated Capital Expenditures .
As of the end of each fiscal quarter of the Borrower beginning with
the fiscal quarter ending June 30, 2008, Consolidated Capital
Expenditures of the Borrower for the immediately preceding twelve
month period shall not exceed two hundred percent (200%) of the
last twelve month depreciation and amortization of the Borrower and
its consolidated Subsidiaries determined on a rolling four fiscal
quarter basis.
(g) Section 6.1(b) of the
Credit Agreement is hereby amended to read in its entirety as
follows:
(b) Indebtedness of the Borrower and its
Subsidiaries existing as of July 30, 2009 and set out more
specifically in Schedule 6.1(b) hereto and Indebtedness
assumed after July 30, 2009 in connection with
acquisitions
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permitted under
Section 6.6(c) (provided that such Indebtedness was not
incurred in connection with such acquisition and any Liens existing
in connection with such Indebtedness shall relate only to the
assets financed thereby), and renewals, refinancings or extensions
of any of the
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