EXHIBIT 10.1

 

FORM OF
LOAN AND SECURITY AGREEMENT

 

This Loan And Security Agreement (this “Agreement”), dated as
of                        , 2002 is entered into by and between
                         , (“Borrower”) having its offices
at                         and                         (“Lender”) having its
offices                 .

 

Borrower desires to borrow from the Lender $                           , as more
particularly described below (the “Loan”), secured by a lien on all of the
Borrower’s right, title and interest in and to certain Equipment (as defined
herein). As further inducement for Lender to enter into this Agreement, Borrower
agrees to obtain the guaranty of its parent company (“Guarantor”) for the full
and prompt payment by Borrower of all obligations hereunder (“Guaranty”), such
Guaranty to be substantially in the form of Exhibit C attached hereto. In
consideration of the mutual covenants hereinafter set forth the parties agree as
follows:

 

1.             AS SECURITY FOR THE PROMPT PAYMENT OF ALL DEBT, PRINCIPAL,
INTEREST, AND OTHER AMOUNTS OWED TO LENDER BY BORROWER AND THE PROMPT
PERFORMANCE OF EACH OF THE BORROWER’S COVENANTS AND DUTIES HEREUNDER AND UNDER
ONE OR MORE PROMISSORY NOTE(S) (THE “NOTES”) IN THE ORIGINAL PRINCIPAL AMOUNTS
AS SET FORTH IN EXHIBIT A HERETO AND PAYABLE BY THE BORROWER TO THE LENDER OR
ANY OTHER AGREEMENT, WHETHER ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE,
INCLUDING ANY INTEREST THAT ACCRUES AFTER THE COMMENCEMENT OF AN INSOLVENCY
PROCEEDING (“INDEBTEDNESS”), THE BORROWER HEREBY ASSIGNS TO THE LENDER, AND
GRANTS TO THE LENDER A SECURITY INTEREST IN ALL THE BORROWER’S RIGHT, TITLE AND
INTEREST IN AND TO PROPERTY (“COLLATERAL”) CONSISTING OF THE EQUIPMENT
(“EQUIPMENT”) DESCRIBED IN EXHIBIT A HERETO AND ANY REPAIRS AND REPLACEMENTS
THEREOF AND SUBSEQUENT ADDITIONS, MODIFICATIONS AND ACCESSIONS THERETO, AND ALL
PROCEEDS OF THE FOREGOING AND OF THE INSURANCE REFERRED TO IN PARAGRAPH (3)
HEREOF, EXCEPT FOR INCOME OR PROCEEDS GENERATED BY THE USE OF THE EQUIPMENT
INCLUDING, WITHOUT LIMITATION, INCOME, ACCOUNTS, OR INSTRUMENTS. A FORM OF NOTE
IS ATTACHED HERETO AS EXHIBIT B.

 

2.             THE BORROWER REPRESENTS, WARRANTS AND AGREES THAT (I) IT HAS GOOD
TITLE TO THE COLLATERAL, FREE OF ALL LIENS, CLAIMS AND ENCUMBRANCES, EXCEPT FOR
LIENS INFERIOR OR SUBORDINATE TO THE LENDER’S INTEREST EXISTING ON THE DATE
HEREOF TO WHICH LENDER SHALL HAVE CONSENTED TO IN WRITING; (II) IT IS A
CORPORATION DULY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF ITS STATE OF
INCORPORATION AND QUALIFIED AND LICENSED TO DO BUSINESS IN THE JURISDICTION
WHERE THE EQUIPMENT IS OR WILL BE LOCATED; (III) THE NOTE AND THIS AGREEMENT
(THE “COLLATERAL DOCUMENTS”) ARE VALID AND ARE ENFORCEABLE IN ACCORDANCE WITH
THEIR RESPECTIVE TERMS SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION OR OTHER SIMILAR LAWS AFFECTING

 

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THE ENFORCEABILITY GENERALLY OF THE RIGHTS OF CREDITORS; (IV) THE MAKING AND
PERFORMANCE BY THE BORROWER OF THE COLLATERAL DOCUMENTS, AND ANY RELATED
DOCUMENTS AND TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY DO NOT CONTRAVENE ANY
PROVISIONS OF LAW APPLICABLE TO THE BORROWER AND DO NOT CONFLICT WITH AND WILL
NOT RESULT IN A BREACH OF OR CONSTITUTE A DEFAULT OR REQUIRE ANY CONSENT UNDER,
OR RESULT IN THE CREATION OF ANY LIEN, CHARGE OR ENCUMBRANCE UPON THE COLLATERAL
(OTHER THAN THE LIEN CREATED HEREUNDER) PURSUANT TO THE TERMS OF BORROWER’S
CHARTER OR BYLAWS OR OF ANY CREDIT AGREEMENT, LEASE, GUARANTY, OR OTHER
INSTRUMENT TO WHICH THE BORROWER IS A PARTY OR BY WHICH THE BORROWER MAY BE
BOUND OR TO WHICH ITS PROPERTIES MAY BE SUBJECT (V) THERE ARE NO SET-OFFS,
COUNTERCLAIMS OR DEFENSES ON THE PART OF THE BORROWER WITH RESPECT TO ITS
OBLIGATIONS HEREUNDER; (VI) THE EQUIPMENT HAS BEEN DELIVERED TO AND ACCEPTED BY
THE BORROWER AND WILL BE KEPT AT THE BORROWER’S ADDRESS SET FORTH IN EXHIBIT A
HERETO UNLESS SUCH EQUIPMENT IS DISPOSED OF  AS PROVIDED UNDER SECTION 5 HEREOF
OR THE LENDER OTHERWISE CONSENTS (WHICH CONSENT SHALL NOT BE WITHHELD
UNREASONABLY) OR AT THE ADDRESS OF ANOTHER SUBSIDIARY OF GUARANTOR PROVIDED THAT
BORROWER OR GUARANTOR NOTIFIES LENDER OF SUCH OTHER ADDRESS IN ADVANCE; (VII) IT
WILL NOT ASSIGN ITS RIGHTS TO, CONVEY, SELL, LEASE, OR TRANSFER ANY COLLATERAL,
OR CREATE, INCUR, ASSUME OR ALLOW ANY LIEN WITH RESPECT TO THE COLLATERAL, TO
ANY PERSON OTHER THAN THE LENDER, EXCEPT FOR ASSIGNMENTS AND SECURITY INTERESTS
WHICH ARE INFERIOR OR SUBORDINATE TO THE LENDER’S INTEREST AND TO WHICH LENDER
HAS CONSENTED IN WRITING IN ITS SOLE DISCRETION; (VIII) IT WILL EXECUTE SUCH
FINANCING STATEMENTS IN CONNECTION HEREWITH AS THE LENDER MAY REASONABLY
REQUEST; (IX) IT WILL PRESERVE ITS CORPORATE EXISTENCE AND REMAIN QUALIFIED TO
DO BUSINESS IN THE JURISDICTION(S) WHERE THE EQUIPMENT IS OR WILL BE LOCATED;
(X) ITS CHIEF EXECUTIVE OFFICE IS LOCATED AT THE ADDRESS OF THE BORROWER STATED
ABOVE, AND IT WILL PROMPTLY NOTIFY LENDER OF ANY CHANGE IN SUCH ADDRESS; AND
(XI) THERE IS NO PENDING OR THREATENED LITIGATION AGAINST THE BORROWER WHICH
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT ON THE ABILITY OF
THE BORROWER TO PERFORM ITS OBLIGATIONS UNDER THE COLLATERAL DOCUMENTS.
BORROWER, AT ITS OWN EXPENSE SHALL MAINTAIN THE EQUIPMENT IN GOOD REPAIR,
APPEARANCE AND CONDITIONS, OTHER THAN NORMAL WEAR AND TEAR AND SHALL OBTAIN AND
KEEP IN EFFECT THROUGHOUT THE TERM OF THE APPLICABLE NOTE A MAINTENANCE
AGREEMENT WITH THE MANUFACTURER OR OTHER MANUFACTURER APPROVED SERVICE PROVIDER
FOR SUCH EQUIPMENT.  NOTWITHSTANDING THE FOREGOING PROVISIONS, NOTHING CONTAINED
HEREIN SHALL PROHIBIT THE BORROWER, THE GUARANTOR, OR ANY SUBSIDIARY THERETO
FROM ENTERING INTO ANY TRANSACTION PERMITTED BY SECTION 6.6 OF THAT CERTAIN
CREDIT AGREEMENT BY AND AMONG CONSOLIDATED GRAPHICS, INC., AS BORROWER, AND ITS
DOMESTIC SUBSIDIARIES FROM TIME TO TIME A PARTY THERETO AS GUARANTORS, AND
WACHOVIA BANK NATIONAL ASSOCIATION (FORMERLY FIRST UNION NATIONAL BANK), AND
OTHER LENDERS THERETO DATED DECEMBER 11, 2000, AS IT CURRENTLY EXISTS TODAY.

 

3.             RISK OF LOSS OR, DAMAGE TO OR DESTRUCTION OF THE EQUIPMENT SHALL
BE BORNE BY THE BORROWER AND THE BORROWER SHALL INSURE THE EQUIPMENT AGAINST
SUCH RISKS TO BE BORNE BY IT IN EACH CASE IN AN AMOUNT NOT LESS THAN THE
AGGREGATE AMOUNT OF THE INDEBTEDNESS

 

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OUTSTANDING FROM TIME TO TIME WITH SUCH COMPANIES AND INSURING AGAINST SUCH
RISKS AS IS HELD BY THE BORROWER AND GUARANTOR AND APPROVED BY LENDER AS OF THE
DATE OF EXECUTION.  THE INSURANCE COVERAGE OF THE GUARANTOR AND THE COMPANY AS
OF THE DATE OF EXECUTION HEREOF IS OUTLINED AS TO CARRIER, POLICY NUMBER,
EXPIRATION DATE, TYPE, AND AMOUNT ON EXHIBIT D, ATTACHED HERETO.  LENDER
ACKNOWLEDGES AND AGREES THAT SAID INSURANCE SHALL BE SATISFACTORY FOR ALL
PURPOSES HEREUNDER.  ALL POLICIES FOR SUCH INSURANCE SHALL CONTAIN LOSS PAYABLE
CLAUSES IN FAVOR OF THE BORROWER AND THE LENDER AS THEIR RESPECTIVE INTEREST MAY
APPEAR, AND SHALL NOT BE SUBJECT TO TERMINATION OR CANCELLATION WITHOUT THIRTY
(30) DAYS’ PRIOR WRITTEN NOTICE TO THE LENDER.  CERTIFICATES OF INSURANCE OR
OTHER REASONABLE EVIDENCE THEREOF SHALL BE DEPOSITED WITH THE LENDER AS THE
LENDER MAY REQUEST FROM TIME TO TIME.  THE BORROWER HEREBY ASSIGNS AND SETS OVER
UNTO THE LENDER ALL MONIES WHICH MAY BECOME PAYABLE ON ACCOUNT OF ANY SUCH
INSURANCE AND DIRECTS THE INSURERS TO PAY THE LENDER ANY AMOUNTS SO DUE, UNLESS
THE BORROWER ELECTS TO REPLACE THE EQUIPMENT DAMAGED WITH EQUIPMENT OF SIMILAR
USE AND VALUE REASONABLY ACCEPTABLE TO LENDER. GUARANTOR MAY SELF-INSURE THE
EQUIPMENT ON BEHALF OF THE COMPANY, PROVIDED THAT AT ALL TIMES DURING SUCH
SELF-INSURANCE GUARANTOR MAINTAINS A CREDIT RATING OF INVESTMENT GRADE FOR ITS
LONG TERM DEBT.

 

4.             IF (I) THE BORROWER DEFAULTS IN THE PAYMENT OF ANY PRINCIPAL OR
INTEREST PAYABLE UNDER ANY NOTE GOVERNED BY THIS AGREEMENT FOR MORE THAN FIVE
(5) DAYS AFTER DATE DUE; (II) THE BORROWER DEFAULTS IN THE PAYMENT OF OR
PERFORMANCE OF ANY OTHER OBLIGATION OF THE BORROWER HEREUNDER OR UNDER ANY NOTE
HEREUNDER FOR MORE THAN THIRTY (30) DAYS AFTER EITHER THE LENDER HAS GIVEN
NOTICE OF SUCH DEFAULT TO THE BORROWER AND THE GUARANTOR; (III) ANY OTHER
REPRESENTATION OR WARRANTY MADE BY THE BORROWER IN ANY OF THE COLLATERAL
DOCUMENTS SHALL PROVE TO BE FALSE OR MISLEADING IN ANY MATERIAL RESPECT; (IV)
THERE IS A MATERIAL ADVERSE CHANGE IN THE FINANCIAL CONDITION OF GUARANTOR, OR A
CHANGE OF OWNERSHIP OR CONTROL OF BORROWER; (V) THE GUARANTOR FAILS TO MAKE ANY
PAYMENT PAYABLE UNDER THE GUARANTY OR ANY OTHER GUARANTY MADE BY GUARANTOR FOR
THE PURPOSE OF SECURING A LOAN, OR (VI) EITHER THE BORROWER OR GUARANTOR BECOMES
INSOLVENT OR ADMITS IN WRITING ITS INABILITY TO PAY ITS DEBTS AS THEY MATURE OR
APPLIES FOR, CONSENTS TO OR ACQUIESCES IN THE APPOINTMENT OF A TRUSTEE OR
RECEIVER FOR IT OR ANY OF ITS PROPERTY, OR ANY BANKRUPTCY, REORGANIZATION, DEBT
ARRANGEMENT OR OTHER PROCEEDING, SHALL BE INSTITUTED BY OR AGAINST THE BORROWER
OR GUARANTOR, AND IF INSTITUTED AGAINST IT SHALL BE CONSENTED TO OR ACQUIESCED
IN BY IT OR SHALL NOT BE DISMISSED WITHIN A PERIOD OF SIXTY  (60) DAYS, OR ANY
MATERIAL PORTION OF THE COLLATERAL IS ATTACHED, SEIZED, SUBJECTED TO A WRIT OR
DISTRESS WARRANT OR IS LEVIED UPON AND THE SAME IS NOT REMOVED, DISCHARGED OR
RESCINDED WITHIN A PERIOD OF THIRTY (30) DAYS, THEN THE OCCURRENCE OF ANY EVENT
DESCRIBED IN ANY ONE OR MORE OF CLAUSES (I) THROUGH (VI) ABOVE SHALL BE AN
“EVENT OF DEFAULT” AND THE LENDER MAY AT ITS OPTION DECLARE ALL NOTES GOVERNED
UNDER THIS AGREEMENT TO BE DUE AND PAYABLE, WHEREUPON THE UNPAID PRINCIPAL OF
AND ACCRUED INTEREST ON ALL NOTES SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND
THE LENDER MAY EXERCISE ALL RIGHTS AND REMEDIES, WITH RESPECT TO

 

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ALL COLLATERAL, AVAILABLE TO IT UNDER APPLICABLE LAW; PROVIDED, HOWEVER, THAT IN
THE EVENT OF THE OCCURRENCE OF AN EVENT OF DEFAULT UNDER (VI) ABOVE, ALL NOTES
UNDER THIS AGREEMENT SHALL BECOME IMMEDIATELY DUE AND PAYABLE AUTOMATICALLY,
WITH NO FURTHER ACTION BY THE LENDER.  IN CONNECTION WITH ANY SALE OR
DISPOSITION OF COLLATERAL THE REQUIREMENT OF REASONABLE NOTICE SHALL BE MET IF
SUCH NOTICE IS MAILED POSTAGE PREPAID TO BORROWER AT LEAST TEN (10) DAYS BEFORE
SUCH SALE OR DISPOSITION. LENDER SHALL BE ENTITLED TO OBTAIN REIMBURSEMENT FOR
ALL REASONABLE COSTS, ATTORNEY’S FEES AND LEGAL EXPENSES INCURRED BY IT ON
EXERCISING SUCH RIGHTS AND REMEDIES AGAINST THE BORROWER WITH RESPECT TO THE
COLLATERAL.  THE LENDER AGREES TO PAY FORTHWITH TO THE BORROWER ANY SURPLUS
REMAINING FROM THE COLLATERAL AFTER PAYMENT OF ALL INDEBTEDNESS.

 

5.             BORROWER MAY PREPAY THE INDEBTEDNESS IN WHOLE OR IN PART UPON AT
LEAST THIRTY (30) DAYS PRIOR WRITTEN NOTICE TO LENDER, UPON PAYMENT OF PRINCIPAL
(AND INTEREST DUE ON SAID PRINCIPAL AT THE TIME OF SUCH PREPAYMENT) PLUS THE
MAKE-WHOLE PREMIUM (DEFINED HEREIN).  THE TERM “MAKE-WHOLE PREMIUM” SHALL MEAN
AN AMOUNT EQUAL TO THE SUM OF (A) THE POSITIVE DIFFERENCE, IF ANY, OF (X) THE
PRESENT VALUE OF THE REMAINING PRINCIPAL PAYMENTS OUTSTANDING DISCOUNTED AT A
PER ANNUM RATE OF INTEREST EQUAL TO THE FIVE-YEAR U.S. TREASURY CONSTANT
MATURITIES (AS REPORTED IN THE MOST RECENTLY PUBLISHED FEDERAL RESERVE
STATISTICAL RELEASE H.15 PRIOR TO THE PREPAYMENT DATE) PLUS 296 BASIS POINTS;
MINUS (Y) THE PRESENT VALUE OF THE REMAINING PRINCIPAL PAYMENTS OUTSTANDING AT
THE APPLICABLE NOTE RATE; PLUS (B) ANY REASONABLE FEES OR COSTS INCURRED BY THE
LENDER RESULTING FROM BORROWER’S ELECTION TO PREPAY.

 

6.             THE AGREEMENT AND THE NOTES SHALL BE CONTRACTS MADE UNDER AND
GOVERNED BY THE LAWS OF NEW YORK, EXCLUDING ITS CONFLICTS OF LAW PRINCIPLES. 
WHENEVER POSSIBLE, EACH PROVISION OF THE AGREEMENT SHALL BE INTERPRETED IN SUCH
MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION
OF THIS AGREEMENT SHALL BE PROHIBITED BY OR INVALID UNDER SUCH LAW, SUCH
PROVISION SHALL BE INEFFECTIVE ONLY TO THE EXTENT AND DURATION OF SUCH
PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION
OR THE REMAINING PROVISIONS OF THE AGREEMENT. LENDER AND BORROWER WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY LITIGATION RELATING TO THIS AGREEMENT, THE NOTE,
AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

 

7.             NOTICES SHALL BE DEEMED GIVEN WHEN DEPOSITED IN THE U.S. MAILS,
WITH POSTAGE PREPAID FOR CERTIFIED OR REGISTERED SERVICES, RETURN RECEIPT
REQUESTED, ADDRESSED TO THE PARTIES AT THE ADDRESSES INDICATED ON THE FIRST PAGE
OF THIS AGREEMENT, OR TO SUCH OTHER ADDRESSES AS THE PARTIES SHALL PROVIDE BY
NOTICE. ALL NOTICES REQUIRED TO BE GIVEN TO THE BORROWER HEREUNDER OR UNDER ANY
DOCUMENT EXECUTED IN CONNECTION HEREWITH SHALL ALSO BE GIVEN TO THE GUARANTOR AT
THE ADDRESS PROVIDED IN THIS PARAGRAPH 7.  IN ADDITION, ALL NOTICES TO THE
GUARANTOR HEREUNDER OR UNDER ANY DOCUMENT EXECUTED IN CONNECTION HEREWITH SHALL
BE GIVEN TO THE GUARANTOR AT THE FOLLOWING ADDRESS:

 

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Consolidated Graphics, Inc.
5858 Westheimer Road, Suite 200
Houston, Texas  77057
Attention:  Chief Financial Officer

 

8.             THIS AGREEMENT SHALL BE BINDING UPON, AND SHALL INURE TO THE
BENEFIT OF, THE SUCCESSORS AND ASSIGNS OF THE BORROWER AND THE LENDER. THIS
AGREEMENT, THE NOTES AND THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR AS
SECURITY FOR THE NOTES MAY BE ASSIGNED, TRANSFERRED, PLEDGED, OR PARTICIPATED TO
ANY OTHER PERSON OR ENTITY ONLY UPON PRIOR WRITTEN NOTICE TO BORROWER OF AT
LEAST FIVE (5) BUSINESS DAYS. THE LENDER AGREES THAT, IN THE EVENT OF ANY
TRANSFER BY IT OF THE NOTE, IT WILL ENDORSE THEREON A NOTATION AS TO THE PORTION
OF THE PRINCIPAL OF THE NOTE WHICH SHALL HAVE BEEN PAID AT THE TIME OF SUCH
TRANSFER AND AS TO THE DATE TO WHICH INTEREST SHALL HAVE BEEN PAID THEREON.

 

9.             THE OBLIGATIONS OF THE BORROWER UNDER THIS AGREEMENT SHALL CEASE
AND TERMINATE WHEN ALL PRINCIPAL, INTEREST AND OTHER AMOUNTS PAYABLE OR DUE
HEREUNDER HAVE BEEN INDEFEASIBLY PAID IN FULL, WHETHER AT MATURITY OF THE NOTE,
BY ACCELERATION, BY PREPAYMENT OR OTHERWISE.  UPON TERMINATION OF THIS AGREEMENT
LENDER SHALL, AT BORROWER’S REQUEST, EXECUTE AND DELIVER TO BORROWER THE
DOCUMENTS OR INSTRUMENTS NECESSARY TO EVIDENCE THE TERMINATION OF ITS SECURITY
INTEREST UNDER THIS AGREEMENT.

 

10.           THIS AGREEMENT MAY BE EXECUTED BY THE BORROWER AND THE LENDER IN
COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED SHALL BE DEEMED TO BE AN ORIGINAL,
AND ALL SUCH COUNTERPARTS TOGETHER SHALL CONSTITUTE BUT ONE AGREEMENT.

 

11.           BORROWER AND LENDER ACKNOWLEDGE THAT REVISED ARTICLE 9 OF THE
UNIFORM COMMERCIAL CODE, (“REVISED ARTICLE 9”), HAS BEEN ADOPTED BY THE
APPLICABLE JURISDICTION(S)GOVERNING THE EQUIPMENT AND THIS TRANSACTION. LENDER
MAY AT ANY TIME AND FROM TIME TO TIME FILE FINANCING STATEMENTS, CONTINUATION
STATEMENTS AND AMENDMENTS THERETO THAT DESCRIBE THE COLLATERAL AND WHICH CONTAIN
ANY OTHER INFORMATION REQUIRED BY PART 5 OF REVISED ARTICLE 9 FOR THE
SUFFICIENCY OR FILING OFFICE ACCEPTANCE OF ANY FINANCING STATEMENT, CONTINUATION
STATEMENT OR AMENDMENT, INCLUDING WHETHER BORROWER IS AN ORGANIZATION, THE TYPE
OF ORGANIZATION AND ANY ORGANIZATION IDENTIFICATION NUMBER ISSUED TO SUCH
BORROWER, IF BORROWER FAILS TO EXECUTE AND RETURN TO LENDER OR OBJECT TO ANY
DOCUMENT REASONABLY REQUESTED IN WRITING BY THE LENDER WITHIN FIVE (5) BUSINESS
DAYS FROM SUCH REQUEST. BORROWER AGREES TO FURNISH ANY SUCH INFORMATION TO
LENDER PROMPTLY UPON REQUEST. ANY SUCH FINANCING STATEMENTS, CONTINUATION
STATEMENTS OR AMENDMENTS MAY BE SIGNED BY LENDER ON BEHALF OF BORROWER AND MAY
BE FILED AT ANY TIME IN ANY JURISDICTION WHETHER OR NOT REVISED ARTICLE 9 IS
THEN IN EFFECT IN THAT JURISDICTION.

 

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12.           THE LENDER AGREES THAT IT WILL NOT DISCLOSE WITHOUT THE PRIOR
CONSENT OF THE BORROWER AND THE GUARANTOR (OTHER THAN TO ITS EMPLOYEES,
AFFILIATES, AUDITORS, COUNSEL, OR OTHER LENDERS HEREUNDER) ANY INFORMATION WITH
RESPECT TO THE BORROWER AND/OR GUARANTOR WHICH IS FURNISHED PURSUANT TO THIS
AGREEMENT, ANY OTHER DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THEREIN
AND WHICH IS DESIGNATED BY THE BORROWER AND/OR GUARANTOR TO THE LENDER IN
WRITING AS CONFIDENTIAL OR AS TO WHICH IT IS OTHERWISE REASONABLY CLEAR SUCH
INFORMATION IS NOT PUBLIC EXCEPT THAT LENDER MAY DISCLOSE ANY SUCH INFORMATION
(A) AS HAS BECOME GENERALLY AVAILABLE TO THE PUBLIC OTHER THAN BY A BREACH OF
THIS SECTION 12; (B) AS MAY BE REQUIRED OR APPROPRIATE IN ANY REPORT, STATEMENT,
OR TESTIMONY SUBMITTED TO ANY MUNICIPAL, STATE OR FEDERAL REGULATORY BODY HAVING
OR CLAIMING TO HAVE JURISDICTION OVER LENDER OR TO THE NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONERS, THE FEDERAL RESERVE BOARD, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE OCC OR ANY SIMILAR REGULATORY ORGANIZATIONS (WHETHER
IN THE UNITED STATES OR ELSEWHERE) OR THEIR SUCCESSORS; (C) AS MAY BE REQUIRED
OR APPROPRIATE IN RESPONSE TO ANY SUMMONS OR SUBPOENA OR ANY LAW, ORDER,
REGULATION OR RULING APPLICATION TO LENDER; (D) TO ANY PROSPECTIVE PARTICIPANT
OR ASSIGNEE IN CONNECTION WITH ANY CONTEMPLATED TRANSFER PURSUANT TO SECTION 8
PROVIDED THAT SUCH PROSPECTIVE TRANSFEREE SHALL HAVE BEEN MADE AWARE OF THIS
SECTION 12 AND SHALL HAVE AGREED IN WRITING TO BE BOUND BY ITS PROVISIONS AS IF
IT WERE A PARTY TO THIS AGREEMENT; OR (E) TO LENDER’S REPRESENTATIVES (WHICH
SHALL INCLUDE, WITHOUT LIMITATION, ANY OTHER BANK AND COMPANY AFFILIATED WITH
LENDER OR THE PARENT OF LENDER), IT BEING EXPRESSLY UNDERSTOOD AND AGREED THAT
SUCH REPRESENTATIVES SHALL BE INFORMED OF THE CONFIDENTIAL NATURE OF THE
INFORMATION, SHALL BE REQUIRED BY SUCH LENDER TO TREAT THE INFORMATION AS
CONFIDENTIAL IN ACCORDANCE WITH THE TERMS AND CONDITIONS HEREOF AND SUCH
REPRESENTATIVE SHALL HAVE AGREED IN WRITING TO BE BOUND BY THIS PROVISION AS IF
IT WERE A PARTY TO THIS AGREEMENT.

 

13.           BORROWER HEREBY COVENANTS AND AGREES THAT, DURING THE TERM OF THIS
AGREEMENT, IN THE EVENT THAT GUARANTOR CEASES TO BE A PUBLICLY TRADED COMPANY OR
GUARANTOR FAILS TO FILE ANY PUBLIC CONSOLIDATED REPORTS, FOR ANY REASON,
BORROWER SHALL CAUSE GUARANTOR TO FURNISH TO LENDER (I) AS SOON AS AVAILABLE,
BUT IN ANY EVENT WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER THE END OF EACH
FISCAL YEAR, A COPY OF THE CONSOLIDATED BALANCE SHEET OF GUARANTOR AND ITS
CONSOLIDATED SUBSIDIARIES AS AT THE END OF SUCH FISCAL YEAR AND THE RELATED
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS AND OF CASH FLOWS OF THE
GUARANTOR AND ITS CONSOLIDATED SUBSIDIARIES FOR SUCH YEAR, WHICH CONSOLIDATED
STATEMENTS SHALL BE AUDITED BY A FIRM OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS OF NATIONALLY RECOGNIZED STANDING; AND (II) AS SOON AS AVAILABLE,
AND IN ANY EVENT WITHIN SIXTY (60) DAYS AFTER THE END OF EACH OF THE FIRST THREE
FISCAL QUARTERS OF THE GUARANTOR, A COMPANY-PREPARED CONSOLIDATED BALANCE SHEET
OF THE GUARANTOR AND ITS CONSOLIDATED SUBSIDIARIES AS AT THE END OF SUCH PERIOD
AND RELATED COMPANY-PREPARED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED
EARNINGS AND OF CASH FLOWS FOR THE GUARANTOR AND ITS CONSOLIDATED SUBSIDIARIES
FOR SUCH QUARTERLY PERIOD AND FOR THE PORTION OF THE FISCAL YEAR ENDING WITH
SUCH PERIOD, IN EACH CASE

 

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SETTING FORTH IN COMPARATIVE FORM CONSOLIDATED FIGURES FOR THE CORRESPONDING
PERIOD OR PERIODS OF THE PRECEDING FISCAL YEAR (SUBJECT TO NORMAL YEAR-END AUDIT
ADJUSTMENTS).

 

14.           AS STATED IN SECTION 6, THE PARTIES HERETO HAVE CHOSEN NEW YORK
LAW TO APPLY TO THIS AGREEMENT AND THE NOTES.  IT IS EXPRESSLY STIPULATED AND
AGREED TO BE THE INTENT OF BORROWER AND LENDER AT ALL TIMES TO COMPLY STRICTLY
WITH THE APPLICABLE LAWS INCLUDING, WITHOUT LIMITATION, THE LAWS OF THE STATE OF
NEW YORK (AND ANY OTHER STATE LAW, IF FOR ANY REASON A COURT SHOULD FOLLOW SUCH
LAW (INCLUDING WITHOUT LIMITATION TEXAS) NOTWITHSTANDING THE PARTIES EXPRESS
INTENTION TO FOLLOW NEW YORK LAW), GOVERNING THE MAXIMUM RATE OR AMOUNT OF
INTEREST PAYABLE ON THE NOTES OR THE RELATED INDEBTEDNESS (OR APPLICABLE UNITED
STATES FEDERAL LAW TO THE EXTENT THAT IT PERMITS LENDER TO CONTRACT FOR, CHARGE,
TAKE, RESERVE OR RECEIVE A GREATER AMOUNT OF INTEREST THAN UNDER ANY APPLICABLE
STATE LAW).  IF THE APPLICABLE LAW IS EVER JUDICIALLY INTERPRETED SO AS TO
RENDER USURIOUS ANY AMOUNT (I) CONTRACTED FOR, CHARGED, TAKEN, RESERVED OR
RECEIVED PURSUANT TO ANY OF THE NOTES, ANY OF THE OTHER DOCUMENTS EXECUTED IN
CONNECTION THEREWITH OR AS SECURITY THEREFORE INCLUDING THE GUARANTY AND THIS
AGREEMENT (THE “LOAN DOCUMENTS”), OR ANY OTHER COMMUNICATION OR WRITING BY OR
BETWEEN BORROWER AND LENDER RELATED TO THE TRANSACTION OR TRANSACTIONS THAT ARE
THE SUBJECT MATTER OF THE LOAN DOCUMENTS, (II) CONTRACTED FOR, CHARGED OR
RECEIVED BY REASON OF LENDER’S EXERCISE OF THE OPTION TO ACCELERATE THE MATURITY
OF ANY OF THE NOTES AND/OR THE RELATED INDEBTEDNESS, OR (III) BORROWER WILL HAVE
PAID OR LENDER WILL HAVE RECEIVED BY REASON OF ANY VOLUNTARY PREPAYMENT BY
BORROWER OF ANY OF THE NOTES AND/OR THE RELATED INDEBTEDNESS, THEN IT IS
BORROWER’S AND LENDER’S EXPRESS INTENT THAT ALL AMOUNTS CHARGED IN EXCESS OF THE
MAXIMUM LAWFUL RATE SHALL BE AUTOMATICALLY CANCELLED, AB INITIO, AND ALL AMOUNTS
IN EXCESS OF THE MAXIMUM LAWFUL RATE THERETOFORE COLLECTED BY LENDER SHALL BE
CREDITED ON THE PRINCIPAL BALANCE OF ANY OF THE NOTES AND/OR THE RELATED
INDEBTEDNESS (OR, IF THE NOTES AND ALL RELATED INDEBTEDNESS HAVE BEEN OR WOULD
THEREBY BE PAID IN FULL, REFUNDED TO BORROWER), AND THE PROVISIONS OF THE NOTES
AND THE OTHER LOAN DOCUMENTS IMMEDIATELY BE DEEMED REFORMED AND THE AMOUNTS
THEREAFTER COLLECTIBLE HEREUNDER AND THEREUNDER REDUCED, WITHOUT THE NECESSITY
OF THE EXECUTION OF ANY NEW DOCUMENT, SO AS TO COMPLY WITH THE APPLICABLE LAW,
BUT SO AS TO PERMIT THE RECOVERY OF THE FULLEST AMOUNT OTHERWISE CALLED FOR
HEREUNDER AND THEREUNDER; PROVIDED, HOWEVER, IF ANY OF THE NOTES HAVE BEEN PAID
IN FULL BEFORE THE END OF THE STATED TERM OF ANY OF THE APPLICABLE NOTES, THEN
BORROWER AND LENDER AGREE THAT LENDER SHALL, WITH REASONABLE PROMPTNESS AFTER
LENDER DISCOVERS OR IS ADVISED BY BORROWER THAT INTEREST WAS RECEIVED IN AN
AMOUNT IN EXCESS OF THE MAXIMUM LAWFUL RATE, EITHER REFUND SUCH EXCESS INTEREST
TO BORROWER AND/OR CREDIT SUCH EXCESS INTEREST AGAINST THE NOTES AND/OR ANY
RELATED INDEBTEDNESS THEN OWING BY BORROWER TO LENDER.  BORROWER HEREBY AGREES
THAT AS A CONDITION PRECEDENT TO ANY CLAIM SEEKING USURY PENALTIES AGAINST
LENDER, BORROWER WILL PROVIDE WRITTEN NOTICE TO LENDER, ADVISING LENDER IN
REASONABLE DETAIL OF THE NATURE AND AMOUNT OF THE VIOLATION, AND LENDER SHALL
HAVE SIXTY (60) DAYS AFTER RECEIPT OF SUCH NOTICE IN

 

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WHICH TO CORRECT SUCH USURY VIOLATION, IF ANY, BY EITHER REFUNDING SUCH EXCESS
INTEREST TO BORROWER OR CREDITING SUCH EXCESS INTEREST AGAINST THE NOTES AND/OR
THE RELATED INDEBTEDNESS THEN OWING BY BORROWER TO LENDER.  ALL SUMS CONTRACTED
FOR, CHARGED OR RECEIVED BY LENDER FOR THE USE, FORBEARANCE OR DETENTION OF ANY
DEBT EVIDENCED BY ANY OF THE NOTES AND/OR THE RELATED INDEBTEDNESS SHALL, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, BE AMORTIZED OR SPREAD, USING THE ACTUARIAL
METHOD, THROUGHOUT THE STATED TERM OF THE APPLICABLE NOTE AND/OR THE RELATED
INDEBTEDNESS (INCLUDING ANY AND ALL RENEWAL AND EXTENSION PERIODS) UNTIL PAYMENT
IN FULL SO THAT THE RATE OR AMOUNT OF INTEREST ON ACCOUNT OF ANY OF THE NOTES
AND/OR THE RELATED INDEBTEDNESS DOES NOT EXCEED THE MAXIMUM LAWFUL RATE FROM
TIME TO TIME IN EFFECT AND APPLICABLE TO THE NOTE AND/OR THE RELATED
INDEBTEDNESS FOR SO LONG AS DEBT IS OUTSTANDING.  IN NO EVENT SHALL THE
PROVISIONS OF CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN
REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) APPLY TO ANY OF
THE NOTES AND/OR THE RELATED INDEBTEDNESS.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN OR IN ANY OF THE OTHER LOAN DOCUMENTS, IT IS NOT THE
INTENTION OF LENDER TO ACCELERATE THE MATURITY OF ANY INTEREST THAT HAS NOT
ACCRUED AT THE TIME OF SUCH ACCELERATION OR TO COLLECT UNEARNED INTEREST AT THE
TIME OF SUCH ACCELERATION.

 

As used herein, the term “Maximum Lawful Rate” shall mean the maximum lawful
rate of interest which may be contracted for, charged, taken, received or
reserved by Lender in accordance with the applicable laws of the State of New
York (and the law of any other State, if for any reason a court should follow
such law (including without limitation Texas law) notwithstanding the parties
express intention to follow New York law, or applicable United States federal
law to the extent that it permits Lender to contract for, charge, take, receive
or reserve a greater amount of interest than under applicable state law), taking
into account all Charges (as herein defined) made in connection with the
transaction evidenced by the Notes and the other Loan Documents.  As used
herein, the term “Charges” shall mean all fees, charges and/or any other things
of value, if any, contracted for, charged, received, taken or reserved by Lender
in connection with the transactions relating to any of the Notes and the other
Loan Documents, which are treated as interest under applicable law.  As used
herein, the term “Related Indebtedness” shall mean any and all debt paid or
payable by Borrower to Lender pursuant to the Loan Documents or any other
communication or writing by or between Borrower and Lender related to the
transaction or transactions that are the subject matter of the Loan Documents,
except such debt which has been paid or is payable by Borrower to Lender under
the Notes.

 

If for any reason any other State law (including without limitation Texas)
should be deemed to apply (notwithstanding the parties’ express intention to
follow New York law):  (i) to the extent that Lender is relying on Chapter 303
of the Texas Finance Code (collectively “Chapter 303”), to determine the Maximum
Lawful Rate

 

8

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payable on the Note and/or the Related Indebtedness, Lender will utilize the
weekly ceiling from time to time in effect as provided in such Chapter 303, as
amended; (ii) to the extent United States federal law permits Lender to contract
for, charge, take, receive or reserve a greater amount of interest than under
the applicable law, Lender will rely on United States federal law instead of
such Chapter 303 for the purpose of determining the Maximum Lawful Rate; and
(iii) to the extent permitted by applicable law now or hereafter in effect,
Lender may, at its option and from time to time, utilize any other method of
establishing the Maximum Lawful Rate under such Chapter 303 or under other
applicable law by giving notice, if required, to Borrower as provided by
applicable law now or hereafter in effect.

 

IN WITNESS WHEREOF, the Borrower and the Lender have duly executed and delivered
this Agreement as of the day and year first above written.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BY:

 

 

BY:

 

 

ITS:

 

 

ITS:

 

 

 

 

 

 

BY:

 

 

 

ITS:

 

 

 

9

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EXHIBIT A

 

to the Loan and Security Agreement
dated             , 2002
between             , as Borrower and
            , as Lender

 

Promissory Note No.          

Name of Borrower:

Equipment:

Amount: $

Location:

Date:

 

Maturity:

 

A-1

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EXHIBIT B

 

$                                
Date:                        , 2002
Final Due Date:                            , 2007

 

PROMISSORY NOTE NO.    

 

For value received,                          (the “Borrower”) promises to pay to
the order of                          (together with its successors and assigns,
the “Lender”), at the Lender’s office at                          (or such other
address as Lender may designate in writing) the principal amount of 
$                          with interest at the rate of                % per
annum from the date hereof to maturity, such principal and interest to be paid
each month in installments of $                    plus interest each (except
that the last such installment shall be in a balloon payment amount equal to all
unpaid principal and interest on this Note),
commencing                          , 200   and on the last date of each month
thereafter to and including                          , 2007, such installments
to be applied first to accrued and unpaid interest and the balance to unpaid
principal, pursuant to the attached amortization schedule.  Interest shall be
computed in arrears on the basis of a 360-day year consisting of twelve months
of thirty days each.  If any payment due hereunder is not made within 3 days of
the due date, the Borrower shall pay the Lender a late fee equal to the lesser
of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum
amount permitted to be charged under applicable law. All amounts due hereunder
shall bear interest, from and after the occurrence and during the continuance of
an Event of Default (as defined in the Security Agreement), at a rate equal to
the lesser of (y) five (5) percentage points above the interest rate applicable
immediately prior to the occurrence of the Event of Default or (z) the maximum
amount permitted to be charged under applicable law.

 

This Note is governed by and incorporates by reference that certain Loan and
Security Agreement of even date herewith (the “Security Agreement”), between the
Borrower and Lender, to which Security Agreement reference is made as to the
nature and extent of the security (“Collateral”) for this Note, the rights of
the Lender, the Borrower and any holder of this Note with respect to the
Collateral, the personal liability of the Borrower, interest on late
installments and the acceleration of the maturity of the Note. In the event of a
casualty loss of the Collateral, the Borrower may prepay this Note, in whole or
in part, provided that any such prepayment shall be applied to installments of
principal hereof in the inverse order of the maturity of such installments, and
any prepayments of the full amount of this Note shall include accrued interest
thereon, and provided that prepayment of this Note is further governed by the
prepayment terms of Section 5 of the Security Agreement.

 

B-1

--------------------------------------------------------------------------------

 

Except as provided in the Security Agreement, the Borrower waives presentment
and demand for payment, notification of dishonor, protest and notice of protest
of the Note, and shall pay all reasonable costs of collection when incurred,
including reasonable attorneys’ fees.

 

This Note is a negotiable instrument and the rights of the holders hereof shall
be governed by New York law, excluding its conflicts of law principles.

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

B-2

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EXHIBIT C

 

GUARANTY

 

For value received, and in order to induce                         (“Holder”) to
enter into certain Loan and Security Agreements and Promissory Notes
(collectively, the “Loan Agreement”) as set forth in Exhibit A hereto and
incorporated herein by reference with                              (the
“Borrower”) for financing of certain equipment (the “Equipment”), the
undersigned (the “Guarantor”), does hereby unconditionally guaranty to Holder
the full and prompt payment by Borrower of all obligations which said Borrower
presently or hereafter may have to Holder under the Loan Agreement and under any
other agreement related thereto, and agree to indemnify Holder against any
losses Holder may sustain and expenses it may incur in its collection efforts,
including but not limited to any reasonable administrative or legal costs, fees
(including reasonable attorneys’ fees) or expenses, as a result of any default
by Borrower under any Loan Agreement hereunder and/or as a result of the
enforcement or attempted enforcement by Holder of any of its rights against
Guarantor hereunder, except those losses arising from the gross negligence or
willful misconduct of the Holder. Guarantor hereby expressly waives the
following defenses which might constitute a legal or equitable discharge of a
surety or guarantor, and agrees that this Guaranty shall be valid and
unconditionally binding upon Guarantor regardless of (i) the reorganization,
merger, or consolidation of Borrower into or with another entity, corporate or
otherwise, or the dissolution of Borrower, or the sale or other disposition of
all or substantially all of the capital stock, business, or assets of Borrower
to any other person or party, or (ii) the voluntary or involuntary bankruptcy
(including a reorganization in bankruptcy) of Borrower, or (iii) the granting by
Holder of any indulgences to Borrower, or (iv) the assertion by Holder against
Borrower of any of Holder’s rights and remedies provided for under any Loan
Agreement or existing in its favor in law, equity or bankruptcy, or (v) the
release of Borrower from any of its obligations under any Loan Agreement
hereunder by Holder or by operation of law or otherwise, or (vi) any invalidity,
irregularity, or defect, of any provision of any Loan Agreement, or (vii) any
defect in Holder’s title or right to use any of the Equipment, or (viii) the
dissolution of Guarantor. As an accommodation to Guarantor, and not as a
condition of Guarantor’s liability to make payment when due, Guarantor shall
have five (5) days’ notice and opportunity to cure any payment defaults by the
Borrower and thirty (30) days’ notice and opportunity to cure any other
defaults, if curable within thirty (30) days, by the Borrower under the Loan
Agreement, or any document executed in connection therewith or as security
therefor; notwithstanding the foregoing, in no event will any failure to give
such notice result in a discharge of Guarantor’s obligations hereunder. Except
as provided herein, Guarantor hereby waives notice of any consents to the
financing of all Equipment under the Loan Agreement, and to any amendment (but
not increases) thereof, and to any actions taken thereunder, and to the
execution by any

 

C-1

--------------------------------------------------------------------------------

 

Borrower of the foregoing documents and of any Guaranty, of any default and
nonpayment and/or nonperformance any Borrower under any Loan Agreement
hereunder, of presentment, protest, and demand, and of all other matters to
which Guarantor might otherwise be entitled. Guarantor further agrees that this
Guaranty shall remain and continue in full force and effect notwithstanding any
renewal, modification, or extension of any Loan Agreement (but not increases
thereof). Guarantor hereby expressly waives all notice of and consents to any
such renewal, modification, or extension, and to the execution by any Borrower
of any document pertaining to any such renewal, modification, or extension. 
Guarantor further agrees that its liability under this Guaranty shall be
absolute, primary, and direct, joint and several, and that Holder shall not be
required to pursue any right or remedy it may have against any Borrower under
any Loan Agreement or otherwise (and shall not be required to first commence any
action or obtain any judgment against Borrower) before enforcing this Guaranty
against Guarantor, and the Guarantor will, upon demand, pay Holder all amounts
and all other sums, due and owing under any Loan Agreements in default
hereunder, and will, upon demand, perform all other obligations of the Borrower,
the performance of which is in default under any Loan Agreement hereunder.

 

Guarantor knowingly and voluntarily waives, releases, and relinquishes
Guarantor’s rights of indemnification, subrogation, contribution and
reimbursement from the Borrower in respect of demands under this guaranty,
except those arising out of the gross negligence or willful misconduct of the
Holder, until such time as the Borrower’s obligations under the Loan Agreement
have been fully satisfied.  Any obligation of Borrower, now or hereafter held by
or owing, to Guarantor is hereby subordinated to obligations of Borrower to
Holder, and, upon an Event of Default, as defined in the Loan Agreement, any
indebtedness shall be collected, enforced and received by Guarantor as trustee
for Holder and paid over to Holder. Notwithstanding the foregoing, and provided
that Borrower has not failed to make any payment when due hereunder, Guarantor
shall be entitled to collect and keep any indebtedness or other obligations
(including, without limitation, management fees), of Borrower to Guarantor.
Guarantor hereby agrees that the failure of Holder to insist in any one or more
instances upon a strict performance or observance of any of the terms,
provisions, or covenants of any Loan Agreement or any other agreements, or to
exercise any of its rights thereunder, shall not be construed or deemed to be a
waiver or relinquishment for the future of any such terms, provisions,
covenants, or rights, but such terms, provisions, covenants, and rights shall
continue and remain in full force and effect.  Receipt by Holder of any payment
or other sums payable under any Loan Agreement with knowledge that Borrower has
breached any of the terms, provisions or covenants or the Loan Agreement shall
not be deemed to be a waiver by Holder of such breach.

 

No assignment or other transfer by Holder or Borrower of any interest, rights,
or obligation under any Loan Agreement, or assumption by any third party of the
obligations of Borrower under any

 

C-2

--------------------------------------------------------------------------------

 

Loan Agreement, shall extinguish or diminish the unconditional, absolute,
primary, and direct liability of Guarantor under this Guaranty, if done in
accordance with all the Loan Agreements. Guarantor hereby consents to and waives
all notice of any such assignment, transfer, or assumption.

 

Guarantor hereby warrants and represents to Holder that the execution and
delivery of this Guaranty is not in contravention of Guarantor’s charter,
certificate of incorporation, by-laws, and applicable law, and that the
execution and delivery of this Guaranty, and the performance thereof has been
duly authorized by Guarantor’s Board of Directors or an authorized Committee
thereof, and will not result in a breach of or constitute a default under, or
result in the creation of any security interest lien, charge, or encumbrance
upon any property or assets of Guarantor pursuant to any loan agreement,
indenture, or contract to which Guarantor is a party or by or under which it is
bound. This Guaranty is assignable by Holder, if done in accordance with all the
Loan Agreements but may not be assigned by Guarantor. Any Assignee of Holder
shall have all of the rights of Holder hereunder and may enforce this Guaranty
against Guarantor with the same force and effect as if this Guaranty were given
to such Assignee in the first instance. This Guaranty shall inure to the benefit
of Holder, and it successors and assigns, and shall be binding upon Guarantor
and its heirs, executors, administrators, personal representatives, successors
and assigns.  No term or condition of this Guaranty may be waived or modified
except by the prior written consent of an authorized representative of Holder.

 

This Guaranty shall be governed by and construed in all respects in accordance
with the internal laws and decisions (except any conflict of laws provisions) of
the State of New York, including all matters of construction, validity,
enforceability, and performance. THE UNDERSIGNED i) CONSENT(S), AT HOLDER’S
ELECTION AND WITHOUT LIMITING HOLDER’S RIGHT TO COMMENCE AN ACTION IN ANY OTHER
JURISDICTION, TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF ANY COURTS
(FEDERAL, STATE, OR LOCAL) SITUATED IN THE COUNTY OF NEW YORK, STATE OF NEW
YORK; AND ii) WAIVE(S) ANY OBJECTION TO IMPROPER VENUE AND FORUM NON CONVENIENS.
GUARANTOR AND HOLDER HEREBY WAIVE TRIAL BY JURY.

 

IN WITNESS WHEREOF, the undersigned have executed this Guaranty
this          day of                        , 2002.

 

 

Consolidated Graphics Inc.
5858 Westheimer Road, Suite 200
Houston, TX 77057
Attn: Chief Financial Officer

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

C-3

--------------------------------------------------------------------------------

 

EXHIBIT A

 

to the Loan and Security Agreement
Dated             , 2002
between                 , as Borrower and
                 , as Lender

 

Promissory Note No.

Name of Borrower:

Equipment:

Amount: $

Location:

Date:

 

Maturity:

 

C-4

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SCHEDULE
OF
TERM EQUIPMENT NOTES WITH VARIOUS LENDERS

 

Various subsidiaries of Consolidated Graphics, Inc. executed the form of Loan
and Security Agreement and Promissory Note included in this Exhibit 10.1 in
connection with the refinancing of certain term equipment notes. The principal
loan amounts borrowed by each of these subsidiaries and the applicable interest
rates charged thereon differed in each transaction. Consolidated Graphics, Inc.
guaranteed each of the borrowed amounts by execution of a separate Guaranty
Agreement in the form included in this Exhibit 10.1.

 

The schedule below sets forth the aggregate principal amounts borrowed from
various lenders by these subsidiaries, the interest rates charged thereon and
the closing dates of the transactions.

 

Lenders 

 

Aggregate
Principal
Loan Amount 

 

Interest
Rate

 

Closing
Date

 

SouthTrust Bank

 

$

19,582,515.22

 

5.92

 

10/31/02

 

 

 

 

 

 

 

 

 

 

LaSalle National Leasing Corp.

 

$

10,131,004.32

 

5.92

 

10/31/02

 

 

 

 

 

 

 

 

 

 

Information Leasing Corporation

 

$

4,910,367.65

 

5.92

 

10/31/02

 

 

 

 

 

 

 

 

 

 

Allpoints Capital Corp.

 

$

3,848,318.87

 

5.83

 

12/27/02

 

 

 

 

 

 

 

 

 

 

Total

 

$

38,472,206.06

 

 

 

 

 

 

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