EXHIBIT 4.1
PREMIER GRAPHICS, INC.
as Issuer
$130,000,000
11 1/2% Senior Notes due 2005
_______________
INDENTURE
Dated as of December 11, 1998
_______________
United States Trust Company of New York
as Trustee
______________________________________________
TABLE OF CONTENTS
Page
Article 1 DEFINITIONS AND INCORPORATION BY REFERENCE............................................................. 1
SECTION 1.1 Definitions..................................................................................... 1
SECTION 1.2 Other Definitions............................................................................... 23
SECTION 1.3 Incorporation By Reference of Trust Indenture Act............................................... 24
SECTION 1.4 Rules of Construction........................................................................... 24
Article 2 THE NOTES.............................................................................................. 25
SECTION 2.1 Form and Dating................................................................................. 25
SECTION 2.2 Execution and Authentication.................................................................... 27
SECTION 2.3 Registrar and Paying Agent...................................................................... 28
SECTION 2.4 Paying Agent to Hold Money in Trust............................................................. 29
SECTION 2.5 Holder Lists.................................................................................... 29
SECTION 2.6 Transfer and Exchange........................................................................... 29
SECTION 2.7 Replacement of Notes............................................................................ 39
SECTION 2.8 Outstanding Notes............................................................................... 40
SECTION 2.9 Treasury Notes.................................................................................. 40
SECTION 2.10 Temporary Notes................................................................................ 40
SECTION 2.11 Cancellation................................................................................... 41
SECTION 2.12 Payment of Interest; Interest Rights Preserved................................................. 41
SECTION 2.13 Computation of Interest........................................................................ 42
SECTION 2.14 CUSIP Number................................................................................... 42
Article 3 REDEMPTION AND PREPAYMENT.............................................................................. 42
SECTION 3.1 Notices to Trustee.............................................................................. 42
SECTION 3.2 Selection of Notes to be Redeemed............................................................... 42
SECTION 3.3 Notice of Redemption............................................................................ 43
SECTION 3.4 Effect of Notice of Redemption.................................................................. 44
SECTION 3.5 Deposit of Redemption Price..................................................................... 44
SECTION 3.6 Notes Redeemed in Part.......................................................................... 44
SECTION 3.7 Optional Redemption............................................................................. 45
Article 4 COVENANTS.............................................................................................. 45
SECTION 4.1 Payment of Notes................................................................................ 45
SECTION 4.2 Maintenance of Office or Agency................................................................. 46
SECTION 4.3 Corporate Existence............................................................................. 46
SECTION 4.4 Maintenance of Properties and Insurance......................................................... 47
SECTION 4.5 Compliance With Laws............................................................................ 47
SECTION 4.6 Reports......................................................................................... 47
SECTION 4.7 Taxes and Other Claims.......................................................................... 48
SECTION 4.8 Stay, Extension and Usury Laws.................................................................. 48
SECTION 4.9 Change of Control............................................................................... 49
SECTION 4.10 Transactions With Affiliates................................................................... 51
SECTION 4.11 Limitation on Restricted Payments.............................................................. 51
SECTION 4.12 Limitation on Indebtedness..................................................................... 54
SECTION 4.13 Limitation on Subsidiary Indebtedness and Preferred Stock...................................... 54
SECTION 4.14 Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries.................. 55
SECTION 4.15 Limitation on Asset Sales...................................................................... 56
SECTION 4.16 Limitation on Sale and Lease-Back Transactions................................................. 59
SECTION 4.17 Limitation on Liens............................................................................ 59
SECTION 4.18 Limitation on Guarantees by Subsidiaries....................................................... 59
SECTION 4.19 Unrestricted Subsidiaries...................................................................... 60
SECTION 4.20 Limitations on Line of Business................................................................ 60
SECTION 4.21 Compliance Certificate; Notice of Default or Event of Default.................................. 60
SECTION 4.22 Prohibition on Company and Guarantors Becoming an Investment Company........................... 61
Article 5 CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER................................................... 62
SECTION 5.1 Consolidation, Merger, Conveyance, Lease or Transfer............................................ 62
SECTION 5.2 Successor Corporation Substituted............................................................... 63
Article 6 DEFAULTS AND REMEDIES.................................................................................. 64
SECTION 6.1 Events of Default............................................................................... 64
SECTION 6.2 Acceleration.................................................................................... 66
SECTION 6.3 Other Remedies.................................................................................. 67
SECTION 6.4 Waiver of Past Defaults......................................................................... 67
SECTION 6.5 Control By Majority............................................................................. 68
SECTION 6.6 Limitation on Suits............................................................................. 68
SECTION 6.7 Rights of Holders of Notes to Receive Payment................................................... 68
SECTION 6.8 Collection Suit by Trustee...................................................................... 69
SECTION 6.9 Trustee May File Proofs of Claim................................................................ 69
SECTION 6.10 Priorities..................................................................................... 70
SECTION 6.11 Undertaking For Costs.......................................................................... 70
SECTION 6.12 Restoration of Rights and Remedies............................................................. 70
SECTION 6.13 Rights and Remedies Cumulative................................................................. 71
SECTION 6.14 Delay or Omission Not Waiver................................................................... 71
Article 7 TRUSTEE................................................................................................ 71
SECTION 7.1 Duties of Trustee............................................................................... 71
SECTION 7.2 Rights of Trustee............................................................................... 72
SECTION 7.3 Individual Rights of Trustee.................................................................... 74
SECTION 7.4 Trustee's Disclaimer............................................................................ 74
SECTION 7.5 Notice of Defaults.............................................................................. 74
SECTION 7.6 Reports by Trustee to Holders of the Notes...................................................... 74
SECTION 7.7 Compensation and Indemnity...................................................................... 75
SECTION 7.8 Replacement of Trustee.......................................................................... 76
SECTION 7.9 Successor Trustee by Merger, Etc................................................................ 77
SECTION 7.10 Eligibility; Disqualification.................................................................. 77
SECTION 7.11 Preferential Collection of Claims Against the Company.......................................... 78
Article 8 SATISFACTION AND DISCHARGE............................................................................. 78
SECTION 8.1 Satisfaction and Discharge...................................................................... 78
SECTION 8.2 Application of Trust Money...................................................................... 79
SECTION 8.3 Repayment of the Company........................................................................ 79
SECTION 8.4 Reinstatement................................................................................... 79
Article 9 DEFEASANCE AND COVENANT DEFEASANCE..................................................................... 80
SECTION 9.1 Option to Effect Defeasance or Covenant Defeasance.............................................. 80
SECTION 9.2 Defeasance and Discharge........................................................................ 80
SECTION 9.3 Covenant Defeasance............................................................................. 81
SECTION 9.4 Conditions to Defeasance or Covenant Defeasance................................................. 81
SECTION 9.5 Deposited Money and U.S. Government Obligations To Be Held in Trust; Other Miscellaneous
Provisions................................................................................................. 83
SECTION 9.6 Repayment to the Company........................................................................ 83
SECTION 9.7 Reinstatement................................................................................... 84
Article 10 AMENDMENT, SUPPLEMENT AND WAIVER...................................................................... 84
SECTION 10.1 Without Consent of Holders of Notes............................................................ 84
SECTION 10.2 With Consent of Holders of Notes............................................................... 85
SECTION 10.3 Effect of Supplemental Indentures.............................................................. 87
SECTION 10.4 Compliance with Trust Indenture Act............................................................ 87
SECTION 10.5 Revocation and Effect of Consents.............................................................. 87
SECTION 10.6 Notation on or Exchange of Notes............................................................... 87
SECTION 10.7 Trustee to Sign Supplemental Indentures........................................................ 87
SECTION 10.8 Payment for Consent............................................................................ 88
Article 11 MISCELLANEOUS......................................................................................... 89
SECTION 11.1 Trust Indenture Act Controls................................................................... 89
SECTION 11.2 Notices........................................................................................ 89
SECTION 11.3 Communication By Holders of Notes With Other Holders of Notes.................................. 90
SECTION 11.4 Certificate and Opinion as to Conditions Precedent............................................. 90
SECTION 11.5 Statements Required in a Certificate or Opinion................................................ 91
SECTION 11.6 Acts of Holders................................................................................ 91
SECTION 11.7 Rules by Trustee and Agents.................................................................... 93
SECTION 11.8 No Personal Liability of Directors, Officers, Employees and Stockholders....................... 93
SECTION 11.9 Governing Law.................................................................................. 93
SECTION 11.10 Agent for Service; Submission to Jurisdiction; Waiver of Immunities........................... 93
SECTION 11.11 No Adverse Interpretation of Other Agreements................................................. 94
SECTION 11.12 Successors.................................................................................... 94
SECTION 11.13 Severability.................................................................................. 94
SECTION 11.14 Counterpart Originals......................................................................... 94
SECTION 11.15 Table of Contents, Headings, Etc.............................................................. 95
Article 12 GUARANTEES............................................................................................ 95
SECTION 12.1 Guarantors..................................................................................... 95
SECTION 12.2 Limitation on Liability........................................................................ 97
SECTION 12.3 Execution and Delivery of Guarantees........................................................... 98
SECTION 12.4 When A Guarantor May Merge, Etc................................................................ 98
SECTION 12.5 No Waiver...................................................................................... 98
SECTION 12.6 Modification................................................................................... 99
SECTION 12.7 Release of Guarantor........................................................................... 99
SECTION 12.8 Future Guarantors; Execution of Supplemental Indentures for Future Guarantors.................. 99
SCHEDULES
Schedule 1.1(a) ........... Existing Investments
Schedule 4.13 ........... Existing Indebtedness and Preferred Stock of Subsidiaries
Schedule A ........... Guarantors
EXHIBITS
Exhibit A ........... Form of Note
Exhibit B-1 ........... Form of Certificate for Exchange or Registration of Transfer
from U.S. Global Note to Regulation S Global Note
Exhibit B-2 ........... Form of Certificate for Exchange or Registration of Transfer
from Regulation S Global Note to U.S. Global Note
Exhibit B-3 ........... Form of Certificate for Exchange or Registration of Transfer
of Certificated Notes
Exhibit B-4 ........... Form of Certificate for Exchange or Registration of Transfer
from U.S. Global Note or Regulation S Permanent Global Note to
Certificated Note
Exhibit C ........... Form of Certificate From Acquiring Institutional Accredited
Investor
INDENTURE, dated as of March 14, 1997, among Anvil Knitwear, Inc.,
a Delaware corporation ("Anvil"), Anvil Holdings, Inc., a Delaware corporation
("Holdings"), Cottontops, Inc., a Delaware corporation and the other Subsidiary
Guarantors (as "Indenture", dated as of December 11, 1998, among Premier
Graphics, Inc., a Delaware corporation (the "Company"), each of the guarantors
listed on Schedule A hereto (each a "Guarantor" and, collectively, the
"Guarantors"), and United States Trust Company of New York as trustee (the
"Trustee").
RECITALS
The Company has duly authorized the creation and issuance of its
11 1/2% Senior Notes due 2005 (the "Initial Notes") of substantially the tenor
and amount hereinafter set forth; and to provide therefor and for, if and when
issued as further evidence of the Company's indebtedness and in substitution
for the Initial Notes pursuant to this Indenture and the Registration Rights
Agreement (as defined herein), the Company's 11 1/2% Senior Notes due 2005 (the
"Exchange Notes," and together with the Initial Notes, the "Notes"), the
Company has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the
Company and authenticated and delivered by the Trustee hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid instrument of the Company and the Guarantors, in accordance
with their respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Initial Notes by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a subsidiary of such specified Person,
but excluding Indebtedness which is extinguished, retired or repaid in
connection with such other Person merging with or into or becoming a subsidiary
of such specified Person.
"Adjusted Net Assets" of a Guarantor at any date shall mean the amount by
which the fair value of the Property and other assets of such Guarantor exceeds
the total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and
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contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Guarantee of such Guarantor.
"Affiliate" of any specified Person means another Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided, however,
that beneficial ownership of 10% or more of the Voting Stock of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
beneficial interest in a Global Note, the rules and procedures of the Depositary
and the Trustee that apply to such transfer and exchange.
"Asset Acquisition" means (a) an Investment by the Company or any Subsidiary
in any other Person pursuant to which such Person becomes a Subsidiary, or is
merged with or into the Company or any Subsidiary or (b) the acquisition by the
Company or any Subsidiary of the assets of any Person (other than a Subsidiary)
which constitute all or substantially all of the assets of such Person or
comprise any division or line of business of such Person.
"Asset Sale" means any direct or indirect sale, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger or
consolidation or by means of a Sale and Lease-Back Transaction) by the Company
or any Subsidiary to any Person other than the Company or a Subsidiary
Guarantor, in one transaction or a series of related transactions, of (i) any
Capital Stock of any Subsidiary of the Company or any Subsidiary Guarantor
(except for directors' qualifying shares or certain minority interests sold to
other Persons solely due to local law requirements that there be more than one
stockholder, but which are not in excess of what is required for such purpose),
or (ii) any other Property or assets of the Company or any Subsidiary, other
than (A) sales of obsolete or worn out equipment in the ordinary course of
business or other assets that, in the Company's reasonable judgment, are no
longer used or useful in the conduct of the business of the Company and its
Subsidiaries, (B) a Restricted Payment or Restricted Investment permitted under
Section 4.11, (C) a Change of Control, (D) a consolidation, merger, continuance
or the disposition of all or substantially all of the assets of the Company and
the Subsidiaries (determined on a consolidated basis) in compliance with the
provisions of Article 5 described in Section 5.1 and (E) any transfer,
conveyance, sale, lease or other disposition of Property or assets, the gross
proceeds of which (exclusive of indemnities) do not exceed $250,000. An Asset
Sale shall include the requisition of title to, seizure of or forfeiture of any
Property or assets, or any actual or constructive total loss or an agreed or
compromised total loss of any Property or assets.
"Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction
means, at any date of determination, the present value (discounted at the
interest rate borne by the Notes,
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compounded annually) of the total obligations of the lessee for rental payments
during the remaining term of the lease (or to the first date on which the
lessee is permitted to terminate such lease without the payment of a penalty)
included in such Sale and Lease-Back Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of any date, with respect to any debt security, the
quotient obtained by dividing (i) the sum of the products of (x) the number of
years from such date to the date of each scheduled principal payment (including
any sinking fund or mandatory redemption payment requirements) of such debt
security multiplied in each case by (y) the amount of such principal payment by
(ii) the sum of all such principal payments.
"Board of Directors" of any Person means the Board of Directors of such
Person, or any authorized committee of such Board of Directors.
"Board Resolution" means a copy of a resolution certified by a Secretary or
Assistant Secretary of a Person to have been duly adopted by the Board of
Directors thereof and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Borrowing Base" means, at any date of determination, an amount equal to 85%
of the accounts receivable owned by the Company and its Subsidiaries that are
not more than 90 days past due and 60% of the inventory of the Company and its
Subsidiaries, each calculated on a consolidated basis in accordance with GAAP as
shown on the last financial statements delivered to the Trustee pursuant to
Section 4.6.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at any time as to any Person with respect to
any Property leased by such Person as lessee, the amount of the liability with
respect to such lease that would be required at such time to be capitalized and
accounted for as a capital lease on the balance sheet of such Person prepared in
accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests, partnership
interests, participations or other equivalents in the equity interest (however
designated) in such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to acquire any equity
interest in such Person.
"Cash Proceeds" means, with respect to any Asset Sale by any Person, the
aggregate consideration received for such Asset Sale by such Person in the form
of cash or cash equivalents (including any amounts of insurance or other
proceeds received in connection with an Asset Sale of the type described in the
last sentence of the definition thereof or marketable securities that are
converted into cash or cash equivalents within 30 days of an Asset Sale),
including payments in respect of deferred payment obligations when received in
the form of cash or cash equivalents (except to the extent that such obligations
are financed or sold with recourse to such Person or any subsidiary thereof).
"Cedel" means Cedel Bank, societe anonyme (or any successor securities
clearing agency).
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"Certificated Notes" means Notes that are substantially in the form of the
Note attached hereto as Exhibit A that do not include the information or text
called for by footnotes 1, 2 and 3 thereto.
"Change of Control" means (i) at any time prior to any Public Equity Offering
by the Company or Master Graphics of the Common Stock of the Company, Master
Graphics ceases to be directly or indirectly, the beneficial owner of 100% of
the Voting Stock of the Company; (ii) any person or group (as defined in Section
13(d)(3) or 14(d)(2) of the Exchange Act) other than Permitted Holders or Master
Graphics becomes the direct or beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of more than 50% of the voting power of the outstanding Voting
Stock of the Company; (iii) the Company is merged with or into or consolidated
with another corporation and, immediately after giving effect to the merger or
consolidation, less than 50% of the outstanding voting securities entitled to
vote generally in the election of directors or persons who serve similar
functions of the surviving or resulting entity are then beneficially owned
(within the meaning of Rule 13d-3 of the Exchange Act) in the aggregate by (x)
the stockholders of the Company immediately prior to such merger or
consolidation, or (y) if the record date has been set to determine the
stockholders of the Company entitled to vote on such merger or consolidation,
the stockholders of the Company as of such a record date; (iv) the Company or
Master Graphics, as the case may be, either individually or in conjunction with
one or more Subsidiaries, sells, conveys, transfers or leases, or the
Subsidiaries sell, convey, transfer or lease, all or substantially all of the
assets of the Company, or of Master Graphics and the Subsidiaries taken as a
whole (or the Company and the Subsidiaries taken as a whole if the Company is no
longer a subsidiary of Master Graphics), as applicable (either in one
transaction or a series of related transactions), including Capital Stock of the
Subsidiaries, to any Person (other than a Wholly Owned Subsidiary); (v) the
liquidation or dissolution of the Company; (vi) the first day on which a
majority of the individuals who constitute the Board of Directors of the Company
are not Continuing Directors; or (vii) at any time prior to any Public Equity
Offering by the Company or Master Graphics of the Common Stock of the Company,
the first day on which a majority of the individuals who constitute the Board of
Directors of Master Graphics are not Continuing Directors.
"Commission" means the U.S. Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
date of execution of this Indenture, such commission is not existing and
performing the duties assigned to it under the Trust Indenture Act, the body
performing such duties at such time.
"Common Stock" means Capital Stock other than Preferred Stock.
"Company Order" means a written order or request signed in the name of an
Officer and delivered to the Trustee.
"Company" means the Person named as such in the preamble of this Indenture
unless and until a successor replaces it pursuant to the applicable provisions
hereof and thereafter means such successor.
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"Consolidated Interest Coverage Ratio" means as of the date of the transaction
giving rise to the need to calculate the Consolidated Interest Coverage Ratio
(the "Transaction Date"), the ratio of (a) the aggregate amount of EBITDA of the
Company and the Subsidiaries on a combined consolidated basis for the four
fiscal quarters for which financial information in respect thereof is available
immediately prior to the applicable Transaction Date (the "Determination
Period") to (b) the aggregate Consolidated Interest Expense of the Company and
the Subsidiaries on a combined consolidated basis for such Determination Period.
In addition to and without limitation of the foregoing, for purposes of this
definition, "EBITDA" and "Consolidated Interest Expense" shall be calculated
after giving effect on a pro forma basis to (i)(a) the incurrence of any
Indebtedness of the Company or any of the Subsidiaries (and the application of
the proceeds thereof) giving rise to the need to make such calculation and (b)
any incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof) occurring on or after the first day of the Determination
Period and on or prior to the Transaction Date, in each case set forth in
clauses (i)(a) and (b), as if such incurrence or repayment, as the case may be,
(and the application of proceeds thereof) occurred on the first day of the
Determination Period (except that Indebtedness under any revolving credit
facility shall be deemed to be the average daily balance of such Indebtedness
during such Determination Period) and (ii) any Asset Sales or Asset Acquisitions
(including (x) any Person who becomes a Subsidiary as a result of any such Asset
Acquisition and including any Asset Sale or Asset Acquisition during such
Determination Period by any such Person determined as if such Person had been a
Subsidiary at the time of such transaction; provided that all Indebtedness of
the Company and any such Subsidiaries shall be deemed to have been incurred on
the first day of the Determination Period and (y) the increase or decrease, as
the case may be, in EBITDA directly attributable to such Asset Sale or Asset
Acquisition, as the case may be) occurring on or after the first day of the
Determination Period and on or prior to the Transaction Date, as if such Asset
Sale or Asset Acquisition, as the case may be, (including the issuance,
assumption or liability for any such Acquired Indebtedness) occurred on the
first day of the Determination Period. For purposes of this definition, whenever
pro forma effect is to be given to an Asset Acquisition, the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness incurred in connection therewith shall be
determined in good faith by a responsible financial or accounting officer of the
Company.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication (A) the sum of (i) the aggregate amount of cash and
noncash interest expense (including capitalized interest) of such Person and its
subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP (or in respect of the Company and the Subsidiaries, on a combined
consolidated basis), including, without limitation, (x) net costs associated
with Interest Swap Obligations (including any amortization of discounts), (y)
the interest portion of any deferred payment obligation calculated in accordance
with the effective interest method, and (z) all accrued interest and paid or
accrued, or scheduled to be paid or accrued, during such period; (ii) dividends
on Preferred Stock or Redeemable Stock of such Person (and Preferred Stock or
Redeemable Stock of its subsidiaries if paid to a Person other than such Person
or its subsidiaries and in the case of the Company, also to any Guarantor)
declared and payable in cash; (iii) the portion of any rental obligation of such
Person or its subsidiaries in respect of any Capital Lease Obligation allocable
to interest expense in accordance with GAAP; (iv) the portion of any rental
obligation of such Person or its
5
subsidiaries in respect of any Sale and Lease-Back Transaction allocable to
interest expense (determined as if such were treated as a Capital Lease
Obligation); and (v) to the extent any debt of any other Person is guaranteed
by such Person or any of its subsidiaries, the aggregate amount of interest
paid, accrued or scheduled to be paid or accrued, by such other Person during
such period attributable to any such debt, less (B) to the extent included in
(A) above, amortization or write-off of deferred financing costs of such Person
and its subsidiaries during such period and any charge related or any premium
or penalty paid in connection with redeeming or retiring any Indebtedness of
such Person and its subsidiaries prior to its stated maturity; in the case of
both (A) and (B) above, after elimination of intercompany accounts among such
Person and its subsidiaries and as determined in accordance with GAAP. For
purposes of clause (ii) above, dividend requirements attributable to any
Preferred Stock or Redeemable Stock shall be deemed to be an amount equal to
the amount of dividend requirements on such Preferred Stock or Redeemable Stock
times a fraction, the numerator of which is one, and the denominator of which
is one minus the applicable combined federal, state, local and foreign income
tax rate of the Company and its Subsidiaries (expressed as a decimal), on a
consolidated basis for the fiscal year immediately preceding the date of the
transaction giving rise to the need to calculate Consolidated Interest Expense.
"Consolidated Net Income" of any Person means, for any period, the aggregate
net income (or net loss, as the case may be) of such Person and its subsidiaries
for such period on a consolidated basis (or in the case of the Company, the
Company and the Subsidiaries on a combined consolidated basis), determined in
accordance with GAAP, provided that there shall be excluded therefrom, without
duplication, (i) any net income of any Unrestricted Subsidiary, except that the
Company's or any Subsidiary's interest in the net income of such Unrestricted
Subsidiary for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash or cash equivalents actually distributed by such
Unrestricted Subsidiary during such period to the Company or a Subsidiary as a
dividend or other distribution, (ii) gains and losses, net of taxes, from Asset
Sales or reserves relating thereto, (iii) the net income of any Person that is
not a subsidiary or that is accounted for by the equity method of accounting
which shall be included only to the extent of the amount of dividends or
distributions paid to such Person or its subsidiaries, (iv) items (but not loss
items) classified as extraordinary, unusual or nonrecurring (other than the tax
benefit, if any, of the utilization of net operating loss carryforwards or
alternative minimum tax credits), (v) the net income (or net loss) of any Person
acquired by such specified Person or any of its subsidiaries in a pooling of
interests transaction for any period prior to the date of such acquisition, (vi)
any gain or loss, net of taxes, realized on the termination of any employee
pension benefit plan, (vii) the net income (but not net loss) of any subsidiary
of such specified Person to the extent that the transfer to that Person of that
income is not at the time permitted, directly or indirectly, by any means
(including by dividend, distribution, advance or loan or otherwise), or by
operation of the terms of its charter or any agreement with a Person other than
with such specified Person, instrument held by a Person other than by such
specified Person, judgment, decree, order, statute, law, rule or governmental
regulations applicable to such subsidiary or its stockholders, except for any
dividends or distributions actually paid by such subsidiary to such Person, and
(viii) with regard to a non-Wholly Owned Subsidiary, any aggregate net income
(or net loss) in excess of such Person's or such subsidiary's pro rata share of
such non-Wholly Owned Subsidiary's net income (or net loss).
6
"Consolidated Net Worth" of any Person means, as of any date, the sum of the
Capital Stock and additional paid-in capital plus retained earnings (or minus
accumulated deficit) of such Person and its subsidiaries on a consolidated basis
at such date, each item determined in accordance with GAAP, less amounts
attributable to Redeemable Stock of such Person or any of its subsidiaries.
"Continuing Director" means an individual who (i) is a member of the Board of
Directors of the Company or Master Graphics, as the case be, and (ii) either (A)
was a member of the Board of Directors of the Company or Master Graphics, as the
case may be, on the Issue Date or (B) whose nomination for election or election
to the Board of Directors of the Company or Master Graphics, as the case may be,
was approved by vote of at least a majority of the directors then still in
office who were either directors on the Issue Date or whose election or
nomination for election was previously so approved.
"Corporate Trust Office of the Trustee" shall be at the address of the Trustee
specified in Section 11.2 hereof or such other address as to which the Trustee
may give notice to the Company.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or future contract or other similar agreement or arrangement designed to protect
against or manage such Person's or any of its subsidiaries' exposure to
fluctuations in foreign currency exchange rates.
"Default" means any event, act or condition the occurrence of which is, or
after notice or the passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Notes issuable or issued in whole or
in part in global form, the Person specified in Section 2.3 hereof as the
Depositary with respect to the Notes, until a successor shall have been
appointed and become such Depositary pursuant to the applicable provision of
this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
"Determination Period" has the meaning specified in clause (a) of the
definition of "Consolidated Interest Coverage Ratio."
"EBITDA" means, with respect to any Person for any period, the Consolidated
Net Income of such Person for such period, plus to the extent reflected in the
income statement of such Person for such period from which Consolidated Net
Income is determined, without duplication, (i) Consolidated Interest Expense,
(ii) income tax expense, (iii) depreciation expense, (iv) amortization expense,
(v) any charge related to any premium or penalty paid in connection with
redeeming or retiring any Indebtedness prior to its stated maturity, (vi) any
one-time write-off of non-recurring closing costs incurred in connection with
any merger consummated after the Issue Date, and (vii) any other non-cash
charges minus, to the extent reflected in such income
7
statement, any noncash credits that had the effect of increasing Consolidated
Net Income of such Person for such period.
"Euroclear" means the Euroclear System (or any successor securities clearing
agency).
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Exchange Global Note" means one or more Global Notes that do not and are not
required to bear the Private Placement Legend.
"Exchange Notes" has the meaning set forth in the Recitals to this Indenture
and more particularly means any of the Notes authenticated and delivered under
this Indenture pursuant to the Exchange Offer.
"Exchange Offer" means the offer that may be made by the Company pursuant to
the Registrations Rights Agreement to exchange Exchange Notes for Initial Notes.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Fair Market Value" means, with respect to consideration received or to be
received pursuant to any transaction by any Person, the fair market value of
such consideration as determined in good faith by the Board of Directors of the
Company and, in the case of a determination including a Fair Market Value in
excess of $1,000,000, shall be evidenced by a Board Resolution delivered to the
Trustee.
"Fair Value" means, with respect to any asset or Property, the price which
could be negotiated in an arm's-length free market transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under undue
pressure or compulsion to complete the transaction.
"GAAP" means, at any date, United States generally accepted accounting
principles, consistently applied, as set forth in the opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants
("AICPA") and statements of the Financial Accounting Standards Board, or in such
other statements by such other entity as may be designated by the AICPA, that
are applicable to the circumstances as of the date of determination; provided,
however, that all calculations made for purposes of determining compliance with
the provisions set forth in the Indenture shall utilize GAAP in effect at the
Issue Date.
"Global Note" means, individually and collectively, the Regulation S Temporary
Global Note, the Regulation S Permanent Note, the U.S. Global Notes and the
Exchange Global Notes.
"Guarantee" means any guarantee of the Notes by any Guarantor in accordance
with the provisions described in Article 12.
8
"Guarantor" means the Initial Guarantors and each other future Subsidiary that
is required to guarantee the Company's Obligations under the Notes and this
Indenture as described in Section 4.18 and Article 12 and any other Subsidiary
of the Company that executes a supplemental indenture in which such Subsidiary
agrees to guarantee the Company's Obligations under the Notes and this
Indenture.
"Harperprints" means Harperprints, Inc., a North Carolina corporation.
"Holder" means a Person in whose name a Note is registered on the Registrar's
books.
"incur" means, with respect to any Indebtedness or other obligation of any
Person, to create, issue, suffer to exist, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or obligation on the balance sheet of
such Person (and "incurrence," "incurred," "incurrable" and "incurring" shall
have meanings correlative to the foregoing); provided that a change in GAAP that
results in an obligation of such Person that exists at such time becoming
Indebtedness shall not be deemed an incurrence of such Indebtedness.
Indebtedness otherwise incurred by a Person before it becomes a Subsidiary shall
be deemed to have been incurred at the time at which it becomes a Subsidiary. A
guarantee otherwise permitted by the Indenture to be incurred by the Company or
a Subsidiary of Indebtedness incurred in compliance with the terms of this
Indenture by the Company or a Subsidiary, as applicable, shall not constitute a
separate incurrence of Indebtedness.
"Indebtedness" as applied to any Person means, at any time, without
duplication, whether recourse is to all or a portion of the assets of such
Person, and whether or not contingent, (i) any obligation of such Person for
borrowed money; (ii) any obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including, without limitation,
any such obligations incurred in connection with acquisition of Property, assets
or businesses, excluding accounts payable made in the ordinary course of
business which are not more than 90 days overdue or which are being contested in
good faith and by appropriate proceedings; (iii) any obligation of such Person
for all or any part of the purchase price of Property or assets, or for the cost
of Property constructed or of improvements thereto (including any obligation
under or in connection with any letter of credit related thereto), other than
accounts payable incurred in respect of Property and services purchased in the
ordinary course of business which are no more than 90 days overdue or which are
being contested in good faith and by appropriate proceedings; (iv) any
obligation of such Person upon which interest charges are customarily paid
(other than accounts payable incurred in the ordinary course of business); (v)
any obligation of such Person under conditional sale or other title retention
agreements relating to purchased Property; (vi) any obligation of such Person
issued or assumed as the deferred purchase price of Property or assets (other
than accounts payable incurred in the ordinary course of business which are no
more than 90 days overdue or which are being contested in good faith and by
appropriate proceedings); (vii) any Capital Lease Obligation or Attributable
Indebtedness pursuant to any Sale and Lease-Back Transaction of such Person;
(viii) any obligation of any other Person secured by (or for which the obligee
hereof has an existing right, contingent or otherwise, to be secured by) any
Lien on Property owned or acquired, whether or not any obligation secured
thereby has been assumed, by
9
such Person; (ix) any obligation of such Person in respect of any letter of
credit supporting any obligation of any other Person; (x) the maximum fixed
repurchase price of any Redeemable Stock of such Person (or if such Person is a
subsidiary, any Preferred Stock of such Person); (xi) the notional amount of
any Interest Swap Obligation or Currency Hedge Obligation of such Person at the
time of determination; and (xii) any obligation which is in economic effect a
guarantee, regardless of its characterization (other than endorsements of
negotiable instruments in the ordinary course of business), with respect to any
Indebtedness of another Person, to the extent guaranteed. For purposes of the
preceding sentence, the maximum fixed repurchase price of any Redeemable Stock
or subsidiary Preferred Stock that does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Redeemable Stock or
subsidiary Preferred Stock as if such Redeemable Stock or subsidiary Preferred
Stock were repurchased on any date on which Indebtedness shall be required to
be determined pursuant to this Indenture; provided that if such Redeemable
Stock or subsidiary Preferred Stock is not then permitted to be repurchased,
the repurchase price shall be the book value of such Redeemable Stock or
subsidiary Preferred Stock. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any guarantees at
such date; provided, further, that for purposes of calculating the amount of
any non-interest bearing or other discount security, such Indebtedness shall be
deemed to be the principal amount thereof that would be shown on the balance
sheet of the issuer dated such date prepared in accordance with GAAP but that
such security shall be deemed to have been incurred only on the date of the
original issuance thereof.
"Indenture" means this Indenture, as amended or supplemented from time to time
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including for all purposes of this Indenture and
any supplemental indenture the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this Indenture and any supplemental indenture.
"Indirect Participant" means a Person who holds an interest through a
Participant.
"Initial Guarantors" means Master Graphics and all of Master Graphics'
Subsidiaries (other than the Company) as of the close of business on the Issue
Date.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation, Prudential Securities Incorporated and Morgan Keegan & Company,
Inc.
"Initial Notes" has the meaning set forth in the Recitals to this Indenture
and more particularly means any of the Notes authenticated and delivered under
this Indenture other than Exchange Notes.
"Institutional Accredited Investor" means an entity which is an "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"Interest Swap Obligation" means, with respect to any Person, the obligation
of such Person pursuant to any interest rate swap agreement, interest rate cap,
collar or floor agreement or other
10
similar agreement or arrangement designed to protect against or manage such
Person's or any of its subsidiaries' exposure to fluctuations in interest
rates.
"Investment" means, with respect to any Person, any direct, indirect or
contingent investment in another Person, whether by means of a share purchase,
capital contribution, loan, advance (other than advances to employees for moving
and travel expenses, drawing accounts and similar expenditures in the ordinary
course of business) or similar credit extension constituting Indebtedness of
such other Person, and any guarantee of Indebtedness of any other Person;
provided that the term "Investment" shall not include any transaction involving
the purchase or other acquisition (including by way of merger) of Property or
assets (including Capital Stock) by the Company or any Subsidiary in exchange
for Capital Stock (other than Redeemable Stock) of the Company or Master
Graphics. The amount of any Person's Investment shall be the original cost of
such Investment to such Person, plus the cost of all additions thereto paid by
such Person, and minus the amount of any portion of such Investment repaid to
such Person in cash as a repayment of principal or a return of capital, as the
case may be, but without any other adjustments for increases or decreases in
value, or write-ups, writedowns, or write-offs with respect to such Investment.
In determining the amount of any Investment involving a transfer of any Property
or assets other than cash, such Property or assets shall be valued at its Fair
Value at the time of such transfer as determined in good faith by the board of
directors (or comparable body) of the Person making such transfer. The Company
shall be deemed to make an "Investment" in the amount of the Fair Value of the
Property and assets of a Subsidiary at the time such Subsidiary is designated an
Unrestricted Subsidiary.
"Issue Date" means the date on which the Notes are first authenticated and
delivered under this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which federal offices
or banking institutions in The City of New York, in the city of the Corporate
Trust Office of the Trustee, or at a place of payment are authorized by law,
regulation or executive order to remain closed. If a payment date is a Legal
Holiday, payment may be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"Lien" means any mortgage, pledge, hypothecation, charge, assignment, deposit
arrangement, encumbrance, security interest, lien (statutory or other), or
preference, priority or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Master Graphics" means Master Graphics, Inc., a Tennessee corporation.
"Maturity" means the date on which the principal of a Note becomes due and
payable as provided therein or in the Indenture, whether at the Stated Maturity
or the Change of Control Payment Date or the purchase date established pursuant
to the terms of this Indenture for an Asset Sale Offer or by declaration of
acceleration, call for redemption or otherwise.
11
"Moody's" means Moody's Investors Service, Inc., or if Moody's Investors
Services, Inc. shall cease rating the specified debt securities and such ratings
business with respect thereto shall have been transferred to a successor Person,
such successor Person.
"Net Available Proceeds" means, as to any Asset Sale, the Cash Proceeds
therefrom, net of all legal and title expenses, commissions and other fees and
expenses incurred, and all Federal, state, foreign, recording and local taxes
payable, as a consequence of such Asset Sale, net of all payments made to any
Person other than the Company or a Subsidiary on any Indebtedness which is
secured by such assets, in accordance with the terms of any Lien upon or with
respect to such assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale and, as for any Asset Sale by a Subsidiary, net of
the equity interest in such Cash Proceeds of any holder of Capital Stock of such
Subsidiary (other than the Company, any other Subsidiary or any Affiliate of the
Company or any such other Subsidiary).
"Net Proceeds" means (a) in the case of any sale of Capital Stock by a Person,
the aggregate net cash proceeds received by such Person, after payment of
expenses, commissions, and the like incurred in connection therewith and (b) in
the case of any exchange, exercise, conversion or surrender of outstanding
securities of any kind for or into shares of Capital Stock of any Person which
is not Redeemable Stock, the net book value of such outstanding securities on
the date of such exchange, exercise, conversion or surrender (plus any
additional amount required to be paid by the holder to the Company or Master
Graphics, as applicable, upon such exchange, exercise, conversion or surrender)
less any and all payments made to the holders, e.g., on account of fractional
shares and less all expenses incurred by such Person in connection therewith.
"New Credit Facility" means that certain credit facility to be entered into
among the Company, Master Graphics, Harperprints and General Electric Capital
Corporation, as agent.
"Non-Recourse Indebtedness" means Indebtedness or that portion of Indebtedness
of an Unrestricted Subsidiary as to which (a) neither the Company nor any other
Subsidiary (other than an Unrestricted Subsidiary) (i) provides credit support
including any undertaking, agreement or instrument which would constitute
Indebtedness or (ii) is directly or indirectly liable for such Indebtedness and
(b) no default with respect to such Indebtedness (including any rights which the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Company or any other Subsidiaries to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Note Custodian" means the Trustee, as custodian for the Depositary with
respect to the Notes in global form, or any successor entity thereto.
"Notes" has the meaning set forth in the Recitals of this Indenture and more
particularly means any of the Notes authenticated and delivered under this
Indenture.
"Obligations" means, with respect to any Indebtedness, any obligation
thereunder, including, without limitation, principal, premium and interest
(including post petition interest
12
thereon and, with respect to the Notes, Special Interest), penalties, fees,
costs, expenses, indemnifications, reimbursements, damages and other
liabilities.
"Obligors" means the Company and the Guarantors, collectively; "Obligor" means
the Company or any Guarantor.
"Offering Memorandum" means the Offering Memorandum, dated December 8, 1998,
relating to the Company's offering and placement of the Initial Notes.
"Offering" means the Offering of the Initial Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the Board, a Vice
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, any Assistant
Treasurer, the Controller, the Secretary, an Assistant Secretary or any Vice
President of such Person.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President, the Chief Executive Officer
or a Vice President, and by the Chief Financial Officer, the Chief Accounting
Officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, Master Graphics or a Subsidiary and delivered to the
Trustee, which shall comply with this Indenture.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Sections 11.4 and 11.5
hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary or the Trustee.
"Participant" means, with respect to DTC, Euroclear or Cedel, a Person who has
an account with DTC, Euroclear or Cedel, respectively (and, with respect to DTC,
shall include Euroclear and Cedel).
"Permitted Holders" means John P. Miller and any person related to him by
kinship or marriage, trusts or similar arrangements established solely on the
behalf of one or more of them, and partnerships and other entities that are
controlled by them.
"Permitted Indebtedness" means (a) Indebtedness of the Company under the Notes
and the Indenture; (b) Indebtedness (and any guarantee thereof) under one or
more credit or revolving credit facilities with a bank or financial institution
or syndicate of banks or financial institutions, including the New Credit
Facility, as such may be amended, modified, revised, extended, replaced, or
refunded from time to time, in an aggregate principal amount at any one time
outstanding not to exceed at the time of incurrence the greater of (i) $50.0
million or (ii) the Borrowing Base, less any amounts derived from Asset Sales
and applied to the required permanent reduction of Senior Debt (and a permanent
reduction of the related commitment to lend or amount available to be reborrowed
in the case of a revolving credit facility) under such credit facilities as
contemplated by Section 4.15; (c) Indebtedness of the Company or any Subsidiary
under Interest Swap Obligations, provided that (i) such Interest Swap
Obligations are related to payment obligations on Indebtedness otherwise
permitted under the covenants
13
described in Section 4.12 and Section 4.13 and (ii) the notional principal
amount of such Interest Swap Obligations does not exceed the principal amount
of the Indebtedness to which such Interest Swap Obligations relate; (d)
Indebtedness of the Company or any Subsidiary under Currency Hedge Obligations,
provided that (i) such Currency Hedge Obligations are related to payment
obligations on Indebtedness otherwise permitted under the covenants described
in Section 4.12 and Section 4.13 or to the foreign currency cash flows
reasonably expected to be generated by the Company and the Subsidiaries and
(ii) the notional principal amount of the Indebtedness and the amount of such
Currency Hedge Obligations does not exceed the principal amount of the
Indebtedness and the amount of foreign currency cash flows to which such
Currency Hedge Obligations relate; (e) Indebtedness of the Company or any
Subsidiary outstanding on the Issue Date and listed on Schedule 1.1(a) attached
hereto (excluding Indebtedness under the New Credit Facility and excluding
Indebtedness being repaid with the proceeds of Notes being issued on the Issue
Date), (f) the Guarantees of the Notes (and any assumption of the Obligations
guaranteed thereby); (g) Indebtedness of the Company or any Subsidiary in
respect of bid and performance bonds, surety bonds, appeal bonds and letters of
credit or similar arrangements issued for the account of the Company or any
Subsidiary Guarantor, in each case in the ordinary course of business and other
than for an obligation for money borrowed; (h) Indebtedness of the Company to a
Subsidiary Guarantor and Indebtedness of a Subsidiary Guarantor to the Company
or another Subsidiary Guarantor; provided that upon any subsequent event which
results in any such Subsidiary Guarantor ceasing to be a Subsidiary or any
other subsequent transfer of any such Indebtedness (except to the Company or a
Subsidiary Guarantor), such Indebtedness shall be deemed, in each case, to be
incurred and shall be treated as an incurrence for purposes of Section 4.12 and
Section 4.13 at the time the Subsidiary in question ceased to be a Subsidiary
or on which such subsequent transfer occurred; (i) Indebtedness of the Company
in connection with a purchase of the Notes pursuant to a Change of Control
Offer and guarantees of Subsidiaries of such Indebtedness of the Company,
provided that the aggregate principal amount of such Indebtedness does not
exceed 101% of the aggregate principal amount at Stated Maturity of the Notes
purchased pursuant to such Change of Control Offer, provided, further, that
such Indebtedness (A) has an Average Life equal to or greater than the
remaining Average Life of the Notes and (B) does not mature prior to one year
following the Stated Maturity of the Notes; (j) Permitted Refinancing
Indebtedness; (k) Permitted Subsidiary Refinancing Indebtedness; and (l)
additional Indebtedness in an aggregate principal amount not to exceed
$5,000,000 at any time outstanding. So as to avoid duplication in determining
the amount of Permitted Indebtedness under any clause of this definition,
guarantees permitted to be incurred pursuant to this Indenture of, or
obligations permitted to be incurred pursuant to this Indenture in respect of
letters of credit supporting, Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Permitted Investments" means (a) certificates of deposit, bankers
acceptances, time deposits, Eurocurrency deposits and similar types of
Investments routinely offered by commercial banks with final maturities of one
year or less issued by commercial banks organized in the United States, or
foreign branches thereof, having capital and surplus in excess of $500,000,000;
(b) commercial paper issued by any corporation, if such commercial paper has
credit ratings of at least "A-1" or its equivalent by S&P and at least "P-1" or
its equivalent by Moody's; (c) U.S. Government Obligations with a maturity of
one year or less; (d) repurchase obligations for instruments of the type
described in clause (c) with any bank meeting the
14
qualifications specified in clause (a) above; (e) shares of money market mutual
or similar funds having assets in excess of $500,000,000; (f) payroll advances
in the ordinary course of business and other advances and loans to officers and
employees of the Company or any Subsidiary, so long as the aggregate principal
amount of such advances and loan, does not exceed $1,500,000 at any one time
outstanding; (g) Investments represented by that portion of the proceeds from
Asset Sales that is not required to be Cash Proceeds by the covenant described
in Section 4.15; (h) Investments made by the Company in Subsidiary Guarantors
(or any Person that will be a Subsidiary and a Subsidiary Guarantor as a result
of such Investment) or by a Subsidiary in the Company or in one or more
Subsidiary Guarantors (or any Person that will be a Subsidiary of the Company
as a result of such Investment); (i) Investments in stock, obligations or
securities received in settlement of debts owing to the Company or any
Subsidiary as a result of bankruptcy or insolvency proceedings or upon the
foreclosure, perfection or enforcement of any Lien in favor of the Company or
any Subsidiary, in each case as to debt owing to the Company or any Subsidiary
that arose in the ordinary course of business of the Company or any such
Subsidiary; (j) Interest Swap Obligations with respect to any floating rate
Indebtedness that is permitted by the terms of the Indenture to be outstanding;
(k) Currency Hedge Obligations, provided that such Currency Hedge Obligations
constitute Permitted Indebtedness permitted by clause (d) of the definition
thereof; (m) Investments in prepaid expenses, negotiable instruments held for
collection and lease, utility, worker's compensation and performance and other
similar deposits in the ordinary course of business; and (n) Investments
pursuant to any agreement or obligation of the Company or any Subsidiary in
effect on the Issue Date and listed on Schedule 1.1(b) attached hereto.
"Permitted Liens" means (a) Liens in existence on the Issue Date; (b) Liens
created for the benefit of the Notes and/or the Guarantees; (c) Liens on
Property of a Person existing at the time such Person is merged or consolidated
with or into the Company or a Subsidiary (and not incurred as a result of, or in
anticipation of, such transaction), provided that any such Lien relates solely
to such Property; (d) Liens on Property existing at the time of the acquisition
thereof (and not incurred as a result of, or in anticipation of such
transaction), provided that any such Lien relates solely to such Property; (e)
Liens incurred or pledges and deposits made in connection with worker's
compensation, unemployment insurance and other social security benefits,
statutory obligations, bid, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business; (f)
Liens imposed by law or arising by operation of law, including, without
limitation, landlords', mechanics', carriers', warehousemen's, materialmen's,
suppliers' and vendors' Liens, and incurred in the ordinary course of business
for sums not delinquent or being contested in good faith, if such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made with respect thereof; (g) zoning restrictions, easements, licenses,
covenants, reservations, restrictions on the use of real property and defects,
irregularities and deficiencies in title to real property that do not,
individually or in the aggregate, materially affect the ability of the Company
or any Subsidiary to conduct its business presently conducted; (h) Liens for
taxes or assessments or other governmental charges or levies not yet due and
payable, or the validity of which is being contested by the Company or a
Subsidiary in good faith and by appropriate proceedings upon stay of execution
or the enforcement thereof and for which adequate reserves in accordance with
GAAP or other appropriate provision has been made; (i) Liens to secure
Indebtedness incurred for the purpose of financing all or a part of the purchase
price or construction cost of Property or
15
assets acquired or constructed after the Issue Date, provided that (l) the
principal amount of Indebtedness secured by such Liens shall not exceed 100% of
the lesser of cost or Fair Market Value of the Property or assets so acquired
or constructed plus transaction costs related thereto, (2) such Liens shall not
encumber any other assets or Property of the Company or any Subsidiary (other
than the proceeds thereof and accessions and upgrades thereto) and (3) such
Liens shall attach to such Property or assets within 120 days of the date of
the completion of the construction or acquisition of such Property for assets;
(j) Liens to secure any extension, renewal, refinancing or refunding (or
successive extensions, renewals, refinancings or refundings), in whole or in
part, of any Indebtedness secured by Liens referred to in the foregoing clauses
(a), (c) and (d), provided that such Lien does not extend to any other Property
or assets of the Company or any Subsidiary and the principal amount of the
Indebtedness secured by such Lien is not increased; (k) leases or subleases of
real property to other Persons; (l) judgment liens not giving rise to an Event
of Default so long as any appropriate legal proceedings which may have been
initiated for the review of such judgment shall not have been finally
terminated or the period within which such proceeding may be initiated shall
not have expired; (m) rights of off-set of banks and other Persons; (n) Liens
in favor of the Company; (o) Liens securing Indebtedness described under clause
(b) of the definition of Permitted Indebtedness; and (p) Liens securing Senior
Debt if at the time of the incurrence of such Indebtedness or the granting of
such Liens, whichever is later to occur, and after the giving of pro forma
effect to such incurrence of Indebtedness or granting of Liens, the Senior Debt
to EBITDA Ratio does not exceed 4.0 to 1.0 until December 1, 2000 and
thereafter does not exceed 3.75 to 1.0.
"Permitted Refinancing Indebtedness" means Indebtedness of the Company,
incurred in exchange for, or the net proceeds of which are used to renew,
extend, refinance, refund or repurchase, outstanding Indebtedness of the Company
which outstanding Indebtedness was incurred in accordance with, or is otherwise
permitted by, the terms of clauses (a) and (e) of the definition of "Permitted
Indebtedness; provided that (i) if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased is pari passu with or subordinated in right
of payment (without regard to its being secured) to the Notes, then such new
Indebtedness is pari passu with or subordinated in right of payment (without
regard to its being secured) to, as the case may be, the Notes at least to the
same extent as the Indebtedness being renewed, extended, refinanced, refunded or
repurchased, (ii) such new Indebtedness is scheduled to mature later than the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, (iii)
such new Indebtedness has an Average Life at the time such Indebtedness is
incurred that is greater than the Average Life of the Indebtedness being
renewed, extended, refinanced, refunded or repurchased, and (iv) such new
Indebtedness is in aggregate principal amount (or, if such Indebtedness is
issued at a price less than the principal amount thereof, the aggregate amount
of gross proceeds therefrom is) not in excess of the aggregate principal amount
then outstanding of the Indebtedness being renewed, extended, refinanced,
refunded or repurchased (or if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased was issued at a price less than the
principal amount thereof, then not in excess of the amount of liability in
respect thereof determined in accordance with GAAP) plus the amount of
reasonable fees, expenses, and premium, if any, incurred by the Company or such
Subsidiary in connection therewith.
"Permitted Subsidiary Refinancing Indebtedness" means Indebtedness of any
Subsidiary, incurred in exchange for, or the net proceeds of which are used to
renew, extend, refinance,
16
refund or repurchase, outstanding Indebtedness of such Subsidiary which
outstanding Indebtedness was incurred in accordance with, or is otherwise
permitted by, the terms of clauses (e) and (f) of the definition of Permitted
Indebtedness, provided that (i) if the Indebtedness being renewed, extended,
refinanced, refunded or repurchased is pari passu with or subordinated in right
of payment (without regard to its being secured) to the Guarantee of such
Subsidiary, then such new Indebtedness is pari passu with or subordinated in
right of payment (without regard to its being secured) to, as the case may be,
the Guarantee of such Subsidiary at least to the same extent as the
Indebtedness being renewed, extended, refinanced, refunded or repurchased, (ii)
such new Indebtedness is scheduled to mature later than the Indebtedness being
renewed, extended, refinanced, refunded or repurchased, (iii) such new
Indebtedness has an Average Life at the time such Indebtedness is incurred that
is greater than the Average Life of the Indebtedness being renewed, extended,
refinanced, refunded or repurchased, and (iv) such new Indebtedness is in an
aggregate principal amount (or, if such Indebtedness is issued at a price less
than the principal amount thereof, the aggregate amount of gross proceeds
therefrom is) not in excess of the aggregate principal amount then outstanding
of the Indebtedness being renewed, extended, refinanced, refunded or
repurchased (or if the Indebtedness being renewed, extended, refinanced,
refunded or repurchased was issued at a price less than the principal amount
thereof, then not in excess of the amount of liability in respect thereof
determined in accordance with GAAP) plus the amount of reasonable fees,
expenses, and premium, if any, incurred by the Company or such Subsidiary in
connection therewith.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint stock
company, trust, unincorporated organization or government or other agency or
political subdivision thereof or other entity of any kind.
"Preferred Stock" of any Person means Capital Stock of such Person of any
class or classes (however designated) that ranks prior, as to the payment of
dividends and/or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Capital Stock of at least one other class of such Person.
"Property" means, with respect to any Person, any interest of such Person in
any kind of property or asset, whether real, personal or mixed, or tangible or
intangible, excluding Capital Stock in any other Person.
"Public Equity Offering" means an offering of Capital Stock (other than
Redeemable Stock) of the Company or Master Graphics for cash pursuant to an
effective registration statement (other than on a Form S-4 or a Form S-8 or any
other form relating to securities issuable under any employee benefit plan of
the Company or Master Graphics) under the Securities Act; provided that in the
event of a Public Equity Offering by Master Graphics, Master Graphics
contributes the Net Proceeds of such Public Equity Offering to the common equity
of the Company.
"Qualified Institutional Buyer" or "QIB" shall have the meaning specified in
Rule 144A under the Securities Act.
17
"Record Date" means, for the interest payment on any Interest Payment Date,
the date specified in Section 2.12 hereof.
"Redeemable Stock" means, with respect to any Person, any equity security that
by its terms or otherwise is required to be redeemed, or is redeemable at the
option of the holder thereof, at any time prior to one year following the Stated
Maturity of the Notes or is exchangeable into Indebtedness of such Person or any
of its subsidiaries.
"Redemption Date" means, when used with respect to any Note or part thereof to
be redeemed hereunder, the date fixed for redemption of such Notes pursuant to
the terms of the Notes and this Indenture.
"Redemption Price" means, when used with respect to any Note or part thereof
to be redeemed hereunder, the price fixed for redemption of such Note pursuant
to the terms of the Notes and this Indenture, plus accrued and unpaid interest,
if any, and Special Interest, if any, thereon, to the Redemption Date.
"Registration Rights Agreement" means the Registration Rights Agreement, dated
as of the date of this Indenture, by and among the Company, the Initial
Guarantors and the Initial Purchasers, as such agreement may be amended,
modified or supplemented from time to time.
"Regulation S" means Regulation S under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global senior note that
contains the paragraph referred to in footnote 1, the phrase referred to in
footnote 1 and the additional schedule referred to in footnote 5 to the form of
the Note attached hereto as Exhibit A, and that is deposited with the Note
Custodian and registered in the name of the Depositary or its nominee,
representing the Initial Notes sold in reliance on Regulation S.
"Regulation S Temporary Global Note" means a single temporary global senior
note that contains the paragraphs referred to in footnotes 1 and 3, the phrase
referred to in Footnote 4 and the additional schedule referred to in footnote 4
to the form of the Senior Note attached hereto as Exhibit A, in the form of the
Note attached hereto as Exhibit A that is deposited with the Note Custodian and
registered in the name of the Depositary or its nominee, representing the
Initial Notes sold in reliance on Regulation S.
"Related Business" means the general commercial printing business and any
business reasonably complementary, related or ancillary thereto.
"Replacement Asset" means a Property or asset that, as determined by the Board
of Directors of the Company as evidenced by a Board Resolution, is used or is
useful in a Related Business.
18
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee with direct responsibility of the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means any Investment in any Person, including an
Unrestricted Subsidiary or the designation of a Subsidiary as an Unrestricted
Subsidiary, other than a Permitted Investment.
"Restricted Payment" means to (i) declare or pay any dividend on, or make any
distribution in respect of, or purchase, redeem, retire or otherwise acquire for
value, any Capital Stock of the Company or any Affiliate of the Company
(including, without limitation, any such dividend, distribution or other payment
made as a payment in connection with any merger or consolidation involving the
Company), or warrants, rights or options to acquire such Capital Stock, other
than (x) dividends payable solely in the Capital Stock (other than Redeemable
Stock) of the Company or such Affiliate, as the case may be, or in warrants,
rights or options to purchase or acquire such Capital Stock and (y) dividends or
distributions by a Subsidiary to the Company or to a Subsidiary Guarantor; (ii)
make any principal payment on, or redeem, repurchase, defease (including an in-
substance or legal defeasance) or otherwise acquire or retire for value
(including pursuant to mandatory repurchase covenants), prior to any scheduled
principal payment, scheduled sinking fund payment or other stated maturity,
Indebtedness of the Company or any Subsidiary Guarantor which is subordinated
(whether pursuant to its terms or by operation of law) in right of payment to
the Notes or the Guarantees, as applicable; (iii) make any Restricted Investment
in any Person; (iv) designate (other than pursuant to clause (xi) of the
definition of Permitted Investments) a Subsidiary as an Unrestricted Subsidiary,
provided that such a designation of a Subsidiary as an Unrestricted Subsidiary
shall be deemed to include the designation of all of the subsidiaries of such
Subsidiary that were Subsidiaries and (vi) forgive any Indebtedness of an
Affiliate of the Company to the Company or a Subsidiary. For purposes of
determining the amount expended for Restricted Payments, cash distributed or
invested shall be valued at the face amount thereof and Property other than cash
shall be valued at its Fair Market Value, except that in determining the amount
of any Restricted Payment made under clause (iv) above, the amount of such
Restricted Payment shall be equal to the greater of (i) the book value or (ii)
the Fair Market Value of the Company's or Master Graphics', as applicable,
direct and indirect proportionate interest in such Subsidiary on such date or
the date of the acquisition by the Company or Master Graphics.
"Rule 144A" means Rule 144A under the Securities Act (including any successor
regulation thereto), as it may be amended from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill, Inc.,
or if Standard & Poor's Ratings Group shall cease rating the specified debt
securities and such ratings business with respect thereto shall have been
transferred to a successor Person, such successor Person.
19
"Sale and Lease-Back Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a subsidiary of such Person and is thereafter leased back from
the purchaser or transferee thereof by such Person or one of its subsidiaries.
"Securities Act" means the U.S. Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller Notes" means unsecured, subordinated promissory notes issued by Master
Graphics to the sellers of businesses acquired by Master Graphics and its
subsidiaries, provided that after giving effect to such Asset Acquisitions, the
Person so acquired becomes a Subsidiary Guarantor or the assets so acquired are
held by the Company or a Subsidiary Guarantor.
"Senior Debt" means any Indebtedness incurred by the Company or a Guarantor,
as the case may be, unless the instrument under which such Indebtedness is
incurred expressly provides that it is subordinated in right of payment to the
Notes or such Guarantor's Guarantee, as applicable, provided that Senior Debt
will not include (a) any liability for federal, state, local or other taxes owed
or owing, (b) any Indebtedness owing to any Subsidiaries or to Master Graphics
or to any Affiliate, (c) any trade payables or (d) any Indebtedness that is
incurred in violation of this Indenture.
"Senior Debt to EBITDA Ratio" means, at any time of determination, the ratio
of (i) the aggregate amount of Senior Debt outstanding on the date of
determination, other than Senior Debt secured by Permitted Liens described in
clause (o) of the definition of Permitted Liens, to (ii) the aggregate amount of
EBITDA of the Company and the Subsidiaries on a combined consolidated basis for
the four fiscal quarters for which financial information is available
immediately prior to date of determination; provided that any Senior Debt
incurred or retired by the Company or any of the Subsidiaries during the fiscal
quarter in which the date of determination occurs shall be calculated as if such
Senior Debt were so incurred or retired on the first day of the fiscal quarter
in which the date of determination occurs; and provided, further, that (x) if
the transaction giving rise to the need to calculate the Senior Debt to EBITDA
Ratio would have the effect of increasing or decreasing Senior Debt or EBITDA in
the future, Senior Debt or EBITDA shall be calculated on a pro forma basis as if
such transaction had occurred on the first day of such four fiscal quarter
period preceding the date of determination, and (y) if during such four fiscal
quarter period, the Company or any of the Subsidiaries shall have engaged in any
Asset Sale, EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive), or increased by an amount equal to the EBITDA (if
negative), directly attributable to the assets which are the subject of such
Asset Sale and any related retirement of Senior Debt as if such Asset Sale and
related retirement of Senior Debt had occurred on the first day of such four
fiscal quarter period or (z) if during such four fiscal quarter period the
Company or any of the Subsidiaries shall have made any Asset Acquisition, EBITDA
shall be calculated on a pro forma basis as if such Asset Acquisition and any
related financing had occurred on the first day of such four fiscal quarter
period. For purposes of this definition, whenever pro forma effect is to be
given to an Asset Acquisition, the amount of income or earnings relating thereto
shall be determined in good faith by a responsible financial or accounting
officer of the Company.
20
"Significant Subsidiary" means any Subsidiary Guarantor or any other
Subsidiary that is a "significant subsidiary" as defined in Rule 1-02(w) of
Regulation S-X under the Securities Act and the Exchange Act.
"Special Interest" means all "special interest" owing pursuant to the
Registration Rights Agreement.
"Special Record Date" means a date fixed by the Trustee pursuant to Section
2.12 hereof for the payment of Defaulted Interest.
"Stated Maturity" when used with respect to a Note or any installment of
interest thereon, means the date specified in such Note as the fixed date on
which the principal of such Note or such installment of interest is due and
payable.
"Subordinated Indebtedness" means any Indebtedness of the Company or any
Subsidiary that is subordinated in right of payment to the Notes or the
Guarantees, as the case may be.
"subsidiary" means, with respect to any Person, (i) any corporation more than
50% of the outstanding Voting Stock of which is owned, directly or indirectly,
by such Person, or by one or more other subsidiaries of such Person, or by such
Person and one or more other subsidiaries of such Person, (ii) any general
partnership, joint venture or similar entity, more than 50% of the outstanding
partnership or similar interest of which is owned, directly or indirectly, by
such Person, or by one or more other subsidiaries or such Person, or by such
Person and one or more other subsidiaries of such Person and (iii) any limited
partnership of which such Person or any subsidiary of such Person is a general
partner.
"Subsidiary" means a subsidiary of Master Graphics (or the Company, if the
Company is no longer a Subsidiary of Master Graphics) other than an Unrestricted
Subsidiary.
"Subsidiary Guarantor" means a Guarantor that is a Subsidiary.
"Tax Sharing Agreement" means that certain tax sharing agreement among the
Company, Harperprints and Master Graphics.
"Transaction Date" has the meaning specified within the definition of
Consolidated Interest Coverage Ratio.
"Transfer Restricted Notes" means Notes that bear or are required to bear the
Private Placement Legend.
"Trust Indenture Act" or "TIA" means the U.S. Trust Indenture Act of 1939 (15
U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the Trust Indenture Act except as required by Section 9.3
hereof, provided that if the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" or "TIA" means, if so required by such amendment,
the Trust Indenture Act of 1939, as so amended.
21
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"U.S. Global Note" means a permanent Global Note that contains the paragraphs
referred to in footnote 1, in the phrase referred to in footnote 4 and the
additional schedule referred to in footnote 5 to the form of the Note attached
hereto as Exhibit A, and that is deposited with the Note Custodian and
registered in the name of the Depositary or its nominee, representing Notes sold
in reliance on Rule 144A or in reliance on another exemption from the
registration requirements of the Securities Act.
"U.S. Government Obligations" means securities that are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged; (ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case under clauses
(i) or (ii) above, are not callable or redeemable at the option of the issuers
thereof; or (iii) depository receipts issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligations or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.
"U.S. Person" means (i) any individual resident in the United States, (ii)
any partnership or corporation organized or incorporated under the laws of the
United States, (iii) any estate of which an executor or administrator is a U.S.
Person (other than an estate governed by foreign law and of which at least one
executor or administrator is a non-U.S. Person who has sole or shared investment
discretion with respects to its assets), (iv) any trust of which any trustee is
a U.S. Person (other than a trust of which at least one trustee is an non-U.S.
Person who has sole or shared investment discretion with respect to its assets
and no beneficiary of the trust (and no settler, if the trust is revocable) is a
U.S. Person), (v) any agency or branch of a foreign entity located in the United
States, (vi) any non-discretionary or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a U.S.
person, (vii) any discretionary or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated or (if an
individual) resident in the United States (other than such an account held for
the benefit or account of a non-U.S. Person), (viii) any partnership or
corporation organized or incorporated under the laws of a foreign jurisdiction
and formed by a U.S. Person principally for the purpose of investing in
securities not registered under the Securities Act (unless it is organized or
incorporated and owned, by "accredited investors" within the meaning of Rule
501(a) under the Securities Act who are not natural persons, estates or trusts);
provided, however, that the term "U.S. Person" shall not include (A) a branch or
agency of a U.S. Person that is located and operating outside the United States
for valid business purposes as a locally regulated branch or agency engaged in
the banking or insurance business, (B) any employee benefit plan established and
administered in accordance with the law, customary practices and documentation
of a foreign country and (C) the international
22
organizations set forth in Section 902(o)(7) of Regulation S and any other
similar international organizations, and their agencies, affiliates and pension
plans.
"Unrestricted Subsidiary" means any subsidiary of the Company or a Subsidiary
that the Company has classified as an Unrestricted Subsidiary, and that has not
been reclassified as a Subsidiary, pursuant to the terms of the Indenture.
"Voting Stock" means with respect to any Person, securities of any class or
classes of Capital Stock in such Person entitling the holder thereof (whether at
all times or at the times that such class of Capital Stock has voting power by
reason of the happening of any contingency) to vote in the election of members
of the board of directors or comparable body of such Person.
"Wholly Owned Subsidiary" means any Subsidiary to the extent (i) all of the
Capital Stock or other ownership interests in such Subsidiary, other than any
directors' qualifying shares mandated by applicable law, is owned directly or
indirectly by Master Graphics or the Company, as the case may be, or (ii) such
Subsidiary is organized in a foreign jurisdiction and is required by the
applicable laws and regulations of such foreign jurisdiction to be partially
owned by the government of such foreign jurisdiction or individual or corporate
citizens of such foreign jurisdiction in order for such Subsidiary to transact
business in such foreign jurisdiction, provided that Master Graphics or the
Company, directly or indirectly, owns the remaining Capital Stock or ownership
interest in such Subsidiary and, by contract or otherwise, controls the
management and business of such Subsidiary and derives the economic benefits of
ownership of such Subsidiary to substantially the same extent as if such
Subsidiary were a Wholly Owned Subsidiary.
SECTION 1.2 Other Definitions.
-----------------
Defined
Term in Section
---- ----------
"Act" 11.6
"Asset Sale Offer" 4.15(b)
"Asset Sale Offer Amount" 4.15(c)
"Asset Sale Offer Period" 4.15(c)
"Asset Sale Offer Purchase Price" 4.15(b)
"Asset Sale Purchase Date" 4.15(b)
"Change of Control Offer" 4.9(a)
"Change of Control Purchase Price" 4.9(a)
"Change of Control Offer Period" 4.9(a)
"Change of Control Payment Date" 4.9(a)
"Covenant Defeasance" 9.3
"DTC" 2.3
"Defaulted Interest" 2.12
"Defeasance" 9.2
"Event of Default" 6.1
"Excess Proceeds" 4.15(b)
"40-day restricted period" 2.1(b)
23
"Guaranteed Indebtedness" 4.18, 12.8
"Interest Payment Date" 2.12
"Paying Agent" 2.3
"Payment Default" 6.1(e)
"Private Placement Legend" 2.6(e)(i)
"Process Agent" 11.10
"Registrar" 2.3
"Required Filing Dates" 4.6
"Securities Register" 2.3
"Surviving Entity" 5.1(a)(i)
SECTION 1.3 Incorporation By Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a part of
this Indenture.
The following Trust Indenture Act terms used in this Indenture have
the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company or any other obligor on
the Notes.
All other terms used in this Indenture that are defined by the
Trust Indenture Act, defined by the Trust Indenture Act reference to another
statute or defined by Commission rule under the Trust Indenture Act have the
meanings so assigned to them therein.
SECTION 1.4 Rules of Construction.
---------------------
Unless the context otherwise requires:
(1) the words "herein," "hereof" and "hereunder," and other words
of similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(2) a term has the meaning assigned to it;
(3) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
24
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the plural
include the singular;
(6) provisions apply to successive events and transactions;
(7) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections or
rules adopted by the Commission from time to time;
(8) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof that would
be shown on a balance sheet of the issuer dated such date prepared in
accordance with generally accepted accounting principles;
(9) when used with respect to the Notes, the term "principal
amount" shall mean the principal amount thereof at Maturity;
(10) unless otherwise expressly provided herein, the principal
amount of any preferred stock shall be greater of (i) the maximum liquidation
value of such preferred stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such preferred stock; and
(11) all references to amounts of money or $ mean U.S. Dollars.
ARTICLE 2
THE NOTES
SECTION 2.1 Form and Dating.
---------------
(a) General. The Notes, together with the Trustee's certificate
of authentication and the Guarantors' notation of Guarantees, shall be
substantially in the form set forth in Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof. The Initial Notes
and the Exchange Notes will be the same except that the Private Placement
Legend and paragraph 18 will be omitted from the Exchange Notes.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
25
(b) Initial Notes. Initial Notes, with the notations of the
Guarantees endorsed thereon, shall be issued in the form of one or more
permanent Global Notes in definitive fully registered form without interest
coupons. Notes offered and sold to QIBs in reliance on Rule 144A, shall be
issued initially in the form of the U.S. Global Notes, which shall be deposited
on behalf of the purchasers of the Notes represented thereby with the Note
Custodian, and registered in the name of the Depositary or a nominee of the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the U.S. Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as hereinafter
provided. Initial Senior Notes offered and sold in reliance on Regulation S
shall be issued initially in the form of the Regulation S Temporary Global
Note, which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Note Custodian, and registered in the name of the
Depositary or the nominee of the Depositary for the accounts of designated
agents holding on behalf of Euroclear or Cedel, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The "40-day
restricted period" (as defined in Regulation S) shall be terminated upon the
receipt by the Trustee of a written certificate from the Depositary, together
with copies of certificates from Euroclear and Cedel certifying that they have
received certification of non-United States beneficial ownership of 100% of the
aggregate principal amount of the Regulation S Temporary Global Note (except to
the extent of any beneficial owners thereof who acquired an interest therein
pursuant to another exemption from registration under the Securities Act and
who will take delivery of a beneficial ownership interest in a 144A Global
Note, all as contemplated by Section 2.6(a)(ii) hereof). Following the
termination of the 40-day restricted period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in Regulation S Permanent Global Note pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent Global Note,
the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate
principal amount of the Regulation S Temporary Global Note and the Regulation S
Permanent Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its
nominee, as the case may be, in connection with transfers of interest as
hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed on Schedule A
thereto and that the aggregate amount of outstanding Notes represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges, redemptions and transfers of interests. Any endorsement of Schedule A
of a Global Note to reflect the amount of any increase or decrease in the amount
of outstanding Notes represented thereby shall be made by the Trustee or the
Note Custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.6 hereof.
The provisions of the "Operating Procedures of the Euroclear
Clearance System" and "Terms and Conditions Governing Use of Euroclear" and the
"Management Regulations" and "Instructions to Participants" of Cedel shall be
applicable to interests in the Regulation S Temporary Global Note and the
Regulation S Permanent Global Note that are held by Participants through
Euroclear or Cedel. The Trustee shall have no obligation to notify Holders of
any such procedures or to monitor or enforce compliance with the same.
26
Except as set forth in Section 2.6 hereof, the Global Notes may be
transferred, in whole and not in part, only to another nominee of the Depositary
or to a successor of the Depositary or its nominee.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only
to Global Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(c), authenticate and deliver the Global Notes that (i) shall be
registered in the name of the Depositary or the nominee of the Depositary and
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary's instructions or held by the Note Custodian.
Participants shall have no rights either under this Indenture with
respect to any Global Note held on their behalf by the Depositary or by the Note
Custodian as custodian for the Depositary or under such Global Note, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Participants, the
operation of customary practices of such Depositary governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(d) Certificated Notes. Notes issued in certificated form shall
be substantially in the form of Exhibit A attached hereto (but without
including the text referred to in footnotes 1, 3 and 4 thereto) and shall be
printed, typewritten, lithographed or engraved or produced by any combination
of these methods or may be produced by any other method permitted by the rules
of any securities exchange on which the Notes may be listed, as evidenced by
the execution of such Notes.
(e) Provisions Applicable to Forms of Notes. The Notes may also
have such additional provisions, omissions, variations or substitutions as are
not inconsistent with the provisions of this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with this Indenture,
any applicable law or with any rules made pursuant thereto or with the rules of
any securities exchange or governmental agency or as may be determined
consistently herewith by the Officers of the Company executing such Notes, as
conclusively evidenced by their execution of such Notes. All Notes will be
otherwise substantially identical except as provided herein.
Subject to the provisions of this Article 2, a Holder of a Global
Note may grant proxies and otherwise authorize any Person to take any action
that a Holder is entitled to take under this Indenture or the Notes.
SECTION 2.2 Execution and Authentication.
----------------------------
27
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially
as set forth in Exhibit A hereto.
The Trustee shall authenticate (i) Initial Notes for original
issue in an aggregate principal amount not to exceed $130,000,000 and (ii)
Exchange Notes for issue only in the Exchange Offer pursuant to the Exchange
Offer Registration Statement for a like principal amount of Initial Notes
exchanged in such Exchange Offer, in each case upon the receipt of a Company
Order directing the Trustee to authenticate such Notes and certifying that all
conditions precedent to the issuance of the relevant Notes contained herein
have been complied with. The aggregate principal amount of Notes outstanding at
any time may not exceed $130,000,000, except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.3 Registrar and Paying Agent.
--------------------------
The Company shall maintain (i) an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar"), (ii)
an office or agency where Notes may be presented for payment ("Paying Agent"),
and (iii) and an office or agency where notices or demands to or upon the
Company and the Guarantors in respect of the Notes and this Indenture may be
served. The Registrar shall keep a register of the Notes and of their transfer
and exchange (the "Securities Register"). The Company may appoint one or more
co- registrars and one or more additional paying agents except as otherwise
provided in this Indenture. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The Company
or any of its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
28
The Company initially appoints the Trustee (at the Corporate Trust
Office of the Trustee) to act as the Registrar and Paying Agent and to act as
Note Custodian with respect to the Global Notes.
SECTION 2.4 Paying Agent to Hold Money in Trust.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, premium, if any, on, interest on, and Special Interest, if any,
on, the Notes, and shall notify the Trustee of any default by the Company in
making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the
Company or a Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.5 Holder Lists.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each Interest Payment Date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes, and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.6 Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Global Notes. The transfer and
exchange of beneficial interests in Global Notes shall be effected through the
Depositary, in accordance with this Indenture and the Applicable Procedures,
which shall include restrictions on transfer comparable to those set forth
herein to the extent required by the Securities Act. Beneficial interests in a
Global Note may be transferred to Persons who take delivery thereof in the form
of a beneficial interest in the same Global Note in accordance with the
transfer restrictions set forth in the legend in subsection (e) of this Section
2.6. Transfers of beneficial interests in the Global Notes to Persons required
to take delivery thereof in the form of an interest in another Global Note
shall be permitted as follows:
(i) U.S. Global Note to Regulation S Global Note. Prior to the
expiration of the 40-day restricted period, an owner of a
beneficial interest in a U.S. Global Note deposited with the
Depositary (or the Note Custodian) will not be permitted to
transfer its interest to a Person who wishes to take delivery
thereof in the form of an interest in the Regulation S Global
Note.
29
If, at any time after the expiration of the 40-day restricted
period, an owner of a beneficial interest in a U.S. Global
Note deposited with the Depositary (or the Note Custodian)
wishes to transfer its beneficial interest in such U.S.
Global Note to a Person who is required or permitted to take
delivery thereof in the form of an interest in a Regulation S
Global Note, such owner shall, subject to the Applicable
Procedures, exchange or cause the exchange of such interest
for an equivalent beneficial interest in a Regulation S
Global Note as provided in this Section 2.6(a)(i). Upon
receipt by the Trustee of (1) instructions given in
accordance with the Applicable Procedures from a Participant
directing the Trustee to credit or cause to be credited a
beneficial interest in the Regulation S Global Note in an
amount equal to the beneficial interest in the U.S. Global
Note to be exchanged, (2) a written order given in accordance
with the Applicable Procedures containing information
regarding the Participant account of the Depositary and the
Euroclear or Cedel account to be credited with such increase,
and (3) a certificate in the form of Exhibit B-1 hereto given
by the owner of such beneficial interest stating that the
transfer of such interest has been made in compliance with
the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 of
Regulation S, then the Trustee, as Registrar, shall instruct
the Depositary to reduce or cause to be reduced the aggregate
principal amount at Maturity of the applicable U.S. Global
Note and to increase or cause to be increased the aggregate
principal amount at Maturity of the applicable Regulation S
Global Note by the principal amount at Maturity of the
beneficial interest in the U.S. Global Note to be exchanged
or transferred, to credit or cause to be credited to the
account of the Person specified in such instructions, a
beneficial interest in the Regulation S Global Note equal to
the reduction in the aggregate principal amount at Maturity
of the U.S. Global Note, and to debit, or cause to be
debited, from the account of the Person making such exchange
or transfer the beneficial interest in the U.S. Global Note
that is being exchanged or transferred.
(ii) Regulation S Global Note to U.S. Global Note. Prior to the
expiration of the 40-day restricted period, an owner of a
beneficial interest in a Regulation S Global Note deposited
with the Depositary (or the Note Custodian) will not be
permitted to transfer its interest to a Person who wishes to
take delivery thereof in the form of an interest in a U.S.
Global Note. If, at any time, after the expiration of the
40-day restricted period, an owner of a beneficial interest
in a Regulation S Global Note deposited with the Depositary
or with the Note Custodian wishes to transfer its beneficial
interest in such Regulation S Global Note to a Person who is
required or permitted to take delivery thereof in the form of
an interest in a U.S. Global Note, such owner shall, subject
to the Applicable Procedures, exchange or cause the exchange
of such interest for an equivalent beneficial interest in a
U.S. Global Note as provided in this Section
30
2.6(a)(ii). Upon receipt by the Trustee of (1) instructions
from Euroclear or Cedel, if applicable, and the Depositary,
directing the Trustee, as Registrar, to credit or cause to be
credited a beneficial interest in the U.S. Global Note equal
to the beneficial interest in the Regulation S Global Note to
be exchanged, such instructions to contain information
regarding the Participant account with the Depositary to be
credited with such increase, (2) a written order given in
accordance with the Applicable Procedures containing
information regarding the Participant account of the
Depositary and (3) a certificate in the form of Exhibit B-2
attached hereto given by the owner of such beneficial
interest stating (A) if the transfer is pursuant to Rule
144A, that the Person transferring such interest in a
Regulation S Global Note reasonably believes that the Person
acquiring such interest in a U.S. Global Note is a QIB and is
obtaining such beneficial interest in a transaction meeting
the requirements of Rule 144A and any applicable blue sky or
securities laws of any state of the United States, (B) that
the transfer complies with the requirements of Rule 144 under
the Securities Act, (C) if the transfer is to an
Institutional Accredited Investor that such transfer is in
compliance with the Securities Act and that a certificate in
the form of Exhibit C attached hereto is attached thereto,
together with, if the Company should so request or if the
transfer is in respect of an aggregate principal amount of
Notes less than $250,000, an Opinion of Counsel in form
reasonably acceptable to the Company that such transfer is in
compliance with the Securities Act or (D) if the transfer is
pursuant to any other exemption from the registration
requirements of the Securities Act, that the transfer of such
interest has been made in compliance with the transfer
restrictions applicable to the Global Notes and pursuant to
and in accordance with the requirements of the exemption
claimed, such statement to be supported by an Opinion of
Counsel from the transferee or the transferor in form
reasonably acceptable to the Company and to the Registrar
and, in each case, in accordance with any applicable
securities laws of any state of the United States or any
other applicable jurisdiction, then the Trustee, as
Registrar, shall instruct the Depositary to reduce or cause
to be reduced the aggregate principal amount at Maturity of
such Regulation S Global Note and to increase or cause to be
increased the aggregate principal amount at Maturity of the
applicable U.S. Global Note by the principal amount at
Maturity of the beneficial interest in the Regulation S
Global Note to be exchanged or transferred, and the Trustee,
as Registrar, shall instruct the Depositary, concurrently
with such redemption, to credit or cause to be credited to
the account of the Person specified in such instructions a
beneficial interest in the applicable U.S. Global Note equal
to the reduction in the aggregate principal amount at
Maturity of such Regulation S Global Note and to debit or
cause to be debited from the account of the Person making
such transfer the beneficial interest in the Regulation S
Global Note that is being exchanged or transferred.
31
(iii) U.S. Global Notes to Institutional Accredited Investor. If,
at any time, an owner of a beneficial interest in a U.S.
Global Note deposited with the Depositary (or the Senior Note
Custodian) wishes to transfer its beneficial interest in such
U.S. Global Note to a Person who is an Institutional
Accredited Investor, such owner shall, subject to the
Applicable Procedures and the other provisions of this
Section 2.6, exchange or cause the exchange of such interest
for an equivalent beneficial interest in a U.S. Global Note
as provided in this Section 2.6(a)(iii). Upon receipt by the
Trustee of (1) instructions given in accordance with the
Applicable Procedures from a Participant directing the
Trustee to credit or cause to be credited a beneficial
interest in the U.S. Global Note in an amount equal to the
beneficial interest in the U.S. Global Note to be exchanged,
(2) a written order given in accordance with the Applicable
Procedures containing information regarding the Participant
account of the Depositary to be credited with such increase,
and (3) a certificate in the form of Exhibit C hereto given
by the proposed transferee, and, if the Company should so
request, an Opinion of Counsel provided by the transferor or
the transferee (a copy of which the Transferor attaches to
such certificate), in form reasonably acceptable to the
Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act, then the
Trustee, as Registrar, shall instruct the Depositary to
credit or cause to be credited to the account of the Person
specified in such instructions, a beneficial interest in the
U.S. Global Note equal to the aggregate principal amount
being transferred, and to debit, or cause to be debited, from
the account of the Person making such exchange or transfer
the beneficial interest in the U.S. Global Note that is being
exchanged or transferred.
(b) Transfer and Exchange of Certificated Notes. When
Certificated Notes are presented by a Holder to the Registrar with a request to
register the transfer of the Certificated Notes or to exchange such
Certificated Notes for an equal principal amount of Certificated Notes of other
authorized denominations, the Registrar shall register the transfer or make the
exchange as requested only if the Certificated Notes are presented or
surrendered for registration of transfer or exchange, are endorsed and contain
a signature guarantee or are accompanied by a written instrument of transfer in
form satisfactory to the Registrar duly executed by such Holder or by his
attorney and contains a signature guarantee, duly authorized in writing and the
Registrar received the following documentation (all of which may be submitted
by facsimile):
in the case of Certificated Notes that are Transfer Restricted
Notes, such request shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Note is being delivered to
the Registrar by a Holder for registration in the name
of such Holder, without transfer, or such Transfer
Restricted Note is being transferred to the Company, a
certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto); or
32
(B) if such Transfer Restricted Note is being transferred to
a QIB in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or in
an offshore transaction pursuant to and in compliance
with Rule 904 under the Securities Act or pursuant to an
effective registration statement under the Securities
Act, a certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto); or
(C) if such Transfer Restricted Note is being transferred in
reliance on any other exemption from the registration
requirements of the Securities Act, a certification to
that effect from such Holder (in substantially the form
of Exhibit B-3 hereto) and an Opinion of Counsel from
such Holder or the transferee in form reasonably
acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the
Securities Act.
(c) Transfer of a Beneficial Interests in Global Notes for
Certificated Notes.
(i) The Global Notes that are Transfer Restricted Notes or the
Exchange Global Notes, as the case may be, shall be exchanged
by the Company for one or more Certificated Notes
representing Initial Notes or Exchange Notes, as the case may
be, if (x) the Depositary (i) has notified the Company that
it is unwilling or unable to continue as, or ceases to be, a
"Clearing Agency" registered under Section 17A of the
Exchange Act and (ii) a successor to the Depositary
registered as a "Clearing Agency" under Section 17A of the
Exchange Act is not able to be appointed by the Company
within 90 calendar days or (y) the Depositary is at any time
unwilling or unable to continue as Depositary and a successor
to the Depositary is not able to be appointed by the Company
within 90 calendar days or (iii) the Company, at its option,
delivers a notice in the form of an Officers' Certificate
that it elects to cause the issuance of Certificated Notes.
If an Event of Default occurs and is continuing, the Company
shall, at the request of the Holder thereof, exchange all or
part of a Global Note that is a Transfer Restricted Note or
an Exchange Global Note, as the case may be, for one or more
Certificated Notes representing Initial Notes or Exchange
Notes, as the case may be; provided that the principal amount
of each of such Certificated Notes, and such Global Note,
after such exchange, shall be $1,000 or an integral multiple
thereof. Whenever a Global Note is exchanged as a whole for
one or more Certificated Notes, it shall be surrendered by
the Holder thereof to the Trustee for cancellation. Whenever
a Global Note is exchanged in part for one or more
Certificated Notes, it shall be surrendered by the Holder
thereof to the Trustee and the Trustee shall make the
appropriate notations to Schedule A thereof pursuant to
Section 2.1 hereof. All Certificated Notes or Exchange
Notes,
33
as the case may be, issued in exchange for a Global Note or
any portion thereof shall be registered in such names, and
delivered, as the Depositary shall instruct the Trustee. Any
Certificated Notes issued pursuant to this Section 2.6(c)(i)
shall include the Private Placement Legend, except as
otherwise provided for by Section 2.6 hereof. Interests in a
Global Note may not be exchanged for Certificated Notes other
than as provided in this Section 2.6. If a beneficial
interest in a Transfer Restricted Note is being transferred,
the following additional documents and information must be
submitted (including by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the
beneficial owner, a certification to that effect from
such Person (in substantially the form of Exhibit B-4
hereto);
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act or in
an offshore transaction pursuant to and in compliance
with Rule 904 under the Securities Act or pursuant to an
effective registration statement under the Securities
Act, a certification to that effect from the transferor
(in substantially the form of Exhibit B-4 hereto);
(C) if such beneficial interest is being transferred in
reliance on any other exemption from the registration
requirements of the Securities Act, a certification to
that effect from the transferor (in substantially the
form of Exhibit B-4 hereto) and an Opinion of Counsel
from the transferee or the transferor in form reasonably
acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the
Securities Act, in which case the Trustee or the Note
Custodian, at the direction of the Trustee, shall, in
accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian,
cause the aggregate principal amount of U.S. Global
Notes or Regulation S Permanent Global Notes, as
applicable, to be reduced accordingly and, following
such reduction, the Company shall execute and, the
Trustee shall authenticate and deliver to the transferee
a Certificated Note in the appropriate principal amount.
(ii) Certificated Notes issued in exchange for a beneficial
interest in a U.S. Global Note or Regulation S Permanent
Global Note, as applicable, pursuant to this Section 2.6(c)
shall be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions
from its Participants or Indirect Participants or otherwise,
shall instruct the
34
Trustee. The Trustee shall deliver such Certificated Notes to
the Persons in whose names such Notes are so registered.
Following any such issuance of Certificated Notes, the
Trustee, as Registrar, shall instruct the Depositary to
reduce or cause to be reduced the aggregate principal amount
at maturity of the applicable Global Note to reflect the
transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (e) of this Section 2.6), a Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Any Holder of
a beneficial interest in a Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Notes represented hereby shall be required to be reflected in book entry form.
Interests of beneficial owners in a Global Note may be transferred in
accordance with the rules and procedures of the Depositary (or its successors).
(e) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Note certificate evidencing Global Notes and
Certificated Notes (and all Notes issued in exchange therefor
or substitution thereof) shall bear a legend (the "Private
Placement Legend") in substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE.
BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A
"QIB"), (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
UNDER REGULATION D UNDER THE SECURITIES ACT (AN "IAI")),
35
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
(B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN
AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO
AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE
WITH A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF
WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER
IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY)
OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING.
(ii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a
Global Note) pursuant to Rule 144 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Note that is a
Certificated Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a
Certificated Note that does not
36
bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted
Note upon receipt of a certification from the
transferring Holder substantially in the form of Exhibit
B-4 hereto; and
(B) in the case of any Transfer Restricted Note represented
by a Global Note, such Transfer Restricted Note shall
not be required to bear the legend set forth in (i)
above, but shall continue to be subject to the
provisions of Section 2.6(a) and (b) hereof; provided,
however, that with respect to any request for an
exchange of a Transfer Restricted Note that is
represented by a Global Note for a Certificated Note
that does not bear the legend set forth in (i) above,
which request is made in reliance upon Rule 144, the
Holder thereof shall certify in writing to the Registrar
that such request is being made pursuant to Rule 144
(such certification to be substantially in the form of
Exhibit B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a
Global Note) in reliance on any exemption from the
registration requirements of the Securities Act (other than
exemptions pursuant to Rule 144A or Rule 144 under the
Securities Act) in which the Holder or the transferee
provides an Opinion of Counsel to the Company and the
Registrar in form and substance reasonably acceptable to the
Company and the Registrar (which Opinion of Counsel shall
also state that the transfer restrictions contained in the
legend are no longer applicable):
(A) in the case of any Transfer Restricted Note that is a
Certificated Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a
Certificated Note that does not bear the legend set
forth in (i) above and rescind any restriction on the
transfer of such Transfer Restricted Note; and
(B) in the case of any Transfer Restricted Note represented
by a Global Note, such Transfer Restricted Note shall
not be required to bear the legend set forth in (i)
above, but shall continue to be subject to the
provisions of Section 2.6(a) and (b) hereof.
(iv) By its acceptance of any Initial Note represented by a
certificate bearing the Private Placement Legend, each Holder
of, and beneficial owner of an interest in, such Initial Note
acknowledges the restrictions on transfer of such Initial
Note set forth in the Private Placement Legend and under the
heading "Notice to Investors" in the Offering Memorandum and
agrees that it will transfer such Initial Note only in
accordance with the Private Placement Legend and the
restrictions set forth under the heading "Notice to
Investors" in the Offering Memorandum.
37
(v) Notwithstanding the foregoing, upon the occurrence of the
Exchange Offer in accordance with the Registration Rights
Agreement, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.2 hereof,
the Trustee shall authenticate (i) one or more unrestricted
Global Notes in aggregate principal amount equal to the
principal amount of the restricted beneficial interests
validly tendered and not properly withdrawn by Persons that
certify in the letter of transmittal delivered in the
Exchange Offer that they are not (x) broker-dealers, (y)
Persons participating in the distribution of the Exchange
Notes or (z) Persons who are affiliates (as defined in Rule
144 under the Securities Act) of the Company and accepted for
exchange in the Exchange Offer and (ii) Certificated Notes
that do not bear the Private Placement Legend in an aggregate
principal amount equal to the principal amount of the
Certificated Notes that are Transfer Restricted Notes
accepted for exchange in the Exchange Offer. Concurrently
with the issuance of such Notes, the Trustee shall cause the
aggregate principal amount of the applicable Global Notes to
be reduced accordingly and the Company shall execute and the
Trustee shall authenticate and deliver to the Persons
designated by the Holders of Certificated Notes so accepted
Certificated Notes in the appropriate principal amount.
(f) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in Global Notes have been exchanged for
Certificated Notes, redeemed, repurchased or cancelled, all Global Notes shall
be returned to or retained and cancelled by the Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for Certificated Notes, redeemed,
repurchased or cancelled, the principal amount of Notes represented by such
Global Note shall be reduced accordingly and an endorsement shall be made on
such Global Note, by the Trustee or the Note Custodian, at the direction of the
Trustee, to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate
Global Notes and Certificated Notes at the Registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any stamp or
transfer tax or similar governmental charge payable in
connection therewith (other than any such stamp or transfer
taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.6, 4.9, 4.15 and 10.6
hereto).
(iii) All Global Notes and Certificated Notes issued upon any
registration of transfer or exchange of Global Notes or
Certificated Notes shall be the
38
valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as
the Global Notes or Certificated Notes surrendered upon such
registration of transfer or exchange.
(iv) The Registrar shall not be required: (A) to issue, to
register the transfer of or to exchange Notes during a period
beginning at the opening of fifteen (15) Business Days before
the day of any selection of Notes for redemption under
Section 3.2 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being
redeemed in part, or (C) to register the transfer of or to
exchange a Note between a Record Date and the next succeeding
Interest Payment Date.
(v) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as
the absolute owner of such Note for the purpose of receiving
payment of principal of and interest on such Notes and for
all other purposes, and neither the Trustee, any Agent nor
the Company shall be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Certificated
Notes in accordance with the provisions of Section 2.2
hereof.
Notwithstanding anything herein to the contrary, as to any certifications or
certificates delivered to the Trustee or Registrar pursuant to this Section 2.6,
the Trustee's or the Registrar's duties shall be limited to confirming that any
such certifications and certificates delivered to it are in the form of Exhibits
B-1 through B-4 and C attached hereto. The Trustee or Registrar shall not be
responsible for confirming the truth or accuracy of representations made in any
such certifications or certificates.
SECTION 2.7 Replacement of Notes.
--------------------
If any mutilated Note is surrendered to the Trustee or the Company
and the Trustee receive evidence to their satisfaction of the destruction, loss
or theft of any Note, the Company shall issue, and the Trustee, upon the
receipt of a Company Order, shall authenticate, a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, each Guarantor,
the Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Company may charge for its expenses
in replacing a Note.
Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder. The provisions of
this Section 2.7 are exclusive and shall preclude (to the extent
39
lawful) all other rights and remedies with respect to the replacement of
mutilated, destroyed, lost or stolen Notes.
SECTION 2.8 Outstanding Notes.
-----------------
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.9 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest (including Special
Interest, if any) on it ceases to accrue.
If the Paying Agent (other than the Company, a Guarantor, a
Subsidiary or an Affiliate of any thereof) holds, on a Redemption Date or
Maturity, money sufficient to pay Notes payable on that date, then on and after
that date such Notes shall be deemed to be no longer outstanding and shall
cease to accrue interest (including Special Interest, if any).
SECTION 2.9 Treasury Notes.
--------------
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or any Guarantor, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any Guarantor, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that
a Responsible Officer knows are so owned shall be so disregarded.
SECTION 2.10 Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a Company
Order. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Company considers appropriate for temporary
Notes and as shall be reasonably acceptable to the Trustee. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
40
SECTION 2.11 Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall upon the
written request of the Company, return such cancelled Notes to the Company. The
Company may not issue new Notes to replace Notes that it has paid or that have
been delivered to the Trustee for cancellation.
SECTION 2.12 Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest (including Special Interest, if any) on any Note which is
payable, and is punctually paid or duly provided for, on any December 1 or June
1 (an "Interest Payment Date"), commencing on June 1, 1999, shall be paid to the
Person in whose name such Note is registered at the close of business on the
Record Date for such interest payment, which shall be the May 15 or November 15
(whether or not a Business Day) immediately preceding such Interest Payment
Date.
Any interest on any Note which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the registered
Holder on the relevant Record Date, and, except as hereinafter provided, such
Defaulted Interest and any interest payable on such Defaulted Interest may be
paid by the Company, at its election, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest, and any interest payable on such Defaulted Interest, to the Persons
in whose names the Notes are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on the Notes and the date of
the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest (including Special Interest, if any) or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as provided
in this clause (a). Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 calendar
days and not less than 10 calendar days prior to the date of the proposed
payment and not less than 10 calendar days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be sent, first class mail, postage
prepaid, to each Holder at such Holder's address as it appears in the
Securities Register, not less than 10 calendar days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names the
41
Notes are registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest
(including Special Interest, if any), and any interest payable on such
Defaulted Interest, on the Notes in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.12, each Note
delivered under this Indenture upon registration of transfer of, or in exchange
for, or in lieu of, or in substitution for, any other Note, shall carry the
rights to interest (and Special Interest, if any) accrued and unpaid, and to
accrue, which were carried by such other Note.
SECTION 2.13 Computation of Interest.
-----------------------
Interest on the Notes shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 2.14 CUSIP Number.
------------
The Company in issuing the Notes may use a "CUSIP" number, and if
it does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes and that reliance may be placed
only on the other identification numbers printed on the Notes. The Company
shall promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1 Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof and of the Notes, it shall furnish
to the Trustee, at least 45 days (unless a shorter period is acceptable to the
Trustee) but not more than 60 days before a Redemption Date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the Redemption Date, (iii) the principal amount of
Notes to be redeemed and (iv) the Redemption Price.
SECTION 3.2 Selection of Notes to be Redeemed.
---------------------------------
If less than all of the Notes are to be redeemed at any time,
selection of the Notes for redemption will be made by the Trustee in compliance
with the requirements of the principal
42
national securities exchange, if any, on which the Notes are listed or, if the
Notes are not so listed, on a pro rata basis, by lot or by such method as the
Trustee considers fair and appropriate. In the event of partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the Redemption
Date by the Trustee from the outstanding Notes not previously called for
redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the portion of the principal amount thereof to be redeemed. Notes
and portions of Notes selected shall be in amounts of $1,000 or integral
multiples of $1,000, except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
not an integral multiple of $1,000, shall be redeemed. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Notes called
for redemption also apply to portions of Notes called for redemption.
SECTION 3.3 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its
registered address as it appears in the Securities Register.
The notice shall identify the Notes to be redeemed including CUSIP
number and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion shall be issued upon cancellation of the original
Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption (other than a Global Note)
must be surrendered to the Paying Agent to collect the Redemption Price;
(f) that, unless the Company defaults in making such Redemption
Payment, interest (and Special Interest, if any) on Notes (or portions thereof)
called for redemption cease to accrue on and after the Redemption Date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Notes.
43
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 30 days prior to the
Redemption Date (unless a shorter time is acceptable to the Trustee), an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as provided in the preceding
paragraph.
SECTION 3.4 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Notes called for redemption become irrevocably due and payable on the
Redemption Date at the Redemption Price including interest and Special Interest,
if any, accrued and unpaid on the Redemption Date. Upon surrender to the Paying
Agent, such Notes shall be paid at the Redemption Price stated in such notice.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder. A notice of redemption
may not be conditional.
SECTION 3.5 Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date, the Company shall deposit with
the Trustee or with the Paying Agent immediately available funds sufficient to
pay the Redemption Price of and accrued and unpaid interest, if any, on (and
Special Interest, if any, on) all Notes to be redeemed on that date. The
Trustee or the Paying Agent shall promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the Redemption Price of, and accrued interest
(including Special Interest, if any) on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the Redemption Date, interest (and Special Interest, if
any) shall cease to accrue on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after a Record Date but on or prior to
the related Interest Payment Date, then any accrued and unpaid interest (and
Special Interest, if any) shall be paid to the Person in whose name such Note
was registered at the close of business on such Record Date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest (and
Special Interest, if any) shall be paid on the unpaid principal, from the
Redemption Date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes and in Section 4.1 hereof.
SECTION 3.6 Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note equal in
principal amount to the unredeemed portion of the Note surrendered. The records
of the Registrar and the Depositary shall reflect any partial redemption of any
Global Note.
44
SECTION 3.7 Optional Redemption.
-------------------
(a) Except as set forth in subsection (b) of this Section 3.7,
the Notes shall not be redeemable at the Company's option prior to December 1,
2002. On or after such date, the Notes shall be redeemable at the option of
the Company, in whole at any time or in part from time to time, at the
following prices (expressed in percentages of the principal amount thereof) if
redeemed during the twelve-month period beginning December 1 of each of the
years indicated below, in each case together with interest (and Special
Interest, if any) accrued to the Redemption Date (subject to the right of
Holders of record on the relevant Record Date to receive interest (and Special
Interest, if any), due on the relevant Interest Payment Date):
Year Percentage
2002................................. 105.750 %
2003................................. 102.875 %
2004 and thereafter.................. 100.000 %
(b) Notwithstanding the provisions of subsection (a) of this
Section 3.7, at any time during the first 36 months after the Issue Date, the
Company may at its option redeem up to a maximum of 35% of the original
aggregate principal amount of the Notes with the net cash proceeds of one or
more Public Equity Offerings at a Redemption Price equal to 111.5% of the
principal amount thereof, plus accrued and unpaid interest (and Special
Interest, if any), thereon to the Redemption Date; provided that at least 65%
of the aggregate principal amount of the Notes originally issued shall remain
outstanding immediately after the occurrence of such redemption; and provided,
further, that such redemption shall occur within 90 days of the date of the
closing of such Public Equity Offering.
(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Section 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
SECTION 4.1 Payment of Notes.
----------------
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest (and Special Interest, if any) on, the Notes on
the dates and in the manner provided in the Notes and in this Indenture.
Principal, premium, if any, and interest (and Special Interest, if any) shall
be considered paid on the date due if the Trustee or the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 11:00 noon, New York
Time, on the due date money deposited by the Company in immediately available
funds and designated for and sufficient to pay all principal, premium, if any,
and interest (and Special Interest, if any) then due. The Company shall pay all
Special Interest, if any, in the same manner on the dates and in the amounts
set forth in
45
the Registration Rights Agreement. The Company will promptly notify the Trustee
of a Registration Default (as defined in the Registration Rights Agreement)
under the Registration Rights Agreement and any cure thereof.
The Company shall pay interest (including post-petition interest in
any proceeding under any applicable Federal, state or foreign bankruptcy law) on
Defaulted Interest and Special Interest, if any, (without regard to any
applicable grace period) at the same rate to the extent lawful.
SECTION 4.2 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3 hereof.
SECTION 4.3 Corporate Existence.
-------------------
Subject to the provisions of Article 5 hereof, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect (i) its corporate existence, and the corporate, partnership or other
existence of each of the Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of each
of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of each of the Company and the
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any of the Subsidiaries, if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and the Subsidiaries taken as a
whole and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
46
SECTION 4.4 Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall cause all material Properties owned by or
leased by it or any of the Subsidiaries useful and necessary to the conduct of
its business or the business of any of its Subsidiaries to be maintained and
kept in good condition, repair and working order (reasonable wear and tear
excepted) and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may
be necessary, so that the business carried on in connection therewith may be
properly conducted at all times; provided, however, that nothing in this
Section 4.4 shall prevent the Company or any of the Subsidiaries from
discontinuing the use, operation or maintenance of any of such Properties, or
disposing of any of them, if such discontinuance or disposal is, in the
judgment of the Board of Directors of the Company or the Subsidiary so
concerned, or of an officer (or other agent employed by the Company or of the
Subsidiary so concerned) of the Company or a Subsidiary having managerial
responsibility for any such property, desirable in the conduct of the business
of the Company or such Subsidiary of the Company, and if such discontinuance or
disposal is not adverse in any material respect to the Holders.
(b) To the extent available at commercially reasonable rates, the
Company shall maintain, and shall cause the Subsidiaries, to the extent such
Subsidiaries maintain operations, to maintain, insurance with responsible
carriers against such risks and in such amounts, and with such deductibles,
retentions, self-insured amounts and co-insurance provisions, as are
customarily carried by similar businesses, of similar size.
SECTION 4.5 Compliance With Laws.
--------------------
The Company shall comply, and shall cause each of the Subsidiaries
to comply, with all applicable statutes, rules, regulations, orders and
restrictions in respect of the conduct of their respective businesses and the
ownership of their respective properties, except for such noncompliances as
would not in the aggregate have a material adverse effect on the financial
condition or results of operations of the Company and the Subsidiaries taken as
a whole.
SECTION 4.6 Reports.
-------
(a) Whether or not the Company is subject to Section 13(a) or
15(d) of the Exchange Act, or any successor provision thereto, the Company
shall file with the Commission the annual reports, quarterly reports and other
documents which the Company would have been required to file with the
Commission pursuant to such Section 13(a) or 15(d) or any successor provision
thereto if the Company were subject thereto, such documents to be filed with
the Commission on or prior to the respective dates (the "Required Filing
Dates") by which the Company would have been required to file them; provided,
however, if the Company is not subject to Section 13(a) or 15(d) of the
Exchange Act, the Company shall not be required to file such reports and
documents with the Commission under Section 13(a) or 15(d) of the Exchange Act
(or any successor provisions thereto) so long as (i) Master Graphics files the
reports and documents with the Commission under Section 13(a) or 15(d) of the
Exchange Act that it is required to file, (ii) the Company is a Wholly Owned
Subsidiary of Master Graphics (iii) revenue of Master Graphics and its
consolidated subsidiaries (excluding the combined revenue of the
47
Company and Harperprints and their consolidated subsidiaries) shall not exceed
for any financial quarter 2% of the consolidated revenue of Master Graphics and
(iv) the Company and Master Graphics are in compliance with the requirements
set forth in the Commission's Staff Accounting Bulletin No. 53 or its
successor. Notwithstanding the foregoing, all financial information relevant to
the Holders of the Notes for the Company and its consolidated subsidiaries
shall be disclosed as required and permitted by GAAP and Regulation S-X under
the Exchange Act in the reports and documents filed with the Commission by
Master Graphics or the Company, as the case may be. The Company shall also
(whether or not it is required to file reports with the Commission), within 30
days of each Required Filing Date, (i) transmit by mail to all Holders of
Notes, as their names and addresses appear in the applicable Security Register,
without cost to such Holders or Persons, and (ii) file with the Trustee, copies
of the annual reports, quarterly reports and other documents (without exhibits)
which the Company has filed or would have filed, or which Master Graphics has
filed, with the Commission pursuant to Section 13(a) or 15(d) of the Exchange
Act, any successor provisions thereto or this covenant. The Company shall not
be required to file any report with the Commission if the Commission does not
permit such filing.
(b) For so long as any Notes remain outstanding, the Company
shall furnish to all Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act and the exhibits omitted
from the information furnished pursuant to the last sentence of Section 4.6(a)
for so long as the Notes are not freely transferred under the Securities Act.
SECTION 4.7 Taxes and Other Claims.
----------------------
The Company shall pay, and shall cause each of the Subsidiaries to
pay, prior to delinquency, (a) all material taxes, assessments, and governmental
charges levied or imposed upon the Company or any of the Subsidiaries or upon
the income, profits or property or assets of the Company or any of the
Subsidiaries and (b) all lawful claims for labor, materials and supplies, which,
if unpaid, might by law become a Lien upon the property or assets of the Company
or any of the Subsidiaries, except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes and for which
adequate reserves in accordance with GAAP or other appropriate provisions have
been made.
SECTION 4.8 Stay, Extension and Usury Laws.
------------------------------
The Company and each of the Guarantors covenant (to the extent that
they may lawfully do so) that they shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that they may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and covenant
that they shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law has been enacted.
48
SECTION 4.9 Change of Control.
-----------------
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require the Company to repurchase such Holder's Notes in
whole or in part (the "Change of Control Offer") at a purchase price (the
"Change of Control Purchase Price") in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, and
Special Interest, if any, to the Change of Control Payment Date. The Change of
Control Offer will remain open for a period of at least 30 days following its
commencement but no longer than 60 days, except to the extent that a longer
period is required by applicable law (the "Change of Control Offer Period").
On the first Business Day after the termination of the Change of Control Offer
Period (the "Change of Control Payment Date"), the Company will purchase all
Notes validly tendered and not properly withdrawn pursuant to the Change of
Control Offer. Payment for any Notes so purchased will be made in the same
manner as interest payments are made on the Notes. If the Change of Control
Payment Date is on or after a Record Date and on or before the related Interest
Payment Date, any accrued and unpaid interest and Special Interest (to the
extent involving interest that is due and payable on such Interest Payment
Date), if any, shall be paid to the Person in whose name a Note is registered
at the close of business on such Record Date, and no additional interest (or
Special Interest, if any) (to the extent involving interest that is due and
payable on such Interest Payment Date)) shall be payable to Holders who validly
tender Notes pursuant to the Change of Control Offer.
(b) Within 30 days following any Change of Control, the Company
or the Trustee (at the expense of the Company) shall mail by first class mail,
a notice to each Holder, with a copy of such notice to the Trustee. The notice,
which shall govern the terms of the Change of Control Offer, shall state, among
other things:
(i) that a Change of Control has occurred and a Change of Control
Offer is being made as provided for herein, and that,
although Holders are not required to tender their Notes, all
Notes that are validly tendered shall be accepted for
payment;
(ii) the Change of Control Purchase Price and the Change of
Control Payment Date, which will be no earlier than 30 days
and no later than 60 days after the date such notice is
mailed;
(iii) that any Note accepted for payment pursuant to the Change of
Control Offer (and duly paid for on the Change of Control
Payment Date) shall cease to accrue interest and Special
Interest, if applicable, after the Change of Control Payment
Date;
(iv) that any Notes (or portions thereof) not validly tendered
shall continue to accrue interest and Special Interest, if
applicable;
(v) that any Holder electing to have a Note purchased pursuant
to any Change of Control Offer shall be required to
surrender the Note, with the form
49
entitled "Option of Holder to Elect Purchase" on the reverse
of the Note completed, or transfer by book-entry transfer,
to the Company, a depositary, if appointed by the Company,
or a Paying Agent at the address specified in the notice at
least one (1) Business Day before the Change of Control
Purchase Date;
(vi) that Holders shall be entitled to withdraw their election if
the Company, the depositary or the Paying Agent, as the case
may be, receives, not later than the expiration of the
Change of Control Offer Period, a telegram, facsimile
transmission or letter setting forth the name of the Holder,
the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his
election to have such Note purchased; and
(vii) the instructions and any other information necessary to
enable Holders to tender their Notes (or portions thereof)
and have such Notes (or portions thereof) purchased pursuant
to the Change of Control Offer.
(c) On or before the Change of Control Payment Date, the Company
shall, to the extent lawful, (1) accept for payment all Notes or portions
thereof validly tendered and not properly withdrawn pursuant to the Change of
Control Offer, (2) deposit by 12:00 noon, New York City time, on such date with
the Paying Agent an amount equal to the Change of Control Purchase Price in
respect of all Notes or portions thereof so validly tendered and not properly
withdrawn and (3) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officers' Certificate stating the aggregate principal
amount of Notes or portions thereof being purchased by the Company. The Paying
Agent shall promptly (but in any case not later than five days after the Change
of Control Payment Date) mail to each Holder of Notes so validly tendered and
not properly withdrawn the Change of Control Purchase Price for such Notes.
(d) Upon surrender and cancellation of a Certificated Note that
is purchased in part pursuant to the Change of Control Offer, the Company shall
promptly issue and the Trustee shall authenticate and mail (or cause to be
transferred by book entry) to the surrendering Holder of such Certificated
Note, a new Certificated Note equal in principal amount to the unpurchased
portion of such surrendered Certificated Note; provided that each such new
Certificated Note shall be in a principal amount of $1,000 or an integral
multiple thereof.
Upon surrender of a Global Note that is purchased in part pursuant
to a Change of Control Offer, the Paying Agent shall forward such Global Note
to the Trustee who shall make a notation on Schedule A thereof to reduce the
principal amount of such Global Note to an amount equal to the unpurchased
portion of such Global Note, as provided in Section 2.6 hereof. The Company
shall publicly announce the results of the Change of Control Offer on the
Change of Control Payment Date. For purposes of this Section 4.9, the Trustee
shall act as the Paying Agent.
(e) The Company shall not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at
50
the times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
(f) The Company shall comply with the requirements of Rules 13e-4
and 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with the repurchase of the Notes as a result of a Change of Control.
SECTION 4.10 Transactions With Affiliates.
----------------------------
Subsequent to the Issue Date, the Company shall not, and shall not
permit any Subsidiary to, directly or indirectly, enter into or permit to exist
any transaction or series of related transactions (including, but not limited
to, the purchase, sale, lease or exchange of Property, the making of any
Investment, the giving of any guarantee or the rendering of any service) with
any Affiliate of the Company, other than transactions among the Company and the
Subsidiary Guarantors, unless (i) such transaction or series of related
transactions is on terms no less favorable to the Company or such Subsidiary
than those that could be obtained in a comparable arm's length transaction with
a Person that is not such an Affiliate, and (ii) (a) with respect to a
transaction or series of related transactions that has a Fair Market Value in
excess of $1,000,000, the transaction or series of related transactions is
approved by a majority of the Board of Directors of the Company (including a
majority of the disinterested directors), which approval is set forth in a Board
Resolution certifying that such transaction or series of transactions complies
with clause (i) above, and (b) with respect to a transaction or series of
related transactions that has a Fair Market Value in excess of $3,000,000, the
Company delivers an opinion as to the fairness from a financial point of view to
the Company or such Subsidiary issued by an investment banking firm of
nationally recognized standing or other independent appraisal firm or expert of
nationally recognized standing that is qualified, in the reasonable and good
faith judgment of the Board of Directors, to perform the task for which it has
been engaged. The foregoing provisions shall not be applicable to (i) reasonable
and customary compensation, indemnification and other benefits paid or made
available to an officer, director or employee of the Company or a Subsidiary for
services rendered in such Person's capacity as an officer, director or employee
(including reimbursement or advancement of reasonable out-of-pocket expenses and
provisions of directors' and officers' liability insurance) or (ii) the making
of any Restricted Payment otherwise permitted by this Indenture, (iii)
transactions and agreements existing on the Issue Date and described in the
Offering Memorandum under the caption "--Certain Transactions" and (iv) loans to
officers and employees of the Company and the Subsidiaries made in the ordinary
course of business and in furtherance of the Company's business in an aggregate
amount not to exceed $1,500,000 at any one time outstanding.
SECTION 4.11 Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Subsidiary
to, make any Restricted Payment, directly or indirectly, unless at the time of
and after giving effect to the proposed Restricted Payment, (i) no Default
shall have occurred and be continuing (or would result therefrom), (ii) the
Company could incur at least $1.00 of additional Indebtedness under
51
the test described in the first sentence of Section 4.12 and (iii) the
aggregate amount of all Restricted Payments declared or made on or after the
Issue Date by the Company or any Subsidiary shall not exceed the sum of (A) 50%
(or if such Consolidated Net Income of the Company shall be a deficit, minus
100% of such deficit) of the aggregate Consolidated Net Income of the Company
accrued during the period beginning on the first day of the fiscal quarter in
which the Issue Date falls and ending on the last day of the fiscal quarter
ending immediately prior to the date of such proposed Restricted Payment, minus
(B) 100% of the amount of any writedowns, write- offs and other negative
extraordinary charges not otherwise reflected in Consolidated Net Income of the
Company during such period, plus (C) an amount equal to the aggregate Net
Proceeds received by the Company, subsequent to the Issue Date, from the
issuance or sale (other than to a Subsidiary) of shares of its Capital Stock
(excluding Redeemable Stock, but including Capital Stock issued upon the
exercise of options, warrants or rights to purchase Capital Stock (other than
Redeemable Stock) of the Company) subsequent to the Issue Date, plus (D) 100%
of the liability (expressed as a positive number) as expressed on the face of a
balance sheet in accordance with GAAP in respect of any Indebtedness of the
Company, any of its Subsidiaries or any Subsidiary Guarantor, or the carrying
value of Redeemable Stock, which has been converted into, exchanged for or
satisfied by the issuance of shares of Capital Stock (other than Redeemable
Stock) of the Company or Master Graphics, subsequent to the Issue Date, plus
(E) 100% of the net reduction in Restricted Investments, subsequent to the
Issue Date, in any Person, resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers of Property (but
only to the extent such interest, dividends, repayments or other transfers of
Property are not included in the calculation of Consolidated Net Income of the
Company), in each case to the Company, any Subsidiary Guarantor or any
Subsidiary of the Company from any Person (including, without limitation, from
Unrestricted Subsidiaries) or from redesignations of Unrestricted Subsidiaries
as Subsidiaries (valued in each case as provided in the definition of
"Investment"), not to exceed in the case of any Person the amount of Restricted
Investments previously made by the Company, such Subsidiary Guarantor or such
Subsidiary in such Person and in each such case which was treated as a
Restricted Payment.
(b) The provisions of Section 4.11(a) above shall not prevent (A)
the payment of any dividend on Capital Stock of any class within 60 days after
the date of its declaration if at the date of declaration such payment would be
permitted by this Indenture; (B) any repurchase or redemption of Capital Stock
or Subordinated Indebtedness of the Company or a Subsidiary made by exchange
for Capital Stock of the Company (other than Redeemable Stock) or Capital Stock
of Master Graphics, or out of the Net Proceeds from the substantially
concurrent issuance or sale (other than to a Subsidiary) of Capital Stock of
the Company (other than Redeemable Stock) or Capital Stock of Master Graphics,
provided that the Net Proceeds from any such sale of Capital Stock of the
Company are excluded from computations under clause (a)(iii)(C) of this Section
to the extent that such proceeds are applied to purchase or redeem such Capital
Stock or Subordinated Indebtedness; (C) so long as no Default shall have
occurred and be continuing or should occur as a consequence thereof, any
repurchase or redemption of Subordinated Indebtedness of the Company or a
Subsidiary Guarantor solely in exchange for, or out of the Net Proceeds from
the substantially concurrent sale of, new Subordinated Indebtedness of the
Company or a Subsidiary Guarantor, so long as such Subordinated Indebtedness is
permitted under the covenant described in Sections 4.12 and 4.13 and (x) is
subordinated to the Notes or
52
the applicable Guarantee at least to the same extent as the Subordinated
Indebtedness so exchanged, purchased or redeemed, (y) has a stated maturity
later than the stated maturity of the Subordinated Indebtedness so exchanged,
purchased or redeemed and (z) has an Average Life at the time incurred that is
greater than the remaining Average Life of the Subordinated Indebtedness so
exchanged, purchased or redeemed; (D) Investments in any Person engaged in the
Related Business in an aggregate amount not to exceed $2,000,000; (E) payments
to Master Graphics or any other Person in respect of which Master Graphics or
such other Person is a member of the consolidated tax group of the Company or
any Subsidiary Guarantor, as applicable, for so long as Master Graphics or such
other Person owns such amount of the Capital Stock of Master Graphics, the
Company or such Subsidiary Guarantor, as applicable, as will permit it or a
member of the consolidated tax group of Master Graphics or such other Person to
be entitled to file consolidated federal tax returns with the Company or such
Subsidiary Guarantor, for income taxes pursuant to the Tax Sharing Agreement or
for the purpose of enabling Master Graphics or such other Person or any such
member to pay taxes other than income taxes, to the extent actually owned and
attributable to the operations of the Company and the Subsidiary Guarantors or
such other Person's ownership thereof; (F) payments to Master Graphics for so
long as it owns not less than a majority of the outstanding Common Stock of the
Company or a Subsidiary Guarantor, in amounts sufficient to pay the ordinary
operating and administrative expenses of Master Graphics (including all
reasonable professional fees and expenses), including in connection with its
complying with its reporting obligations (including filings with the Commission
and any exchange on which Master Graphics' securities are traded) and
obligations to prepare and distribute business records in the ordinary course
of business and Master Graphics' costs and expenses relating to taxes, other
than those referred to in clause (E) (which taxes are attributable to the
operations of the Company or any Guarantor or to ownership thereof); provided
that the aggregate payments paid in each fiscal year pursuant to this clause
(F) will not exceed $2,500,000; (G) any dividend, obligation or other payment
by any Subsidiary on shares of its Common Stock that is paid pro rata to all
holders of such Common Stock; (H) so long as no Default or Event of Default
shall have occurred and be continuing, dividends, distributions and other
payments to Master Graphics for the sole purpose of making scheduled interest
payments on Seller Notes in an aggregate amount not to exceed $1,000,000; and
(I) so long as no Default or Event of Default shall have occurred and be
continuing, repurchases by the Company, or by Master Graphics so long as the
Company is a Wholly Owned Subsidiary of Master Graphics, of Capital Stock
(other than Preferred Stock) of the Company or the Subsidiary Guarantors from
officers and employees of the Company or the Subsidiary Guarantors or their
authorized representatives upon the death, disability or termination of
employment of such employees, in an aggregate amount not to exceed $1,000,000
in any calendar year. Notwithstanding the foregoing, the amount available for
Investments in a Person engaged in the Related Business pursuant to clause (D)
of the preceding sentence may be increased by the aggregate amount received by
the Company and the Subsidiaries from such a Person on or before such date
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances or other transfers of Property made to such a Person (but
only to the extent such interest, dividends, repayments or other transfers of
Property are not included in the calculation of Consolidated Net Income of the
Company). Restricted Payments permitted to be made as described in the first
sentence of this Section 4.11(b) will be excluded in calculating the amount of
Restricted Payments thereafter for purposes of clause (iii) of Section 4.11(a),
except that amounts expended pursuant to clause (A) (but only if the
declaration thereof has not been
53
counted in a prior period), payments made pursuant to clause (E) (other than to
the extent otherwise reducing Consolidated Net Income of the Company), any
dividends, distributions or other payments made to a Person other than the
Company or a Wholly Owned Subsidiary permitted to be made pursuant to clause
(F) and any repurchases of Capital Stock of the Company or Master Graphics, as
applicable, permitted to be made pursuant to clause (G) will be included in
calculating the amount of Restricted Payments thereafter and except that any
such Restricted Payments permitted to be made pursuant to clause (D) will be
included in calculating the amount of Restricted Payments made pursuant to such
clause (D) thereafter.
(c) For purposes of this covenant, if a particular Restricted
Payment involves a non-cash payment, including a distribution of assets, then
such Restricted Payment shall be deemed to be an amount equal to the cash
portion of such Restricted Payment, if any, plus an amount equal to the Fair
Market Value of the non-cash portion of such Restricted Payment.
(d) If the Board of Directors of the Company designates a
subsidiary (including a newly formed or newly acquired subsidiary) of the
Company or any of the Subsidiaries as an Unrestricted Subsidiary pursuant to
Section 4.19, all outstanding Investments by the Company and the Subsidiaries
in the subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under Section 4.11(a)(iii) above.
SECTION 4.12 Limitation on Indebtedness.
--------------------------
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, incur any Indebtedness (including Acquired
Indebtedness), unless after giving pro forma effect to the incurrence of such
Indebtedness, the Consolidated Interest Coverage Ratio for the Determination
Period preceding the Transaction Date is at least 2.0 to 1.0. Notwithstanding
the foregoing, the Company or any Subsidiary may incur Permitted Indebtedness
which such Person is permitted thereby to incur. Any Indebtedness of a Person
existing at the time at which such Person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be incurred
by such Subsidiary at the time at which it becomes a Subsidiary.
SECTION 4.13 Limitation on Subsidiary Indebtedness and Preferred Stock.
---------------------------------------------------------
The Company shall not permit any Subsidiary to, directly or
indirectly, incur any Indebtedness or issue any Preferred Stock except:
(a) Indebtedness or Preferred Stock issued to and held by the
Company or a Subsidiary Guarantor, so long as any transfer of such Indebtedness
or Preferred Stock to a Person other than the Company or a Subsidiary Guarantor
shall be deemed to constitute an incurrence of such Indebtedness or Preferred
Stock by the issuer thereof as of the date of such transfer;
(b) Acquired Indebtedness or Preferred Stock of a Subsidiary
issued and outstanding prior to the date on which such Subsidiary was acquired
by Master Graphics (other than Indebtedness or Preferred Stock issued in
connection with or in anticipation of such acquisition);
54
(c) Indebtedness or Preferred Stock outstanding on the Issue Date
and listed in Schedule 4.13 attached hereto;
(d) Indebtedness permitted to be incurred by the first sentence
of the covenant described in Section 4.12 and Indebtedness described in clauses
(b), (c), (d), (e), (f), (g), (h), (i) and (l) under the definition of
"Permitted Indebtedness";
(e) Permitted Subsidiary Refinancing Indebtedness of such
Subsidiary; and
(f) Indebtedness of a Subsidiary which represents the assumption
by such Subsidiary of Indebtedness of another Subsidiary in connection with a
merger of such Subsidiaries, provided that no Subsidiary or any successor (by
way of merger) thereto existing on the Issue Date shall assume or otherwise
become responsible for any Indebtedness of an entity which is not a Subsidiary
on the Issue Date, except to the extent that a Subsidiary would be permitted to
incur such Indebtedness under this Section 4.13.
SECTION 4.14 Limitation on Dividends and Other Payment Restrictions Affecting
----------------------------------------------------------------
Subsidiaries.
- ------------
The Company shall not, and shall not permit any of its
Subsidiaries, directly or indirectly, to create, enter into any agreement with
any Person or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind which by its terms restricts
the ability of any of its Subsidiaries to (a) pay dividends, in cash or
otherwise, or make any other distributions on its Capital Stock to the Company
or any Subsidiary Guarantor, (b) pay any Indebtedness owed to the Company or
any Subsidiary Guarantor, (c) make loans or advances to the Company or any
Subsidiary Guarantor or (d) transfer any of its Property or assets to the
Company or any Subsidiary Guarantor except any encumbrance or restriction
contained in any agreement or instrument:
(i) existing on the Issue Date;
(ii) relating to any Property or assets acquired after the Issue
Date, so long as such encumbrance or restriction relates
only to the Property or assets so acquired and is not and
are not created in anticipation of such acquisition;
(iii) relating to any Acquired Indebtedness of any Subsidiary at
the date on which such Subsidiary was acquired by Master
Graphics or any Subsidiary (other than Indebtedness incurred
in anticipation of such acquisition);
(iv) effecting a refinancing of Indebtedness incurred pursuant to
an agreement referred to in the foregoing clauses (i)
through (iii) of this Section, so long as the encumbrances
and restrictions contained in any such refinancing agreement
are no more restrictive than the encumbrances and
restrictions contained in such agreements;
(v) constituting customary provisions restricting subletting or
assignment of any lease of the Company or any Subsidiary or
provisions in license
55
agreements or similar agreements that restrict the
assignment of such agreement or any rights thereunder;
(vi) constituting restrictions on the sale or other disposition
of any Property securing Indebtedness as a result of a
Permitted Lien on such Property;
(vii) constituting any temporary encumbrance or restriction with
respect to a Subsidiary pursuant to an agreement that has
been entered into for the sale or disposition of all or
substantially all of the Capital Stock of or Property and
assets of such Subsidiary; or
(viii) governing Indebtedness permitted to be incurred hereunder,
provided that the terms and conditions of any such
restrictions and encumbrances are not materially more
restrictive than those contained in this Indenture.
SECTION 4.15 Limitation on Asset Sales.
-------------------------
(a) The Company shall not engage in, and shall not permit any
Subsidiary to engage in, any Asset Sale unless: (i) except in the case of an
Asset Sale resulting from the requisition of title to, seizure or forfeiture of
any Property or assets or any actual or constructive total loss or an agreed or
compromised total loss, the Company or such Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the Property or asset; (ii) at least 75% of such
consideration consists of Cash Proceeds (or the assumption of Indebtedness of
the Company or such Subsidiary relating to the Capital Stock or Property or
asset that was the subject of such Asset Sale and the unconditional release of
the Company or such Subsidiary from such Indebtedness); (iii) after giving
effect to such Asset Sale, the total non-cash consideration held by the Company
from all such Asset Sales does not exceed $2,000,000; and (iv) the Company
delivers to the Trustee an Officers' Certificate certifying that such Asset
Sale complies with clauses (i), (ii) and (iii). The Company or such Subsidiary,
as the case may be, may apply the Net Available Proceeds from each Asset Sale
(x) to the acquisition of one or more Replacement Assets or (y) to repurchase
or repay Senior Debt of the Company or a Subsidiary Guarantor (with a permanent
reduction of availability in the case of revolving credit borrowings); provided
that such acquisition or such repurchase or repayment shall be made within 270
days after the consummation of the relevant Asset Sale; provided, further, that
any such Net Available Proceeds that are applied to the acquisition of
Replacement Assets useful in the business of the Company or any of its
Subsidiaries, or the Subsidiary making such Asset Sale, pursuant to any binding
agreement relating thereto shall be deemed to have been applied for such
purpose within such 270-day period so long as they are so applied within 30
days of the effective date of such agreement.
(b) Any Net Available Proceeds from any Asset Sale that are not
used to so acquire Replacement Assets or to repurchase or repay Senior Debt
within 270 days after consummation of the relevant Asset Sale constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds
$5,000,000, the Company shall within 30 days thereafter, or at any time after
receipt of Excess Proceeds but prior to there being $5,000,000 of Excess
Proceeds, the Company may, at its option, make a pro rata offer (an "Asset Sale
Offer") to all
56
Holders of Notes and holders of Senior Debt, if and to the extent the Company
is required by the instruments governing such Senior Debt to make such an
offer, to purchase Notes and such Senior Debt in an aggregate amount equal to
the Excess Proceeds, at a price in cash (the "Asset Sale Offer Purchase Price")
equal to 100% of the outstanding principal of the Notes plus accrued interest
and Special Interest, if any, to the date of purchase and, in the case of such
other Senior Debt, 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, thereon to the date of purchase, in accordance with
the procedures set forth in this Section 4.15. Upon completion of such Asset
Sale Offer, the amount of Excess Proceeds shall be reset to zero and the
Company may use any remaining amount for general corporate purposes.
(c) The Asset Sale Offer will remain open for a period of at
least 30 days following its commencement but no longer than 60 days, except to
the extent that a longer period is required by applicable law (the "Asset Sale
Offer Period"). On the Business Day following the termination of the Asset
Sale Offer Period (the "Asset Sale Purchase Date"), the Company will purchase
the principal amount of Notes required to be purchased pursuant to this Section
4.15 (the "Asset Sale Offer Amount") or, if less than the Asset Sale Offer
Amount has been so validly tendered and not properly withdrawn, all Notes
validly tendered and not properly withdrawn in response to the Asset Sale
Offer. Payment for any Notes so purchased will be made in the same manner as
interest payments are made on the Notes. If the Asset Sale Purchase Date is on
or after a Record Date and on or before the related Interest Payment Date, any
accrued and unpaid interest and Special Interest, if any, shall be paid to the
Person in whose name a Note is registered at the close of business on such
Record Date, and no additional interest (or Special Interest (to the extent
involving interest that is due and payable on such Interest Payment Date), if
any) shall be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
(d) Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
Asset Sale Offer shall be made to all Holders. The notice, which shall govern
the terms of the Asset Sale Offer, shall state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 4.15 and the Asset Sale Offer Period during which
the Asset Sale Offer shall remain open;
(ii) the Asset Sale Offer Amount, the Asset Sale Offer Purchase
Price and the Asset Sale Purchase Date;
(iii) that any Notes which are not validly tendered or are not
otherwise accepted for payment shall continue to accrue
interest and Special Interest, if applicable;
(iv) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale
Offer shall cease to accrue interest and Special Interest,
if applicable, after the Asset Sale Purchase Date;
57
(v) that any Holder electing to have a Note purchased pursuant
to any Asset Sale Offer shall be required to surrender the
Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed, or transfer
by book-entry transfer, to the Company, a depositary, if
appointed by the Company, or a Paying Agent at the address
specified in the notice at least (1) one Business Day
before the Asset Sale Purchase Date;
(vi) that Holders shall be entitled to withdraw their election
if the Company, the depositary or the Paying Agent, as the
case may be, receives, no later than the expiration of the
Asset Sale Offer Period, a telegram, facsimile transmission
or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(vii) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Asset Sale Offer Amount,
the Trustee shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in
denominations of $1,000, or integral multiples thereof,
shall be purchased); and
(viii) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).
(e) On or before the Asset Sale Purchase Date, the Company
shall, to the extent lawful, (1) accept for payment, on a pro rata basis to the
extent necessary, the Asset Sale Offer Amount of Notes or portions thereof so
validly tendered and not properly withdrawn pursuant to the Asset Sale Offer,
or if less than the Asset Sale Offer Amount has been so validly tendered and
not properly withdrawn, all Notes validly tendered and not properly withdrawn,
(2) deposit by 12:00 noon New York City time, on such date with the Paying
Agent an amount equal to Asset Sale Offer Amount, plus accrued and unpaid
interest, and Special Interest, if any, in respect of all Notes, or portions
thereof, so accepted and (3) shall deliver to the Trustee an Officers'
Certificate stating that such Notes or portions thereof were accepted for
payment by the Company in accordance with the terms of this Section 4.15. The
Company, the Depositary or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five days after the Asset Sale Purchase Date)
mail or deliver to each tendering Holder an amount equal to the Asset Sale
Offer Purchase Price of the Notes validly tendered and not properly withdrawn
by such Holder and accepted by the Company for purchase. Upon surrender and
cancellation of a Certificated Note that is purchased in part, the Company
shall promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Certificated Note a new Certificated Note equal in
principal amount to the unpurchased portion of such surrendered Certificated
Note; provided that each such new Certificated Note shall be in a principal
amount at Maturity of $1,000 or an integral multiple thereof. Upon surrender
of a Global Note that is purchased in part pursuant to an Asset Sale Offer, the
Paying Agent shall forward such Global
58
Note to the Trustee who shall make a notation on Schedule A thereof to reduce
the principal amount of such Global Note to an amount equal to the unpurchased
portion of such Global Note, as provided in Section 2.6 hereof. Any Note not
so accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale
offer on the Asset Sale Purchase Date. For purposes of this Section 4.15, the
Trustee shall act as the Paying Agent.
(f) The Company shall comply with any applicable tender offer
rules (including, without limitation, any applicable requirements of Rules
13e-4 and 14e-1 under the Exchange Act) in the event that an Asset Sale Offer
is required under the circumstances described herein.
SECTION 4.16 Limitation on Sale and Lease-Back Transactions.
----------------------------------------------
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, enter into, assume, guarantee or otherwise become liable
with respect to, any Sale and Lease-Back Transaction unless (i) the proceeds
from such Sale and Lease-Back Transaction are at least equal to the Fair Market
Value of such Property being transferred and (ii) the Company or such Subsidiary
would have been permitted to enter into such transaction under the covenants
described in Sections 4.12, 4.13 and 4.17.
SECTION 4.17 Limitation on Liens.
-------------------
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create, affirm, incur, assume or suffer to exist any
Liens of any kind other than Permitted Liens on or with respect to any Property
or assets of the Company or such Subsidiary or any interest therein or any
income or profits therefrom, whether owned at the Issue Date or thereafter
acquired, without effectively providing that the Notes or the Guarantees, as
applicable, shall be secured equally and ratably with (or prior to) the
Indebtedness so secured for so long as such obligations are so secured.
SECTION 4.18 Limitation on Guarantees by Subsidiaries.
----------------------------------------
The Company shall not permit any Subsidiary which is not already a
Subsidiary Guarantor, directly or indirectly, to guarantee any Indebtedness of
the Company or Master Graphics or any other Obligor ("Guaranteed Indebtedness")
unless (i) such Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a Guarantee of payment of the Notes by
such Subsidiary and (ii) such Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Subsidiary as a result of any payment by such Subsidiary under its
Guarantee. If the Guaranteed Indebtedness is pari passu with the Notes or, if
the Guaranteed Indebtedness was incurred by Master Graphics, then the guarantee
of such Guaranteed Indebtedness shall be pari passu with or subordinated to the
Guarantee; and if the Guaranteed Indebtedness is subordinated to the Notes, then
the guarantee of such Guaranteed Indebtedness shall be subordinated to the
Guarantee at least to the extent that all Guaranteed Indebtedness is
subordinated to the Notes. Notwithstanding
59
the foregoing, any Guarantee by a Subsidiary that was incurred pursuant to the
terms of the preceding sentence (but not otherwise) shall provide by its terms
that it shall be automatically and unconditionally released and discharged upon
the release or discharge of the guarantee which resulted in the creation of
such Subsidiary's Guarantee, except a discharge or release by, or as a result
of, payment under such guarantee.
SECTION 4.19 Unrestricted Subsidiaries.
-------------------------
(a) The Company may designate a subsidiary (including a newly
formed or newly acquired subsidiary) of Master Graphics or any of its
Subsidiaries as an Unrestricted Subsidiary; provided that (i) immediately after
giving effect to the transaction, the Company could incur $1.00 of additional
Indebtedness pursuant to the first sentence of Section 4.12 and (ii) such
designation is at the time permitted under Section 4.11. Notwithstanding any
provisions of this covenant all subsidiaries of an Unrestricted Subsidiary
shall be Unrestricted Subsidiaries.
(b) The Company shall not, and shall not permit any Subsidiary
to, take any action or enter into any transaction or series of transactions
that would result in a Person (other than a newly formed subsidiary having no
outstanding Indebtedness (other than Indebtedness to the Company or a
Subsidiary Guarantor) at the date of determination) becoming a Subsidiary
(whether through an acquisition, the redesignation of an Unrestricted
Subsidiary or otherwise) unless, after giving effect to such action,
transaction or series of transactions on a pro forma basis, (i) the Company
could incur at least $1.00 of additional Indebtedness pursuant to the first
sentence of Section 4.12 and (ii) no Default or Event of Default would occur.
(c) Subject to the preceding provisions of this Section 4.19, an
Unrestricted Subsidiary may be redesignated as a Subsidiary. The designation of
a subsidiary as an Unrestricted Subsidiary or the designation of an
Unrestricted Subsidiary as a Subsidiary in compliance with the preceding
provisions of this Section 4.19 shall be made by the Board of Directors of the
Company pursuant to a Board Resolution delivered to the Trustee and shall be
effective as of the date specified in such Board Resolution, which shall not be
prior to the date such Board Resolution is delivered to the Trustee. Any
Unrestricted Subsidiary shall become a Subsidiary if it incurs any Indebtedness
other than Non-Recourse Indebtedness. If at any time Indebtedness of an
Unrestricted Subsidiary which was Non-Recourse Indebtedness no longer so
qualifies, such Indebtedness shall be deemed to have been incurred when such
Non-Recourse Indebtedness becomes Indebtedness.
SECTION 4.20 Limitations on Line of Business.
-------------------------------
Neither the Company nor any of the Subsidiaries shall directly or
indirectly engage to any substantial extent in any line or lines of business
activity other than a Related Business.
SECTION 4.21 Compliance Certificate; Notice of Default or Event of Default.
-------------------------------------------------------------
(a) The Company and each Guarantor shall deliver to the Trustee,
within 90 days after the end of each fiscal year, an Officers' Certificate
(which shall be signed by Officers
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satisfying the requirements of Section 314 of the Trust Indenture Act) stating
that a review of the activities of the Company and the Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in
the performance or observance of any of the terms, provisions and conditions of
this Indenture (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she may have
knowledge and what action the Company is taking or proposes to take with
respect thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account of the
principal of, interest, if any, or Special Interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) The year-end financial statements delivered pursuant to
Section 4.6(a) hereof shall be accompanied by a written statement of the
independent public accountants of the Company or Master Graphics, as
applicable, (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial
statements, nothing has come to their attention that would lead them to believe
that the Company has violated any provisions of Article 4 or Article 5 hereof
(except that, such written statement need not address the Company's compliance
with the provisions of Sections 4.2, 4.5, 4.6, 4.8, 4.9, 4.10 or 4.22 hereof)
or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain knowledge
of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon, but in any event within
five Business Days after, any Officer's becoming aware of any Default or Event
of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.
(d) For purposes of this Section 4.21, compliance shall be
determined without required by any period of grace or requirement of notice
under this Indenture.
SECTION 4.22 Prohibition on Company and Guarantors Becoming an Investment
------------------------------------------------------------
Company.
- -------
None of the Company or the Subsidiary Guarantors shall become an
"Investment Company" as defined in the Investment Company Act of 1940, as
amended.
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ARTICLE 5
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.1 Consolidation, Merger, Conveyance, Lease or Transfer
----------------------------------------------------
(a) The Company shall not, in any transaction or series of
transactions, consolidate with or merge into any other Person (other than a
merger of a Wholly Owned Subsidiary into the Company in which the Company is
the continuing corporation), continue in a new jurisdiction or sell, convey,
assign, transfer, lease or otherwise dispose of all or substantially all of the
Property and assets of the Company and its Subsidiaries, taken as a whole, to
any Person, unless:
(i) either (a) the Company shall be the continuing corporation
or (b) the corporation (if other than the Company) formed by
such consolidation or into which the Company is merged, or
the Person which acquires, by sale, assignment, conveyance,
transfer, lease or disposition, all or substantially all of
the Property and assets of the Company and its Subsidiaries,
taken as a whole (such corporation or Person, the "Surviving
Entity"), shall be a corporation organized and validly
existing under the laws of the United States of America, any
political subdivision thereof or any state thereof or the
District of Columbia, and shall expressly assume, by a
supplemental indenture, the due and punctual payment of the
principal of (and premium, if any) and interest (including
Special Interest, if any) on all the Notes and the
performance of the Company's covenants and obligations under
this Indenture;
(ii) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness incurred or
anticipated to be incurred in connection with or in respect
of such transaction or series of transactions), no Event of
Default or Default shall have occurred and be continuing or
would result therefrom;
(iii) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including,
without limitation, any Indebtedness incurred or anticipated
to be incurred in connection with or in respect of such
transaction or series of transactions), the Company (or the
Surviving Entity if the Company is not continuing) shall
have a Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the Company immediately prior to
such transactions; and
(iv) immediately after giving effect to any such transaction or
series of transactions on a pro forma basis as if such
transaction or series of transactions had occurred on the
first day of the Determination Period, the
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Company (or the Surviving Entity if the Company is not
continuing) would be permitted to incur $1.00 of additional
Indebtedness pursuant to the test described in the first
sentence of Section 4.12.
The provision of clause (iv) shall not apply to any merger or consolidation
into or with, or any such transfer of all or substantially all of the Property
and assets of the Company and its Subsidiaries, taken as a whole, into the
Company.
(b) In connection with any consolidation, merger, continuance,
transfer of assets or other transactions contemplated by this provision, the
Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger,
continuance, sale, assignment, conveyance or transfer and the supplemental
indenture in respect thereto comply with the provisions of this Indenture and
that all conditions precedent in this Indenture relating to such transactions
have been complied with.
(c) Upon any transaction or series of transactions that are of
the type described in, and are effected in accordance with, this Section 5.1,
the Surviving Entity shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture and the Notes with
the same effect as if such Surviving Entity had been named as the Company in
this Indenture; and when a Surviving Person duly assumes all of the Obligations
and covenants of the Company pursuant to this Indenture and the Notes, except
in the case of a lease, the predecessor Person shall be relieved of all such
Obligations.
SECTION 5.2 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger by the Company with or into any
other corporation, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Subsidiaries, taken as a whole, in accordance with Section 5.1 hereof, the
successor corporation formed by such consolidation into or with which the
Company is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted
for (so that from and after the date of such consolidation, merger, sale,
lease, conveyance or other disposition, the provisions of this Indenture
referring to "the Company" shall refer instead to the Surviving Entity and not
to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such Surviving Entity had been named
as the Company herein; provided, however, that the predecessor of the Company
shall not be relieved from the obligation to pay the principal, premium, if
any, and interest and Special Interest, if any, on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.1 hereof.
If the Surviving Entity shall have succeeded to and been
substituted for the Company, such Surviving Entity may cause to be signed, and
may issue either in its own name or in the name of the Company prior to such
succession any or all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee; and, upon the
order of such Surviving Entity, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall
63
deliver any Notes which previously shall have been signed and delivered by the
Officers of the Company to the Trustee for authentication, and any Notes which
such Surviving Entity thereafter shall cause to be signed and delivered to the
Trustee for that purpose (in each instance with notations of Guarantees thereon
by the Guarantors). All of the Notes so issued and so endorsed shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued and endorsed in accordance with the terms of
this Indenture and the Guarantees as though all such Notes had been issued and
endorsed at the date of the execution hereof.
In case of any such consolidation, merger, continuance, sale,
transfer, conveyance or other disposal, such changes in phraseology and form
(but not in substance) may be made in the Notes thereafter to be issued or the
Guarantees to be endorsed thereon as may be appropriate.
For all purposes of this Indenture and the Notes, Subsidiaries of
any Surviving Entity will, upon such transaction or series of transactions,
become Subsidiaries or Unrestricted Subsidiaries as provided pursuant to this
Indenture and all Indebtedness, and all Liens on Property or assets, of the
Surviving Entity and its Subsidiaries immediately prior to such transaction or
series of transactions shall be deemed to have been incurred upon such
transaction or series of transactions.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
-----------------
Each of the following is an "Event of Default" hereunder:
(a) default in the payment of interest on, or Special Interest
with respect to, any Note issued pursuant to this Indenture when the same
becomes due and payable, and the continuance of such default for a period of 30
days;
(b) default in the payment of the principal of (or premium, if
any, on) any Note issued pursuant to this Indenture at its Maturity, whether
upon optional redemption, required repurchase (including pursuant to a Change
of Control Offer or an Asset Sale Offer) or otherwise or the failure to make an
offer to purchase any such Note as required;
(c) the Company fails to comply with any of its covenants or
agreements contained in Sections 4.9, 4.11, 4.12, 4.13, 4.15, 4.16, 4.21(c) and
5. 1;
(d) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty
addressed in clause (a), (b) or (c) above) and continuance of such Default or
breach for a period of 30 days after written notice thereof has been given to
the Company by the Trustee or to the Company and the Trustee by Holders of at
least 25% of the aggregate principal amount at Stated Maturity of the
outstanding Notes;
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(e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of the Subsidiaries (or
the payment of which is guaranteed by the Company or any of the Subsidiaries)
whether such Indebtedness or guarantee now exists, or is created after the date
of this Indenture, which default (a) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in such Indebtedness on the date of such default (a
"Payment Default") or (b) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates $10,000,000 or more;
(f) the entry by a court of competent jurisdiction of one or more
final judgments against the Company or any Subsidiary in an uninsured or
unindemnified aggregate amount in excess of $5,000,000 which is not discharged,
waived, appealed, stayed, bonded or satisfied for a period of 60 consecutive
days;
(g) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal, state, or
foreign bankruptcy, insolvency, or other similar law or (ii) a decree or order
adjudging the Company or any Significant Subsidiary a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal, state or foreign bankruptcy, insolvency, or similar
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any Significant
Subsidiary or of any substantial part of the Property or assets of the Company
or any Significant Subsidiary, or ordering the winding up or liquidation of the
affairs of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days;
(h) (i) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal,
state or foreign bankruptcy, insolvency or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against the Company or any Significant Subsidiary; or
(iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such
65
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or any Significant Subsidiary or of any
substantial part of the Property or assets of the Company or any
Significant Subsidiary, or the making by the Company or any Significant
Subsidiary of an assignment for the benefit of creditors; or (v) the
admission by the Company or any Significant Subsidiary in writing of
its inability to pay its debts generally as they become due; or (vi)
the taking of corporate action by the Company or any Significant
Subsidiary in furtherance of any such action; or
(ii) any Guarantee shall for any reason cease to be, or be
asserted by the Company or any Guarantor, as applicable, not to be, in
full force and effect (except pursuant to the release of any such
Guarantee in accordance with this Indenture).
SECTION 6.2 Acceleration.
------------
If any Event of Default (other than an Event of Default specified
in clause (g) or (h) of Section 6.1) occurs and is continuing, then and in
every such case the Trustee or the Holders of not less than 25% of the
outstanding aggregate principal amount at Stated Maturity of the Notes, may
declare the principal amount at Stated Maturity of, premium, if any, and any
accrued and unpaid interest (and Special Interest, if any) on all such Notes
then outstanding to be immediately due and payable by a notice in writing to
the Company (and to the Trustee if given by Holders of such Notes), and upon
any such declaration all amounts payable in respect of the Notes will become
and be immediately due and payable. If any Event of Default specified in clause
(g) or (h) of Section 6.1 occurs, the principal amount at Stated Maturity of,
premium, if any, and any accrued and unpaid interest (including Special
Interest, if any) on, the Notes then outstanding shall become immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder of such Notes. In the event of a declaration of acceleration because
an Event of Default set forth in clause (e) of Section 6.1 has occurred and is
continuing, such declaration of acceleration shall be automatically rescinded
and annulled if the event of default triggering such Event of Default pursuant
to clause (e) of Section 6.1 shall be remedied or cured or waived by the
holders of the relevant Indebtedness within 30 days after such event of
default; provided that no judgment or decree for the payment of the money due
on the Notes has been obtained by the Trustee as provided in this Indenture.
After any such acceleration, but before a judgment or decree based
on acceleration, Holders of a majority in principal amount at Stated Maturity
of the outstanding Notes by notice to the Company and the Trustee may rescind
an acceleration and its consequences if:
(a) the Company or any Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(i) all money paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursement and advances
of the Trustee, its agents and counsel, and any other amounts
due to the Trustee under Section 7.7;
66
(ii) all overdue installments of interest and Special Interest, if
any, on, and any other amounts due in respect of, all Notes;
(iii) the principal of (and premium, if any, on) any Notes that
have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates
prescribed therefor in the Notes and this Indenture; and
(iv) to the extent that payment of such interest is lawful,
interest upon Defaulted Interest at the rate or rates
prescribed therefor in the Notes and this Indenture;
(b) all Events of Default, other than the nonpayment of
principal of Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.4;
(c) the annulment of such acceleration would not conflict with
any judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the
Trustee to the effect of clauses (b) and (c) of this sentence.
No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.3 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, premium, on,
if any, any interest on, Special Interest, if any, on, and any other amounts
owing and unpaid on, the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.4 Waiver of Past Defaults.
-----------------------
Subject to Section 6.7 hereof, Holders of not less than a majority
in aggregate principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of the Holders of all of the Notes waive an existing
Default or Event of Default and its consequences hereunder, except (i) an
existing Default or Event of Default in the payment of the principal of,
premium, if any, on, or interest and Special Interest, if any, on, the Notes
(including in connection with an offer to purchase) or (ii) an existing Default
or Event of Default in respect of a provision
67
that under Section 10.2 cannot be amended without the consent of each Holder
affected thereby. Upon any such waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
SECTION 6.5 Control By Majority.
-------------------
The Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.1
hereof, that the Trustee determines may be unduly prejudicial to the rights of
other Holders of Notes or that may involve the Trustee in personal liability;
provided that the Trustee may take any other action deemed by the Trustee that
is not inconsistent with such direction. Prior to taking any action hereunder,
the Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action.
SECTION 6.6 Limitation on Suits.
-------------------
No Holder of any Note shall have the right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, the
Guarantees or the Notes, or for the appointment of a receiver or a trustee, or
for any other remedy, unless:
(a) the Holder of a Note has given to the Trustee written notice
of a continuing Event of Default;
(b) a Holder or Holders of at least 25% in principal amount of
the then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the Notes then outstanding do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.7 Rights of Holders of Notes to Receive Payment.
---------------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium, if any, on, and interest
and Special Interest, if any, on, the Notes held by such Holder, on or after the
respective due dates expressed in the Note or this Indenture (including in
connection with an offer to purchase), or to bring suit for the enforcement of
68
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 6.8 Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.1(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in its own
name and as trustee of an express trust against the Company for the whole
amount of principal of, premium, if any, on, interest and Special Interest, if
any, remaining unpaid on, the Notes and interest on overdue principal and, to
the extent lawful, interest and such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due to the Trustee under Section 7.7.
SECTION 6.9 Trustee May File Proofs of Claim.
--------------------------------
The Trustee shall be entitled and empowered, without regard to
whether the Trustee or any Holder shall have made any demand or performed any
other act pursuant to the provisions of this Article and without regard to
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise, by intervention in any proceedings
relative to the Company or any Obligor upon the Notes, or to the creditors or
property or assets of the Company, any Guarantor or any other Obligor or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be entitled and empowered in such
instances:
(a) to file and prove a claim or claims for the whole amount of
principal (and premium, if any), interest, Special Interest, if any, and any
other amounts owing and unpaid in respect of the Notes, and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including all amounts owing to the Trustee and each
predecessor Trustee pursuant to Section 7.7 hereof) and of the Holders allowed
in any judicial proceedings relative to the Company or other Obligor upon the
Notes, or to the creditors or property of the Company, any Guarantor, or any
such other Obligor,
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of the Notes in any election of a trustee or a standby
trustee in arrangement, reorganization, liquidation or other bankruptcy or
insolvency proceedings or Person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other Property or assets
payable or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Holders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Holders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Holders, to pay to the Trustee such amounts as shall
be sufficient to cover all amounts owing to the Trustee and each predecessor
Trustee pursuant to Section 7.7 hereof.
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Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or vote for or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Notes, and it shall not be necessary to make any Holders of the
Notes parties to any such proceedings.
SECTION 6.10 Priorities.
----------
If the Trustee collects any money or property pursuant to this
Article, it shall pay out the money or property in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, interest, and Special Interest, if any,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal (premium, if any), interest, and
Special Interest, if any, respectively; and
Third: to the Company or to the Guarantors or to such other party
as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Holder and the Trustee a notice
that states the record date, the payment date and amount to be paid. The
Trustee may mail such notice in the name and at the expense of the Company.
SECTION 6.11 Undertaking For Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.7 hereof, or a suit by Holders of more than 10% in
aggregate principal amount of the then outstanding Notes.
SECTION 6.12 Restoration of Rights and Remedies.
----------------------------------
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If the Trustee or any Holder of Notes has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Guarantors, the Trustee and the Holders shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been
instituted.
SECTION 6.13 Rights and Remedies Cumulative.
------------------------------
Except as otherwise provided in Section 2.7 hereof, no right or
remedy conferred herein, upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 6.14 Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article 6 or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
ARTICLE 7
TRUSTEE
SECTION 7.1 Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in
this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
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(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability
or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the Trust
Indenture Act.
SECTION 7.2 Rights of Trustee.
-----------------
(a) Subject to the provisions of Section 7.1(a) hereof, the
Trustee may rely upon any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it
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takes or omits to take in good faith in reliance on such Officers' Certificate
or Opinion of Counsel. The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel with respect to legal matters
relating to this Indenture and the Notes shall be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture; provided, however, that
the Trustee's conduct does not constitute willful misconduct or negligence.
(e) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(f) Except with respect to Section 4.1 hereof, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of Default
occurring pursuant to Sections 6.1(a) (except that the Trustee shall not be
deemed to have knowledge of a default in the payment of Special Interest) or
6.1(b), or (ii) any Default or Event of Default of which a Responsible Officer
of the Trustee shall have received written notification; provided that the
Trustee shall comply with the "automatic stay" provisions contained in U.S.
bankruptcy laws, if applicable. As used herein, the term "actual knowledge"
means the actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
(g) Prior to the occurrence of an Event of Default hereunder and
after the curing and waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document unless requested in writing to do so by
the Holders of not less than a majority in aggregate principal amount of the
Notes then outstanding; provided that if the payment within a reasonable time
to the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the terms
of this Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable expenses
of every such examination shall be paid by the Company or, if advanced by the
Trustee, shall be repaid by the Company upon demand. The Trustee shall not be
bound to ascertain or inquire as to the performance or observance of any
covenants, conditions, or agreements on the part of the Company, except as
otherwise set forth herein, but the Trustee may, in its discretion, make such
further inquiry or investigation into such facts or matters as it may see fit
and if the Trustee shall determine to make such further inquiry or
73
investigation, it shall be entitled to examine the books, records and premises
of the Company personally or by agent or attorney.
(h) The Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty.
SECTION 7.3 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest (as defined in the Trust Indenture Act) it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue as Trustee or
resign. Any Agent may do the same with like rights and duties. The Trustee is
also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4 Trustee's Disclaimer.
--------------------
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, any Guarantee
or the Notes, it shall not be accountable for the Company's use of the proceeds
from the Notes or any money paid to the Company or upon the Company's direction
under any provision of this Indenture, it shall not be responsible for the use
or application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital herein or
any statement in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.5 Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice
of the Default or Event of Default within 90 days after it occurs. Except in
the case of a Default or Event of Default in payment of principal of, premium,
if any, or interest on any Note (including payments pursuant to the mandatory
repurchase provisions of such Notes, if any), the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of
the Notes.
SECTION 7.6 Reports by Trustee to Holders of the Notes.
------------------------------------------
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if
no event described in TIA Section 313(a) has occurred within the twelve months
preceding the
74
reporting date, no report need be transmitted). The Trustee also shall comply
with TIA Section 313(b). The Trustee shall also transmit by mail all reports
as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee whenever the Notes become
listed on any stock exchange and of any delisting thereof.
SECTION 7.7 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee promptly from time to time
such compensation for its acceptance of this Indenture and services hereunder
as agreed to by the parties from time to time. The Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee promptly upon request for all
reasonable disbursements, advances and expenses incurred or made by it,
including the costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses (including reasonable attorneys' fees) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including the costs and expenses of enforcing this
Indenture against the Company (including this Section 7.7) and defending itself
against any claim (whether asserted by the Company or any Holder or any other
Person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall survive
the resignation or removal of the Trustee and the satisfaction and discharge of
this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or Property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall be a Permitted Lien and survive
the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Sections 6.1(g) or 6.1(h) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of
administration under any applicable bankruptcy laws.
75
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.8 Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of Notes
of a majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. If at any time:
(a) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request thereof by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
unless the Trustee's duty to resign is stayed in accordance with the provisions
of TIA Section 310(b); or
(b) the Trustee shall cease to be eligible under Section 7.10
hereof and shall fail to resign after written request therefor by the Company
or by any Holder; or
(c) the Trustee shall become incapable of acting or a decree or
order for relief by a court having jurisdiction in the premises shall have been
entered in respect of the Trustee in an involuntary case under the U.S.
bankruptcy laws, as now or hereinafter constituted, or a decree or order by a
court having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee or of its Property and
assets or affairs, or any public officer shall take charge or control of the
Trustee or of its Property and assets or affairs for the purpose of
rehabilitation, conservation, winding-up or liquidation; or
(d) the Trustee shall commence a voluntary case under the U.S.
bankruptcy laws, as now or hereafter constituted, or shall consent to the
appointment of or taking possession by a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Trustee or
of its Property and assets or affairs, or shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or shall take corporate action in furtherance of
any such action; or
(e) the Trustee becomes incapable of acting,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to the Notes, or (ii) subject to Section 6.11 hereof, any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of such Holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee for the Notes.
76
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after
the retiring Trustee notifies the Company of its resignation or is removed, the
retiring Trustee, the Company, or the Holders of Notes of at least 10% in
principal amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all Property held by it as Trustee to the successor Trustee, provided that all
sums owing to the Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof
shall continue for the benefit of the retiring Trustee.
SECTION 7.9 Successor Trustee by Merger, Etc.
---------------------------------
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the Surviving Entity without any further act shall be the
successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes either
in the name of any predecessor hereunder or in the name of the successor to the
Trustee; and in all such cases such certificates shall have the full force
which it is anywhere in the Notes or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification.
-----------------------------
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or
77
examination by federal or state authorities and that has a combined capital and
surplus of at least $100,000,000 as set forth in its most recent published
annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from
the operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against the Company.
-----------------------------------------------------
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge.
--------------------------
This Indenture shall upon the request of the Company cease to be of
further effect (except as to surviving rights of registration of transfer,
substitution or exchange of Notes herein expressly provided for, the Company's
obligations under Sections 7.7 and 8.4 hereof, the Company's rights of optional
redemption under Article 3 hereof, and the Company's, the Trustee's and the
Paying Agent's obligations under Section 8.3 hereof) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when:
(a) either
(i) all outstanding Notes have been delivered to the Trustee for
cancellation, or
(ii) all such Notes not theretofore delivered to the Trustee for
cancellation have become due and payable, will become due and
payable within one year or are to be called for redemption
within one year under irrevocable arrangements satisfactory
to the Trustee for the giving of notice of redemption by the
Trustee in the name and at the expense of the Company, and
the Company has irrevocably deposited or caused to be
deposited with the Trustee funds in an amount sufficient to
pay and discharge the entire debt on the Notes not
theretofore delivered to the Trustee for cancellation, for
principal of (premium, if any, on) and interest (including
Special Interest, if any) to the date of deposit or Maturity
or date of redemption;
78
(b) the Company has paid or caused to be paid all sums then due
and payable by the Company under this Indenture; and
(c) the Company has delivered an Officers' Certificate and an
Opinion of Counsel relating to compliance with the conditions set forth in this
Indenture.
Notwithstanding the satisfaction and discharge of this Indenture,
the Company's obligations in Sections 2.3, 2.4, 2.6, 2.7, 2.11, 2.13, 7.7, 7.8,
8.2, 8.3 and 8.4, and the Trustee's and Paying Agent's obligations in Section
8.3 shall survive until the Notes are no longer outstanding. Thereafter, only
the Company's obligations in Sections 7.7, 8.3 and 8.4 and the Trustee's and
Paying Agent's obligations in Section 8.3 shall survive.
In order to have money available on a payment date to pay principal
(and premium, if any, on) or interest (and Special Interest, if any) on the
Notes, the U.S. Government Obligations shall be payable as to principal (and
premium, if any) or interest (and Special Interest, if any) at least one
Business Day before such payment date in such amounts as will provide the
necessary money. U.S. Government Obligations shall not be callable at the
issuer's option.
SECTION 8.2 Application of Trust Money.
--------------------------
All money deposited with the Trustee pursuant to Section 8.1 shall
be held in trust and, at the written direction of the Company, be invested
prior to maturity in non-callable U.S. Government Obligations, and applied by
the Trustee in accordance with the provisions of the Notes and this Indenture,
to the payment, either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest (and Special Interest, if any) for the payment of which money
has been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
SECTION 8.3 Repayment of the Company.
------------------------
The Trustee and the Paying Agent shall promptly pay to the Company
upon written request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the payment of principal or interest
that remains unclaimed for two years after the date upon which such payment
shall have become due; provided that the Company shall have either caused
notice of such payment to be mailed to each Holder of the Notes entitled
thereto no less than 30 days prior to such repayment or within such period
shall have published such notice in a financial newspaper of widespread
circulation published in The City of New York, including, without limitation,
The Wall Street Journal (national edition). After payment to the Company,
Holders entitled to the money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
SECTION 8.4 Reinstatement.
-------------
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If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 8.1 by reason of any
legal proceeding or by reason of any order or judgment of any court of
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and Guarantors' obligations under this Indenture,
the Notes and the Guarantees shall be revived and reinstated as though no
deposit has occurred pursuant to Section 8.1 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with Section 8.2; provided, however, that if the
Company or the Guarantors have made any payment of interest on or principal of
any Notes because of the reinstatement of their Obligations, the Company or
such Guarantors shall be subrogated to the rights of the Holders of such Notes
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.
ARTICLE 9
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 9.1 Option to Effect Defeasance or Covenant Defeasance.
--------------------------------------------------
The Company may, at the option of its Board of Directors evidenced
by a Board Resolution, at any time, elect to have either Section 9.2 or 9.3
hereof be applied to all outstanding Notes upon compliance with the conditions
set forth below in this Article 9.
SECTION 9.2 Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 9.1 hereof of the option
applicable to this Section 9.2, the Company and the Guarantors shall, subject to
the satisfaction of the conditions set forth in Section 9.4 hereof, be deemed to
have been discharged from their respective Obligations with respect to all
outstanding Notes, this Indenture and the Guarantees on the date the conditions
set forth below are satisfied (hereinafter, "Defeasance"). For this purpose,
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes and the Company and
the Guarantors shall be deemed to have satisfied all of their obligations under
such Notes, this Indenture and the Guarantees (and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same),
subject to the following which shall survive until otherwise terminated or
discharged hereunder:
(a) the rights of Holders of such Notes to receive, solely from
the trust fund described in Section 9.4 hereof and as more fully set forth in
Section 9.4, payments in respect of the principal and of and any premium and
interest (including Special Interest, if any), on such Notes when payments are
due, (but not the Change of Control Purchase Price or the Asset Sale Offer
Price).
(b) the Company's obligations with respect to such Notes under
Sections 2.6, 2.7, 2.10, and 4.2 hereof,
(c) the rights, powers, trusts, duties and immunities of the
Trustee under this Indenture,
80
(d) Article 3 hereof, and
(e) this Article 9.
Subject to compliance with this Article 9, the Company may exercise its option
under this Section 9.2 notwithstanding the prior exercise of its option under
Section 9.3 hereof.
SECTION 9.3 Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 9.1 hereof of the option
applicable to this Section 9.3, (i) the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 9.4 hereof,
be released from its obligations under the covenants contained in Sections 4.4,
4.6, 4.7, 4.9, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and
4.20 and Section 5.1(iv) hereof and any covenant added to this Indenture
subsequent to the Issue Date pursuant to Section 10.1 hereof with respect to the
outstanding Notes and (ii) the occurrence of any event specified in Section
6.1(c) or 6.1(d) hereof, with respect to any of Sections 4.4, 4.6, 4.7, 4.9,
4.10, 4.11, 4.12, 4.12, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 and Section
5.1(iv) hereof, and any covenant added to this Indenture subsequent to the Issue
Date pursuant to Section 10.1 hereof, shall be deemed not to be or result in an
Event of Default, in each case with respect to such Notes as provided in this
Section 9.3 on and after the date on which the conditions set forth in Section
9.4 hereof are satisfied, and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, "Covenant Defeasance" means that,
with respect to the outstanding Notes, the Company and the Guarantors may omit
to comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant (to the extent so specified in the
case of Section 6.1(c) or 6.1(d) hereof), whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.1 hereof, but, except as specified above, the
remainder of this Indenture, the Guarantees and the Notes shall be unaffected
thereby.
SECTION 9.4 Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to the application of either
Section 9.2 or 9.3 hereof to the outstanding Notes:
In order to exercise either Defeasance or Covenant Defeasance:
(a) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to the benefits of the Holders of such Notes, (i) money in an amount, or
(ii) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one Business Day before the due date of any payment,
money in an amount, or (iii)
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a combination thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge the
principal of (premium, if any, on) and any installment of interest on and
Special Interest, if any, on the Notes at the Maturity thereof or Redemption
Date therefor in accordance with the terms of this Indenture and the Notes;
(b) in the case of an election under Section 9.2 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel confirming
that (A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this Indenture,
there has been a change in the applicable U.S. federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of such
Defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
Defeasance had not occurred;
(c) in the case of an election under Section 9.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel confirming
that the Holders of the outstanding Notes will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Covenant
Defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this Article 9
concurrently with such incurrence) or insofar as Sections 6.1(g) or 6.1(h)
hereof is concerned, shall have occurred at any time on or prior to the 91st
day after the date of such deposit and be continuing on such 91st day (it being
understood that this condition shall not be deemed satisfied until after such
91st day);
(e) such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement
or instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming for the purpose of this clause (f) that all Notes are
in default within the meaning of such Act);
(g) such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act of 1940, as amended, unless such
trust shall be registered under such Act or exempt from registration
thereunder;
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that on the 91st day following the deposit, the trust
funds will not be subject to the
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effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(i) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Company; and
(j) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Defeasance or the Covenant Defeasance
have been complied with.
SECTION 9.5 Deposited Money and U.S. Government Obligations To Be Held in
-------------------------------------------------------------
Trust; Other Miscellaneous Provisions.
- -------------------------------------
Subject to Section 9.6 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 9.5, the
"Trustee") pursuant to Section 9.4 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any such Paying Agent as the Trustee may determine, to the Holders of
such Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest (including Special Interest, if any), but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or U.S. Government
Obligations deposited pursuant to Section 9.4 hereof or the principal and
interest received in respect thereof.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or U.S. Government Obligations held by it as provided
in Section 9.4 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
9.4(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Defeasance or Covenant Defeasance.
SECTION 9.6 Repayment to the Company.
------------------------
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium, if
any, Special Interest, if any, or interest on any Note and remaining unclaimed
for two years after such principal, and premium, if any Special Interest, if
any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Note shall thereafter, as a creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of
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the Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in The
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 9.7 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 9.2 or 9.3
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's Obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 9.2 or 9.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 9.2 or 9.3 hereof,
as the case may be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, interest, Special Interest, if any, on any Note
following the reinstatement of its Obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money held by the Trustee or Paying Agent.
ARTICLE 10
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 10.1 Without Consent of Holders of Notes.
-----------------------------------
Notwithstanding Section 9.2 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture or the Notes
without the consent of any Holder of a Note:
(a) to evidence the succession of another Person to the Company
and the Guarantors and the assumption by such successor of the covenants and
Obligations of the Company under this Indenture and contained in the Notes and
of the Guarantors contained in this Indenture and the Guarantees,
(b) to add to the covenants of the Company, for the benefit of
Holders, or to surrender any right or power conferred upon the Company or the
Guarantors by this Indenture,
(c) to add any additional Events of Default,
(d) to provide for uncertificated Notes in addition to or in
place of Certificated Notes,
(e) to evidence and provide for the acceptance of appointment
under this Indenture by the successor Trustee,
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(f) to secure the Notes and/or the Guarantees,
(g) to cure any ambiguity, to correct or supplement any provision
in this Indenture which may be inconsistent with any other provision herein or
to add any other provisions with respect to matters or questions arising under
this Indenture, provided that such actions will not adversely affect the
interests of Holders in any material respect,
(h) to add or release any Guarantor pursuant to the terms of this
Indenture, or
(i) to comply with the requirements of the Commission to effect
or maintain he qualification of the Indenture under the Trust Indenture Act.
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon receipt by the Trustee of the documents described in Section 10.7 hereof,
the Trustee shall join with the Company in the execution of any amended or
supplemental Indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 10.2 With Consent of Holders of Notes.
--------------------------------
Except as provided below in this Section 10.2, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture and the Notes
may be amended or supplemented with the consent of the Holders of at least a
majority in aggregate principal amount at Stated Maturity of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for the Notes), and, subject to Sections 6.4 and 6.7 hereof, any
existing Default or Event of Default (other than a Default or Event of Default
in the payment of the principal of, premium, if any, or, interest on, or Special
Interest, if any, on, the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in aggregate principal amount at Stated Maturity of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes).
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of
the documents described in Section 10.7 hereof, the Trustee shall join with the
Company and the Guarantors in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 10.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
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After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected,
an amendment or waiver may not (with respect to any Notes held by a non-
consenting Holder):
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount thereof
(or premium, if any), or the interest thereon that would be due and payable
upon Maturity thereof, or change the place of payment where, or the coin or
currency in which, any Note or any premium or interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof;
(b) reduce the percentage in principal amount at Stated Maturity
of the outstanding Notes, the consent of whose Holders is necessary for any
such supplemental indenture or required for any waiver of compliance with
certain provisions of this Indenture, or certain Defaults hereunder;
(c) modify the Obligations of the Company to make offers to
purchase Notes upon a Change of Control or from the proceeds of Asset Sales;
(d) subordinate in right of payment the Notes or the Guarantees
to any other Indebtedness;
(e) amend, supplement or otherwise modify the provisions of this
Indenture relating to Guarantees or
(f) make any change in Sections 6.4 or 6.7 or modify any of the
provisions of this Section 10.2 (except to increase any percentage set forth
therein or herein).
Upon the request of the Company accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental Indenture, and
upon the filing with the Trustee of evidence satisfactory to the Trustee of the
consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of
the documents described in Section 7.2 hereof, the Trustee shall join with the
Company in the execution of such amended or supplemental Indenture unless such
amended or supplemental Indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 10.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
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SECTION 10.3 Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article
10, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby. After a supplemental indenture becomes
effective, the Company shall mail to Holders a notice briefly describing such
amendment. The failure to give such notice to all Holders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 10.4 Compliance with Trust Indenture Act.
-----------------------------------
Every amendment or supplement to this Indenture or the Notes shall
be set forth in an amended or supplemental Indenture that complies with the
Trust Indenture Act as then in effect.
SECTION 10.5 Revocation and Effect of Consents.
---------------------------------
(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent
Holder of a Note may revoke the consent as to its Note if the Trustee receives
written notice of revocation before the date the waiver, supplement or
amendment becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every Holder.
(b) The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding subsection, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than
120 days after such record date.
SECTION 10.6 Notation on or Exchange of Notes.
--------------------------------
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.7 Trustee to Sign Supplemental Indentures.
---------------------------------------
87
The Trustee shall sign any supplemental Indenture authorized
pursuant to this Article 10 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. Neither
the Company nor a Guarantor may sign a supplemental Indenture until the Board
of Directors of such Person approves it. In executing any supplemental
indenture, the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive and (subject to Section 7.1) shall be fully
protected in relying upon, in addition to the documents required by Section
11.4, an Officers' Certificate and an Opinion of Counsel stating that:
(a) such supplemental indenture is authorized or permitted by
this Indenture and that all conditions precedent to the execution, delivery and
performance of such supplemental indenture have been satisfied;
(b) the Company and the Guarantors have all necessary corporate
power and authority to execute and deliver the supplemental indenture and that
the execution, delivery and performance of such supplemental indenture has been
duly authorized by all necessary corporate action of the Company and the
Guarantors;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or constitute a
default under any of the terms, conditions or provisions of (i) this Indenture,
(ii) the charter documents and by-laws of the Company or any Guarantor, or
(iii) any material agreement or instrument to which the Company or any
Guarantor is subject and of which such counsel is aware;
(d) to the knowledge of legal counsel writing such Opinion of
Counsel, the execution, delivery and performance of the supplemental indenture
do not conflict with, or result in the breach of any of the terms, conditions
or provisions of (i) any law or regulation applicable to the Company or any
Guarantor, or (ii) any material order, writ, injunction or decree of any court
or governmental instrumentality applicable to the Company or any Guarantor;
(e) such supplemental indenture has been duly and validly
executed and delivered by the Company and the Guarantors, and this Indenture
together with such supplemental indenture constitutes a legal, valid and
binding obligations of the Company and the Guarantors enforceable against the
Company and the Guarantors, as applicable, in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles (whether considered in a proceeding at law or in equity); and
(f) this Indenture together with such amendment or supplement
complies with the Trust Indenture Act.
SECTION 10.8 Payment for Consent.
-------------------
Neither the Company nor any Affiliate of the Company shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or
88
provisions of this Indenture or the Notes unless such consideration is offered
to be paid to all Holders that so consent, waive or agree to amend in the time
frame set forth in solicitation documents relating to such consent, waiver or
agreement.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by, or with another provision included in this
Indenture by operation of Sections 310 to 318, inclusive, of the Trust
Indenture Act, such imposed duties or incorporated provision shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that can be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or excluded, as the case
may be.
SECTION 11.2 Notices.
-------
Any notice or communication by the Company, the Guarantors or the
Trustee to the others is duly given if in writing and delivered in person or
mailed by first class mail (registered or certified, return receipt requested),
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company or any Guarantor:
Premier Graphics, Inc. c/o Master Graphics, Inc.
6075 Poplar, Suite 401
Memphis, Tennessee 38119
Telephone No.: (901) 685-2020
Attention: Lance T. Fair
Telephone No.: (901) 685-2020
Telecopier No.: (901) 685-3600
If to the Trustee:
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Division
Telephone No.: (212) 852-1662
Telecopier No.: (212) 852-1626
The Company, the Guarantors, or the Trustee, by notice to the
others may designate additional or different addresses for subsequent notices
or communications.
89
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the
Securities Register kept by the Registrar and shall be given if so sent within
the time prescribed. Any notice or communication shall also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the Trust
Indenture Act. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it; a notice or communication, however, shall not be effective unless,
in the case of the Company, the Guarantors or the Trustee, actually received.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give notice by mail to
Holders, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
SECTION 11.3 Communication By Holders of Notes With Other Holders of Notes.
-------------------------------------------------------------
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Guarantors, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 11.4 Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company, upon request, shall furnish
to the Trustee, to the extent required by this Indenture or the Trust Indenture
Act:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
90
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company or any
Guarantor may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such Officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, and may state that it is so based, insofar as it
relates to factual matters, upon a certificate or opinion of, or representations
by, an Officer or Officers of the Company or such Guarantor stating that the
information with respect to such factual matters is in the possession of the
Company or such Guarantor, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate of opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 11.5 Statements Required in a Certificate or Opinion.
-----------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Persons making such certificate or
opinion have read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Persons, they have
made such examination or investigation as is necessary to enable them to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Persons, such condition or covenant has been satisfied.
SECTION 11.6 Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by a specified percentage of Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor
91
signed by such specified percentage of Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are received
by the Trustee and, where it is hereby expressly required, by the Company and
the Guarantors. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 7.1 and 7.2) conclusive
in favor of the Trustee, the Company and the Guarantors, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient, including the execution
of such instrument or writing without more.
(c) The ownership, principal amount and serial numbers of Notes
held by any Person, and the date of holding the same, shall be proved by the
Securities Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Company shall have no obligation to do so. Such record date shall
be the record date specified in or pursuant to such Board Resolution, which
shall be a date not earlier than the date 30 days prior to the first
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Notes have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Notes shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on
such record date shall be deemed effective unless it shall become pursuant to
the provisions of this Indenture not later than eleven months after the record
date.
(e) Except to the extent otherwise expressly provided in this
Indenture, any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future Holder of
the same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Note.
92
(f) Without limiting the foregoing, a Holder entitled hereunder
to give or take any action with regard to any particular Note may do so with
regard to all or any part of the principal amount of such Note or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
SECTION 11.7 Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions; provided that no such rule shall
conflict with the terms of this Indenture or the Trust Indenture Act.
SECTION 11.8 No Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders.
- ------------
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or the Guarantors under the Notes, this Indenture, the Guarantees
or for any claim based on, in respect of, or by reason of, such Obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
SECTION 11.9 Governing Law.
-------------
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES, WITHOUT REGARD TO THE CONFLICTS
OF LAWS PRINCIPLES THEREOF.
SECTION 11.10 Agent for Service; Submission to Jurisdiction; Waiver of
--------------------------------------------------------
Immunities.
- ----------
By the execution and delivery of this Indenture or any amendment
or supplement hereto, each of the Company and the Guarantors (i) acknowledges
that it has, by separate written instrument, designated and appointed CT
Corporation System (the "Process Agent") currently located at 1633 Broadway,
New York, New York 10019, as its authorized agent upon which process may be
served in any suit, action or proceeding with respect to, arising out of, or
relating to, this Indenture, the Guarantees, or the Notes or brought under U.S.
federal or state securities laws, may be instituted in any U.S. federal or
state court located in The City of New York, New York, and acknowledges that
the Process Agent has accepted such designation, (ii) irrevocably submits to
the jurisdiction of any such court in any such suit, action or proceeding and
irrevocably waives, to the fullest extent that it may effectively and lawfully
do so, any obligation to the laying of venue of any such suit, action or
proceeding and the defense of an inconvenient forum to the maintenance of any
such suit action or proceeding in such court, and (iii) agrees that service of
process upon the Process Agent shall be deemed in every respect effective
service of process upon the Company and the Guarantors in any such suit, action
or proceeding. The Company and the Guarantors further agree to take any and all
action, including the execution and filing of any and all such documents and
instruments as may be necessary to continue such designation and appointment of
the Process Agent in full force and effect so long as this Indenture shall be
in full force and effect; provided that the Company and the Guarantors may and
shall (to the extent the Process Agent ceases to be able to
93
be served on the basis contemplated herein), by written notice to the Trustee,
designate such additional or alternative agents for service of process under
this Section 11.10 that (i) maintains an office located in the Borough of
Manhattan, The City of New York in the State of New York, (ii) are either (a)
counsel for the Company or (b) a corporate service company which acts as agent
for service of process for other persons in the ordinary course of its business
and for other persons in the ordinary course of its business and (iii) agrees
to act as agent for service of process in accordance with this Section 11.10.
Such notice shall identify the name of such agent for process and the address
of such agent for process in the Borough of Manhattan, The City of New York,
State of New York. Upon the request of any Holder of a Note, the Trustee shall
deliver such information to such Holder. Notwithstanding the foregoing, there
shall, at all times, be at least one agent for service of process for the
Company and each Guarantor appointed and acting in accordance with this Section
11.10.
To the extent that the Company or any Guarantor has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, each of the Company and the Guarantors hereby irrevocably
waives such immunity in respect of its Obligations under this Indenture, the
Guarantees and the Notes, to the extent permitted by law.
SECTION 11.11 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company, the Guarantors or the Company's
Subsidiaries or of any other Person. Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.
SECTION 11.12 Successors.
----------
All agreements of the Company and the Guarantors in this
Indenture, the Notes and the Guarantors shall bind its successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.13 Severability.
------------
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.14 Counterpart Originals.
---------------------
The parties may sign any number of copies of this Indenture and
by the parties thereto in separate counterparts. Each of which when signed
shall be deemed to be an original, but all of them together represent the same
agreement.
94
SECTION 11.15 Table of Contents, Headings, Etc.
---------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
ARTICLE 12
GUARANTEES
SECTION 12.1 Guarantors.
----------
(a) For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Guarantors, together
with each Subsidiary of the Company which in accordance with Sections 4.18 and
12.8(a) hereof is required in the future to guarantee the Obligations of the
Company and the Guarantors under the Notes, the Guarantees and this Indenture
upon execution of a supplemental indenture, hereby jointly and severally and
irrevocably and unconditionally guarantees to the Trustee and to each Holder
irrespective of the validity or enforceability of this Indenture or the Notes
or the Obligations of the Company and the Guarantors under this Indenture,
that: (i) the principal of, premium, if any, any interest, and Special
Interest, if any, on the Notes (including, without limitation, any interest
that accrues after the filing of a proceeding of the type described in Sections
6.1(g) and (h)) and any fees, expenses and other amounts owing under this
Indenture will be duly and punctually paid in full when due, whether at
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise, and interest on the overdue principal
and (to the extent permitted by law) interest, if any, on the Notes and any
other amounts due in respect of the Notes, and all other Obligations of the
Company and the Guarantors, including the Company's obligations under the New
Credit Facility to the Holders of the Notes under this Indenture, the Notes and
the Guarantees, whether now or hereafter existing, will be promptly paid in
full or performed, all strictly in accordance with the terms hereof and of the
Notes; and (ii) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at Maturity, by acceleration, call for redemption, upon Change of
Control Offer, Asset Sale Offer, purchase or otherwise. If payment is not made
when due of any amount so guaranteed for whatever reason, each Guarantor shall
be jointly and severally obligated to pay the same individually whether or not
such failure to pay has become an Event of Default which could cause
acceleration pursuant to Section 6.2. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection. An Event of Default
under this Indenture or the Notes shall constitute an Event of Default under
each Guarantee, and shall entitle the Holders to accelerate the Obligations of
each Guarantor hereunder in the same manner and to the same extent as the
Obligations of the Company. Each Guarantee is intended to be superior to or
pari passu in right of payment with all Indebtedness of the Guarantors and each
Guarantor's Obligations are independent of any Obligation of the Company or any
other Guarantor.
95
(b) Each Guarantor waives presentation to, demand of, payment from
and protest to the Company of any of the Obligations under this Indenture or
the Notes and also waives notice of protest for nonpayment. Each Guarantor
waives notice of any default under the Notes or the Obligations. The
Obligations of each Guarantor hereunder shall not be affected by (i) the
failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person under this
Indenture, the Notes or any other agreement or otherwise; (ii) any extension or
renewal of any thereof; (iii) any rescission, waiver, amendment or modification
of any of the terms or provisions of this Indenture, the Notes or any other
agreement; (iv) the release of any security held by any Holder or the Trustee
for the Obligations or any of them; (v) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of the
Obligations; or (f) any change in the ownership of such Guarantor.
(c) The Obligations of each Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations of the Company or otherwise. Without
limiting the generality of the foregoing, the Obligations of each Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Notes or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations of the Company, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of such Guarantor or
would otherwise operate as a discharge of such Guarantor as a matter of law or
equity.
(d) Each Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of, premium, if any, on or interest
(or Special Interest, if any) on any Obligation of the Company is rescinded or
must otherwise be restored by any Holder or the Trustee upon the bankruptcy or
reorganization of the Company or otherwise.
(e) In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of, premium, if any, on or interest (or Special Interest, if any) on
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any
other Obligation, each Guarantor hereby promises to and will, upon receipt of
written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to
the Holders or the Trustee an amount equal to the sum of (i) the unpaid amount
of such Obligations, (ii) accrued and unpaid interest on such Obligations (but
only to the extent not prohibited by law) and (iii) all other monetary
Obligations of the Company to the Holders and the Trustee.
(f) Until such time as the Notes and the other Obligations of the
Company guaranteed hereby have been satisfied in full, each Guarantor hereby
irrevocably waives any
96
claim or other rights that it may now or hereafter acquire against the Company
or any other Guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's Obligations under each Guarantee, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Holders or the Trustee against the Company or any other Guarantor
or any security, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the right
to take or receive from the Company or any other Guarantor, directly or
indirectly, in cash or other Property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right. If any amount
shall be paid to such Guarantor in violation of the preceding sentence at any
time prior to the later of the payments in full of the Notes and all other
amounts payable under this Indenture and each Guarantee upon the Maturity of
the Notes, such amount shall be held in trust for the benefit of the Holders
and the Trustee and shall forthwith be paid to the Trustee to be credited and
applied to the Notes and all other amounts payable under each Guarantee,
whether matured or unmatured, in accordance with the terms of this Indenture,
or to be held as security for any Obligations or other amounts payable under
any Guarantee thereafter arising.
(g) Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that the waiver set forth in this Section 12.1 is knowingly made in
contemplation of such benefits. Each Guarantor further agrees that, as between
it, on the one hand, and the Holders and the Trustee, on the other hand, (x)
subject to this Article 12, the maturity of the Obligations guaranteed hereby
may be accelerated as provided in Article 6 for the purposes of each Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in the
event of any acceleration of such Obligations guaranteed hereby as provided in
Article 6, such Obligations (whether or not due and payable) shall further then
become due and payable by the Guarantors for the purposes of each Guarantee.
(h) A Guarantor that makes a distribution or payment under a
Guarantee shall be entitled to contribution from each other Guarantor in a pro
rata amount based on the Adjusted Net Assets of each such other Guarantor for
all payments, damages and expenses incurred by that Guarantor in discharging
the Company's obligations with respect to the Notes and this Indenture or any
other Guarantor with respect to its Guarantee, so long as the exercise of such
right does not impair the rights of the Holders of the Notes under the
Guarantees.
(i) Each Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 12.2 Limitation on Liability.
-----------------------
The Obligations of each Guarantor will be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any collections from
or payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under its Guarantee or pursuant to its
contribution obligations under this Indenture, result in the Obligations of
such Guarantor under
97
its Guarantee not constituting a fraudulent conveyance or fraudulent transfer
under federal or state law or otherwise not being void, voidable or
unenforceable under any bankruptcy, reorganization, receivership, insolvency,
liquidation or other similar legislation or legal principles under any
applicable foreign law. Each Guarantor that makes a payment or distribution
under a Guarantee shall be entitled to a contribution from each other Guarantor
in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
SECTION 12.3 Execution and Delivery of Guarantees.
------------------------------------
To further evidence its Guarantee set forth in Section 12.1
hereof, each Guarantor hereby agrees that notation of such Guarantee shall be
endorsed on each Note authenticated and delivered by the Trustee and executed
by either manual or facsimile signature of an authorized officer of such
Guarantor. Each Guarantor hereby agrees that its Guarantee set forth in Section
12.1 hereof shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Guarantee. If an officer of a
Guarantor whose signature is on this Indenture or a Note no longer holds that
office at the time the Trustee authenticates such Note or at any time
thereafter, such Guarantor's guarantee of such Note shall be valid
nevertheless. The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of any Guarantee set forth in
this Indenture on behalf of the Guarantor.
SECTION 12.4 When A Guarantor May Merge, Etc.
--------------------------------
Each Guarantor may consolidate with or merge into or sell or
otherwise dispose of all or substantially all of its Property and assets to the
Company or another Guarantor without limitation, except to the extent any such
transaction is subject to Section 5.1 hereof. Each Guarantor may consolidate
with or merge into or sell all or substantially all of its Property and assets
to a Person other than the Company or another Guarantor (whether or not
Affiliated with the Guarantor), provided that (a) if the surviving Person is
not the Guarantor, the surviving Person agrees to assume such Guarantor's
Guarantee and all its Obligations pursuant to this Indenture (except to the
extent the provisions of Section 12.7(a) would result in the release of such
Guarantee) and (b) such transaction does not (i) violate any of the covenants
described in Article 4 hereof or (ii) result in a Default or Event of Default
being in existence or continuing immediately thereafter.
SECTION 12.5 No Waiver.
---------
Neither a failure nor a delay on the part of either the Trustee or
the Holders in exercising any right, power or privilege under this Article 12
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege. The rights, remedies and benefits of the Trustee and the Holders
herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article 12 at
law, in equity, by statute or otherwise.
98
SECTION 12.6 Modification.
------------
No modification, amendment or waiver of any provision of this
Article 12, nor the consent to any departure by any Guarantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand
on any Guarantor in any case shall entitle such Guarantor to any other or
further notice or demand in the same, similar or other circumstances.
SECTION 12.7 Release of Guarantor.
--------------------
(a) Upon the sale or other disposition (by merger or otherwise)
of a Guarantor (or all or substantially all of its Property and assets) to a
Person other than the Company, Master Graphics or another Guarantor and
pursuant to a transaction that is otherwise in compliance with this Indenture
(including as described in clause (b) of Section 12.4 and as described in
Section 4.15 hereof), such Guarantor (unless it otherwise remains a Subsidiary)
shall be deemed released from its Guarantee and the related Obligations set
forth in this Indenture; provided that any such termination shall occur only to
the extent that all Obligations of such Guarantor under all of its guarantees
of and under all of its pledges of assets or other security interests which
secure, other Indebtedness of the Company or any other Subsidiary shall also
terminate or be released upon such sale or other disposition. Each Guarantor
that is designated as an Unrestricted Subsidiary in accordance with this
Indenture shall be released from its Guarantee and the related Obligations set
forth in this Indenture so long as it remains an Unrestricted Subsidiary.
(b) Any Guarantee by a Subsidiary (including an Initial
Guarantor) shall be automatically and unconditionally released and discharged,
as evidenced by a supplemental indenture executed by the Company, the
Guarantors, if any, and the Trustee, upon the release or discharge of the
guarantee which resulted in the creation of such Subsidiary's Guarantee and all
other guarantees of the Obligations of any Obligor on the Notes, except a
discharge or release by, or as a result of, payment under such guarantee.
SECTION 12.8 Future Guarantors; Execution of Supplemental Indentures for Future
------------------------------------------------------------------
Guarantors.
- ----------
(a) The Company may not permit any Subsidiary, directly or
indirectly, to guarantee any Indebtedness of the Company or any other Obligor
("Guaranteed Indebtedness") unless (i) such Subsidiary simultaneously executes
and delivers a supplemental indenture to this Indenture providing for a
Guarantee of payment of the Notes by such Subsidiary and (ii) such Subsidiary
waives and will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Subsidiary as a result of any
payment by such Subsidiary under its Guarantee. If the Guaranteed Indebtedness
is pari passu with the Notes, then the guarantee of such Guaranteed
Indebtedness shall be pari passu with or subordinated to the Guarantee; and if
the Guaranteed Indebtedness is subordinated to the Notes, then the guarantee of
such Guaranteed Indebtedness shall be subordinated to the Guarantee at least to
the extent that all Guaranteed Indebtedness is subordinated to the Notes.
99
(b) Any Subsidiary that guarantees any Indebtedness of the
Company or another Obligor is required pursuant to Section 12.8(a) or 4.18
hereof to become a Guarantor and the Company shall cause each such Subsidiary
to promptly execute and deliver to the Trustee a supplemental indenture
pursuant to which such Subsidiary shall become a Guarantor under this Article
12 and shall guarantee the Obligations of the Company under the Notes and this
Indenture. Concurrently with the execution and delivery of such supplemental
indenture, the Company shall deliver to the Trustee an Opinion of Counsel to
the effect that such supplemental indenture has been duly authorized, executed
and delivered by such Subsidiary and that, subject to the application of
bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or
transfer and other similar laws relating to creditors' rights generally and to
the principles of equity, whether considered in a proceeding at law or in
equity, the Guarantee of such Guarantor is a legal, valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms, and as to any such other matters as the Trustee may reasonably
request.
100
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
PREMIER GRAPHICS, INC.
By: /s/ John P. Miller
----------------------------
Name: John P. Miller
Title: President
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By: /s/ Jason Gregory
----------------------------
Name: Jason Gregory
Title Vice President
Each of the following entities as Guarantors:
MASTER GRAPHICS, INC.
By: /s/ Lance T. Fair
-----------------------------------------
Name: Lance T. Fair
Title: Vice President/Chief Executive Officer
HARPERPRINTS, INC.
By: /s/ John P. Miller
-----------------------------------------
Name: John P. Miller
Title: President
SCHEDULE A
Initial Guarantors
MASTER GRAPHICS, INC.
HARPERPRINTS, INC.
(Face of Note) Exhibit A
---------
[THIS GLOBAL NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED
TO ON THE REVERSE THEREOF.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO PREMIER
GRAPHICS, INC. (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.6 OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL NOTE IS EXCHANGEABLE FOR A NOTE IN DEFINITIVE, FULLY REGISTERED
FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES THE COMPANY THAT IT IS
UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY FOR THIS GLOBAL NOTE OR IF AT ANY
TIME DTC CEASES TO BE A "CLEARING AGENCY" REGISTERED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND A SUCCESSOR DEPOSITORY IS NOT APPOINTED BY
THE COMPANY WITHIN 90 DAYS OF SUCH NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS
TO THE TRUSTEE A NOTICE THAT THIS GLOBAL NOTE SHALL BE SO TRANSFERABLE,
REGISTRABLE, AND EXCHANGEABLE, AND SUCH TRANSFER SHALL BE SO REGISTRABLE, OR (C)
AN EVENT OF DEFAULT (AS HEREINAFTER DEFINED) HAS OCCURRED AND IS CONTINUING WITH
RESPECT TO THE NOTES.]/1/
[THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
- -----------------------------------
/1/ These paragraphs should be included if the Notes are issued in global form.
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT IS ACQUIRING THIS NOTE
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER REGULATION D UNDER THE SECURITIES ACT (AN
"IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO
THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER
THE SECURITIES ACT, (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE
TRUSTEE WITH A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY)
OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST
HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.]/2/
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF
- -----------------------------------
/2/ These paragraphs (the Private Placement Legend) should be omitted upon the
exchange of Initial Notes for Exchange Notes in the Exchange Offer or upon
the registration of Initial Notes pursuant to the Registration Rights
Agreement.
INTEREST HEREON PRIOR TO THE EXCHANGE OF THIS NOTE FOR A REGULATION S PERMANENT
GLOBAL NOTE AS CONTEMPLATED BY THE INDENTURE.]/3/
- -----------------------------------
/3/ This should be included only if the Note is a Regulation S Temporary Global
Note.
11 1/2% Senior Notes due 2005
PREMIER GRAPHICS, INC.
No.
CUSIP No.
$___________________
PREMIER GRAPHICS, INC. promises to pay to _______________________ or
registered assigns, the principal sum of ___________________ United States
Dollars, [or such greater or lesser amount as may from time to time be endorsed
on Schedule A hereto]4 on [_________], 2005.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authorization hereon has been duly executed
by the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit of this Indenture or be valid or obligatory
for any purpose.
- --------------------------
4 This is included on Global Notes only.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
as of the date written below.
PREMIER GRAPHICS, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
By:
-----------------------------------
Dated: Name:
------------------ ---------------------------------
Title:
--------------------------------
Certificate of Authentication:
This is one of the Notes
referred to in the within-mentioned
Indenture:
United States Trust Company of New York
as Trustee
By:
------------------------------
Authorized Signatory
(Reverse of Note)
11 1/2% Senior Note due 2005
Capitalized terms used herein shall have the meanings assigned to them
in this Indenture referred to below unless otherwise indicated.
1. Interest. Premier Graphics, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being called the "Company"), promises to pay interest on the
principal amount of this Note at 11 1/2% per annum until Maturity and shall pay
Special Interest, if any, payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest, if any, and
Special Interest, if any, semi-annually in arrears on June 1 and December 1 of
each year (each, an "Interest Payment Date"), or if any such day is not a
Business Day, on the next succeeding Business Day. Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Issue Date; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a Record Date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
June 1, 1999. The Company shall pay interest (including post-petition interest
in any proceeding under any applicable Federal, State or foreign bankruptcy law)
on overdue installments of interest ("Defaulted Interest"), and Special
Interest, if any, if any, (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes
(except Defaulted Interest) and Special Interest, if any, to the Persons who are
registered Holders of Notes at the close of business on May 15 or November 15
immediately preceding the Interest Payment Date (each, a "Record Date"), even if
such Notes are canceled after such Record Date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to Defaulted Interest. The Notes will be payable as to principal, premium,
interest and Special Interest at the office or agency of the Company maintained
for such purpose within the City and State of New York, or, at the option of the
Company, payment of interest and Special Interest may be made by check mailed to
the Holders at their addresses set forth in the register of Holders, provided
that payment by wire transfer of immediately available funds will be required
with respect to principal of and interest, premium, if any, and Special
Interest, if any, on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company and the Paying
Agent prior to the applicable Record Date for such payment. Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, the Trustee under the
Indenture will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. In certain situations,
the Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated
as of December 11, 1998 ("Indenture") between the Company, the Persons acting as
guarantors and named therein (the "Guarantors") and United States Trust Company
of New York, as trustee (the "Trustee," which term includes any successor
trustee under the Indenture). The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the U.S. Trust
Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbbb) as in
effect on the date of the Indenture. The Notes are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured obligations of the Company limited to
$130,000,000 in aggregate principal amount (subject to Section 2.7 of the
Indenture). This Note is one of the Notes referred to in the Indenture.
5. Optional Redemption. (a) Except as set forth in clause 5(b) of
this Note, the Notes shall not be redeemable at the Company's option prior to
December 1, 2002. On or after such date, the Notes shall be redeemable at the
option of the Company, in whole at any time or in part from time to time, at the
following prices (expressed in percentages of principal amount thereof) if
redeemed during the twelve-month period beginning December 1 of each of the
years indicated below, in each case together with interest (and Special
Interest, if any) accrued to Redemption Date (subject to the right of Holders of
record on the relevant Record Date to receive interest (and Special Interest, if
any), due on the relevant Interest Payment Date):
Year Percentage
2002 105.750%
2003 102.875%
2004 and thereafter 100.000%
(b) Notwithstanding the provisions of clause (a) of this clause 5, at
any time during the first 36 months after the Issue Date, the Company may at its
option redeem up to a maximum of 35% of the original aggregate principal amount
of the Notes with the net cash proceeds of one or more Public Equity Offerings
at a Redemption Price equal to 111.5% of the principal amount thereof, plus
accrued and unpaid interest (and Special Interest, if any), thereon to the
Redemption Date; provided that at least 65% of the aggregate principal amount of
the Notes originally issued shall remain outstanding immediately after the
occurrence of such redemption; and provided, further, that such redemption shall
occur within 90 days of the date of the closing of such Public Equity Offering.
(c) Notices of redemption will be mailed by first class mail at least
30 days but not more than 60 days before the Redemption Date to each Holder
whose Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in integral multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. Unless the
Company defaults in making such redemption payment, on and after the Redemption
Date interest (including Special Interest, if any) ceases to accrue on Notes or
portions thereof called for redemption.
6. Mandatory Redemption. Except as contemplated by clause 7 below,
the Company shall not be required to make any mandatory redemption, purchase or
sinking fund payments with respect to the Notes prior to the maturity date.
7. Repurchase at Option of Holder. (a) Upon the occurrence of a
Change of Control, each Holder will have the right to require the Company to
repurchase such Holder's Notes in whole or in part (the "Change of Control
Offer") at a purchase price (the "Change of Control Purchase Price") in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, and Special Interest, if any, to the Change of Control
Payment Date on the terms described in the Indenture.
Within 30 days following any Change of Control, the Company shall
send, or cause to be sent, by first class mail, postage prepaid, a notice
regarding the Change of Control Offer to each Holder of Notes. The Holder of
this Note may elect to have this Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of Holder to
Require Purchase" appearing below and tendering this Note pursuant to the Change
of Control Offer. Unless the Company defaults in the payment of the Change of
Control Payment with respect thereto, all Notes or portions thereof accepted for
payment pursuant to the Change of Control Offer will cease to accrue interest
(and Special Interest, if any) from and after the Change of Control Purchase
Date.
(b) If at any time the Company or any Subsidiary engages in an Asset
Sale as result of which the aggregate amount of Excess Proceeds exceeds
$5,000,000, the Company shall within 30 days thereafter, or at any time after
receipt of Excess Proceeds but prior to there being $5,000,000 of Excess
Proceeds, the Company may, at its option, make a pro rata offer (an "Asset Sale
Offer") to all Holders of Notes and holders of Senior Debt, if and to the extent
the Company is required by the instruments governing such Senior Debt to make
such an offer, to purchase Notes and such Senior Debt in an aggregate amount
equal to the Excess Proceeds, at a price in cash (the "Asset Sale Offer Purchase
Price") equal to 100% of the outstanding principal amount of the Notes plus
accrued interest and Special Interest, if any, to the date of purchase and, in
the case of such other Senior Debt, 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, thereon to the date of purchase. Upon
completion of such Asset Sale Offer, the amount of Excess Proceeds shall be
reset to zero and the Company may use any remaining amount for general corporate
purposes.
Within 30 days of the date the amount of Excess Proceeds exceeds $5,000,000,
the Company shall send, or cause to be sent, by first class mail, postage
prepaid, a notice regarding the Asset Sale Offer to each Holder of Notes. The
Holder of this Note may elect to have this Note or a portion hereof in an
authorized denomination purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below and tendering this Note pursuant to
the Asset Sale Offer. Unless the Company defaults in the payment of the Asset
Sale Offer Purchase Price with respect thereto, all Notes or portions thereof
selected for payment pursuant to the Asset Sale Offer will cease to accrue
interest from and after the Asset Sale Offer Purchase Date.
8. Denominations; Transfer and Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
(including in certain cases, opinions of counsel) and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not
exchange or register the transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being redeemed in
part. Also, it need not exchange or register the transfer of any Notes for a
period of 15 days before a selection of Notes to be redeemed or during the
period between a Record Date and the corresponding Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
10. Amendment, Supplement and Waiver. With the consent of the holders
of not less than a majority in aggregate principal amount at Stated Maturity of
the outstanding Notes (including consents obtained in connection with a tender
offer or exchange offer for the Notes), the Company, the Guarantors and the
Trustee may enter into one or more indentures supplemental to the Indenture for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of modifying in any manner the rights
of the holders; provided that no such supplemental indenture will, without the
consent of the Holder of each outstanding Note affected thereby, (a) change the
Stated Maturity of the principal of, or any installment of interest on, any
Note, or reduce the principal amount thereof (or premium, if any), or the
interest thereon that would be due and payable thereon, or change the place of
payment where, or the coin or currency in which, any Note or any premium or
interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof, (b)
reduce the percentage in principal amount at Stated Maturity of the outstanding
Notes, the consent of whose Holders is necessary for any such supplemental
indenture or required for any waiver of compliance with certain provisions of
the Indenture, or certain Defaults thereunder, (c) modify the Obligations of the
Company to make offers to purchase Notes upon a Change of Control or from the
proceeds of Asset Sales, (d) subordinate in right of payment the Notes or the
Guarantees to any other Indebtedness, (e) amend, supplement or otherwise modify
the provisions of the Indenture relating to Guarantees or (f) make any changes
in Sections 6.4 or 6.7 of the Indenture or modify any of the provisions of this
clause (except to increase any percentage set forth therein or herein).
11. Defaults and Remedies. Events of Default include in summary form:
(i) default for 30 days in the payment when due of interest on, or Special
Interest with respect to, the Notes; (ii) default in payment when due of the
principal of or premium, if any, on the Notes; (iii) failure by the Company to
comply with Sections 4.9, 4.11, 4.12, 4.13, 4.15, 4.16, 4.21(c) or 5.1 of the
Indenture; (iv) failure by the Company for 30 days after notice to comply with
any of its other agreements in the Indenture or the Notes; (v) Indebtedness of
the Company or any Subsidiary is not paid when due within the applicable grace
period, if any, or is accelerated by the holders thereof and, in either case,
the aggregate principal amount of such unpaid or accelerated Indebtedness
exceeds $10,000,000 or more; (vi) failure by the Company or any of its
Restricted Subsidiaries to pay final judgments aggregating in excess of
$5,000,000, which judgments are not paid, discharged or stayed for a period of
60 days; (viii) certain events of bankruptcy or insolvency with respect to the
Company or any Significant Subsidiary; and (ix) any Guarantee shall for any
reason cease to be, or be asserted by the Company or any Guarantor, as
applicable, not to be, in full force as effect (except pursuant to the release
of any Guarantee in accordance with the Indenture).
Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal, premium, if any, interest or Special
Interest, if any) if it determines that withholding notice is in their interest.
Subject to certain limitations, the Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes then outstanding waive any existing Default or
Event of Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest on, or the principal of,
premium, if any, on, interest on, and, if any, on, the Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
12. Defeasance Prior to Maturity or Redemption. The Company, at its
election, shall (a) be deemed to have paid and discharged its debt on the Notes
and the Indenture and Guarantees shall cease to be of further effect as to all
outstanding Notes (except as to (i) rights of registration of transfer,
substitution and exchange of Notes, (ii) the Company's right of optional
redemption, (iii) rights of Holders to receive payments of principal of,
premium, if any, and interest on the Notes (but not the Change of Control
Purchase Price or the Asset Sale Offer Purchase Price) and any rights of the
Holders with respect to such amounts, (iv) the rights, obligations and
immunities of the Trustee under the Indenture, and (v) certain other specified
provisions in the Indenture) or (b) cease to be under any obligation to comply
with certain restrictive covenants that are described in the Indenture, after
the irrevocable deposit by the Company with the Trustee, in trust for the
benefit of the Holders, at any time prior to the Stated Maturity of the Notes,
of (i) money in an amount, (ii) U.S. Government Obligations which through the
payment of interest and principal will provide, not later than one Business Day
before the due date of payment in respect of such Notes, money in an amount, or
(C) a combination thereof sufficient to pay and discharge the principal of,
premium, if any on, and interest (including Special Interest, if any) on, such
Notes then outstanding on the dates on which any such payments are due in
accordance with the terms of the Indenture and of such Notes.
13. Trustee Dealings with the Company. Subject to certain
limitations imposed by the Trust Indenture Act, the Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder of the Company or a Guarantor, as such, shall not
have any liability for any obligations of the Company or the Guarantors under
the Notes, the Indenture, the Guarantees or for any claim based on, in respect
of, or by reason of, such Obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issuance of the Notes.
15. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS NOTE, WITHOUT REGARD TO THE CONFLICTS OF
LAWS PRINCIPLES THEREOF.
16. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. Additional Rights of Holders of Transfer Restricted Notes. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Notes (as defined in the Registration Rights
Agreement) shall have all the rights set forth in the Registration Rights
Agreement dated as of the date of the Indenture, between the Company and the
parties named on the signature pages thereof (the "Registration Rights
Agreement").
19. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Premier Graphics, Inc.
6075 Poplar, Suite 401
Memphis, Tennessee 38119
Telephone No.: (901) 685-2020
Attention: Lance T. Fair
Telephone No.: (901) 685-2020
Telecopier No.: (901) 685-3600
GUARANTEE
Subject to the limitations set forth in the Indenture, the Guarantors (as
defined in the Indenture referred to in this Note and each hereinafter referred
to as a "Guarantor," which term includes any successor or additional Guarantor
under the Indenture) have jointly and severally, irrevocably and unconditionally
guaranteed (a) the due and punctual payment of the principal (and premium, if
any) of and interest (and Special Interest, if any), on the Notes, whether at
Maturity, by acceleration, call for redemption, upon a Change of Control Offer,
Asset Sale Offer, purchase or otherwise, (b) the due and punctual payment of
interest on the overdue principal of and interest (and Special Interest, if
any), on the Notes to the extent lawful, (c) the due and punctual performance of
all other Obligations of the Company and the Guarantors to the Holders under the
Indenture and the Notes and (d) in case of any extension of time of payment or
renewal of any Notes or any of such other Obligations, the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Asset Sale Offer, purchase or otherwise. Capitalized
terms used herein shall have the same meanings assigned to them in the Indenture
unless otherwise indicated.
Payment on each Note is guaranteed, jointly and severally, by the
Guarantors pursuant to Article 12 of the Indenture and reference is made to such
Indenture for the precise terms of the Guarantees.
The Obligations of each Guarantor are limited to the maximum amount as
will, after giving effect to such maximum amount and all other contingent and
fixed liabilities of such Guarantor, and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
Obligations of such other Guarantor under its Guarantee or pursuant to its
contribution obligations under the Indenture, result in the Obligations of such
Guarantor under its Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under any applicable Federal, State or foreign bankruptcy
law or not otherwise being void, voidable or unenforceable under any such
applicable bankruptcy law. Each Guarantor that makes a payment or distribution
under a Guarantee shall be entitled to a contribution from each other Guarantor
in a pro rata amount based on the Adjusted Net Assets of each Guarantor.
Certain of the Guarantors may be released from their Guarantees upon the
terms and subject to the conditions provided in the Indenture.
The Guarantee shall be binding upon each Guarantor listed below and its
successors and assigns and shall inure to the benefit of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions in the Indenture.
[Remainder of page intentionally left blank.]
MASTER GRAPHICS, INC.
By:
--------------------------
Name:
------------------------
Title:
-----------------------
HARPERPRINTS, INC.
By:
-------------------------
Name:
-----------------------
Title:
----------------------
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
_______________________________________________________________________________
(Insert assignee's Social Security or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Company or the agent appointed by the
Company to maintain such books. The agent appointed hereby may substitute
another to act for him.
_______________________________________________________________________________
Date: ________________________
Your signature: __________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee:
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.9 or 4.15 of the Indenture, check the box below:
[ ] Section 4.9 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.9 or Section 4.15 of the Indenture, state the
amount you elect to have purchased (must be an integral multiple of $1,000):
$__________________
Your Signature:
-----------------------------------
(Sign exactly as your name appears on
the Note)
Signature Guarantee: Social Security or Tax Identification No.:
--------
SCHEDULE A
CHANGES IN PRINCIPAL AMOUNT OF NOTE/5/
The following changes in the principal amount of this Global Note have
been recorded:
Principal Amount of this
Amount of decrease in Amount of increase in Global Note Signature of
Principal Amount of Principal Amount of following such decrease authorized officer
Date of Transaction this Global Note this Global Note (or increase) of Trustee
- ------------------- --------------------- --------------------- ----------------------- -------------------
- -------------------------
/5/ This should only be included if the Note is issued in global form.
Exhibit B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.6(a)(1) of the Indenture)
United States Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 11 1/2% Senior Notes due 2005 of Premier Graphics, Inc.
Reference is hereby made to the Indenture, dated as of December 11,
1998 (the "Indenture"), between Premier Graphics, Inc. (the "Company"), the
Persons acting as guarantors and named therein (the "Guarantors") and United
States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S.$___________ principal amount of Notes
which are evidenced by one or more U.S. Global Notes and held with the
Depositary in the name of _____________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Notes to a Person who
will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Regulation S Global Notes, which amount, immediately
after such transfer, is to be held with the Depositary through Euroclear or
Cedel or both.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with Rule 903 or Rule 904 under the United States Securities
Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor
hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United
States and, if the 40-day restricted period has not yet expired
and the Transferor is a dealer (as defined in Section 2(12) of
the Securities Act), or a person receiving a selling concession,
fee or other remuneration in respect of the Notes being sold
(collectively, "Dealers"), (i) neither the Transferor or any
person acting on its behalf knows that the transferee is a U.S.
person and (ii) if the Transferor or any person acting on its
behalf knows that the transferee is a Dealer, the Transferor or
person acting on its behalf has sent a confirmation or other
notice to the transferee stating that the Notes may be offered or
sold during the 40-day restricted period only in accordance with
the provisions of Regulation S, pursuant to registration under
the Securities Act or pursuant to an available exemption from the
registration requirements of the Securities Act;
(2) either:
(a) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person
acting on its behalf reasonably believed and believes that
the transferee was outside the United States; or
(b) the transaction was executed in, on or through the
facilities of a designated offshore securities market and
neither the Transferor nor any person acting on its behalf
knows that the transaction was prearranged with a buyer in
the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 904(b) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the
registration provisions of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depositary
through Euroclear or Cedel or both.
Upon giving effect to this request to exchange a beneficial interest
in a U.S. Global Note for a beneficial interest in a Regulation S Global Note.
The resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Regulation S Global Notes pursuant to the Indenture and
the Securities Act and, if such transfer occurs prior to the end of the 40-day
restricted period associated with the initial offering of Notes, the additional
restrictions applicable to transfers of interest in the Regulation S Temporary
Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Prudential Securities Incorporated and Morgan Keegan &
Company, Inc. (collectively, the "Initial Purchasers"), the Initial Purchasers
of such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
----------------------------------------
Name:
--------------------------------------
Title:
---------------------
Dated:
---------------------
cc: Premier Graphics, Inc.
Initial Purchasers
Exhibit B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO U.S. GLOBAL NOTE
(Pursuant to Section 2.6(a)(ii) of the Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 11 1/2% Senior Notes due 2005 of Premier Graphics, Inc.
Reference is hereby made to the Indenture dated as of December 11,
1998 (the "Indenture"), between Premier Graphics, Inc. (the "Company"), the
Persons acting as guarantors and named therein (the "Guarantors") and United
States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to $____________ principal amount of Notes which
are evidenced by one or more Regulation S Global Notes and held with the
Depositary through Euroclear or Cedel in the name of _________________ (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Notes to a Person who will take delivery thereof in the form of
an equal principal amount of Notes evidenced by one or more U.S. Global Notes,
to be held with the Depositary.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that:
[CHECK ONE]
o such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act") and, accordingly, the Transferor hereby further certifies
that the Notes are being transferred to a Person that the Transferor
reasonably believes is purchasing the Notes for its own account, or for one
or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A;
or
[ ] such transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;
[ ] the Surrendered Notes are being transferred to Institutional Accredited
Investor pursuant to an exemption under the Securities Act other than Rule
144A, Rule 144 or Rule 904 and the Transferor further certifies that the
Transfer complies with the transfer restrictions applicable to beneficial
interests in Global Notes and Certificated Notes bearing the Private
Placement Legend and the requirements of the exemption claimed, which
certification is supported by a certificate attached hereto executed by the
Transferee in the form of Exhibit C to the Indenture, and, if the Company
should so request, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification), in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act to the effect that such Transfer is in compliance with the
Securities Act;
or
o such transfer is being effected in an offshore transaction pursuant to and
in accordance with Rule 904 under the Securities Act;
or
o such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
o such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of
the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and such Notes are being transferred in compliance with any applicable blue sky
or securities laws of any state of the United States or any other applicable
jurisdiction.
Upon giving effect to this request to exchange a beneficial interest
in Regulation S Global Notes for a beneficial interest in U.S. Global Notes, the
resulting beneficial interest shall be subject to the restrictions on transfer
applicable to U.S. Global Notes pursuant to the Indenture and the Securities
Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporations, Prudential Securities Corporation and Morgan Keegan &
Company, Inc. (collectively, the "Initial Purchasers"), the Initial Purchasers
of such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Dated: _______________________
cc: Premier Graphics, Inc.
Initial Purchasers
Exhibit B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(Pursuant to Section 2.6(b) of the Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 11 1/2% Senior Notes due 2005 of Premier Graphics, Inc.
Reference is hereby made to the Indenture dated as of December 11,
1998 (the "Indenture"), between Premier Graphics, Inc. (the "Company"), the
Persons acting as guarantors and named therein (the "Guarantors") and United
States Trust Company of New York as trustee (the "Trustee"). Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
This relates to $_________ principal amount of Notes which are
evidenced by one or more Certificated Notes in the name of ______________ (the
"Transferor"). The Transferor has requested an exchange or transfer of such
Certificated Note(s) in the form of an equal principal amount of Notes evidenced
by one or more Certificated Notes, to be delivered to the Transferor or, in the
case of a transfer of such Notes, to such Person as the Transferor instructs the
Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
o the Surrendered Notes are being acquired for the Transferor's own account,
without transfer;
or
o the Surrendered Notes are being transferred to the Company;
or
o the Surrendered Notes are being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Surrendered Notes are being
transferred to a Person that the Transferor reasonably believes is
purchasing the Surrendered Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A;
or
o the Surrendered Notes are being transferred in a transaction permitted by
Rule 144 under the Securities Act;
or
o the Surrendered Notes are being transferred in an offshore transaction
pursuant to and in accordance with Rule 904 under the Securities Act;
or
o the Surrendered Notes are being transferred to Institutional Accredited
Investor pursuant to an exemption under the Securities Act other than Rule
144A, Rule 144 or Rule 904 and the Transferor further certifies that the
Transfer complies with the transfer restrictions applicable to beneficial
interests in Global Notes and Certificated Notes bearing the Private
Placement Legend and the requirements of the exemption claimed, which
certification is supported by a certificate attached hereto executed by the
Transferee in the form of Exhibit C to the Indenture, and, if the Company
should so request, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification), in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act to the effect that such Transfer is in compliance with the
Securities Act;
or
o the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
o such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of
the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky or securities laws of any state of the United States or any
other applicable jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Prudential Securities Incorporated and Morgan Keegan &
Company, Inc. (collectively, the "Initial Purchasers"), the Initial Purchasers
of such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Dated: ________________________
cc: Premier Graphics, Inc.
Initial Purchasers
Exhibit B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE OR REGULATION S PERMANENT GLOBAL NOTE
TO DEFINITIVE NOTE
(Pursuant to Section 2.6(c) of the Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 11 1/2% Senior Notes due 2005 of Premier Graphics, Inc.
Reference is hereby made to the Indenture dated as of December 11,
1998 (the "Indenture"), between Premier Graphics, Inc.. (the "Company"), the
Persons acting as guarantors and named therein (the "Guarantors") and United
States Trust Company of New York, as trustee (the "Trustee"). Capitalized terms
used but not defined herein shall have the meanings given them in the Indenture.
This letter relates to $_____________ principal amount of Notes which
are evidenced by a beneficial interest in one or more U.S. Global Notes or
Regulation S Permanent Global Notes in the name of __________________ (the
"Transferor"). The Transferor has requested an exchange or transfer of such
beneficial interest in the form of an equal principal amount of Notes evidenced
by one or more Certificated Notes, to be delivered to the Transferor or, in the
case of a transfer of such Notes, to such Person as the Transferor instructs the
Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such surrendered Notes hereby certifies that:
[CHECK ONE]
o the Surrendered Notes are being transferred to the beneficial owner of such
Notes;
or
o the Surrendered Notes are being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Surrendered Notes are being transferred to a Person that
the Transferor reasonably believes is
purchasing the Surrendered Notes for its own account, or for one or more
accounts with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144A;
or
o the Surrendered Notes are being transferred in a transaction permitted by
Rule 144 under the Securities Act;
or
o such transfer is being effected in an offshore transaction pursuant to and
in accordance with Rule 904 under the Securities Act;
or
o the Surrendered Notes are being transferred to Institutional Accredited
Investor pursuant to an exemption under the Securities Act other than Rule
144A, Rule 144 or Rule 904 and the Transferor further certifies that the
Transfer complies with the transfer restrictions applicable to beneficial
interests in Global Notes and Certificated Notes bearing the Private
Placement Legend and the requirements of the exemption claimed, which
certification is supported by a certificate attached hereto executed by the
Transferee in the form of Exhibit C to the Indenture, and, if the Company
should so request, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification), in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act to the effect that such Transfer is in compliance with the
Securities Act;
or
o the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
o the Surrendered Notes are being transferred pursuant to an exemption from
the registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of
the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Prudential Securities Incorporated and Morgan Keegan &
Company, Inc. (collectively, the "Initial Purchasers"), the Initial Purchasers
of such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Dated: ________________________
cc: Premier Graphics, Inc.
Initial Purchasers
Exhibit C
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Reference is hereby made to the Indenture, dated as of December 11,
1998 (the "Indenture"), between Premier Graphics, Inc., as issuer, and Persons
acting as guarantors and named therein (the "Guarantors") and United States
Trust Company of New York, as trustee. Capitalized terms used but not defined
herein shall have the meanings given them in the Indenture.
In connection with our proposed purchase of $________________
aggregate principal amount of:
(a) o Beneficial interests, or
(b) o Certificated Notes,
we confirm that:
(i) we are an entity which is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of
1933, as amended (the "Securities Act"), or an entity in which all of the
equity owners are accredited investors within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional
Accredited Investor");
(ii) any purchase of Notes by us will be for our own account or
for the account of one or more other Institutional Accredited Investors;
(iii) in the event that we purchase any Notes, we will acquire
Notes having a minimum purchase price of at least $100,000 for our own
account and for each separate account for which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
purchasing Notes;
(v) we are not acquiring Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other applicable
jurisdiction; provided that the disposition of our
property and the property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary in connection with our decision to purchase Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the meaning of the Securities Act and that
the Notes have not been registered under the Securities Act, and we agree, on
our own behalf and on behalf of each account for which we acquire any notes,
that (A) such Notes may be offered, resold, pledged or otherwise transferred
only (i) to a person whom we reasonably believe to be a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in a transaction
meeting the requirements of Rule 144A, in a transaction meeting the requirements
of Rule 144 under the Securities Act, outside the United States in a transaction
meeting the requirements of Rule 904 under the Securities Act or in accordance
with another exemption from the registration requirements of the Securities Act
(and based upon an opinion of counsel if the Company so requests), (ii) to the
Company or (iii) pursuant to an effective registration statement under the
Securities Act, and, in each case, in accordance with any applicable securities
laws of any State of the United States or any other applicable jurisdiction and
(B) that we will, and each subsequent Holder is required to, notify any
subsequent purchaser from it of the resale restrictions set forth in (A) above.
We understand that the registrar and transfer agent will not be required to
accept for registration of transfer any Notes, except upon presentation of
evidence satisfactory to the Company that the foregoing restrictions on transfer
have been complied with. We further understand that the Notes purchased by us
will bear a legend reflecting the substance of this paragraph.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation, Prudential Securities Incorporated and Morgan Keegan &
Company, Inc. (collectively, the "Initial Purchasers"), the Initial Purchasers
of such Notes being transferred. We acknowledge that you, the Company and the
Initial Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in writing if
any of our representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
____________________________________
(Name of Purchaser)
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Address:
----------------------------
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1).................................................. 7.10
(a)(2)................................................... 7.10
(a)(3)................................................... N.A.
(a)(4)................................................... N.A.
(b)...................................................... 7.3; 7.8; 7.10
(c)...................................................... N.A.
311(a)..................................................... 7.11
(b)...................................................... 7.11
(c)...................................................... N.A.
312(a)..................................................... 2.5
(b)...................................................... 11.3
(c)...................................................... 11.3
313(a)..................................................... 7.6
(b)(1)................................................... N.A.
(b)(2)................................................... 7.6
(c)...................................................... 7.6; 11.2
(d)...................................................... 7.6
314(a)..................................................... 4.6; 4,22; 11.2
(b)...................................................... N.A.
(c)(1)................................................... 11.4, 11.5
(c)(2)................................................... 7.2; 11.4; 11.5
(c)(3)................................................... N.A.
(d)...................................................... N.A.
(e)...................................................... 10.5
(f)...................................................... N.A.
315(a)..................................................... 7.1(a)
(b)...................................................... 4.22; 7.5; 11.4
(c)...................................................... 7.1
(d)...................................................... 7.1
(e)...................................................... 6.11
316(a)(last sentence)...................................... 2.9
(a)(1)(A)................................................ 6.5
(a)(1)(B)................................................ 6.4
(a)(2)................................................... N.A.
(b)...................................................... 6.7
317(a)(1).................................................. 6.3; 6.8
(a)(2)................................................... 6.9
(b)...................................................... 2.4
318(a)..................................................... 11.1
---------------
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.