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EXHIBIT 10.9
GUARANTEE AGREEMENT dated as of April 3, 1997, made by UNIDIGITAL
INC., a Delaware corporation (the "Guarantor"), with and in favor of THE CHASE
MANHATTAN BANK, a New York banking corporation (the "Lender").
Reference is hereby made to the Credit Agreement dated as of April
3, 1997 (as amended, supplemented, or modified from time to time, the "Credit
Agreement") among Unidigital Elements (NY), Inc. (formerly known as Linographics
Corporation), a New York corporation, Unidigital/Cardinal Corporation, a
Delaware corporation, Unidigital Elements (SF), Inc. (formerly known as
Linographics (Delaware) Corp.), a Delaware corporation, and Unidigital/Boris
Corporation, a Massachusetts corporation, as Borrowers (the "Borrowers"), and
The Chase Manhattan Bank. Terms used herein as defined terms and not otherwise
defined herein shall have the meanings given thereto in the Credit Agreement.
The Lender has agreed to make Loans to the Borrowers upon the terms
and subject to the conditions specified in the Credit Agreement. The Guarantor
is the owner of all the issued and outstanding capital stock of each of the
Borrowers. The obligation of the Lender to make Loans is conditioned on, among
other things, the execution and delivery by the Guarantor hereunder of a
guarantee agreement in the form hereof.
NOW, THEREFORE, in consideration of the foregoing, and for other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1.01. Definitions; Terms. References to this "Agreement" shall be
to this Guarantee Agreement as amended, supplemented, or otherwise modified from
time to time. The term "Obligations" shall mean, collectively, (a) the due and
punctual payment of (i) the principal of and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans when and as due, whether at maturity, by acceleration,
upon one or more dates on which repayment or prepayment is required, or
otherwise, and (ii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding, regardless of
whether allowed or allowable in such proceeding), of the Borrowers to the Lender
under the Credit Agreement or any of the other Loan Documents, and (b) the due
and punctual performance of all covenants, agreements, obligations and
liabilities of the Borrowers under or pursuant to the Credit Agreement and the
other Loan Documents. References to a "guarantor" shall include the
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Guarantor hereunder, and any other Person that is a guarantor of any or all of
the Obligations, and references to a "guarantee" shall include this Agreement,
and any other guarantee of any or all of the Obligations by any other Person.
Section 2.01. Guarantee.
(A) The Guarantor hereby, unconditionally, absolutely, and
irrevocably guarantees, as a primary obligor and not merely as a surety, the due
and punctual payment and performance in full of the Obligations, in each case
strictly in accordance with the terms thereof. In furtherance of the foregoing
and not in limitation of any other right that the Lender may have at law or in
equity against the Guarantor by virtue hereof, the Guarantor agrees that upon
failure of the Borrowers to pay any Obligations when and as the same shall
become due, whether at maturity, by acceleration, on one or more dates on which
prepayment or repayment is required, or otherwise, the Guarantor will, without
any demand or notice whatsoever, forthwith pay or cause to be paid to the Lender
in cash in immediately available funds, an amount equal to the unpaid amount of
such Obligations. The Guarantor further agrees that the Obligations guaranteed
by it hereunder may be increased in amount, extended or renewed, or otherwise
amended or modified in any respect, including, without limitation, as to
principal, scheduled repayment, prepayment, interest, fees, indemnification,
compensation, and in any other respect whatsoever, in whole or in part, without
notice or further assent from it, and that it will remain bound upon this
guarantee in respect of such Obligations as so increased, extended, renewed,
amended or modified. Payments by the Guarantor hereunder may be required on any
number of occasions.
(B) The Guarantor waives presentation to, demand for payment
from and protest to the Borrowers or any other guarantor, and also waives notice
of acceptance of its guarantee and notice of protest for nonpayment. The
obligations of the Guarantor hereunder shall not be affected by (i) the failure
of the Lender to assert any claim or demand or to enforce any right or remedy
against any Credit Party or any other Person under the provisions of any Loan
Document or any other agreement or otherwise; (ii) any rescission, waiver,
forbearance, compromise, acceleration, amendment or modification of, or any
release of any party from any of the terms or provisions of, this Agreement, any
other Loan Document, any Obligation or any other guarantee or any security
interest in respect of the Obligations (including, without limitation, in
respect of any other guarantor); (iii) any change in respect of any Credit
Party, including, without limitation, as a result of any merger, consolidation,
dissolution, liquidation, recapitalization, or other change of legal form or
status, whether or not permitted under the Loan Documents; (iv) the release,
exchange, waiver or foreclosure of any security held by the Lender for any
Obligations or the invalidity or nonperfection of any security interest securing
the Obligations or the guarantee
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hereunder, or any other defect of any kind pertaining to any Obligations or any
guarantee or collateral security in respect thereof; (v) the failure of the
Lender to exercise any right or remedy in respect of any collateral security for
any Obligations or against any Credit Party, or against any other guarantor of
any Obligations; or (vi) the release or substitution of one or more of the
Borrowers or any guarantor; (vii) the failure of any Person to become a
guarantor pursuant to any other Loan Document, whether or not required under the
Credit Agreement; or (viii) any other circumstance that might otherwise, but for
this specific agreement of the Guarantor to the contrary, result in a discharge
of or the exoneration of the Guarantor hereunder, it being the intent of the
parties hereto that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances.
(C) The Guarantor agrees that this guarantee constitutes a
guarantee of performance and of payment when due and not just of collection,
that it is a primary obligation of the Guarantor, and that the Guarantor waives
any right to require that any resort be had by the Lender to any security held
for this guarantee or for payment of any Obligations, or to any balance of any
deposit, account, or credit on the books of the Lender in favor of any Credit
Party, or to any other Person or property. To the fullest extent permitted by
law, the Guarantor hereby expressly waives any and all rights or defenses
arising by reason of (i) any "one action" or "anti-deficiency" law that would
otherwise prevent the Lender from bringing any action, including any claim for a
deficiency, or exercising any right or remedy (including any right of set-off)
against the Guarantor before or after the commencement or completion of any
foreclosure action or sale of collateral, whether judicially, by exercise of
power of sale or otherwise, or (ii) any other law that in any other way would
otherwise require any election of remedies by the Lender.
(D) No demand hereunder or enforcement hereof against the
Guarantor shall require any demand or enforcement against any other Credit
Party.
Section 2.02. No Impairment of Guarantee. The obligations of the Guarantor
hereunder shall remain absolute and unconditional and shall not be subject to
any reduction, limitation, impairment or termination for any reason, including
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or set-off, counterclaim,
recoupment or termination whatsoever, by reason of the invalidity, illegality or
unenforceability of the Obligations or of this guarantee (or any portion or
provision thereof or hereof) or otherwise. Without limiting the generality of
the foregoing, the Guarantor specifically agrees that it shall not be discharged
or exonerated, nor shall its obligations hereunder be limited or otherwise
affected by the failure of the Lender to exercise any right, remedy, power, or
privilege or to assert any claim or demand or to enforce any remedy under any
Loan Document or applicable law, including, without limitation, any failure by
the Lender to
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setoff or release in whole or in part any balance of any deposit account or
credit on its books in favor of any Credit Party, or by any waiver, consent,
extension, indulgence, modification, or other action or inaction in respect of
any thereof, or by any default, failure or delay, willful or otherwise, in the
performance of any Obligations, or by any other act or thing or omission or
delay to do any other act or thing, by any Person, that might in any manner or
to any extent vary the risk of the Guarantor or that might but for the specific
provisions hereof to the contrary otherwise operate as a discharge or
exoneration of the Guarantor, unless and until the Obligations are fully,
finally and indefeasibly paid in cash.
Section 2.03. Security; Waiver. The Guarantor authorizes the Lender to (i)
take and hold security for the payment of this guarantee and/or the Obligations
and exchange, enforce, waive and release any such security, (ii) apply such
security and direct the order or manner of sale thereof as it in its sole
discretion may determine and (iii) release or substitute any one or more
endorsees, other guarantors or other obligors or any collateral. The Lender may,
at its election, foreclose on any security held by it by one or more judicial or
non-judicial sales, or exercise any other right or remedy available to it
against the Borrowers or any guarantor, or any security, without affecting or
impairing in any way the liability of the Guarantor hereunder except to the
extent that the Obligations have been fully, finally and indefeasibly paid in
cash. The Guarantor waives any defense arising out of any such election even
though such election operates to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantor against
the Borrowers or any other guarantor, as the case may be, or any security.
Section 2.04. Continuation and Reinstatement, etc. The Guarantor agrees
that the guarantee hereunder shall continue to be effective or shall be
reinstated, as the case may be, if at any time payment, or any part thereof, in
respect of any Obligation is rescinded or must otherwise be restored by the
Lender upon the bankruptcy or reorganization of any Credit Party, or otherwise.
Section 2.05. Subrogation. The Guarantor agrees that throughout the period
referred to in clause (ii) of Section 4.02(a) hereof the Guarantor shall not (i)
exercise, and hereby waives, any rights against the Borrowers and any other
guarantor arising as a result of payment by the Guarantor hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise, (ii) prove
any claim in competition with the Lender in respect of any payment hereunder in
any bankruptcy, insolvency or reorganization case or proceeding of any nature,
or (iii) have any benefit of or any right to participate in any collateral
security that may be held by the Lender for the Obligations.
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Section 2.06. Subordination. The payment of any amounts due with respect
to any indebtedness of any Credit Party now or hereafter owed to the Guarantor
(including, without limitation, any such indebtedness arising by way of
subrogation, reimbursement, restitution, contribution or otherwise in respect of
performance by the Guarantor hereunder) is hereby subordinated to the prior
full, final, and indefeasible payment in cash of all Obligations. If,
notwithstanding the foregoing sentence, the Guarantor shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by the Guarantor as trustee for the Lender and
be paid over to the Lender on account of and to be applied against the
Obligations, without affecting in any manner the liability of the Guarantor
under the other provisions of this Agreement.
Section 2.07. Remedies. The Guarantor agrees that, as between the
Guarantor and the Lender, the obligations of the Borrowers under the Credit
Agreement may be declared to be forthwith due and payable as provided in Article
VII of the Credit Agreement (and shall be deemed to have become automatically
due and payable in the circumstances provided in clause (f) or (g) of said
Article VII) for purposes of the guarantee hereunder notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the Borrowers and that,
in the event of such declaration (or such obligations' being deemed to have
become automatically due and payable), such obligations (whether or not due and
payable by the Borrowers) shall forthwith become due and payable by the
Guarantor for purposes hereof.
Section 2.08. Payment. The Guarantor hereby agrees that the Lender, at its
sole option, in the event of a dispute by the Guarantor in the payment of any
moneys due hereunder, shall have the right to proceed under New York CPLR
Section 3213.
Section 2.09. Continuing Guarantee. The guarantee hereunder is a
continuing guarantee, and shall apply to all Obligations whenever arising.
Section 2.10. Other Guarantors. This Agreement shall remain the
unconditional, absolute, and irrevocable obligation of the Guarantor regardless
of whether any other Person (i) becomes guarantor in respect of the Obligations
(whether or not the Credit Agreement requires that such Person be or become a
guarantor) or (ii) fails to become or ceases to be a guarantor of the
Obligations (whether or not the Credit Agreement requires that such Person be or
become a guarantor).
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Section 2.11. Information. The Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition and assets of the
Borrowers, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that the Guarantor
assumes and incurs hereunder, and agrees that the Lender does not have any duty
to advise the Guarantor of information regarding such circumstances or risks.
Section 3.01. Representation and Warranties The Guarantor represents and
warrants that all representations and warranties relating to it in the Credit
Agreement are true and correct.
Section 4.01. Amendment; Waiver. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Guarantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Lender. Any such waiver, consent or approval shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on the Guarantor in any case shall entitle the Guarantor to any other or
further notice or demand in the same, similar or other circumstances. No waiver
by the Lender of any breach or default of or by the Guarantor under this
Agreement shall be deemed a waiver of any other previous breach or default or
any thereafter occurring.
Section 4.02. Survival; Severability.
(A) All covenants, agreements, representations and warranties
made by the Guarantor herein and in the certificates or other instruments
prepared or delivered in connection with or pursuant to this Agreement or any
other Loan Document (i) shall be considered to have been relied upon by the
Lender and shall survive the making by the Lender of the Loans, and the
execution and delivery to the Lender of any Notes evidencing such Loans,
regardless of any investigation made by or on behalf of the Lender, and (ii)
shall continue in full force and effect as long as any of the Obligations is
outstanding and unpaid and as long as the Commitment has not been terminated.
(B) Any provision of this Agreement that is illegal, invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such illegality, invalidity or unenforceability
without invalidating the remaining provisions hereof or affecting the legality,
validity or enforceability of such provisions in any other jurisdiction. The
parties hereto agree to negotiate in good faith
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to replace any illegal, invalid or unenforceable provision of this Agreement
with a legal, valid and enforceable provision that, to the extent possible, will
preserve the economic bargain of this Agreement, or to otherwise amend this
Agreement to achieve such result.
Section 4.03. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Credit Party that are contained in this Agreement shall
bind and inure to the benefit of each party hereto and their respective
successors and assigns. No Credit Party may assign or transfer any of its rights
or obligations hereunder except as expressly contemplated by this Agreement or
the other Loan Documents (and any such attempted assignment shall be void).
Section 4.04. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
Section 4.05. Headings; Interpretation. The Article and Section headings
in this Agreement are for convenience only and shall not affect the construction
hereof. The rules of interpretation of Section 1.03 of the Credit Agreement
shall apply to this Agreement.
Section 4.06. Notices. Notices, consents and other communications provided
for herein shall (except as otherwise expressly permitted herein) be in writing
and given as provided in Section 8.01 of the Credit Agreement. Communications
and notices to the Guarantor shall be given to it at 20 West 20th Street, New
York, New York 10011; Attention: The Chairman; Telecopy: (212) 727-3151.
Section 4.07. Counterparts. This Agreement may be executed in separate
counterparts (telecopy of any executed counterpart having the same effect as
manual delivery thereof), each of which shall constitute an original, but all of
which, when taken together, shall constitute but one Agreement.
Section 4.08. Right of Setoff. The Guarantor hereby agrees that if an
Event of Default shall have occurred and be continuing, the Lender and each of
its Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by
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law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by the Lender or any such Affiliate to or for the credit or the account of
the Guarantor against any of and all the obligations of the Guarantor now or
hereafter existing under this Agreement or any other Loan Document held by the
Lender, irrespective of whether or not the Lender shall have made any demand
under this Agreement or such other Loan Document and although such obligations
may be unmatured. The rights of the Lender under this Section are in addition to
other rights and remedies (including other rights of setoff) that the Lender may
have.
Section 4.09. Waiver of Jury Trial, etc.
(A) The Guarantor hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Lender may otherwise
have to bring any action or proceeding relating to this Agreement against the
Guarantor or its properties in the courts of any jurisdiction.
(B) The Guarantor hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in the preceding paragraph. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(C) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 4.06. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
(D) WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE
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LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed and delivered by their duly authorized officers
and delivered as of the day and year first above written.
UNIDIGITAL INC.
By: __________________________
Name:
Title:
THE CHASE MANHATTAN BANK
By: __________________________
Name:
Title: