GENERAL SECURITY AGREEMENT (BORROWER)
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This General Security Agreement ("Agreement") dated May 12, 1999 is by
Unidigital Inc., a Delaware corporation ("Borrower"), in favor of Fleet Bank,
N.A., a national banking association, as Administrative Agent for itself and
ratably for the benefit of the Lender Parties and the Hedge Banks (the "Secured
Party"). The Lender Parties and the Hedge Banks are collectively referred to
herein as the "Lenders."
W I T N E S S E T H
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WHEREAS, the Secured Party and the Lenders have entered or are about to
enter into certain financing arrangements with the Borrower, pursuant to which
the Lenders may make loans and provide other financial accommodations to
Borrower;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION
1. DEFINITIONS
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All terms used herein which are defined in Article 1 or Article 9 of the
Uniform Commercial Code shall have the meanings given therein unless otherwise
defined in this Agreement. All references to the plural herein shall also mean
the singular and to the singular shall also mean the plural unless the context
otherwise requires. All references to Borrower, the Secured Party and the
Lenders pursuant to the definitions set forth in the recitals hereto or to any
other person herein, shall include their respective successors and assigns. The
words "hereof", "herein", "hereunder", "this Agreement" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not any particular provision of this Agreement and as this Agreement now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced. The word "including" when used in this Agreement shall mean
"including, without limitation". An Event of Default shall exist or continue or
be continuing until such Event of Default is waived in accordance with Section
7.3 or is cured in a manner reasonably satisfactory to the Secured Party, if
such Event of Default is capable of being cured as reasonably determined by the
Secured Party. Any accounting term used herein unless otherwise defined in this
Agreement shall have the meanings customarily given to such term in accordance
with GAAP. For purposes of this Agreement, the following terms shall have the
respective meanings given to them below:
1.1 "Accounts" shall mean all present and future rights of Borrower to
payment for goods sold or leased or for services rendered, which are not
evidenced by instruments or chattel paper, and whether or not earned by
performance.
1.2 "Credit Agreement" shall mean the Credit Agreement, of even date
hereof, by and among Borrower, the Secured Party and the Lenders, as the same
now exists and may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
1.3 "Equipment" shall mean all of Borrower's now owned and hereafter
acquired equipment, machinery, computers and computer hardware and software
(whether owned or licensed), vehicles, tools, furniture, fixtures, all
attachments, accessions and property now or hereafter affixed thereto or used in
connection therewith, and substitutions and replacements thereof, wherever
located.
1.4 "Event of Default" shall have the meaning set forth in Section 6.1
hereof.
1.5 "L/C Cash Collateral Account" shall mean the L/C Cash Collateral
Account established by Borrower with the Secured Party to provide collateral
security with respect to outstanding letters of credit, as provided for in the
Credit Agreement.
1.6 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied.
1.7 "Hedge Banks" shall have the meaning ascribed thereto in the Credit
Agreement.
1.8 "Information Certificate" shall mean the Information Certificate of
Borrower constituting Exhibit A hereto containing material information with
respect to Borrower, its business and assets provided by or on behalf of
Borrower to the Secured Party or any of the Lenders in connection with the
preparation of this Agreement and the other Loan Documents and the financing
arrangements provided for herein.
1.9 "Inventory" shall mean all of Borrower's now owned and hereafter
existing or acquired raw materials, work in process, finished goods and all
other inventory of whatsoever kind or nature, wherever located.
1.10 "Lender Parties" shall have the meaning ascribed thereto in the
Credit Agreement.
1.11 "Loan Documents" shall have the meaning ascribed thereto in the
Credit Agreement.
1.12 "Obligations" shall mean any and all obligations, liabilities and
indebtedness of every kind, nature and description owing by Borrower to the
Secured Party and/or any of the Lenders and/or their respective affiliates,
including principal, interest, charges, fees, costs and expenses, however
evidenced, whether as principal, surety, endorser, guarantor or otherwise,
whether arising under the Credit Agreement, this Agreement and the other Loan
Documents or otherwise, whether now existing or hereafter arising, whether
arising before, during or after the initial or any renewal term of the Credit
Agreement or after the commencement of any case with respect to the Borrower
under the United States Bankruptcy Code or any similar statute (including the
payment of interest and other amounts which would accrue and become due but for
the commencement of such case, whether or not such amounts are allowed or
allowable in whole or in part in such case), whether direct or indirect,
absolute or contingent,
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joint or several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by the Secured Party or
any of the Lenders.
1.13 "Obligor" shall mean any other guarantor, endorser, acceptor, surety
or other person liable on or with respect to the Obligations or who is the owner
of any property which is security for the Obligations, other than Borrower.
1.14 "Person" or "person" shall have the meaning ascribed thereto on the
Credit Agreement.
1.15 "Records" shall mean all of Borrower's present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrower with respect to the
foregoing maintained with or by any other person).
Any term defined in the Credit Agreement and used herein shall have the
respective meanings ascribed to such terms therein, unless specified otherwise
herein.
SECTION 2. GRANT OF SECURITY INTEREST
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To secure payment and performance of all Obligations, Borrower hereby
grants to the Secured Party a continuing security interest in, a lien upon, and
a right of set off against, and hereby assigns to the Secured Party as security,
the following property and interests in property, whether now owned or hereafter
acquired or existing, and wherever located (collectively, the "Collateral"):
2.1 Accounts;
2.2 all present and future contract rights, general intangibles (including
tax and duty refunds, registered and unregistered patents, trademarks, service
marks, copyrights, trade names, applications for the foregoing, trade secrets,
goodwill, processes, drawings, blueprints, customer lists, licenses, whether as
licensor or licensee, choses in action and other claims and existing and future
leasehold interests in equipment, real estate and fixtures), chattel paper,
documents, instruments, letters of credit, bankers' acceptances and guaranties;
2.3 all present and future monies, securities, credit balances, deposits,
deposit accounts and other property of Borrower now or hereafter held or
received by or in transit to the Secured Party, any of the Lenders or any of
their affiliates or at any other depository or other institution from or for the
account of Borrower whether for safekeeping, pledge, custody, transmission,
collection or otherwise, and all present and future liens, security interests,
rights, remedies, title and interest in, to and in respect of Accounts and other
Collateral, including (a) rights and remedies under or relating to guaranties,
contracts of suretyship, letters of credit and credit and other insurance
related to the Collateral, (b) rights of stoppage in transit, replevin,
repossession, reclamation and other rights and remedies of an unpaid vendor,
lienor or secured party, (c) goods described in invoices, documents, contracts
or instruments with respect to, or otherwise representing or evidencing,
Accounts or other Collateral, including returned,
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repossessed and reclaimed goods, and (d) deposits by and property of account
debtors or other persons securing the obligations of account debtors;
2.4 Inventory;
2.5 Equipment;
2.6 Records; and
2.7 L/C Cash Collateral Account;
2.8 all right, title and interest of Borrower in the Master Agreement (as
defined in the Credit Agreement) and each transaction entered into thereunder
(including, without limitation, all amounts payable and deliverable thereunder),
and the benefit of any guarantee of other credit support in connection
therewith; and
2.9 all products and proceeds of the foregoing, in any form, including
insurance proceeds and any claims against third parties for loss or damage to or
destruction of any or all of the foregoing.
SECTION 3. COLLATERAL COVENANTS
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3.1 Accounts Covenants.
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(a) The Secured Party shall have the right at any time or times, in
the Secured Party's name or in the name of a nominee of the Secured Party, to
verify the validity, amount or any other matter relating to any Account or other
Collateral, by mail, telephone, facsimile transmission or otherwise.
(b) Borrower shall deliver or cause to be delivered to the Secured
Party, with appropriate endorsement and assignment, with full recourse to
Borrower, all chattel paper and instruments which Borrower now owns or may at
any time acquire immediately upon Borrower's receipt thereof, except as the
Secured Party may otherwise agree.
(c) The Secured Party may, at any time or times that an Event of
Default exists or has occurred and is continuing, (i) notify any or all account
debtors that the Accounts have been assigned to the Secured Party and that the
Secured Party has a security interest therein and the Secured Party may direct
any or all accounts debtors to make payment of Accounts directly to the Secured
Party, (ii) extend the time of payment of, compromise, settle or adjust for
cash, credit, return of merchandise or otherwise, and upon any terms or
conditions, any and all Accounts or other obligations included in the Collateral
and thereby discharge or release the account debtor or any other party or
parties in any way liable for payment thereof without affecting any of the
Obligations, (iii) demand, collect or enforce payment of any Accounts or such
other obligations, but without any duty to do so, and the Secured Party shall
not be liable for its failure to collect or enforce the payment thereof nor for
the negligence of its agents or attorneys with respect thereto and (iv) take
whatever other action the Secured Party may deem necessary or desirable for the
protection of its interests. At any time that an Event of Default exists or has
occurred and is continuing, at the Secured Party's request, all invoices and
statements sent to any account debtor shall state that the Accounts and such
other obligations have been assigned to the Secured Party and are
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payable directly and only to the Secured Party and Borrower shall deliver to the
Secured Party such originals of documents evidencing the sale and delivery of
goods or the performance of services giving rise to any Accounts as the Secured
Party may require.
3.2 Inventory Covenants. With respect to the Inventory: (a) Borrower shall
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at all times maintain inventory records reasonably satisfactory to the Secured
Party keeping correct and accurate records itemizing and describing the kind,
type, quality and quantity of Inventory, Borrower's cost therefor and daily
withdrawals therefrom and additions thereto; (b) Borrower shall not remove any
Inventory from the locations set forth or permitted herein, without the prior
written consent of the Secured Party, except for sales of Inventory in the
ordinary course of Borrower's business and except to move Inventory directly
from one location set forth or permitted herein to another such location; (c)
Borrower shall produce, use, store and maintain the Inventory, with all
reasonable care and caution and in accordance with applicable standards of any
insurance and in conformity with applicable laws (including the requirements of
the Federal Fair Labor Standards Act of 1938, as amended and all rules,
regulations and orders related thereto); (d) Borrower assumes all responsibility
and liability arising from or relating to the production, use, sale or other
disposition of the Inventory; (e) Borrower shall not sell Inventory to any
customer on approval, or any other basis which entitles the customer to return
or may obligate Borrower to repurchase such Inventory; (f) Borrower shall keep
the Inventory in good and marketable condition; and (g) Borrower shall not,
without prior written notice to the Secured Party, acquire or accept any
Inventory on consignment or approval.
3.3 Equipment Covenants. With respect to the Equipment: (a) Borrower shall
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keep the Equipment in good order, repair, running and marketable condition
(ordinary wear and tear excepted); (b) Borrower shall use the Equipment with all
reasonable care and caution and in accordance with applicable standards of any
insurance and in conformity with all applicable laws; (c) the Equipment is and
shall be used in Borrower's business and not for personal, family, household or
farming use; (d) Borrower shall not remove any Equipment from the locations set
forth or permitted herein, except to the extent necessary to have any Equipment
repaired or maintained in the ordinary course of the business of Borrower or to
move Equipment directly from one location set forth or permitted herein to
another such location and except for the movement of motor vehicles used by or
for the benefit of Borrower in the ordinary course of business; (e) the
Equipment is now and shall remain personal property and Borrower shall not
permit any of the Equipment to be or become a part of or affixed to real
property; and (f) Borrower assumes all responsibility and liability arising from
the use of the Equipment.
3.4 Power of Attorney. Borrower hereby irrevocably designates and appoints
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the Secured Party (and all persons designated by the Secured Party) as
Borrower's true and lawful attorney-in-fact, and authorizes the Secured Party,
in Borrower's or the Secured Party's name, to: (a) at any time an Event of
Default or event which with notice or passage of time or both would constitute
an Event of Default exists or has occurred and is continuing (i) demand payment
on Accounts or other proceeds of Inventory or other Collateral, (ii) enforce
payment of Accounts by legal proceedings or otherwise, (iii) exercise all of
Borrower's rights and remedies to collect any Account or other Collateral, (iv)
sell or assign any Account upon such terms, for such amount and at such time or
times as the Secured Party deems advisable, (v) settle, adjust, compromise,
extend or renew an Account, (vi) discharge and release any Account, (vii)
prepare, file and sign Borrower's name on any proof of claim in bankruptcy or
other similar document against an account debtor, (viii) notify the post office
authorities to change the address for delivery of Borrower's mail to an address
designated by the Secured Party and open and dispose of all mail addressed to
Borrower, (ix) do all acts and things which are necessary, in the Secured
Party's
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determination, to fulfill Borrower's obligations under this Agreement and the
other Loan Documents, (x) take control in any manner of any item of payment or
proceeds thereof, (xi) endorse Borrower's name upon any items of payment or
proceeds thereof and deposit the same in the Secured Party's account for
application to the Obligations, (xii) endorse Borrower's name upon any chattel
paper, document, instrument, invoice, or similar document or agreement relating
to any Account or any goods pertaining thereto or any other Collateral and
(xiii) sign Borrower's name on any verification of Accounts and notices thereof
to account debtors and (b) at any time to (i) have access to any lockbox or
postal box into which Borrower's mail is deposited and (ii) execute in
Borrower's name and file any UCC financing statements or amendments thereto.
Borrower hereby releases the Secured Party and its officers, employees and
designees from any liabilities arising from any act or acts under this power of
attorney and in furtherance thereof, whether of omission or commission, except
as a result of the Secured Party's own gross negligence or wilful misconduct as
determined pursuant to a final non-appealable order of a court of competent
jurisdiction.
3.5 Right to Cure. The Secured Party may, at its option, (a) cure any
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default by Borrower under any agreement with a third party or pay or bond on
appeal any judgment entered against Borrower, (b) discharge taxes, liens,
security interests or other encumbrances at any time levied on or existing with
respect to the Collateral and (c) pay any amount, incur any expense or perform
any act which, in the Secured Party's judgment, is necessary or appropriate to
preserve, protect, insure or maintain the Collateral and the rights of the
Secured Party with respect thereto. The Secured Party may add any amounts so
expended to the Obligations and charge Borrower's account therefor, such amounts
to be repayable by Borrower on demand. The Secured Party shall be under no
obligation to effect such cure, payment or bonding and shall not, by doing so,
be deemed to have assumed any obligation or liability of Borrower. Any payment
made or other action taken by the Secured Party under this Section shall be
without prejudice to any right to assert an Event of Default hereunder and to
proceed accordingly.
3.6 Access to Premises. From time to time as requested by the Secured
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Party, at the cost and expense of Borrower, (a) the Secured Party or its
designee shall have complete access to all of Borrower's premises during normal
business hours and after reasonable notice to Borrower, or at any time and
without notice to Borrower if an Event of Default exists or has occurred and is
continuing, for the purposes of inspecting, verifying and auditing the
Collateral and all of Borrower's books and records, including the Records, and
(b) Borrower shall promptly furnish to the Secured Party such copies of such
books and records or extracts therefrom as the Secured Party may request, and
(c) use during normal business hours such of Borrower's personnel, equipment,
supplies and premises as may be reasonably necessary for the foregoing, provided
that such use does not unreasonably disrupt the business of the Borrower, and if
an Event of Default exists or has occurred and is continuing for the collection
of Accounts and realization of other Collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
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Borrower hereby represents and warrants to the Secured Party and the
Lenders the following (which shall survive the execution and delivery of this
Agreement):
4.1 Chief Executive Office; Collateral Locations. The chief executive
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office of Borrower and Borrower's Records concerning Accounts are located only
at the address set forth below and its only other places of business and the
only other locations of Collateral, if any, are the addresses set forth in
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the Information Certificate, subject to the right of Borrower to establish new
locations in accordance with Section 5.2 below. The Information Certificate
correctly identifies any of such locations which are not owned by Borrower and
sets forth the owners and/or operators thereof, and to the best of Borrower's
knowledge, the holders of any mortgages on such locations.
4.2 Priority of Liens; Title to Properties. The security interests and
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liens granted to the Secured Party under this Agreement and the other Loan
Documents constitute valid and perfected first priority liens and security
interests in and upon the Collateral subject only to the liens indicated on
Schedule 4.2 hereto and the other liens permitted by the Credit Agreement.
Borrower has good and marketable title to all of its properties and assets
subject to no liens, mortgages, pledges, security interests, encumbrances or
charges of any kind, except those granted to the Secured Party and such others
as are specifically listed on Schedule 4.2 hereto or permitted by the Credit
Agreement.
4.3 Bank Accounts. All of the deposit accounts, investment accounts or
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other accounts in the name of or used by Borrower maintained at any bank or
other financial institution are set forth on Schedule 4.3 hereof, subject to the
right of Borrower to establish new accounts in accordance with Section 5.3
below.
4.4 Survival of Warranties; Cumulative. All representations and warranties
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contained in this Agreement or any of the other Loan Documents shall survive the
execution and delivery of this Agreement and shall be deemed to have been made
again to the Secured Party and the Lenders on the date of each additional
borrowing or other credit accommodation under the Credit Agreement and shall be
conclusively presumed to have been relied on by the Secured Party and the
Lenders regardless of any investigation made or information possessed by the
Secured Party or any of the Lenders. The representations and warranties set
forth herein shall be cumulative and in addition to any other representations or
warranties which Borrower shall now or hereafter give, or cause to be given, to
the Secured Party or any of the Lenders.
SECTION 5. AFFIRMATIVE AND NEGATIVE COVENANTS
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5.1 New Collateral Locations. Borrower may open any new location within
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the continental United States provided Borrower (a) gives the Secured Party
fifteen (15) days prior written notice of the intended opening of any such new
location and (b) executes and delivers, or causes to be executed and delivered,
to the Secured Party such agreements, documents, and instruments as the Secured
Party may deem reasonably necessary or desirable to protect its interests in the
Collateral at such location, including UCC financing statements.
5.2 Insurance. Borrower shall, at all times, maintain with financially
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sound and reputable insurers insurance with respect to the Collateral against
loss or damage and all other insurance of the kinds and in the amounts
customarily insured against or carried by corporations of established reputation
engaged in the same or similar businesses and similarly situated. Said policies
of insurance shall be satisfactory to the Secured Party as to form, amount and
insurer. Borrower shall furnish certificates, policies or endorsements to the
Secured Party as the Secured Party shall require as proof of such insurance,
and, if Borrower fails to do so, the Secured Party is authorized, but not
required, to obtain such insurance at the expense of Borrower. All policies
shall provide for at least thirty (30) days prior written notice to the Secured
Party of any cancellation or reduction of coverage and that the Secured
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Party may act as attorney for Borrower in obtaining, and at any time an Event of
Default exists or has occurred and is continuing, adjusting, settling, amending
and canceling such insurance. Borrower shall cause the Secured Party to be named
as a loss payee and an additional insured (but without any liability for any
premiums) under such insurance policies and Borrower shall obtain
non-contributory the Secured Party's loss payable endorsements to all insurance
policies in form and substance satisfactory to the Secured Party. Such Secured
Party's loss payable endorsements shall specify that the proceeds of such
insurance shall be payable to the Secured Party as its interests may appear and
further specify that the Secured Party shall be paid regardless of any act or
omission by Borrower or any of its affiliates. At its option, the Secured Party
may apply any insurance proceeds received by the Secured Party at any time to
the cost of repairs or replacement of Collateral and/or to payment of the
Obligations, whether or not then due, in any order and in such manner as the
Secured Party may determine or hold such proceeds as cash collateral for the
Obligations.
5.3 Additional Bank Accounts. Borrower shall not, directly or indirectly,
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open, establish or maintain any deposit account, investment account or any other
account with any bank or other financial institution, other than the accounts
set forth in Schedule 4.3 hereto, except: (a) as to any new or additional
accounts which contain any Collateral or proceeds thereof, with the prior
written consent of the Secured Party and subject to such conditions thereto as
the Secured Party may establish and (b) as to any accounts used by Borrower to
make payments of payroll, taxes or other obligations to third parties, after
prior written notice to the Secured Party.
5.4 Costs and Expenses. Borrower shall pay to the Secured Party on demand
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all costs, expenses, filing fees and taxes paid or payable in connection with
the preparation, negotiation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of the Obligations, the Secured
Party's rights in the Collateral, this Agreement, the other Loan Documents and
all other documents related hereto or thereto, including any amendments,
supplements or consents which may hereafter be contemplated (whether or not
executed) or entered into in respect hereof and thereof, including: (a) all
costs and expenses of filing or recording (including Uniform Commercial Code
financing statement filing taxes and fees, documentary taxes, intangibles taxes
and mortgage recording taxes and fees, if applicable); (b) all insurance
premiums, appraisal fees and search fees; (c) costs and expenses of preserving
and protecting the Collateral; (d) costs and expenses paid or incurred in
connection with obtaining payment of the Obligations, enforcing the security
interests and liens of the Secured Party, selling or otherwise realizing upon
the Collateral, and otherwise enforcing the provisions of this Agreement and the
other Loan Documents or defending any claims made or threatened against the
Secured Party arising out of the transactions contemplated hereby and thereby
(including preparations for and consultations concerning any such matters); and
(e) the reasonable fees and disbursements of counsel (including legal
assistants) to the Secured Party in connection with any of the foregoing.
5.5 Further Assurances. At the request of the Secured Party at any time
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and from time to time, Borrower shall, at its expense, at any time or times duly
execute and deliver, or cause to be duly executed and delivered, such further
agreements, documents and instruments, and do or cause to be done such further
acts as may be necessary or proper to evidence, perfect, maintain and enforce
the security interests and the priority thereof in the Collateral and to
otherwise effectuate the provisions or purposes of this Agreement or any of the
other Loan Documents. Where permitted by law, Borrower hereby authorizes the
Secured Party to execute and file one or more UCC financing statements signed
only by the Secured Party.
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SECTION 6. EVENTS OF DEFAULT AND REMEDIES
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6.1 Events of Default. The occurrence or existence of any Event of Default
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under the Credit Agreement is referred to herein individually as an "Event of
Default", and collectively as "Events of Default".
6.2 Remedies.
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(a) At any time an Event of Default exists or has occurred and is
continuing, the Secured Party shall have all rights and remedies provided in
this Agreement, the other Loan Documents, the Uniform Commercial Code and other
applicable law, all of which rights and remedies may be exercised without notice
to or consent by Borrower or any Obligor, except as such notice or consent is
expressly provided for hereunder or required by applicable law. All rights,
remedies and powers granted to the Secured Party hereunder, under any of the
other Loan Documents, the Uniform Commercial Code or other applicable law, are
cumulative, not exclusive and enforceable, in the Secured Party's discretion,
alternatively, successively, or concurrently on any one or more occasions, and
shall include, without limitation, the right to apply to a court of equity for
an injunction to restrain a breach or threatened breach by Borrower of this
Agreement or any of the other Loan Documents. The Secured Party may, at any time
or times, proceed directly against Borrower or any Obligor to collect the
Obligations without prior recourse to the Collateral.
(b) Without limiting the foregoing, at any time an Event of Default
exists or has occurred and is continuing, the Secured Party may, in its
discretion and without limitation, (i) accelerate the payment of all Obligations
and demand immediate payment thereof to the Secured Party (provided, that, upon
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the occurrence of any Event of Default described in Section 6.01 of the Credit
Agreement, all Obligations shall automatically become immediately due and
payable), (ii) with or without judicial process or the aid or assistance of
others, enter upon any premises on or in which any of the Collateral may be
located and take possession of the Collateral or complete processing,
manufacturing and repair of all or any portion of the Collateral, (iii) require
Borrower, at Borrower's expense, to assemble and make available to the Secured
Party any part or all of the Collateral at any place and time designated by the
Secured Party, (iv) collect, foreclose, receive, appropriate, setoff and realize
upon any and all Collateral, (v) remove any or all of the Collateral from any
premises on or in which the same may be located for the purpose of effecting the
sale, foreclosure or other disposition thereof or for any other purpose,(vi)
sell, lease, transfer, assign, deliver or otherwise dispose of any and all
Collateral (including entering into contracts with respect thereto, public or
private sales at any exchange, broker's board, at any office of the Secured
Party or elsewhere) at such prices or terms as the Secured Party may deem
reasonable, for cash, upon credit or for future delivery, with the Secured Party
having the right to purchase the whole or any part of the Collateral at any such
public sale, all of the foregoing being free from any right or equity of
redemption of Borrower, which right or equity of redemption is hereby expressly
waived and released by Borrower. If any of the Collateral is sold or leased by
the Secured Party upon credit terms or for future delivery, the Obligations
shall not be reduced as a result thereof until payment therefor is finally
collected by the Secured Party. If notice of disposition of Collateral is
required by law, five (5) days prior notice by the Secured Party to Borrower
designating the time and place of any public sale or the time after which any
private sale or other intended disposition of Collateral is to be made, shall be
deemed to be reasonable notice thereof and Borrower waives any other notice. In
the event the Secured Party institutes an action to recover any Collateral or
seeks recovery of any Collateral by way of prejudgment remedy, Borrower waives
the posting of any bond which might otherwise be required.
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(c) The Secured Party may apply the cash proceeds of Collateral
actually received by the Secured Party from any sale, lease, foreclosure or
other disposition of the Collateral to payment of the Obligations, in whole or
in part and in such order as The Secured Party may elect, whether or not then
due. Borrower shall remain liable to the Secured Party for the payment of any
deficiency with interest at the highest rate provided for in the Credit
Agreement and all costs and expenses of collection or enforcement, including
attorneys' fees and legal expenses.
SECTION 7. JURY TRIAL WAIVER; OTHER WAIVERS
AND CONSENTS; GOVERNING LAW
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7.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.
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(a) The validity, interpretation and enforcement of this Agreement
and the other Loan Documents and any dispute arising out of the relationship
between the parties hereto, whether in contract, tort, equity or otherwise,
shall be governed by the internal laws of the State of New York.
(b) Borrower irrevocably consents and submits to the non-exclusive
jurisdiction of the State of New York and the United States District Court for
the Southern District of New York and waives any objection based on venue or
forum non conveniens with respect to any action instituted therein arising under
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this Agreement or any of the other Loan Documents or in any way connected or
related or incidental to the dealings of Borrower and the Secured Party in
respect of this Agreement or the other Loan Documents or the transactions
related hereto or thereto, in each case whether now existing or hereafter
arising, and whether in contract, tort, equity or otherwise, and agrees that any
dispute with respect to any such matters shall be heard only in the courts
described above (except that the Secured Party shall have the right to bring any
action or proceeding against Borrower or its property in the courts of any other
jurisdiction which the Secured Party deems necessary or appropriate in order to
realize on the Collateral or to otherwise enforce its rights against Borrower or
its property).
(c) Borrower hereby waives personal service of any and all process
upon it and consents that all such service of process may be made by certified
mail (return receipt requested) directed to its address set forth on the
signature pages hereof and service so made shall be deemed to be completed five
(5) days after the same shall have been so deposited in the U.S. mails, or, at
the Secured Party's option, by service upon Borrower in any other manner
provided under the rules of any such courts. Within thirty (30) days after such
service, Borrower shall appear in answer to such process, failing which Borrower
shall be deemed in default and judgment may be entered by the Secured Party
against Borrower for the amount of the claim and other relief requested.
(d) BORROWER AND THE SECURED PARTY MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR THE SECURED PARTY AND THE LENDERS TO ACCEPT THIS AGREEMENT AND
MAKE LOANS PURSUANT TO THE TERMS OF THE CREDIT AGREEMENT.
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(e) The Secured Party shall not have any liability to Borrower
(whether in tort, contract, equity or otherwise) for losses suffered by Borrower
in connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Agreement, or any act, omission or event
occurring in connection herewith, unless it is determined by a final and
non-appealable judgment or court order binding on the Secured Party that the
losses were the result of acts or omissions constituting gross negligence or
willful misconduct. In any such litigation, the Secured Party shall be entitled
to the benefit of the rebuttable presumption that it acted in good faith and
with the exercise of ordinary care in the performance by it of the terms of this
Agreement and the other Loan Documents.
7.2 Waiver of Notices. Borrower hereby expressly waives demand,
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presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on Borrower which The Secured Party may elect to give shall entitle
Borrower to any other or further notice or demand in the same, similar or other
circumstances.
7.3 Amendments and Waivers. Neither this Agreement nor any provision
-----------------------
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of the
Secured Party, and as to amendments, as also signed by an authorized officer of
Borrower. The Secured Party shall not, by any act, delay, omission or otherwise
be deemed to have expressly or impliedly waived any of its rights, powers and/or
remedies unless such waiver shall be in writing and signed by an authorized
officer of the Secured Party. Any such waiver shall be enforceable only to the
extent specifically set forth therein. A waiver by the Secured Party of any
right, power and/or remedy on any one occasion shall not be construed as a bar
to or waiver of any such right, power and/or remedy which the Secured Party
would otherwise have on any future occasion, whether similar in kind or
otherwise.
7.4 Waiver of Counterclaims. Borrower waives all rights to interpose any
------------------------
claims, deductions, setoffs or counterclaims of any nature (other then
compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.
7.5 Indemnification. Borrower shall indemnify and hold the Secured Party,
---------------
the Lenders and their directors, agents, employees and counsel, harmless from
and against any and all losses, claims, damages, liabilities, costs or expenses
imposed on, incurred by or asserted against any of them in connection with any
litigation, investigation, claim or proceeding commenced or threatened related
to the negotiation, preparation, execution, delivery, enforcement, performance
or administration of this Agreement, any other Loan Documents, or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including amounts paid in settlement, court costs, and the reasonable fees and
expenses of counsel. To the extent that the undertaking to indemnify, pay and
hold harmless set forth in this Section may be unenforceable because it violates
any law or public policy, Borrower shall pay the maximum portion which it is
permitted to pay under applicable law to the Secured Party or any of the
Lenders, as the case may be, in satisfaction of indemnified matters under this
Section. The foregoing indemnity shall survive the payment of the Obligations,
the termination of this Agreement and the termination or non-renewal of the
Credit Agreement.
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SECTION 8. MISCELLANEOUS
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8.1 Notices. All notices, requests and demands hereunder shall be in
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writing and (a) made to the Secured Party as follows: Fleet Bank, N.A., as
Administrative Agent, 1185 Avenue of the Americas, New York, New York 10031,
Attention: Ms. Beth Goodman, Vice President and to Borrower at its chief
executive office set forth below, or to such other address as either party may
designate by written notice to the other in accordance with this provision, and
(b) deemed to have been given or made: if delivered in person, immediately upon
delivery; if by telex, telegram or facsimile transmission, immediately upon
sending and upon confirmation of receipt; if by nationally recognized overnight
courier service with instructions to deliver the next business day, one (1)
business day after sending; and if by certified mail, return receipt requested,
five (5) days after mailing.
8.2 Partial Invalidity. If any provision of this Agreement is held to be
-------------------
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.
8.3. Successors. This Agreement, the other Loan Documents and any other
----------
document referred to herein or therein shall be binding upon Borrower and its
successors and assigns and inure to the benefit of and be enforceable by the
Secured Party and its successors and assigns, except that Borrower may not
assign its rights under this Agreement, the other Loan Documents and any other
document referred to herein or therein without the prior written consent of the
Secured Party.
8.4 Entire Agreement. This Agreement, the other Loan Documents, any
-----------------
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represents the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written. In the event of any inconsistency between the terms of this
Agreement and any schedule or exhibit hereto, the terms of this Agreement shall
govern.
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IN WITNESS WHEREOF, Borrower has caused these presents to be duly executed
as of the day and year first above written.
BORROWER
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UNIDIGITAL INC.
By: /s/ William E. Dye
---------------------------------
Title: Chief Executive Officer
CHIEF EXECUTIVE OFFICE:
-----------------------
229 West 28th Street
New York, New York 10001
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