Unassociated Document


     

    EXHIBIT 10.8

     

    
      GUARANTY
AND INDEMNITY AGREEMENT

      


      This
Guaranty and Indemnity Agreement (this “Guaranty”) is made as of the 12th day of
February, 2010, by and between DOCUMENT SECURITY SYSTEMS, INC., a corporation
formed under the laws of the State of New York with offices at 28 East Main
Street, Rochester, New York 14614 (“DSS”), SECUPRINT, INC., a corporation formed
under the laws of the State of New York with offices at 1650 Emerson Street,
Rochester, New York 14606 (“Secuprint”), PLASTIC PRINTING PROFESSIONAL, INC., a
corporation formed under the laws of the State of New York with offices at 151
Park Lane Brisbane, California 94005  (“Plastic Printing,” and with
DSS and Secuprint bound hereby jointly and severally, and individually and
collectively called, “Guarantor”) and RBS CITIZENS, N.A., a national banking
association, with offices at 235 East Main Street, Rochester, New York 14604
(“Bank”), in consideration of the extension, modification, or renewal of credit
or forbearance by Bank to Borrower, as defined in that certain Credit Facility
Agreement, dated on even date herewith, by and between Borrower and Bank (as the
same may be amended, extended, replaced, or modified from time to time, the
“Credit Facility Agreement”).  Unless otherwise expressly provided
herein, all capitalized terms in this Guaranty shall have the meanings given to
them in the Credit Facility Agreement.

      


      Guarantor
acknowledges the receipt of valuable consideration for this Guaranty and
acknowledges that Bank is relying on this Guaranty in making financial
accommodations to Borrower.  Borrower requires financing of the kind
extended to it by the Credit Facility Agreement in order to enable Borrower from
time to time to enter into transactions which will benefit
Guarantor.  Guarantor has determined that (a) the execution, delivery
and performance of this Guaranty is necessary and convenient to the conduct,
promotion and attainment of Guarantor’s business and (b) Guarantor may
reasonably be expected to benefit, directly and indirectly, from the Credit
Facility Agreement.

      


      1.           GUARANTY.  Guarantor
hereby jointly and severally unconditionally guarantees to Bank the payment when
due, by acceleration or otherwise, of all Obligations of Borrower to Bank,
whether heretofore or hereafter created, arising or existing or at any time due
and owing from Borrower to Bank.  The obligations under this Guaranty
are cumulative, and are in addition to obligations under any other guaranty or
indemnity previously given by Guarantor to Bank and not terminated in writing by
Bank.

      


      Anything
contained in this Guaranty to the contrary notwithstanding, the obligations of
Guarantor hereunder shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of the
Bankruptcy Code or under any applicable provisions of state insolvency or
fraudulent transfer laws, or other comparable state laws (collectively, the
“Fraudulent Transfer Laws”), in each case after giving effect to all other
liabilities of Guarantor, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
Guarantor to Borrower in respect of inter-company advances or other
inter-company indebtedness to other affiliates of Borrower to the extent that
such indebtedness would be discharged in an amount equal to the amount paid by
Guarantor hereunder) and after giving effect as assets to the value (as
determined under the applicable provisions of the Fraudulent Transfer Laws) of
any rights to subrogation, reimbursement or contribution of Guarantor pursuant
to applicable laws, rules and regulations, and any applicable orders, writs,
injunctions or decrees of any court or governmental authority.

       

      
        
          
          

        

        
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      2.           UNCONDITIONAL ABSOLUTE
GUARANTY.  Guarantor’s liability hereunder shall be direct,
immediate and absolute and shall not be conditioned or contingent upon the
pursuit, exercise or prosecution by Bank of any remedies, and Bank shall have
and may exercise against Guarantor any and all of the rights and remedies that
it might exercise against a principal debtor upon a past due and liquidated
obligation.  This instrument shall constitute an unconditional,
continuing guarantee independent of and in addition to any other security,
collateral, endorsement or guarantee held by Bank for the Obligations or any
part thereof. The liability of Guarantor hereunder shall not be impaired,
altered or otherwise affected by (i) the taking of or release of any other or
additional security for or guarantee of the Obligations or any part thereof,
(ii) any neglect failure or omission to hold, perfect, protect or rely on or
realize upon any such other or additional security or guarantee, (iii) any
extension of credit in excess of the limit if any, of this guarantee, (iv) any
renewal, extension, modification, compounding, compromise, payment, replacement
or discharge of the Obligations or any part thereof or (v) any other act failure
to act or thing whatsoever, which but for this Section 2 would constitute a
release of any obligations of Guarantor, and all of which Guarantor hereby
consents to without notice to Guarantor.

      


      Any
payment of principal or interest, acknowledgment, promise or other act by or on
behalf of Borrower, the effect of which would take any right which Bank may have
against Borrower out of the operation of any statute of limitations shall have a
like effect with respect to the right which Bank may have hereunder against
Guarantor notwithstanding Guarantor’s lack of notice thereof or consent
thereto.

      


      Guarantor
waives notice of acceptance of this guarantee; notice that any Obligations have
been incurred; presentment demand, protest, notice of dishonor of any note or
Obligations; or notice to Guarantor, Borrower, or any other person, of
Borrower’s default. Guarantor authorizes Bank in its sole discretion to direct
the order or manner of the disposition of the collateral and the enforcement of
any and all endorsements and guaranties relating to the
Obligations.  Any payments or credits received from Borrower,
Guarantor, or any other source may be applied to the Obligations in whatever
order or manner Bank elects.

      


      3.           INDEMNITY.  Guarantor
hereby agrees to indemnify Bank and hold it harmless from and against any and
all losses, expenses and damages incurred by Bank in connection with or as a
result of the assertion of any and all claims for the return of moneys
(including the proceeds of any collateral) received or applied by Bank in
partial or full payment of the Obligations, including without limitation all
claims based upon allegations that moneys so received by Bank constituted trust
funds under the Lien Law of the State of New York or other applicable laws, or
that the payment of such moneys or the giving of such collateral to Bank
constituted a preference or fraudulent transfer under the Bankruptcy Code or any
other applicable statute.  This indemnity shall extend to and include
all moneys recovered from or paid over by Bank as a result of such claims,
regardless of the basis thereof, and all costs and expenses including reasonable
attorneys’ fees incurred by Bank in investigation, evaluating and contesting
such claims, regardless of the outcome.  Guarantor’s liability
pursuant to this Section 3 shall survive any termination of this Guaranty to the
extent of all moneys (including proceeds of any collateral) received by Bank on
account of that portion of the Obligations (and any renewals, modifications or
extensions thereof, or replacements therefor, whether made before or after such
termination) for which Guarantor under the terms of this Guaranty remains liable
notwithstanding such termination, whether such moneys are recovered from, or
paid over by, Bank before or after such termination.  The indemnity
provided by this paragraph is in addition to the guarantee set forth elsewhere
in this Guaranty.

       

      
        
          
          

        

        
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      4.           TERMINATION.  The
liability of Guarantor under this Guaranty may be terminated to the extent
hereinafter permitted only (i) if Borrower has no outstanding obligations to
Bank, Bank has no continuing commitments to lend to Borrower, and Bank receives
written notice of Guarantor’s intent to terminate this Guaranty signed by
Guarantor, or (ii) upon the written agreement of Bank.  Any
termination of Guarantor’s liability under this Guaranty shall be effective only
as to the portion of the Obligations not committed by Bank prior to or created
or arising subsequent to such termination and provided further that this
Guaranty and Guarantor’s liability hereunder shall remain in full force and
effect with respect to the portion of the Obligations committed, created,
arising or existing prior to such termination and to all renewals, extensions
and modifications thereof, whether made before or after such
termination.

      


      If there
is more than one Guarantor, including guarantors of the Obligations under
separate agreements, the liability hereunder of any of them may be terminated in
the manner and to the extent provided above, but the liability of those of
Guarantor whose liability hereunder is not terminated shall continue in full
force and effect as though executed only by those of Guarantor
remaining.

      


      The
payment in full of all Obligations outstanding at any time shall not discharge
or otherwise affect Guarantor’s liability hereunder with respect to Obligations
thereafter created or arising prior to the termination of such liability as
herein provided, unless this Guaranty is otherwise terminated as provided
herein.

      


      5.           SETOFF.  Guarantor
hereby grants to Bank a continuing lien, security interest, and right of set off
as security for the Obligations, whether now existing or hereafter arising, upon
and against all deposits, credits, collateral and property, now or hereafter in
the possession, custody, safekeeping or control of Bank or any entity under the
control of Bank and its successors and assigns or in transit to any of
them.  At any time without demand or notice (any such notice being
expressly waived by Guarantor), Bank may set off the same or any part thereof
and apply the same to any Obligations even though unmatured and regardless of
the adequacy of any other collateral securing the Obligations.  ANY
AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT
TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS PRIOR TO EXERCISING ITS
RIGHT OF SET OFF WITH RESPECT TO SUCH DEPOSITS, CREDITS, OR OTHER PROPERTY OF
GUARANTOR ARE HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY
WAIVED.

       

      
        
          
          

        

        
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      6.           GUARANTY OBLIGATIONS
DUE.  In case of (i) the death, legal incapacity, insolvency,
liquidation, dissolution, merger, consolidation, or other change of
organizational structure of Guarantor, (ii) suspension of the usual business of
Guarantor, (iii) institution of bankruptcy proceedings or other proceedings of
any kind for the relief or collection of debt by or against Guarantor
(including, without limitation, assignments for the benefit of creditors,
appointment of trustees, receivers, or custodians for a material part of
Guarantor’s assets, levies upon or attachments of assets, the filing of
judgments not fully insured or bonded or removed within thirty days, or the
filing of tax liens), (iv) transfer of a material portion of the assets of
Guarantor, (v) any financial statement or information furnished by Guarantor to
Bank having been false or misleading in any material respect as of the date
furnished, (vi) default (after applicable grace and cure periods) by Guarantor
under any other agreement between Guarantor and Bank, (vii) any default or other
reason by which the Obligations shall have become due and payable, the
Obligations at the option of Bank shall become immediately due and payable by
Guarantor irrespective of any other contract or agreement fixing the date of
maturity.

      


      7.           FINANCIAL
INFORMATION.  Guarantor shall provide Bank with such financial
statements, copies of tax returns, and other information as, and in the
form,  Bank may request, in each case as provided in the Credit
Facility Agreement.

      


      8.           COSTS OF
COLLECTION.  Guarantor shall pay on demand of Bank in
connection with the preparation, administration, default, collection, waiver or
amendment of  terms of the Obligations, or in connection with Bank’s
exercise, preservation, or enforcement of any of its rights, remedies, or
options hereunder, including without limitation, fees of outside legal counsel
or the allocated costs of in-house legal counsel, accounting, consulting,
brokerage or similar professional fees or expenses, and any fees or expenses
associated with travel or other costs relating to any appraisals or examinations
conducted in connection with any Obligation or any collateral therefor, and the
amount of all such expenses shall, until paid, bear interest at the highest rate
applicable to any Obligations (including any default rate) and be Obligations
secured by any collateral.

      


      9.           SUBROGATION.  Guarantor
hereby irrevocably waives any claims or rights, including, without limitation,
any right of subrogation, which Guarantor may now possess or subsequently
acquire against the Borrower or its bankruptcy estate, arising from Guarantor’s
execution of, or payment under, this Guaranty and Guarantor agrees that in such
instances it shall have no recourse, at law or in equity against Borrower or its
bankruptcy estate arising from any liability imposed upon, or incurred by,
Guarantor as a result of Guarantor’s execution of this Guaranty.

       

      
        
          
          

        

        
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      10.           AUTHORIZATION.  If
Guarantor is a corporation, partnership or other organization or association,
this Guaranty is made and entered into by it in furtherance of its
purposes.  The execution of this Guaranty is not contrary to, or in
violation of, its certificate of incorporation, charter or by-laws or any other
agreement or indenture to which it or any of its members is a party or by which
it or its property or its members are bound.  Guarantor and the party
executing this Guaranty on its behalf represent to Bank that Guarantor is duly
authorized to guarantee the Obligations and undertake the within
indemnity.

      


      11.           CREDIT FACILITY AGREEMENT
TERMS.  The obligations, representations, covenants, terms and
conditions contained in the Credit Facility Agreement applicable to Guarantor as
a Guarantor thereunder are hereby incorporated into this Guaranty by reference,
and Guarantor shall be bound by them in the same manner as if Guarantor was a
signatory to the Credit Facility Agreement.

      


      12.           NEGATIVE
PLEDGE.                                                      Without
the express written consent of the Bank, such consent to be in the sole
discretion of the Bank, no Guarantor shall (a) distribute, transfer or convey
any asset or property of such Guarantor to any Affiliate except the Borrower or
another Guarantor or (b) make any loan or extend any other credit accommodation
to any Affiliate except the Borrower or another Guarantor.

      


      13.           JURISDICTION/WAIVER OF
JURY.  This Guaranty, and the rights and obligations of the
parties hereunder, shall be construed, interpreted, governed and enforced in
accordance with the laws of the State of New York (excluding the laws applicable
to conflicts or choice of law).

      


      GUARANTOR
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS GUARANTY OR ANY OF THE OTHER
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY
FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION OF
SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON GUARANTOR BY
MAIL AT THE ADDRESSES FIRST SET FORTH ABOVE IN THIS
GUARANTY.  GUARANTOR HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT FORUM.

      


      GUARANTOR
AND BANK (BY ACCEPTANCE OF THIS AGREEMENT) 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
GUARANTY 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, INCLUDING WITHOUT LIMITATION, ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF BANK RELATING TO
THE ADMINISTRATION OF THE OBLIGATIONS OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND
AGREE THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  EXCEPT
AS PROHIBITED BY LAW, GUARANTOR HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES.  GUARANTOR CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR
ATTORNEY OF BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER.  THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BANK TO
ACCEPT THIS AGREEMENT AND MAKE THE LOAN.

       

      
        
          
          

        

        
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      14.           MISCELLANEOUS.  If
there is more than one Guarantor, the representations, agreements, obligations
and liabilities hereunder of Guarantor shall be joint and
several.  This Guaranty shall be binding upon Guarantor, each of them
and their respective heirs, executors, administrators, legal representatives,
successors and assigns, and shall inure to the benefit of Bank, and its
successors and assigns, including specifically any assignee of all or any
portion of the Obligations.

      


      There are
no oral representations, understandings or warranties with respect to this
Guaranty.  It may not be changed except by written agreement signed by
Guarantor and Bank. Bank’s rights and remedies shall not be modified, limited or
waived by any representation, promise or agreement made, or any course of
conduct by Bank after the date of this Guaranty unless evidenced by a written
document signed by Bank.  If any provision of this Guaranty is
declared unenforceable or invalid in whole or in part for any reason, the
remaining provisions shall continue to be effective.

      


      [SIGNATURE
PAGE IMMEDIATELY FOLLOWS.]

       

      
        
          
          

        

        
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      IN
WITNESS WHEREOF, the parties have caused this Unlimited Guaranty and Indemnity
Agreement to be executed by their duly authorized officers as of the date first
set forth above.

       

      
        	
                RBS
      CITIZENS, N.A.

                 

                 

                By:

                
                  
      

                Jeffrey
      R. Morse

                Assistant
      Vice President

                 

                SECUPRINT,
      INC.

                 

                 

                By:

                
                  
      

                Name:  Patrick
      White

                Title:  President

              	
                DOCUMENT
      SECURITY SYSTEMS, INC.

                 

                By:

                
                  
      

                Name: 
      Patrick White

                Title: 
      President

                 

                 

                PLASTIC
      PRINTING PROFESSIONALS, INC.

                 

                 

                By:

                
                  
      

                Name: 
      Patrick White

                Title: 
      President

              


      

       

       

      
        	STATE
      OF NEW YORK	)	 
	 	)
      SS.:	 
	COUNTY
      OF MONROE	)	 


      

       

       

      On the
12th day of February in the year 2010 before me, the undersigned, a notary
public in and for said state, personally appeared Jeffrey R. Morse, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacities, and that by his signature on the
instrument, the individual, or the persons upon behalf of which the individual
acted, executed the instrument.

       

       

      
        
          

        

      

      Notary
Public

       

      
        
          	STATE
      OF NEW YORK	)	 
	 	)
      SS.:	 
	COUNTY
      OF MONROE	)	 


        

         

      

      On the
12th day of February in the year 2010 before me, the undersigned, a notary
public in and for said state, personally appeared Patrick White, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument and acknowledged to
me that he executed the same in his capacities, and that by his signatures on
the instrument, the individual, or the persons upon behalf of which the
individual acted, executed the instrument.

       

       

      
        
          
            

          

        

        Notary
Public

         

         

         

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