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[THE CHASE MANHATTAN BANK LETTERHEAD]
November 11, 1996
Mr. William E. Dye, President
Linographics Corporation
Linographics (Delaware) Corporation
20 West 20th Street
New York, New York 10011
Dear Bill:
The Chase Manhattan Bank (the "Bank") is pleased to make available to
Linographics Corporation and Linographics (Delaware) Corporation, credit
facilities in the aggregate amount of $1,150,000. The Lines of Credit to be
extended at the Bank's sole discretion of up to $1,150,000 for working capital,
are subject but not limited to, the following terms and conditions:
LINOGRAPHICS CORPORATION:
LINE OF CREDIT
FACILITY:
Up to a maximum of $700,000 will be available for working capital purposes.
INTEREST RATE:
Borrowings will be priced at the Bank's Prime Rate, plus one-half (1/2%)
percent.
BORROWING BASE:
All drawdowns will be subject to a maximum borrowing base not to exceed 80% of
eligible accounts receivable aged ninety (90) days and less. Linographics will
provide a monthly borrowing base certificate to the Bank within fifteen (15)
days after the end of each month so long as there are loans outstanding under
the Line of Credit.
Any credit which the Bank may extend will be on terms and conditions as we may
require at the time Linographics requests an advance and must be evidenced by
documents in form and substance satisfactory to the Bank.
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FACILITY FEE:
A facility fee of one half (1/2%) percent ($3,500) payable upon signing of this
Commitment Letter. Thereafter, one half (1/2%) percent of the entire Line of
Credit will be collected on an annual basis on the anniversary date of the Line
of Credit.
The Bank will continue to offer the Credit Facility as outlined herein in its
sole discretion subject to Linographics economic and financial condition
remaining acceptable to the Bank and Linographics maintenance of a satisfactory
relationship with the Bank. In any event, this Credit Facility is available
until January 31, 1998.
LINOGRAPHICS (DELAWARE) CORPORATION:
LINE OF CREDIT
FACILITY:
Up to a maximum of $450,000 will be available for working capital purposes.
INTEREST RATE:
Borrowings will be priced at the Bank's Prime Rate, plus one-half (1/2%)
percent.
BORROWING BASE:
All drawdowns will be subject to a maximum borrowing base not to exceed 80% of
eligible accounts receivable aged ninety (90) days and less. The borrowing base
will be the aggregate of the Accounts Receivable of Linographics Corporation
and Linographics (Delaware) Corporation. Linographics (Delaware) Corporation
will provide a monthly borrowing base certificate to the Bank within fifteen
(15) days after the end of each month so long as there are loans outstanding
under the Line of Credit.
Any credit which the Bank may extend will be on terms and conditions as we may
require at the time Linographics requests an advance and must be evidenced by
documents in form and substance satisfactory to the Bank.
FACILITY FEE:
A facility fee of one half (1/2%) percent ($2,250) payable upon signing of this
Commitment Letter. Thereafter, one half (1/2%) percent of the entire Line of
Credit will be collected on an annual basis on the anniversary date of the Line
of Credit.
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The Bank will continue to offer the Credit Facility as outlined herein in its
sole discretion subject to Linographics (Delaware) Corporation's economic and
financial condition remaining acceptable to the Bank and the company's
maintenance of a satisfactory relationship with the Bank. In any event, this
Credit Facility is available until January 31, 1998.
GENERAL CONDITIONS OF THE CREDIT FACILITY:
All extensions of credit which the Bank may grant will be evidenced by
documents in form and substance satisfactory to the Bank. The Bank will
require the Companies to furnish the following support, which must remain in
place as long as the Credit Facilities as outlined herein are outstanding:
COLLATERAL/ CONDITIONS:
1. Priority UCC-1 Filing + GSA on all assets of Linographics Corp. and
Linographics (Delaware) Corporation.
2. Monthly borrowing base certificate(s) when line is outstanding for
Linographics Corporation or Linographics (Delaware) Corporation , with advances
up to 80% of eligible A/R's 90 days and less. The certificate will be provided
to the bank within 15 days of the end of the prior month.
3. Monthly account receivable agings for both entities provided within 15 days
of the end of the prior month.
4. The credit facility of Linographics (Delaware) Corporation will be supported
by the guaranty of Linographics Corporation.
5. Unidigital Inc.'s Corporate Guaranty remains in place for both facilities.
REPORTING:
1. Within 120 days after the close of each Fiscal Year, audited consolidated
statements for Unidigital Inc., prepared by an accounting firm acceptable to
the bank along with consolidating statements for each subsidiary.
2. Within 90 days after the date of the each semi-annual date, consolidated
statements for Unidigital Inc., prepared by an accounting firm acceptable to
the bank along with consolidating statements for each subsidiary.
3. Quarterly statements internally prepared by management for Unidigital Inc,
and its subsidiaries.
This letter is for your information only and is not to be shown to or relied
upon by third parties. This letter constitutes the entire understanding
between the Bank and the Company and supersedes all prior discussions.
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The Credit Facility described herein will not be made available to the
Companies until they acknowledge its understanding and agreement to the above
terms and conditions. If this letter correctly sets forth your understanding
of the terms and conditions regarding the Credit Facility, please indicate your
acceptance by signing in the space indicated and returning the original to the
Bank no later than November 30, 1996. If not accepted by you, the offer
contained herein shall at the Bank's option expire.
We appreciate this opportunity to work with you and look forward to the
continued development of our mutually beneficial relationship.
Very truly yours,
THE CHASE MANHATTAN BANK
BY: /s/ DONALD FURRER
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Donald Furrer
Vice President
AGREED AND ACCEPTED
ON THIS DAY 21 DAY OF NOVEMBER 1996
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LINOGRAPHICS CORPORATION
BY: /s/ WILLIAM E. DYE
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Title: President
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LINOGRAPHICS (DELAWARE) CORPORATION
BY: /s/ WILLIAM E. DYE
-------------------------
Title: President
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CHASE LETTERHEAD
GRID TIME PROMISSORY NOTE
New York, New York
November 21, 1996
For value received, the undersigned unconditionally (and if more
than one, jointly and severally) promises to pay to the order of THE CHASE
MANHATTAN BANK ("Chase"), at its office located at 270 Park Avenue, New
York, New York, or to such other address as Chase may notify the
undersigned, the sum of Seven hundred thousand DOLLARS ($700,000.00) or
such unpaid principal amount of each loan made to the undersigned by Chase
and outstanding under this Note, on the maturity date(s) as shown on the
attached schedule or any continuation of the schedule.
This Note includes any Schedule or Rider attached hereto.
MATURITY DATE(S). Each loan shall mature on the last day of the
Interest Period therefor, as noted on the Interest Period column on the
attached schedule. As to a Variable Rate loan, if no Interest Period is
noted, then such loan is payable ON DEMAND.
INTEREST. The undersigned promise(s) to pay interest on the unpaid
balance of the principal amount of each such loan from and including the
date of each such loan to but excluding the date such loan shall be paid in
full at the following applicable rates (check Other Rate box if
applicable):
Variable Rate: A rate of interest per year which shall
automatically increase or decrease from time to
time so that at all times such rate shall remain
equal to that rate of interest from time to time
announced by Chase at its head office as its
prime commercial lending rate (the "Prime Rate")
PLUS 1/2%. Changes in the rate of interest
hereunder shall be effective as of and for the
entire day on which such change in the Prime Rate
becomes effective.
and
Other Rate: see Rider(s) attached hereto.
Interest shall be payable, as to a Variable Rate loan, on THE
FIRST DAY of each month and as to an Other Rate loan, on the last day of
each Interest Period, or if such Interest Period is more than 90 days, then
on the 90th day after the date of such loan and on the last day of such
Interest Period, unless otherwise specified on a Rider attached hereto, in
respect of the corresponding principal. Interest shall be calculated on the
basis of a year of 360 days and payable for the actual number of days
elapsed.
After the occurrence of an Event of Default set forth below,
Chase, at its option, by written notice to the undersigned may increase the
interest rate on this Note by an additional four percent (4%) per year
effective on the date of such notice.
PAYMENTS. All payments under this Note shall be made in lawful
money of the United States of America and in immediately available funds at
Chase's office specified above. Chase may (but shall not be obligated to)
debit the amount of any payment (principal or interest) under this Note
when due to any deposit account of (any of) the undersigned with Chase. If
the undersigned are more than one, all obligations of each of the
undersigned under this Note shall be joint and several. This Note may be
prepaid without premium unless otherwise specified on a Rider attached
hereto. Chase may apply any money received or collected for payment of this
Note to the principal of, interest on or any other amount payable under,
this Note in any order that Chase may elect.
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Whenever any payment to be made hereunder (including principal and
interest) shall be stated to be due on a day on which Chase's head office
is not open for business, that payment will be due on the next following
banking day, and any extension of time shall in each case be included in
the computation of interest payable on this Note.
If any payment (principal or interest) shall not be paid when due
other than a payment of the entire principal balance of the Note due upon
acceleration after default, the undersigned shall pay a late payment charge
equal to five percent (5%) of the amount of such delinquent payment,
provided that the amount of such late payment charge shall be not less than
$25 nor more than $500.
AUTHORIZATIONS. The undersigned hereby authorizes Chase to make
loans and disburse the proceeds thereof to the account listed below and to
make repayments of such loans by debiting such account upon oral,
telephonic or telecopied instructions made by any person purporting to be
an officer or agent of the undersigned who is empowered to make such
requests and give such instructions. The undersigned may amend these
instructions, from time to time, effective upon actual receipt of the
amendment by Chase. Chase shall not be responsible for the authority, or
lack of authority, of any person giving such telephonic instructions to
Chase pursuant to these provisions. By executing this Note, the undersigned
agrees to be bound to repay any loan obtained hereunder as reflected on
Chase's books and records and made in accordance with these authorizations,
regardless of the actual receipt of the proceeds thereof.
RECORDS. The date, amount and maturity date of each loan under
this Note and each payment of principal, loan(s) to which such principal is
applied (which shall be at the discretion of Chase) and the outstanding
principal balance of loans, shall be recorded by Chase on its books and
prior to any transfer of this Note (or, at the discretion of Chase at any
other time) endorsed by Chase on the schedule attached or any continuation
of the schedule. Any such endorsement shall be conclusive absent manifest
error.
REPRESENTATIONS AND WARRANTIES. If the undersigned is other than
an individual, the undersigned represents and warrants upon the execution
and delivery of this Note and upon each loan request hereunder, that: (a)
it is duly organized and validly existing under the laws of the
jurisdiction of its organization or incorporation and, if relevant under
such laws, in good standing; (b) it has the power to execute and deliver
this Note and to perform its obligations hereunder and has taken all
necessary action to authorize such execution, delivery and performance; (c)
such execution, delivery and performance do not violate or conflict with
any law applicable to it, any provision of its organizational documents,
any order or judgment of any court or other agency of government applicable
to it or any of its assets or any material contractual restriction binding
on or materially affecting it or any of its assets; (d) to the best of
undersigned's knowledge, all governmental and other consents that are
required to have been obtained by it with respect to this Note have been
obtained and are in full force and effect and all conditions of any such
consents have been complied with; (e) its obligations under this Note
constitute its legal, valid and binding obligations, enforceable in
accordance with its terms except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency or other similar laws
affecting creditors' rights generally; (f) all financial statements and
related information furnished and to be furnished to Chase from time to
time by the undersigned are true and complete and fairly present the
financial or other information stated therein as at such dates or for the
periods covered thereby; (g) there are no actions, suits, proceedings or
investigations pending or, to the knowledge of the undersigned, threatened
against or affecting the undersigned before any court, governmental agency
or arbitrator, which involve forfeiture of any assets of the undersigned or
which may materially adversely affect the financial condition, operations,
properties or business of the undersigned or the ability of the undersigned
to perform its obligation under this Note; and (h) there has been no
material adverse change in the financial condition of the undersigned since
the last such financial statements or information. If the undersigned is an
individual, the undersigned represents and warrants at the times set forth
at the beginning of this section, the correctness of clauses (c), (d), (e),
(f), (g) and (h) above to the extent applicable to an individual.
NO COMMITMENT. This Note does not create and shall not be deemed
or construed to create any contractual commitment to lend by Chase. Any
such commitment in respect of this Note can only be made by and shall only
be effective to the extent set forth in a separate writing expressly
designated for that purpose and subscribed by a duly authorized officer of
Chase.
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SECURITY. As collateral security for the payment of this Note and of any
and all other obligations and liabilities of the undersigned to Chase, now
existing or hereafter arising, the undersigned grants to Chase a security
interest in and a lien upon and right of offset against all moneys, deposit
balances, securities or other property or interest therein of the
undersigned now or at any time hereafter held or received by or for or left
in the possession or control of Chase or any of its affiliates, including
subsidiaries, whether for safekeeping, custody, transmission, collection,
pledge or for any other or different purpose.
DEFAULT. IF ANY OF THE FOLLOWING EVENTS OF DEFAULT SHALL OCCUR
with respect to any of the undersigned (each an "Event of Default"):
(a) the undersigned shall fail to pay the principal of, or
interest on, this Note, or any other amount payable under this
Note, as and when due and payable;
(b) any representation or warranty made or deemed made by the
undersigned in this Note or in any document granting security or
support for (or otherwise executed in connection with) this Note
or by any third party supporting or liable with respect to this
Note (whether by guaranty, subordination, grant of security or any
other credit support, a "Third Party") in any document evidencing
the obligations of a Third Party (this Note and all of the
foregoing documents and all agreements, instruments or other
documents executed by the undersigned or a Third Party being the
"Facility Documents") or which is contained in any certificate,
document, opinion, financial or other statement furnished at any
time under or in connection with any Facility Document, shall
prove to have been incorrect in any material respect on or as of
the date made or deemed made;
(c) the undersigned or any Third Party shall fail to perform
or observe any term, covenant or agreement contained in any
Facility Document on its part to be performed or observed, and
such failure shall continue for 30 consecutive days;
(d) the undersigned or any Third Party shall fail to pay when
due any indebtedness (including but not limited to indebtedness
for borrowed money) or if any such indebtedness shall become due
and payable, or shall be capable of becoming due and payable at
the option of any holder thereof, by acceleration of its maturity,
or if there shall be any default by the undersigned or any Third
Party under any agreement relating to such indebtedness;
(e) the undersigned or any Third Party: (i) shall generally
not, or be unable to, or shall admit in writing its inability to,
pay its debts as such debts become due; (ii) shall make an
assignment for the benefit of creditors; (iii) shall file a
petition in bankruptcy or for any relief under any law of any
jurisdiction relating to reorganization, arrangement, readjustment
of debt, dissolution or liquidation; (iv) shall have any such
petition filed against it and the same shall remain undismissed
for a period of 30 days or shall consent or acquiesce thereto; or
(v) shall have had a receiver, custodian or trustee appointed for
all or a substantial part of its property;
(f) if the undersigned or any Third Party is an individual,
such individual shall die or be declared incompetent;
(g) any Third Party Facility Document shall at any time and
for any reason cease to be in full force and effect or shall be
declared null and void, or its validity or enforceability shall be
contested by the relevant Third Party or such Third Party shall
deny it has any further liability or obligation under any Facility
Document or shall fail to perform its obligations under any
Facility Document;
(h) any security agreement or other agreement (whether by the
undersigned or any Third Party) granting a security interest,
lien, mortgage or other encumbrance securing obligations under any
Facility Document shall at any time and for any reason cease to
create a valid and perfected first priority security interest,
lien, mortgage or other encumbrance in or on the property
purported to be subject to such agreement or shall cease to be in
full force and effect or shall be declared null and void, or the
validity or enforceability of any such agreement shall be
contested by any party to such agreement, or such party shall deny
it has any further liability or obligation under such agreement or
any such party shall fail to perform any of its obligations under
such agreement;
(i) the undersigned shall make or permit to be made any
material change in the character, management or direction of the
undersigned's business or operations (including, but not limited
to, a change in its executive management or in the ownership of
its capital stock which effects a change in the control of any
such business or operations), which is not satisfactory to Chase;
(j) the undersigned or any Third Party shall suffer a material
adverse change in its business, financial condition, properties or
prospects;
(k) any action, suit, proceeding or investigation against or
affecting the undersigned or a Third Party before any court or
governmental agency which involves forfeiture of any assets of the
undersigned or a Third Party shall have been commenced; or
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(l) one or more judgments, decrees or orders for the payment
of money in excess of $50,000 in the aggregate shall be rendered
against the undersigned and shall continue unsatisfied and in
effect for a period of 30 consecutive days without being vacated,
discharged, satisfied or stayed or bonded pending appeal.
THEN, IN ANY SUCH CASE, if Chase shall elect by notice to the undersigned,
the unpaid principal amount of this Note, together with accrued interest,
shall become forthwith due and payable; provided that in the case of an
event of default under (e) above, the unpaid principal amount of this Note,
together with accrued interest, shall immediately become due and payable
without any notice or other action by Chase.
THE EVENTS OF DEFAULT AND REMEDIES SET FORTH ABOVE ARE IN ADDITION
TO AND WITHOUT IN ANY WAY DIMINISHING ANY RIGHT BY CHASE TO MAKE DEMAND FOR
PAYMENT AT ANY TIME.
CERTAIN WAIVERS. The undersigned waive(s) presentment, notice of
dishonor, protest and any other notice or formality with respect to this
Note.
COSTS. The undersigned agree(s) to reimburse Chase on demand for
all costs, expenses and charges (including, without limitation, fees and
charges of external legal counsel for Chase and costs allocated by its
internal legal department) in connection with the preparation,
interpretation, performance or enforcement of this Note and the Facility
Documents.
NOTICES. All notices, requests, demands or other communications to
or upon the undersigned or Chase shall be in writing and shall be deemed to
be delivered upon receipt if delivered by hand or overnight courier or five
days after mailing to the address (a) of the undersigned as set forth next
to the undersigned's execution of this Note, (b) of Chase as first set
forth above, or (c) of the undersigned or Chase at such other address as
the undersigned or Chase shall specify to the other in writing.
ASSIGNMENT. This Note shall be binding upon the undersigned and
its or their successors and shall inure to the benefit of Chase and its
successors and assigns.
AMENDMENT AND WAIVER. This Note may be amended only by a writing
signed on behalf of each party and shall be effective only to the extent
set forth in that writing. No delay by Chase in exercising any power or
right hereunder shall operate as a waiver thereof or of any other power or
right; nor shall any single or partial exercise of any power or right
preclude other or future exercise thereof, or the exercise of any other
power or right hereunder.
GOVERNING LAW; JURISDICTION. This Note shall be governed by and
construed in accordance with the laws of the State of New York, Connecticut
or New Jersey, depending on the location of the Chase office set forth in
this Note. The undersigned consent(s) to the nonexclusive jurisdiction and
venue of the state or federal courts located in such state. In the event of
a dispute hereunder, suit may be brought against the undersigned is such
courts or in any jurisdiction where the undersigned or any of its assets
may be located. Service of process by Chase in connection with any dispute
shall be binding on the undersigned if sent to the undersigned by
registered mail at the address(es) specified below or to such further
address(es) as the undersigned may specify to Chase in writing.
MAXIMUM INTEREST. Notwithstanding any other provision of this
Note, the undersigned shall not be required to pay any amount pursuant to
this Note which is in excess of the maximum amount permitted to be charged
by national banks under applicable law and any such excess interest paid
shall be refunded to the undersigned or applied to principal owing
hereunder.
COMMERCIAL TRANSACTION. IF THE UNDERSIGNED IS A CONNECTICUT
DOMICILED ENTITY OR RESIDENT, EACH OF THE UNDERSIGNED HEREBY ACKNOWLEDGES
THAT THIS NOTE AND THE TRANSACTIONS CONTEMPLATED HEREBY CONSTITUTE
COMMERCIAL TRANSACTIONS WITHIN THE MEANING OF SECTION 52L-278a OF THE
CONNECTICUT GENERAL STATUTES. EACH OF THE UNDERSIGNED EXPRESSLY WAIVES ANY
AND ALL RIGHTS, CONSTITUTIONAL OR OTHERWISE, WITH RESPECT TO NOTICE AND
HEARING AND ANY RIGHTS UNDER CHAPTER 903a OF THE CONNECTICUT GENERAL
STATUTES IN CONNECTION WITH ANY PREJUDGMENT REMEDY AVAILABLE TO CHASE.
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BORROWER WAIVERS. THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE(S) (TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY
RIGHT TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS NOTE
OR ANY FACILITY DOCUMENT, AND AGREES THAT ANY SUCH DISPUTE SHALL, AT CHASE'S
OPTION, BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
IN ADDITION, THE UNDERSIGNED WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE
BASED UPON ANY STATUTE OF LIMITATIONS OR ANY CLAIM OF DELAY BY CHASE AND ANY
SET-OFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.
Chase Account No. to be charged for
Disbursements and Payments:
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Address for notices: Linographics Corporation
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20 West 20th Street By: /s/ William Dye
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New York, New York 10011 Print Name: William Dye
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Title: President
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By:
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Telecopier No. ( ) - Print Name:
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Title:
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SCHEDULE TO GRID
PROMISSORY NOTE OF
_______________________ DATED _______________, 199_.
AGGREGATE
PRINCIPAL
DATE BALANCE NOTATION
OF INTEREST AMOUNT OF INTEREST AMOUNT OF REMAINING MADE
LOAN PERIOD LOAN RATE PAYMENT UNPAID BY