SUBORDINATED PROMISSORY NOTE
$__________ ____________, 1997
FOR VALUE RECEIVED, the undersigned, Unidigital Inc., a Delaware
corporation (the "Obligor"), hereby promises to pay to the order of ____________
_____ (the "Holder"), the principal sum of ___________________ Dollars
($________) payable as set forth below. The Obligor also promises to pay to the
order of the Holder interest on the principal amount hereof at a rate per annum
equal to (i) ten percent (10%) for the six-month period commencing on the date
hereof; (ii) eleven percent (11%) for the six-month period commencing on the day
immediately following the six-month anniversary of the date hereof; and (iii)
twelve percent (12%) commencing on the day immediately following the first
anniversary of the date hereof, which interest shall be payable at such time as
the principal is due hereunder. Interest shall be calculated on the basis of a
year of 365 days and for the number of days actually elapsed. Any amounts of
interest and principal not paid when due shall bear interest at the maximum rate
of interest allowed by applicable law. The payments of principal and interest
hereunder shall be made in coin or currency of the United States of America
which at the time of payment shall be legal tender therein for the payment of
public and private debts.
This Note shall be subject to the following additional terms and
conditions:
1. Payments. Principal shall be payable on the earlier of (i) ______
__, ___ or (ii) the date on which the Obligor consummates an
underwritten public offering in an amount sufficient to pay all
amounts due and owing to the Holder under this Note. In the event
that any payment to be made hereunder shall be or become due on a
Saturday, Sunday or any other day which is a legal bank holiday
under the laws of the State of New York, such payment shall be or
become due on the next succeeding business day. The rights of the
Holder of this Note to receive payment of any principal or interest
hereon is subject and subordinate to the prior payment of the
principal of, and the interest and all other amounts (now or
hereafter accruing or due) on, all indebtedness of the Obligor
and/or its subsidiaries (whether now or hereafter existing or owed)
to The Chase Manhattan Bank, whether such indebtedness is now
outstanding or subsequently incurred, whether secured or unsecured,
and any deferrals, renewals or extensions of such indebtedness, and
to any notes or other evidences of such indebtedness and to any
guarantees of such indebtedness (in the case of guarantees by the
Obligor of indebtedness of any of its subsidiaries to said bank)
(collectively, the "Senior Indebtedness"). No payments shall be
made hereunder if the Obligor (or any of its subsidiaries) is in
default under any of the Senior Indebtedness or if a payment
hereunder would result in such a default and the Holder shall
receive any payments prohibited hereby in trust for The Chase
Manhattan Bank. Without limiting the foregoing, upon the occurrence
of a default under this Note, no amount shall be paid by the
Obligor hereon unless and until the principal of, and interest and
other amounts then owing on, all Senior Indebtedness is paid in
full.
2. Prepayment. The Obligor shall have the right at any time to
prepay the principal hereof in whole or in part, without premium or
penalty, provided that interest on the principal hereof to be so
prepaid, accrued to the date of such prepayment, shall be paid
concurrently therewith.
3. Put Option. Subject to the provisions of Section 1 hereof, at any
time after the first anniversary of the date hereof, the Holder
shall have the right and option (but not the obligation) to require
that the Obligor repay the principal hereof in whole, together with
all interest accrued thereon, without premium or penalty (the "Put
Option"). In the event that the Holder exercises the Put Option,
the Obligor shall, subject to the provisions of Section 1 hereof,
pay all amounts due and owing to the Holder under this Note within
thirty (30) days of receipt of notice that the Holder has exercised
the Put Option.
4. No Waiver. No failure or delay by the Holder in exercising any
right, power or privilege under this Note shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies
provided by law. No course of dealing between the Obligor and the
Holder shall operate as a waiver of any rights by the Holder.
5. Waiver of Presentment and Notice of Dishonor. The Obligor and all
endorsers, guarantors and other parties that may be liable under
this Note hereby waive presentment, notice of dishonor, protest and
all other demands and notices in connection with the delivery,
acceptance, performance or enforcement of this Note.
6. Place of Payment. All payments of principal of this Note and the
interest due thereon shall be made at _______ or at such other
place as the Holder may from time to time designate in writing.
7. Events of Default. The entire unpaid principal amount of this
Note and the interest due thereon shall, at the option of the
Holder exercised by written notice to the Obligor, forthwith become
and be due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived,
if any one or more of the following events (herein called "Events
of Default") shall have occurred (for any reason whatsoever and
whether such happening shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in
compliance with any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body) and be continuing at the time of such notice, that is to say:
a) if default shall be made in the due and punctual payment of
the principal of this Note and the interest due thereon when
and as the same shall
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become due and payable, whether at maturity, or by
acceleration or otherwise, and such default shall have
continued for a period of five days;
b) if the Obligor shall:
(i) admit in writing its inability to pay its debts
generally as they become due;
(ii) file a petition in bankruptcy or a petition to take
advantage of any insolvency act;
(iii) make an assignment for the benefit of creditors;
(iv) consent to the appointment of a receiver of the whole
or any substantial part of his property;
(v) on a petition in bankruptcy filed against him, be
adjudicated a bankrupt; or
(vi) file a petition or answer seeking reorganization or
arrangement under the Federal bankruptcy laws or any
other applicable law or statute of the United States
of America or any State, district or territory
thereof;
c) if a court of competent jurisdiction shall enter an order,
judgment, or decree appointing, without the consent of the
Obligor, a receiver of the whole or any substantial part of
Obligor's property, and such order, judgment or decree shall
not be vacated or set aside or stayed within 90 days from the
date of entry thereof; and
d) if, under the provisions of any other law for the relief or
aid of debtors, any court of competent jurisdiction shall
assume custody or control of the whole or any substantial part
of Xxxxxxx's property and such custody or control shall not be
terminated or stayed within 90 days from the date of
assumption of such custody or control.
8. Remedies. In case any one or more of the Events of Default
specified in Section 7 hereof shall have occurred and be
continuing, the Holder may proceed to protect and enforce its
rights either by suit in equity and/or by action at law, whether
for the specific performance of any covenant or agreement contained
in this Note or in aid of the exercise of any power granted in this
Note, or the Holder may proceed to enforce the payment of all sums
due upon this Note or to enforce any other legal or equitable right
of the Holder; provided, however, that the Holder shall not proceed
to protect and enforce its rights hereunder in the event that an
event of default has occurred, and is continuing, under any of the
Senior Indebtedness.
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9. Severability. In the event that one or more of the provisions of
this Note shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Note,
but this Note shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
10. Governing Law. This Note and the rights and obligations of the
Obligor and the Holder shall be governed by and construed in
accordance with the laws of the State of New York.
11. Unsecured Obligations. The Holder hereby acknowledges that the
obligations of the Obligor hereunder are unsecured.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
and delivered on the date first written above.
UNIDIGITAL INC.
---------------------------------
By: Xxxxxxx X. Xxx
President
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SCHEDULE OF HOLDERS
-------------------
Principal Number of
Holder Amount of Note Warrants
------ -------------- ---------
CRM - 1997 Enterprise Fund LLC $ 200,000 20,000
CRM - Eurycleia, L.P. 200,000 20,000
CRM - U.S. Value Fund Ltd. 200,000 20,000
CRM - EFO Partners, L.P. 200,000 20,000
Xxxx Equity Partners 170,000 17,000
CRM - EFO 100,000 10,000
Xxxxxxx X. Xxxx 100,000 10,000
Dr. Xxxx Xxxx 100,000 10,000
Xxxxxxx Xxxxxxxxx c/o Xxxxxx
Xxxxxxxxx UGMA 50,000 5,000
Xxxxxx Xxxxxxxxxx 50,000 5,000
Xxxxxx Xxxxxxxx & Co. 30,000 3,000
---------- -------
TOTAL: $1,400,000 140,000
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