AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 4, 2004
REGISTRATION NO. 333-114337
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
Amendment No. 1 to
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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CENVEO CORPORATION
(formerly known as Mail-Well I Corporation)
AND
AFFILIATE GUARANTORS LISTED ON SCHEDULE ATTACHED
HERETO
(Exact name of registrant as specified in its charter)
DELAWARE 2677 84-1250533
(State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Code Number) Identification No.)
---------------
8310 S. VALLEY HIGHWAY, SUITE 400
ENGLEWOOD, CO 80112
(303) 790-8023
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------
MARK ZOELLER
VICE PRESIDENT AND GENERAL COUNSEL
CENVEO, INC.
(formerly known as Mail-Well, Inc.)
8310 S. VALLEY HIGHWAY, SUITE 400
ENGLEWOOD, CO 80112
(303) 790-8023
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
---------------
COPIES TO:
HERBERT H. DAVIS III DOUGLAS R. WRIGHT
8310 S. VALLEY HIGHWAY, SUITE 400 FAEGRE & BENSON LLP
ENGLEWOOD, CO 80112 3200 WELLS FARGO CENTER
(303) 790-8023 1700 LINCOLN STREET
DENVER, CO 80203-4532
(303) 607-3500
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As soon as practicable after this registration statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE(1)
-------------------------------------------------------------------------------------------------------------------------
7 7/8% Senior Subordinated Notes due 2013... $320,000,000 100% $320,000,000 $ 40,544
Guarantee of 7 7/8% Senior Subordinated
Notes due 2013.............................. -- -- -- -- (2)
=========================================================================================================================
<FN>
(1) Calculated in accordance with Rule 457(f)(2). For purposes of this
calculation, the offering price per note was assumed to be the stated
principal amount of each note that may be received in the exchange
transaction in which the notes will be offered.
(2) Pursuant to Rule 457(n), no registration fee is required for the
guarantees of the notes registered hereby.
================================================================================
ADDITIONAL REGISTRANTS
STATE OR PRIMARY
OTHER STANDARD I.R.S.
JURISDICTION OF INDUSTRIAL EMPLOYER
NAME OF INCORPORATION CLASSIFICATION IDENTIFICATION
ADDITIONAL REGISTRANT OR FORMATION CODE NUMBER NUMBER
---------------------------------------- ------------ ----------- ------
Classic Envelope Plus, Ltd.............. B.C., Canada 2677 N/A
Discount Labels, Inc.................... IN 2759 35-1119834
Innova Envelope Inc./Enveloppe Innova
Inc................................... Ontario, Canada 2677 N/A
Mail-Well Alberta Finance LP............ Alberta, Canada 2752 N/A
Mail-Well Canada Leasing Company Inc.... Nova Scotia, Canada 2752 20-0193038
Cenveo, Inc. (formerly known as
Mail-Well, Inc.)...................... CO 6719 84-1250533
Cenveo Commercial, Inc. (formerly
known as Mail-Well Commercial
Printing, Inc.)....................... DE 2752 84-1461875
Cenveo Government Printing, Inc.
(formerly known as Mail-Well
Government Printing, Inc.)............ CO 2752 04-3671149
Cenveo Mexico Holdings, Inc. (formerly
known as Mail-Well Mexico Holdings,
Inc.)................................. CO 2677 84-1468396
Cenveo Services, Inc. (formerly known as
Mail-Well Services LLC)............... CO 2752 20-0186643
Cenveo Texas Finance, LP (formerly
known as Mail-Well Texas Finance LP).. TX 2677 52-2360462
Cenveo West, Inc. (formerly known as
Mail-Well West, Inc.)................. DE 2677 84-1313079
McLaren Morris and Todd Company......... Nova Scotia, Canada 2752 N/A
MM&T Packaging Company.................. Nova Scotia, Canada 2752 N/A
National Graphics Company............... CO 2761 84-0692676
PNG Inc................................. Ontario, Canada 2677 84-0692676
Quality Park, Inc. (formerly known as
Poser Business Forms, Inc.)........... DE 2761 75-2195786
Precision Fine Papers, Inc.............. Ontario, Canada 2677 N/A
Supremex, Inc. ......................... Ontario, Canada 2677 N/A
Cenveo III, LLC (formerly known as
Wisco III, LLC)....................... DE 2677 84-1362168
The name and address of the principal executive office for each of the
additional registrants is the same as is set forth for Cenveo Corporation on
the facing page of this registration statement. The old notes are, and the
new notes will be, unconditionally guaranteed on a joint and several basis
by Cenveo, Inc. and the above registered subsidiaries.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Subject to completion, dated June 4, 2004
PROSPECTUS
[CENVEO LOGO]
CENVEO CORPORATION (formerly known as Mail-Well I Corporation)
EXCHANGE OFFER FOR $320,000,000
OF
7 7/8% SENIOR SUBORDINATED NOTES DUE 2013
---------------
Material terms of the exchange offer:
o We are offering to exchange the notes that we sold on February 4,
2004 in a private offering for new notes to be issued in registered
transactions.
o The exchange offer expires at 5:00 p.m., New York City time, on
______________, 2004, unless we extend it.
o The new notes will be identical to the old notes in all material
respects, except that they will not have transfer restrictions,
registration rights, or certain rights to additional interest that
the old notes had.
o The exchange of old notes for new notes will not be taxable for U.S.
Federal income tax purposes, but you should see the discussion under
the caption "Certain U.S. Federal Income Tax Considerations"
beginning on page 62 for more information.
o We will exchange all old notes that are properly tendered. You
should carefully review the procedures for tendering the old notes
beginning on page 21 of this prospectus.
o Tenders of old notes may be withdrawn at any time prior to 5:00
p.m., New York City time, on the expiration date of the exchange
offer.
o We will not receive any cash proceeds from the exchange offer.
o As of May 22, 2004, $474.6 million in indebtedness outstanding under
our senior credit facility, senior notes and other secured
indebtedness was effectively senior to the new notes, and our senior
credit facility would have allowed us to incur $137.4 million of
additional borrowing that would be effectively senior to the new
notes.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 8 OF THIS
PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER.
---------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON
THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
There is no established trading market for the new notes or the old
notes. However, you may trade the old notes in the PORTAL market.
This prospectus is dated , 2004
Each broker-dealer that receives new notes for its own account pursuant to
the exchange offer must acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. The letter of transmittal
states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. This prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of new notes received in exchange for old notes where such old
notes were acquired by such broker-dealer as a result of market-making
activities or other trading activities. We have agreed that, for a period of
180 days after the expiration date of the exchange offer (as defined
herein), we will make this prospectus available to any broker-dealer for use
in connection with any such resale. See "Plan of Distribution" on page 66.
TABLE OF CONTENTS
PAGE
----
Summary................................................... 1
Risk Factors.............................................. 8
Forward-Looking Statements................................ 16
Use of Proceeds........................................... 16
Selected Consolidated Financial Data...................... 17
The Exchange Offer........................................ 19
Description of the New Notes.............................. 26
Description of Certain Indebtedness....................... 59
Description of Capital Stock.............................. 61
Certain U.S. Federal Income Tax Considerations............ 62
Plan of Distribution...................................... 66
Legal Matters............................................. 67
Experts................................................... 67
Exchange Agent............................................ 67
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WHERE YOU CAN FIND MORE INFORMATION
Our parent company, Cenveo, Inc. (formerly known as Mail-Well,
Inc.), is subject to the informational requirements of the Exchange Act, and
in accordance with the requirements of the Exchange Act files reports and
other information with the SEC. You may read and copy documents filed with
the SEC by Cenveo, Inc. at the Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. You can obtain information on the operation of
the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also
obtain the documents that Cenveo, Inc. files electronically from the SEC's
web site at http://www.sec.gov. While any notes remain outstanding, we will
make available, upon request, to any beneficial owner and any prospective
purchaser of notes the information regarding Cenveo, Inc. required pursuant
to Rule 144A(d)(4) under the Securities Act during any period in which
Cenveo, Inc. is not subject to Section 13 or 15(d) of the Exchange Act. Any
such request should be directed to Cenveo, Inc., Attn: Secretary, 8310 S.
Valley Highway, Suite 400, Englewood, Colorado 80112.
We "incorporate by reference" into this prospectus certain
information filed by Cenveo, Inc. with the SEC, which means that we can
disclose important information to you by referring you to those documents.
The information incorporated by reference is an important part of this
prospectus. Certain information that is subsequently filed with the SEC will
automatically update and supercede information in this prospectus and in
earlier filings with the SEC. We incorporate by reference the documents
listed below, which have been filed with the SEC, and any future filings
Cenveo, Inc. may make with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, until all the notes offered by this
prospectus have been exchanged and all conditions to the consummation of
those exchanges have been satisfied, provided, however, that we are not
incorporating any information furnished under Item 9 or Item 12 of any
Current Report on Form 8-K:
o Mail-Well, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 2003 filed with the SEC on February 27, 2004;
o Mail-Well, Inc.'s Quarterly Report on Form 10-Q for the quarter
ended March 31, 2004 filed with the SEC on May 3, 2004;
o Mail-Well, Inc.'s Proxy Statement on Schedule 14A filed with the
SEC on March 16, 2004;
o Mail-Well, Inc.'s Current Reports on Form 8-K filed with the SEC on
May 6, 2004, February 17, 2004, February 9, 2004 and January 21,
2004 and Cenveo, Inc.'s Current Report on Form 8-K filed with the
SEC on May 17, 2004.
This information is available without charge to security holders
upon written or oral request to Cenveo, Inc., Attn: Secretary, 8310 S.
Valley Highway, Suite 400, Englewood, Colorado 80112, telephone (303)
790-8023. To obtain timely delivery of such information, you must request
the information no later than ___________, 2004.
SUMMARY
This summary highlights selected information about us and does not
contain all of the information that is important for you to consider in
deciding whether to participate in the exchange offer. In addition to
reading this summary, you should carefully review this entire prospectus,
especially the "Risk Factors" section beginning on page 8.
The data used in this prospectus are drawn from the financial
statements of Cenveo, Inc. and its subsidiaries on a consolidated basis.
Cenveo, Inc. is the direct parent company of Cenveo Corporation. Because
Cenveo, Inc. has immaterial assets, revenues and expenses (other than
through ownership of Cenveo Corporation), the financial condition and
results of operations of Cenveo Corporation and its subsidiaries on a
consolidated basis do not materially differ from those of Cenveo, Inc. on a
consolidated basis. Cenveo, Inc. and certain of its subsidiaries will
guarantee all of Cenveo Corporation's obligations under the new notes.
OUR COMPANY
We are one of North America's largest providers of printing and
printing related products and value added services. We produce general
commercial printing, high impact premium printing, custom and stock
envelopes, printed business forms and labels. We believe we are the world's
largest manufacturer of envelopes, the leading printer of envelopes in the
United States and Canada, and the premier printer of high impact color
printing in the United States. Our principal executive offices are located
at 8310 S. Valley Highway, Suite 400, Englewood, Colorado, 80112, and our
phone number is (303) 790-8023. On April 29, 2004, our shareholders
approved the change of our company's name from Mail-Well to Cenveo.
COMMERCIAL
Our commercial business had sales of $1.3 billion in 2003. This
business segment operates 66 manufacturing facilities and specializes in the
printing of annual reports, car brochures, brand marketing collateral,
financial communications, general commercial printing and the manufacture
and printing of customized envelopes for billing and remittance and direct
mail advertising. In addition, we operate five distribution and fulfillment
centers and provide our customers with other value added services such as
ecommerce.
RESALE
Our resale business had sales of $399 million in 2003. This
business segment operates 20 manufacturing facilities and produces business
forms and labels, custom and stock envelopes and specialty packaging and
mailers generally sold to third-party dealers such as print distributors,
forms suppliers and office-products retail chains.
RESULTS OF 2001 STRATEGIC PLAN
In 2001, we adopted a strategy to focus on our commercial printing
and envelope businesses and announced plans to divest certain non-core
businesses. In addition to the planned divestitures, we initiated a
restructuring program to consolidate manufacturing facilities to improve our
competitive position and implemented other initiatives to significantly
improve operations, reduce costs and increase marketing effectiveness. We
have substantially completed this strategic plan. The results of the
strategic plan included the following:
o The consolidation of our printing operations in the Philadelphia
market into one facility, the closure of our printing operation in
New York City, and the consolidation of our web printing plant in
Indianapolis, Indiana into our web printing plants in St. Louis,
Missouri and Baltimore, Maryland;
o The consolidation of our best envelope equipment, expertise and
operational capabilities into 39 facilities, down from 50 in 2000;
o The consolidation of the Denver, Colorado and Clearwater, Florida
printed office products manufacturing facilities into other plants;
o The sale of Curtis 1000 Inc. (a distributor of business documents
and envelopes), our prime label business, the filing products
division of our envelope segment and certain digital graphics
operations in our
1
commercial printing segment; and
o The restructuring of our debt.
We believe these actions position us well for the future.
2
SUMMARY DESCRIPTION OF THE EXCHANGE OFFER
Issuer.......................................... Cenveo Corporation.
Old Notes....................................... 7 7/8% Senior Subordinated Notes due 2013, which we
issued on February 4, 2004 in transactions exempt from
registration under the Securities Act of 1933.
New Notes....................................... 7 7/8% Senior Subordinated Notes due 2013, the issuance
of which will be registered under the Securities Act.
The form and terms of the new notes are identical in
all material respects to those of the old notes, except
that the transfer restrictions and registration rights
relating to the old notes do not apply to the new
notes.
Exchange Offer.................................. We are offering to issue up to $320,000,000 aggregate
principal amount of the new notes in exchange for a
like principal amount of the old notes to satisfy our
obligations under the registration rights agreement
that we entered into when the old notes were issued.
Expiration Date................................. The exchange offer will expire at 5:00 p.m., New York City
time, on __________________, 2004, or a later date and
time to which we extend it.
Withdrawal...................................... You may withdraw your tender of the old notes pursuant to
the exchange offer at any time prior to 5:00 p.m., New
York City time, on ______________, 2004, or a later date
and time to which we extend the offer. We will return any
old notes that we do not accept for exchange for any
reason without expense to the tendering holder as soon as
practicable after the exchange offer expires or
terminates.
Interest on the New Notes and the Old Notes..... Interest on the new notes will accrue from the date of the
original issuance of the old notes or from the date of the
last periodic payment of interest on the old notes,
whichever is later. No additional interest will be paid on
old notes tendered and accepted for exchange.
Conditions of the Exchange Offer................ The exchange offer is subject to customary conditions,
some of which we may waive. See "The Exchange
Offer--Conditions of the Exchange Offer."
Procedures for Tendering Old Notes.............. To accept the exchange offer, you must complete, sign and
date the letter of transmittal in accordance with the
instructions contained in this prospectus and in the
letter of transmittal, and send the letter of transmittal
and the old notes and any other required documentation to
the exchange agent at the following address:
US Bank Specialized Finance
60 Livingston Ave.
St. Paul, Minnesota 55107
Telecopier No.: 651-495-8158
If you hold the old notes through the Depository Trust
Company, to accept the exchange offer you must use the
DTC's Automated Tender Offer Program, by which each
3
tendering participant will agree to be bound by the letter
of transmittal. By executing or agreeing to be bound by
the letter of transmittal, each holder will represent to
us that, among other things,
o it is acquiring the new notes in the exchange
offer in its ordinary course of business;
o it has no arrangement or understanding with any
person to participate in a distribution of the
new notes, and if it is not a broker-dealer, it
is not engaged in, and does not intend to engage
in, a distribution of the new notes;
o it is not an "affiliate" of Cenveo Corporation,
as defined in Rule 405 of the Securities Act, or
if it is such an affiliate, it will comply with
the registration and prospectus delivery
requirements of the Securities Act to the extent
applicable; and
o if it is a broker-dealer, it will receive new
notes for its own account in exchange for old
notes that it acquired as a result of
market-making activities or other trading
activities.
Each broker-dealer that receives new notes for its own
account in exchange for old notes, where such old notes
were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in
connection with any resale of such new notes. See "Plan of
Distribution."
We will accept for exchange any and all old notes that are
properly tendered and not withdrawn in the exchange offer
prior to 5:00 p.m., New York City time, on _____________,
2004. The exchange agent will deliver the new notes issued
pursuant to the exchange offer promptly following the
expiration date. See "The Exchange Offer--Terms of the
Exchange Offer; Period for Tendering Old Notes."
Federal Income Tax Considerations............... The exchange of old notes for new notes in the exchange
offer will not be a taxable event for U.S. federal income
tax purposes. See "Certain U.S. Federal Income Tax
Considerations."
Effect of Not Tendering......................... Old notes that are not tendered or that are tendered but
not accepted will, following the completion of the
exchange offer, continue to be subject to the existing
restrictions on transfer. Except as described in
"Description of the New Notes - Registration Rights;
Liquidated Damages," we will have no further obligation to
provide for the registration under the Securities Act of
the old notes. Holders of old notes do not have any
appraisal or dissenters' rights in connection with the
exchange offer.
Regulatory Approvals............................ We do not believe that the receipt of any federal or state
4
approvals will be necessary in connection with the
exchange offer, other than the effectiveness of the
registration statement of which this prospectus
constitutes a part.
SUMMARY DESCRIPTION OF THE NEW NOTES
Issuer.......................................... Cenveo Corporation.
Maturity Date................................... December 1, 2013.
Interest Rate................................... The new notes will bear interest at an annual rate of 7 7/8%.
Interest Payment Dates.......................... We will pay interest on the new notes semi-annually on
June 1 and December 1 of each year, beginning December 1, 2004.
Optional Redemption............................. We may redeem the new notes, in whole or in part, on or
after December 1, 2008, at the redemption prices specified
under "Description of the New Notes--Optional Redemption."
In addition, prior to December 1, 2006, we may redeem new
notes, in an aggregate principal amount not to exceed 35%
of the aggregate principal amount of notes originally
issued and at a redemption price of 108.875%, with the net
cash proceeds of certain equity offerings. See
"Description of the New Notes--Optional Redemption."
Change of Control............................... If we experience a change of control, we may be required
to make an offer to purchase the new notes at a purchase
price equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any.
Ranking......................................... The new notes will be our unsecured senior subordinated
obligations. The note and the guarantees will rank:
o junior to all of our and the guarantors' existing
and future senior indebtedness, of which $137.4
million was outstanding on May 22, 2004;
o equally with any of our and the guarantors'
existing and future senior subordinated
indebtedness; and
o senior to any other of our and the guarantors'
future subordinated indebtedness, if any.
Asset Sale Proceeds............................. We may be obligated to offer to purchase new notes at a
redemption price of 100% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of
purchase, with the net cash proceeds of certain sales or
other dispositions of assets.
Guarantees...................................... The new notes will be unconditionally guaranteed on a
senior unsecured basis by our parent company and certain
of our existing subsidiaries and our future domestic
subsidiaries.
Restrictive Covenants........................... We will issue the new notes under the indenture among us,
the guarantors and U.S. Bank National Association, as
5
trustee. The indenture contains covenants that will limit
our ability and the ability of our restricted subsidiaries
to:
o incur or guarantee additional indebtedness;
o pay dividends or distributions on, or redeem or
repurchase, our capital stock;
o make investments;
o engage in transactions with affiliates;
o transfer or sell assets;
o create liens;
o restrict dividend or other payments to us from
our subsidiaries;
o issue or sell capital stock of our subsidiaries;
and
o consolidate, merge or transfer all or
substantially all of our assets and the assets of
our subsidiaries.
These covenants are subject to important exceptions and
qualifications. See "Description of the Notes - Certain
Covenants" beginning on page 32.
Resale of the New Notes......................... We believe that the new notes may be offered for sale,
resold or otherwise transferred by holders without
compliance with the registration and prospectus delivery
requirements of the Securities Act. Our belief is based on
interpretations by the staff of the Securities and
Exchange Commission, as set forth in no-action letters
issued to persons unrelated to us, and is conditioned upon
the new notes being acquired in the ordinary course of the
holders' business and the holders having no arrangement
with any person to engage in a distribution of new notes.
Furthermore, each holder, other than a broker-dealer, must
acknowledge that it is not engaged in, and does not intend
to engage in, a distribution of the new notes and has no
arrangement or understanding to participate in a
distribution of new notes.
Each broker-dealer that receives new notes for its own
account in this exchange offer must acknowledge that it
will comply with the prospectus delivery requirements of
the Securities Act in connection with any resale of the
new notes. Broker-dealers that acquired old notes directly
from us and not as a result of market-making activities or
other trading activities may not rely on the staff's
interpretations discussed above or participate in the
exchange offer and must comply with the prospectus
delivery requirements of the Securities Act in order to
resell the old notes.
Please note that the Commission has not considered this
exchange offer in the context of a no-action letter and we
cannot be sure that the staff of the Commission would make
6
a similar determination with respect to this exchange
offer as it did in the no-action letters to the unrelated
persons upon which we are relying.
Use of Proceeds................................. We will not receive any proceeds from this offering.
Risk Factors.................................... See "Risk Factors" beginning on page 8 for a discussion of
the factors you should carefully consider before deciding
to participate in the exchange offer.
7
RISK FACTORS
You should carefully consider all of the information in this
prospectus, including the following risk factors, as well as the other
information included or incorporated by reference in this prospectus before
tendering your shares in the exchange offer. Certain information regarding
risks relating to us are incorporated by reference from Mail-Well, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 2003. When we use
the term "notes" in this prospectus, the term includes the old notes and the
new notes.
RISKS RELATING TO THE EXCHANGE OFFER
HOLDERS WHO FAIL TO EXCHANGE THEIR OLD NOTES WILL CONTINUE TO BE SUBJECT TO
RESTRICTIONS ON TRANSFER.
If you do not exchange your old notes for new notes in the exchange
offer, you will continue to be subject to the restrictions on transfer of
your old notes described in the legend on the certificates for your old
notes. The restrictions on transfer of your old notes arise because we
issued the old notes under exemptions from, or in transactions not subject
to, the registration requirements of the Securities Act and applicable state
securities laws. In general, you may only offer or sell the old notes if
they are registered under the Securities Act and applicable state securities
laws, or are offered and sold under an exemption from these requirements. We
do not plan to register the old notes under the Securities Act. For further
information regarding the consequences of tendering your old notes in the
exchange offer, see the discussions below under the captions "The Exchange
Offer -- Consequences of Failure to Exchange " and "Certain U.S. Federal
Income Tax Considerations."
YOU MUST COMPLY WITH THE EXCHANGE OFFER PROCEDURES IN ORDER TO RECEIVE NEW,
FREELY TRADABLE NEW NOTES.
Delivery of new notes in exchange for old notes tendered and
accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of the following:
o certificates for old notes or a book-entry confirmation of a
book-entry transfer of old notes into the exchange agent's
account at DTC, New York, New York as a depository, including
an agent's message if the tendering holder does not deliver a
letter of transmittal;
o a completed and signed letter of transmittal (or facsimile
thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an agent's message in lieu of
the letter of transmittal; and
o any other documents required by the letter of transmittal.
Therefore, holders of old notes who would like to tender old notes
in exchange for new notes should be sure to allow enough time for the old
notes to be delivered on time. We are not required to notify you of defects
or irregularities in tenders of old notes for exchange. Old notes that are
not tendered or that are tendered but we do not accept for exchange will,
following consummation of the exchange offer, continue to be subject to the
existing transfer restrictions under the Securities Act and, upon
consummation of the exchange offer, certain registration and other rights
under the registration rights agreement will terminate. See "The Exchange
Offer -- Procedures for Tendering Old Notes" and "The Exchange Offer --
Consequences of Failure to Exchange."
SOME HOLDERS WHO EXCHANGE THEIR OLD NOTES MAY BE DEEMED TO BE UNDERWRITERS.
If you exchange your old notes in the exchange offer for the
purpose of participating in a distribution of the new notes, you may be
deemed to have received restricted securities and, if so, will be required
to comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction.
8
RISKS RELATING TO THE NEW NOTES
OUR SUBSTANTIAL EXISTING DEBT SERVICE REQUIREMENTS COULD IMPAIR OUR
FINANCIAL CONDITION AND OUR ABILITY TO FULFILL OUR OBLIGATIONS UNDER OUR
INDEBTEDNESS, INCLUDING THE NOTES.
We have incurred substantial amounts of debt, and our level of debt may
affect our operations and our ability to make payments on the notes. As of
May 22, 2004, our total indebtedness was approximately $794.6 million,
representing 95.5% of our total capitalization.
Our substantial indebtedness could have several important effects on
our future operations. For example:
o our ability to obtain additional financing for working capital,
capital expenditures, acquisitions or other corporate purposes in
the future may be limited;
o a substantial portion of our cash flow from operations will be
dedicated to the payment of principal and interest on indebtedness,
and will not be available to fund working capital, capital
expenditures, acquisitions and other business purposes;
o we may be more vulnerable to economic downturns or other adverse
developments than less leveraged competitors;
o borrowings under our senior credit facility bear interest at
fluctuating rates, which could result in higher interest expense in
the event of an increase in interest rates; and
o we may be unable to repurchase all of the notes tendered to us if
we undergo a change of control.
Our ability to make scheduled payments of principal or interest on, or
to reduce or refinance, indebtedness will depend on our future operating
performance and resulting cash flow. To a certain extent, our future
performance will be subject to prevailing economic conditions and financial,
competitive and other factors beyond our control. We cannot be certain,
however, that our business, or businesses that we may acquire in the future,
will generate sufficient cash flow from operations to enable us to service
all of our debt, including the notes. We may need additional funding from
either debt or equity offerings in the future in order to refinance our
existing debt, including the notes, or to continue to grow our business. We
cannot be sure that we will have access to any such sources of funding on
satisfactory terms or on a timely basis or at all.
THE TERMS OF OUR INDEBTEDNESS IMPOSE SIGNIFICANT RESTRICTIONS ON OUR
BUSINESS.
The indentures governing the notes and our senior notes due 2012 and
the agreement governing our senior credit facility contain various covenants
that limit our ability, and that of our restricted subsidiaries, to, among
other things:
o incur or guarantee additional indebtedness;
o make restricted payments, including dividends;
o create or permit to exist certain liens;
o enter into business combinations and asset sale transactions;
o make investments;
o enter into transactions with affiliates; and
o enter into new businesses.
These restrictions could limit our ability to obtain future financing,
make acquisitions or needed capital expenditures, withstand a future
downturn in our business or the economy in general, conduct operations or
otherwise take advantage of business opportunities that may arise. Our
senior credit facility also requires us to maintain specified financial
ratios. Our ability to meet future financial ratios may be affected by
events beyond our control, such as general economic conditions. Our failure
to maintain applicable financial ratios would prevent us
9
from borrowing additional amounts under our senior credit facility, and
could result in a default under that facility. A default could cause the
indebtedness outstanding under the facility, and by reason of
cross-acceleration or cross-default provisions, the notes and any other
indebtedness we may then have, to become immediately due and payable. If we
are unable to repay those amounts, the lenders under our senior credit
facility could initiate a bankruptcy proceeding or liquidation proceeding or
proceed against the collateral granted to them to secure that indebtedness.
If the lenders under our senior credit facility were to accelerate the
repayment of outstanding borrowings, we might not have sufficient assets to
repay our indebtedness, including the notes.
THERE ARE ADDITIONAL BORROWINGS AVAILABLE TO US THAT COULD FURTHER
EXACERBATE THE RISKS DESCRIBED ABOVE.
Despite current indebtedness levels, we and our subsidiaries may be
able to incur substantial additional indebtedness in the future. The terms
of the indenture governing the notes limit but do not prohibit us from doing
so. As of May 22, 2004, our senior credit facility would permit additional
borrowings of up to $137.4 million (less any outstanding letters of credit)
after completion of this offering. All of those borrowings would be secured
and effectively senior to the notes and the guarantees. If new debt is added
to our and our subsidiaries' current debt levels, the related risks that we
and they now face could intensify.
THE NOTES WILL BE CONTRACTUALLY JUNIOR IN RIGHT OF PAYMENT TO OUR SENIOR
INDEBTEDNESS, AND THE GUARANTEES WILL BE CONTRACTUALLY JUNIOR TO ALL SENIOR
INDEBTEDNESS OF THE GUARANTORS.
The notes will be contractually junior in right of payment to all of
our senior indebtedness, and the guarantees will be contractually junior in
right of payment to all senior indebtedness of the guarantors. As of
May 22, 2004, we, excluding our subsidiaries, had approximately $451.6
million of senior indebtedness, consisting of indebtedness under our senior
credit facility and our senior notes due 2012. In addition, our parent
Cenveo, Inc., excluding its subsidiaries, has approximately $451.6
million of senior indebtedness, consisting of its guarantee of our senior
credit facility and our senior notes due 2012, and the subsidiary guarantors
have approximately $459.7 million of senior indebtedness, consisting of
their guarantees of our senior credit facility and our senior notes due 2012
and $8.1 million of other senior indebtedness.
We may not pay principal, premium, if any, interest or other amounts on
the notes in the event of a payment default in respect of certain senior
indebtedness, including debt under our senior credit facility, unless that
indebtedness has been paid in full or the default has been cured or waived.
In addition, if certain other defaults regarding certain senior indebtedness
occur, we may be prohibited from paying any amount on the notes and the
guarantors may be prohibited from paying any amount on the guarantees for a
designated period of time. If we are, or any of the guarantors is, declared
bankrupt or insolvent, or if there is a payment default under, or an
acceleration of, any senior indebtedness, we are required to pay the lenders
under our senior credit facility and any other creditors who are holders of
senior indebtedness in full before we apply any of our assets to pay amounts
owing with respect to the notes. Accordingly, we may not have enough assets
remaining after payments to holders of our senior indebtedness to make any
payments on the notes.
THE GUARANTEES MAY BE SUBJECT TO FRAUDULENT CONVEYANCE LAWS, AND A COURT MAY
VOID THE GUARANTEES OF THE NOTES OR SUBORDINATE THE GUARANTEES TO OTHER
OBLIGATIONS OF THE SUBSIDIARY GUARANTORS.
Although standards may vary depending on the applicable law, generally
under U.S. federal bankruptcy law and comparable provisions of state
fraudulent transfer laws, if a court were to find that, among other things,
at the time any guarantor of the notes incurred the debt evidenced by its
guarantee of the notes, the guarantor:
either:
o was insolvent or rendered insolvent by reason of the incurrence of
the guarantee;
o was engaged or about to engage in a business or transaction for
which that guarantor's remaining assets constituted unreasonably
small capital;
o was a defendant in an action for money damages, or had a judgment
for money damages docketed against
10
it, if in either case, after a final judgment, the judgment were
unsatisfied;
or
o intended to incur, or believed that it would incur, debts beyond
its ability to pay such debts as they mature;
and
o the guarantor received less than reasonably equivalent value or
fair consideration for the incurrence of its guarantee; or
o incurred the guarantee or made related distributions or payments
with the intent of hindering, delaying or defrauding creditors,
there is a risk that the guarantee of that guarantor could be voided by the
court, or claims by holders of the notes under the guarantee could be
subordinated to other debts of that guarantor. In addition, any payment by
that guarantor pursuant to its guarantee could be voided and required to be
returned to the guarantor, or to a fund for the benefit of the creditors of
the guarantor.
The measures of insolvency for purposes of these fraudulent transfer
laws will vary depending upon the law applied in any proceeding to determine
whether a fraudulent transfer has occurred. Generally, however, a guarantor
would be considered insolvent if:
o the sum of its debts, including contingent liabilities, were
greater than the fair saleable value of all of its assets;
o the present fair saleable value of its assets was less than the
amount that would be required to pay its probable liability on its
existing debts, including contingent liabilities, as they become
absolute and mature; or
o it could not pay its debts as they become due.
On the basis of historical financial information, recent operating
history and other factors, we believe that each guarantor, after giving
effect to its guarantee of these notes, will not be insolvent, will not have
unreasonably small capital for the business in which it is engaged and will
not have incurred debts beyond its ability to pay such debts as they mature.
There can be no assurance, however, as to what standard a court would apply
in making such determinations or that a court would agree with our
conclusions in this regard.
THE INSTRUMENTS GOVERNING OUR CURRENT DEBT CONTAIN CROSS DEFAULT PROVISIONS
THAT MAY CAUSE ALL OF THE DEBT ISSUED UNDER SUCH INSTRUMENTS TO BECOME
IMMEDIATELY DUE AND PAYABLE AS A RESULT OF A DEFAULT UNDER AN UNRELATED DEBT
INSTRUMENT.
Our senior credit facility and the indentures pursuant to which our
existing 9 5/8% senior notes and the old notes were issued and under which
the new notes will be issued, contain numerous financial and operating
covenants and require us and our subsidiaries to meet certain financial
ratios and tests.
Our failure to comply with the obligations contained in the senior
credit facility or the indenture governing the notes could result in an
event of default under our senior credit facility, the senior indenture or
the indenture, which could result in the related debt and the debt issued
under other instruments to become immediately due and payable. In such
event, we would need to raise funds through any number of alternative
available sources, which funds may not be available to us on favorable
terms, on a timely basis or at all. Alternatively, such a default would
require us to sell our assets and otherwise curtail operations in order to
pay our creditors.
WE MAY BE UNABLE TO REPURCHASE THE NOTES IF WE EXPERIENCE A CHANGE OF
CONTROL.
If we were to experience a change of control, as defined in the
indenture governing the notes, we will be required to make an offer to
purchase all of the notes at a purchase price equal to 101% of the principal
amount, plus accrued and unpaid interest. Our senior credit facility
restricts our ability to repurchase notes, including the repurchase of notes
under a change of control offer. Our failure to repay holders tendering
notes upon a change of
11
control would result in an event of default under the notes. A change of
control, or an event of default under the notes, may also result in an event
of default under our senior credit facility, which may result in the
acceleration of the indebtedness under that facility requiring us to repay
that indebtedness immediately. If a change of control were to occur, we
cannot assure you that we would have sufficient funds to repay debt
outstanding under the senior credit facility or to purchase the notes or any
other securities which we would be required to offer to purchase or that
become immediately due and payable as a result. We expect that we would
require additional financing from third parties to fund any such purchases,
and we cannot assure you that we would be able to obtain financing on
satisfactory terms, or at all.
THERE IS NO PUBLIC TRADING MARKET FOR THE NOTES, AND THEY ARE SUBJECT TO
TRANSFER RESTRICTIONS
The new notes will be a new issue of securities for which there will be
a limited trading market.
The initial purchaser of the old notes have advised us that they are
making a market in the notes and will do so for the new notes following the
completion of this offering. However, the initial purchaser is not
obligated to do so, and may discontinue any market-making activities with
respect to the new notes at any time without notice. In addition, such
market making activity will be subject to the limitations imposed by the
Securities Act and the Securities Exchange Act of 1934, and may be limited
during this exchange offer.
If an active market for the new notes were to exist, the new notes
might trade at prices lower than their initial offering price. The trading
price would depend on many factors, such as prevailing interest rates and
the market for similar securities, general economic conditions and our
financial condition, performance and prospects.
RISKS RELATED TO OUR BUSINESS
We formed our company through the acquisition of over 50 separate
businesses. Until 2001, our business philosophy was generally to continue to
operate these businesses as separate businesses operating autonomously in
their historical markets. From June 2001 to 2003, we undertook a
restructuring that focused on the integration of our businesses and
operational improvements through the sale of non-core assets, consolidation
of facilities and sharing of best practices. Part of our current strategy
for growing market share and revenues includes a customer focused
reorganization of our company into a commercial segment serving our direct
customers and a resale segment serving wholesalers and value-added
resellers. To be successful with this part of our strategy, certain of our
customers will need to change the way they buy printed products as one stop
shopping has not been traditionally available except through resellers. In
addition, our sales people will need to be trained and change the way they
focus on new customer opportunities because in the past they generally only
sold the products offered at the location out of which they work. We believe
that this one stop shopping, total company solutions strategy will be
accepted by customers as a way to streamline the procurement process and
thereby reduce their print procurement costs. However, this strategy is
generally untested and therefore there is no assurance that it will be
successful.
WE HAVE REPORTED LOSSES IN 2001, 2002, AND THE FIRST QUARTER OF 2004, AND IT
IS UNCERTAIN WHETHER OUR RETURN TO PROFITABILITY CAN BE SUSTAINED.
We reported losses for 2001 and 2002 primarily as a result of expenses
related to our restructuring initiatives and the economic slowdown. The
slowdown in the economy significantly impacted our sales. Reductions by our
customers in spending on printed advertising material and direct mail
promotions impacted sales of commercial printing and envelopes. In addition,
sales of traditional business forms by our printed office products business
have declined. Although we were profitable for the 12 months ended December
31, 2003, we reported a net loss for the first quarter of 2004. Our ability
to return to profitability depends in part on our customers' recovery from
the economic slowdown, the realization of the benefits of our restructuring
and other cost reduction initiatives and our ability to implement our
current strategic plan.
TO THE EXTENT THAT WE MAKE SELECT ACQUISITIONS, WE MAY NOT BE ABLE TO
SUCCESSFULLY INTEGRATE THE ACQUIRED BUSINESSES INTO OUR BUSINESS.
12
In the past, we have grown rapidly through acquisitions. Although we
believe that our experience in making acquisitions is an important asset,
our strategic plan and the terms of our senior credit facility limit the
acquisitions that we may currently pursue. To the extent that we pursue
acquisitions, we cannot be certain that we will be able to identify and
acquire other businesses on favorable terms or that, if we are able to
acquire businesses on favorable terms, we will be able to successfully
integrate the acquired businesses into our current business or profitably
manage them.
THE PRINTING BUSINESS DOES NOT GENERALLY USE LONG-TERM AGREEMENTS, AND OUR
PRINTING OPERATIONS MAY BE SUBJECT TO QUARTERLY AND CYCLICAL FLUCTUATIONS.
The printing industry in which we compete is generally characterized by
individual orders from customers or short-term contracts. Most of our
customers are not contractually obligated to purchase products or services
from us. Most customer orders are for specific printing jobs, and repeat
business largely depends on our customers' satisfaction with the work we do.
Although our business does not depend on any one customer or group of
customers, we cannot be sure that any particular customer will continue to
do business with us for any period of time. In addition, the timing of
particular jobs or types of jobs at particular times of year may cause
significant fluctuations in the operating results of our various printing
operations in any given quarter. We depend to some extent on sales to
certain industries, such as the advertising and automotive industries. We
estimate that over 50% of our commercial printing sales are related to
advertising. To the extent these industries experience downturns, the
results of our operations are adversely affected.
OUR INDUSTRY IS HIGHLY COMPETITIVE.
The printing industry in which we compete is extremely fragmented and
highly competitive. In the commercial printing market, we compete against a
number of large, diversified and financially stronger printing companies, as
well as regional and local commercial printers, many of which are capable of
competing with us on volume, price and production quality. In the envelope
market, we compete primarily with a few multi-plant and many single-plant
companies servicing regional and local markets. In the printed office
products market, we compete primarily with document printers with nationwide
manufacturing locations and regional or local printers. There currently is
excess capacity in the printing industry, which has resulted in excessive
price competition and may continue to do so. We are constantly seeking ways
to reduce our costs and become more efficient competitors. However, we cannot
be certain that these efforts will be successful or that our competitors
will not be more successful in their similar efforts to reduce costs and
become more efficient. If we fail to reduce costs and increase productivity,
we may face decreased profit margins in markets where we encounter price
competition, which in turn could reduce our cash flow and profitability.
FACTORS AFFECTING U.S. AND CANADIAN POSTAL SERVICES CAN IMPACT OUR BUSINESS.
Most envelopes used in the United States and Canada are sent through
the mail and, as a result, postal rates can significantly affect envelope
usage. Historically, increases in postal rates, relative to changes in the
cost of alternative delivery means and/or advertising media, have resulted
in temporary reductions in the growth rate of mail sent, including direct
mail, which is a significant portion of our envelope volume. We cannot be
sure that direct mail marketers will not reduce their volume as a result of
any increases. Because rate increases in the United States and Canada are
outside our control, we can provide no assurance that any increases in U.S.
and/or Canadian postal rates will not have a negative effect on the level of
mail sent, or the volume of envelopes purchased, in either or both
countries. In such event, we would expect to experience a decrease in cash
flow and profitability or financial position.
Factors other than postal rates that detrimentally affect the volume of
mail sent through the U.S. and Canadian postal systems may also negatively
affect our business. If the threats of mass bio-terrorism in the U.S. mail
system resume, or if there is a perception of a lack of safety in the U.S.
or Canadian postal systems, we cannot be sure that direct mail marketers
will not reduce their volume as a result of any such persisting threats or
insecurity, or that such decreases in demand will not have a negative effect
on the level of mail sent or the volume of envelopes purchased. Congress
recently enacted a federal "Do Not Call" registry in response to consumer
backlash against telemarketers
13
and is contemplating enacting so-called "anti-spam" legislation in response
to consumer complaints about unsolicited e-mail advertisements. If this
consumer trend becomes directed at direct mail advertising, or if similar
legislation or regulations prohibit or limit direct mail advertisements, our
business could be negatively affected.
INCREASES IN PAPER COSTS AND ANY DECREASES IN THE AVAILABILITY OF PAPER
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.
Paper costs represent a significant portion of our cost of materials.
Changes in paper pricing generally do not affect the operating margins of
our commercial printing business because prices for those paper grades
historically have been less volatile and we have been able to pass on paper
price increases. Paper pricing does, however, impact the operating margins
of our envelope business because prices for those paper grades historically
have been more volatile and we generally are not able to increase our prices
as quickly as paper prices increase. We cannot be certain that we will be
able to continue to pass on future increases in the cost of paper. Moreover,
rising paper costs and their consequent impact on our pricing could lead to
a decrease in our volume of units sold. Although we have been successful in
negotiating favorable pricing terms with paper vendors, we cannot be certain
we will be successful in negotiating favorable pricing terms in the future.
This may result in decreased sales volumes as well as decreased cash flow and
profitability.
We depend on the availability of paper in manufacturing most of our
products. During periods of tight paper supply, many paper producers
allocate shipments of paper based on the historical purchase levels of
customers. As a result of our large volume paper purchases from several
paper producers, we generally have not experienced difficulty in obtaining
adequate quantities of paper, although we have occasionally experienced
minor delays in delivery. Although we believe that our attractiveness to
vendors as a large volume paper purchaser will continue to enable us to
receive adequate supplies of paper in the future, unforeseen developments in
world paper markets coupled with shortages of raw paper could result in a
decrease in supply, which in turn would cause a decrease in the volume of
products we could produce and sell and a corresponding decrease in cash flow
and profitability.
THE AVAILABILITY OF ALTERNATIVE DELIVERY MEDIA MAY ADVERSELY AFFECT OUR
BUSINESS.
Our business is highly dependent upon the demand for envelopes sent
through the mail. Such demand comes from utility companies, banks and other
financial institutions, among others. Our printing business also depends upon
demand for printed advertising and business forms, among others. Consumers
increasingly use the Internet and other electronic media to purchase goods
and services, and for other purposes such as paying utility and credit card
bills. Advertisers use them for targeted campaigns directed at specific
electronic user groups. Large and small businesses use electronic media to
conduct business, send invoices and collect bills. As a result, we expect
the demand for envelopes and other printed materials for these purposes to
decline. In addition, companies have begun to deliver annual reports
electronically rather than in printed form, which could reduce demand for
our high impact color printing.
Although we expect countervailing trends, such as the growth of
targeted direct mail campaigns based upon mailing lists generated by
electronic purchases, to cause overall demand for envelopes and other
printed materials to continue to grow at rates comparable to recent
historical levels, we cannot be certain that the acceleration of the trend
towards electronic media such as the Internet and other alternative media
will not cause a decrease in the demand for our products. If demand for our
products decreases, we may not generate sufficient cash flow to make required
payment on the notes.
WE DEPEND ON GOOD LABOR RELATIONS.
As of December 31, 2004, we had approximately 10,000 full-time
employees, of whom approximately 1,800 were members of various local labor
unions. If our unionized employees were to engage in a concerted strike or
other work stoppage, or if other employees were to become unionized, we
could experience a disruption of operations, higher labor costs or both. A
lengthy strike could result in a material decrease in our cash flow or
profitability.
14
ENVIRONMENTAL LAWS MAY AFFECT OUR BUSINESS.
Our operations are subject to federal, state, local and foreign
environmental laws and regulations, including those relating to air
emissions, wastewater discharge, waste generation, handling, management and
disposal, and remediation of contaminated sites. In addition, some of the
sellers from which we have bought businesses in the past have been
designated as potentially responsible parties under the federal
Comprehensive Environmental Response, Compensation and Liability Act of
1980, or CERCLA, or similar legislation in Canada. CERCLA imposes strict,
and in certain circumstances joint and several, liability for response
costs. Liability may also include damages to natural resources. We believe
that we have minimal exposure as a result of such designations, either
because indemnities obtained in the course of acquisitions or because of the
de minimis nature of the claims, or both. We also believe that our current
operations are in substantial compliance with applicable environmental laws
and regulations. We cannot be certain, however, that available indemnities
will be adequate to cover all costs or that currently unknown conditions or
matters, new laws and regulations, or stricter interpretations of existing
laws and regulations will not have a material adverse effect on our business
or operations in the future.
WE ARE DEPENDENT ON KEY MANAGEMENT PERSONNEL.
Our success will continue to depend to a significant extent on our
executive officers and other key management personnel. We cannot be certain
that we will be able to retain our executive officers and key personnel or
attract additional qualified management in the future. In addition, the
success of any acquisitions we may pursue may depend, in part, on our
ability to retain management personnel of the acquired companies. We do not
carry key person insurance on any of our managerial personnel.
COMPLIANCE WITH RECENT LEGISLATION COULD BE BURDENSOME AND EXPENSIVE.
Recently enacted and proposed changes in the laws and regulations
affecting public companies, including the provisions of the Sarbanes-Oxley
Act of 2002 and rules proposed by the SEC and the New York Stock Exchange
could cause us to incur increased costs as we evaluate the implications of
new rules and respond to new requirements. The new rules could make it more
difficult for us to obtain certain types of insurance, including directors
and officer liability insurance, and we may be forced to accept reduced
policy limits and coverage or incur substantially higher costs to obtain the
same or similar coverage. The impact of these events could also make it more
difficult for us to attract and retain qualified persons to serve on our board
of directors, or as executive officers.
15
FORWARD-LOOKING STATEMENTS
All statements other than statements of historical facts included in
this prospectus regarding the prospects of our industry and our prospects,
plans, financial position and business strategy, may constitute
forward-looking statements. In addition, forward-looking statements
generally can be identified by the use of forward-looking terminology such
as "may," "will," "should," "expect," "intend," "estimate," "anticipate,"
"believe," "predict," "potential" or "continue" or the negatives of these
terms or variations of them or similar terminology. Although we believe that
the expectations reflected in these forward-looking statements are
reasonable, we cannot assure you that these expectations will prove to be
correct. Important factors that could cause actual results to differ
materially from our expectations are disclosed in this prospectus, including
in conjunction with the forward-looking statements included in this
prospectus and under "Risk Factors." All subsequent written and oral
forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by the cautionary
statements included in this document. These forward-looking statements speak
only as of the date of this prospectus. We do not intend to update these
statements unless the securities laws require us to do so.
USE OF PROCEEDS
We will not receive any proceeds from the issuance of the new notes or
consummation of the exchange offer. In consideration for issuing the new
notes as contemplated in this prospectus, we will receive corresponding old
notes in like principal amount. The old notes will be retired and cancelled
and cannot be reissued. Accordingly, issuance of the new notes will not
result in any change in our indebtedness.
The approximate net proceeds from our sale of the old notes, after
deducting underwriting fees and expenses of the offering, were $313 million.
We used the net proceeds to purchase $300 million principal amount of 8 3/4%
senior subordinated notes due December 15, 2008, together with the premium
and accrued interest payable to the holders of those notes, and to pay
related fees and expenses.
16
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The selected consolidated historical financial information: (i) for the
five years ended December 31, 2003 are derived from our consolidated
financial statements and notes, which have been audited by Ernst & Young LLP
and (ii) for the three months ended March 31, 2003 and 2004, respectively,
are derived from our unaudited financial statements and notes for such
periods.
Since the information presented below is only a summary and does not
provide all of the information contained in our financial statements,
including the related notes, you should read this information in conjunction
with "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and the consolidated financial statements and
accompanying notes included in the Annual Report on Form 10-K for the year
ended December 31, 2003 and the Quarterly Report on Form 10-Q for the period
ended March 31, 2004.
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------------- -----------------------
1999 2000 2001 2002 2003 2003 2004
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS:
Net sales .................................... $1,699,222 $2,044,350 $1,868,768 $1,728,705 $1,671,664 $ 427,320 $ 423,742
Cost of sales ................................ 1,315,735 1,599,613 1,481,135 1,385,361 1,337,118 343,400 335,322
---------- ---------- ---------- ---------- ---------- ---------- ----------
Gross profit ................................. 383,487 444,737 387,633 343,344 334,546 83,920 88,420
Selling, general and administrative
expenses and amortization .................. 232,679 300,035 293,201 265,971 247,588 63,870 69,403
Restructuring, asset impairments and other
charges(1) ................................. 1,807 12,135 79,608 110,292 6,743 771 17,851
---------- ---------- ---------- ---------- ---------- ---------- ----------
Operating income (loss) ...................... 149,001 132,567 14,824 (32,919) 80,215 19,279 1,166
Interest expense ............................. 45,811 72,997 63,314 70,461 71,891 18,214 18,399
Other expenses ............................... (1,228) 847 1,923 1,754 1,819 132 441
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations
before income taxes and cumulative effect
of a change in accounting principle ........ 104,418 58,723 (50,413) (105,134) 6,505 933 (17,674)
Provision (benefit) for income taxes ..... 42,421 22,530 (5,200) (31,646) 2,581 (401) 1,139
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income (loss) from continuing operations
before cumulative effect of a change in
accounting principle ....................... 61,997 36,193 (45,213) (73,488) 3,924 532 (16,535)
Income (loss) from discontinued operations,
net of taxes ............................... 2,485 (8,575) (91,004) (16,868) 1,548 2,500 --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative effect of a change in
accounting principle ....................... 64,482 27,618 (136,217) (90,356) 5,472 3,032 (16,535)
Cumulative effect of a change in accounting
principle .................................. -- -- -- (111,748) (322) (322) --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss) ............................ $ 64,482 $ 27,618 $ (136,217) $ (202,104) $ 5,150 $ 2,710 $ (16,535)
========== ========== ========== ========== ========== ========== ==========
OTHER DATA:
Capital expenditures ......................... $ 85,501 $ 67,063 $ 32,742 $ 30,896 $ 31,602 $ 6,416 $ 5,647
Net cash provided by (used in) operating
activities ................................. 117,504 153,172 170,935 22,971 59,459 (13,067) (14,478)
Net cash provided by (used in) investing
activities ................................. (194,828) (153,449) (32,898) 100,819 (29,856) (2,037) (5,418)
Net cash provided by (used in) financing
activities ................................. 167,313 149,629 (144,144) (110,222) (33,256) 12,618 20,092
Ratio of earnings to fixed charges
(unaudited)(2) ............................. 2.67x 1.57x N/A N/A 1.08x N/A
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------------- -----------------------
1999 2000 2001 2002 2003 2003 2004
---------- ---------- ---------- ---------- ---------- ---------- ----------
BALANCE SHEET DATA: (DOLLARS IN THOUSANDS)
Property, plant and equipment, net ........... $ 451,419 $ 480,327 $ 428,564 $ 379,624 $ 388,240 $ 379,677 $ 380,328
Total assets ................................. 1,310,260 1,683,592 1,476,867 1,107,367 1,107,393 1,110,270 1,111,973
Total debt ................................... 666,397 922,351 855,221 763,899 748,961 777,251 777,337
Long-term debt ............................... 652,743 881,976 552,051 760,938 746,386 775,058 774,749
Shareholders' equity ......................... 375,310 385,853 241,877 42,768 68,019 53,449 49,658
<FN>
(1) Restructuring, asset impairments and other charges includes pre-tax
loss (gain) from the early
17
extinguishment of debt of $(2.4) million, $16.5 million and $17.7 million in
2000, 2002, and the three months ended March 31, 2004, respectively,
impairment loss on assets held for sale of $6.4 million in 2002 and
impairment on operations formerly held for sale of $36.5 million and $12.8
million in 2001 and 2002, respectively.
(2) For purposes of calculating the ratio of earnings to fixed charges, (i)
earnings consist of income (loss) from continuing operations before
cumulative effect of change in accounting principle, fixed charges and income
taxes, and (ii) fixed charges consist of interest expense on all indebtedness
(including amounts allocated to discontinued operations), including the
amount of amortization of deferred financing costs and capitalized interest.
For the years ended December 31, 2001 and 2002, the earnings, as defined
above, were less than fixed charges, as defined above, by $50.4 million and
$105.1 million, respectively. For the three months ended March 31, 2004, the
earnings, as defined above, were less than fixed charges, as defined above,
by $17.7 million.
18
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
Cenveo Corporation originally issued and sold $320 million
aggregate principal amount of 7 7/8% Senior Notes due 2013 on February 4,
2004, in an offering that was exempt from registration under the Securities
Act of 1933 pursuant to Section 4(2), Rule 144A and Regulation S of the
Securities Act. Accordingly, the old notes may not be transferred in the
United States unless registered under the Securities Act or unless an
exemption from the registration requirements of the Securities Act and
applicable state securities laws is available.
As a condition to the sale of the old notes, we entered into a
registration rights agreement dated as of February 4, 2004 with the initial
purchasers of the old notes. In the registration rights agreement, we agreed
to file with the Securities and Exchange Commission a registration statement
under the Securities Act no later than May 4, 2004, with respect to the $320
million aggregate principal amount of 7 7/8% senior notes due 2013 offered
by this prospectus. We will use our reasonable best efforts to cause such
registration statement to become effective within 210 days of the signing of
the registration rights agreement. We also agreed to use our respective
reasonable best efforts to cause the registration statement to be effective
for a period of not less than 20 business days after the date notice of the
exchange offer is mailed to the holders of the old notes, to keep the
exchange offer open for a period of not less than 20 business days and cause
the exchange offer to be consummated no later than the 30th business day
after the registration statement is declared effective by the Commission.
Pursuant to the exchange offer, holders of the old notes may
exchange their old notes for registered new notes. For each old note
surrendered pursuant to the exchange offer, the holder of the old note will
receive a new note having a principal amount equal to that of the
surrendered old note. Interest on each new note will accrue from the last
interest payment date on which interest was paid on the old note surrendered
in exchange for the new note or, if no interest has been paid on such old
note, from the date the old note was issued.
To participate in the exchange offer, each holder must represent
that:
(1) it is acquiring the new notes in the exchange offer in its
ordinary course of business;
(2) it has no arrangement or understanding with any person to
participate in a distribution of the new notes, and if it is
not a broker-dealer, it is not engaged in, and does not intend
to engage in, a distribution of the new notes;
(3) it is not an "affiliate" of Cenveo Corporation, as defined
in Rule 405 of the Securities Act, or if it is such an
affiliate, it will comply with the registration and prospectus
delivery requirements of the Securities Act to the extent
applicable; and
(4) if it is broker-dealer, it will receive new notes for its own
account in exchange for old notes that it acquired as a result
of market-making activities or other trading activities.
Each broker-dealer that receives new notes for its own account in
exchange for old notes, where such old notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such new notes. See "Plan of Distribution." The
Commission has taken the position that these broker-dealers may fulfill
their prospectus delivery requirements with respect to new notes, other than
a resale of an unsold allotment from the original sale of the old notes,
with this prospectus. Under the registration rights agreement, we are
required to allow these broker-dealers and other persons, if any, with
similar prospectus delivery requirements to use this prospectus in
connection with the resale of the new notes. The registration rights
agreement is an exhibit to the registration statement of which this
prospectus is a part.
RESALE OF THE NEW NOTES
Based on no-action letters issued by the staff of the Commission to
persons who are not associated with us, we believe that the new notes issued
in exchange for old notes pursuant to this exchange offer will in general be
19
freely transferable after this exchange offer without further registration
under the Securities Act and without the holder's delivery of a prospectus
under the Securities Act. This presumes that the holder of the new notes
makes the representations described above and, if the holder is a
broker-dealer, it represents that it will receive new notes for its own
account in exchange for old notes that were acquired as a result of
market-making activities or other trading activities and that it will
deliver a prospectus in connection with any resale of the new notes.
However, the Commission has not considered this exchange offer in the
context of a no-action letter and there can be no assurance that the staff
of the Commission would make a similar determination with respect to this
exchange offer as it made in the no-action letters to the unrelated persons.
Holders of old notes wishing to accept the exchange offer must
complete and sign the letter of transmittal that will be mailed to each
holder of the old notes. The letter of transmittal contains the required
representations described above and an agreement to comply with the
agreements and covenants set forth in the registration rights agreement.
This prospectus, as it may be amended or supplemented from time to
time, may be used by broker-dealers in connection with resales of new notes
received in exchange for old notes where the old notes were acquired by the
broker-dealer as a result of market-making activities or other trading
activities. A broker-dealer that signs a letter of transmittal and delivers
a prospectus to purchasers in connection with resales may be deemed to be an
"underwriter" within the meaning of the Securities Act; however, the holder
will not be deemed to admit that it is an "underwriter" within the meaning
of the Securities Act.
TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING OLD NOTES
Upon the terms and subject to the conditions described in this
prospectus and contained in the letter of transmittal, we will accept for
exchange any and all old notes that are properly tendered on or prior to the
expiration date of the exchange offer, _____________, 2004, and are not
withdrawn as permitted below. We will issue $1,000 principal amount of new
notes in exchange for each $1,000 principal amount of outstanding old notes
surrendered pursuant to this exchange offer. Old notes may be tendered only
in integral multiples of $1,000.
The form and terms of the new notes are the same as the form and
terms of the old notes except that:
(1) the new notes will be registered under the Securities Act and
hence the new notes will not bear legends restricting their
transfer, and
(2) holders of the new notes will not be entitled to most rights
under the registration rights agreement, which will terminate
upon the closing of the exchange offer.
The new notes will evidence the same debt as the old notes and will
be issued under, and be entitled to the benefits of, the same indenture.
As of the date of this prospectus, an aggregate of $320 million in
principal amount of the old notes is outstanding. This prospectus, together
with the letter of transmittal, is first being sent on or about
_________________, 2004, to all holders of old notes known to us.
Holders of the old notes do not have any appraisal or dissenters'
rights under the indenture in connection with the exchange offer. We intend
to conduct the exchange offer in accordance with the provisions of the
registration rights agreement and the applicable requirements of the federal
securities laws.
We expressly reserve the right, at any time or from time to time,
to extend the period of time during which the exchange offer is open, and by
the extension to delay acceptance for exchange of any old notes. Notice of
any extension will be issued by means of a press release or other public
announcement no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled expiration date. During the
extension, all old notes previously tendered will remain subject to the
exchange offer and may be accepted for exchange by Cenveo Corporation.
We will return any old notes not accepted for exchange for any reason
without expense to the tendering holder as promptly as practicable after the
expiration of the exchange offer. We will give written notice of any
extension, amendment or nonacceptance to the holders of the old notes as
promptly as practicable.
20
PROCEDURES FOR TENDERING OLD NOTES
Your tender to Cenveo Corporation of old notes as described
below and our acceptance of the old notes will create a binding agreement
between us upon the terms and subject to the conditions set forth in this
prospectus and in the letter of transmittal. Except as set forth below, a
holder who wishes to tender old notes for exchange must send a completed and
signed letter of transmittal, including all other documents required by the
letter of transmittal, to the exchange agent, US. Bank National Association,
at the address set forth below under "-Exchange Agent" on or before the
expiration date. In addition, either:
(1) certificates for the old notes must be received by the
exchange agent, or
(2) a timely confirmation of a book-entry transfer of the old
notes into the exchange agent's account at the Depository
Trust Company pursuant to the procedure for book-entry
transfer described below, must be received by the exchange
agent before the expiration date, or
(3) the holder must comply with the guaranteed delivery procedures
described below.
The method of delivery of old notes, letters of transmittal and all other
required documents is at the election and risk of the holders. If the
delivery is by mail, we recommend you use registered mail, properly insured,
with return receipt requested. In all cases, you should allow sufficient
time to assure timely delivery. No letters of transmittal or old notes
should be sent to Cenveo Corporation.
Any beneficial owner whose old notes are registered in the name of
a broker, dealer, commercial bank, trustee or other nominee and who wishes
to tender should contact the registered holder of the old notes promptly and
instruct the registered holder to tender on behalf of the beneficial owner.
If the beneficial owner wishes to tender on its own behalf, the beneficial
owner must, prior to completing and executing the letter of transmittal and
delivering its old notes, either make appropriate arrangements to register
ownership of the old notes in the beneficial owner's name or obtain a
properly completed power of attorney from the registered holder of the old
notes. The transfer of record ownership may take considerable time.
Signatures on a letter of transmittal or a notice of withdrawal
need not be guaranteed if the old notes surrendered for exchange are
tendered:
(1) by a registered holder of the old notes who has not completed
the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the letter of transmittal, or
(2) for the account of an eligible institution.
An "eligible institution" means a firm that is a member of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc. or a commercial bank or trustee having an office or
correspondent in the United States. In the event that signatures on a letter
of transmittal or a notice of withdrawal are required to be guaranteed, the
guarantees must be by an eligible institution. If old notes are registered
in the name of a person other than a signer of the letter of transmittal,
the old notes surrendered for exchange must be endorsed by the registered
holder, or be accompanied by appropriate powers of attorney or by a written
instrument or instruments of transfer or exchange, in satisfactory form as
determined by Cenveo Corporation in its sole discretion, signed by the
registered holder with the signature guaranteed by an eligible institution.
We will determine all questions as to the validity, form,
eligibility and acceptance of old notes tendered for exchange in our sole
discretion, and our determination shall be final and binding. We reserve the
absolute right to reject any tenders of any particular old notes not
properly tendered or not to accept any particular old notes whose acceptance
might, in our judgment or the judgment of our counsel, be unlawful. We also
reserve the absolute right to waive any defects or irregularities or
conditions of the exchange offer as to any particular old notes either
before or after the expiration date, including the right to waive the
ineligibility of any holder who seeks to tender old notes in the exchange
offer. Our interpretation of the terms and conditions of the exchange offer
as to any particular old notes either before or after the expiration date
shall be binding on all parties. Unless waived, any defects or
21
irregularities in connection with tenders of old notes for exchange must be
cured within a reasonable period of time as we shall determine. Neither
Cenveo Corporation, the exchange agent nor any other person shall be
under any duty to give notification of any defect or irregularity with
respect to any tender of old notes for exchange, nor shall any of them incur
any liability for failure to give the notification.
If the letter of transmittal or any old notes or powers of attorney
are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, those persons should so indicate when signing,
and, unless waived by Cenveo Corporation, proper evidence satisfactory
to Cenveo Corporation of their authority to so act must be submitted.
BOOK-ENTRY TRANSFER
The exchange agent will request to establish an account for the old
notes at DTC for the exchange offer within two business days after the date
of this prospectus. Any financial institution that is a participant in DTC's
systems may make book-entry delivery of old notes by causing DTC to transfer
the old notes into the exchange agent's account at DTC in accordance with
DTC's procedures for transfer.
Although delivery of old notes may be effected through book-entry
transfer at DTC, the letter of transmittal or facsimile, or an agent's
message, with any required signature guarantees and any other required
documents, must, in any case, be received by the exchange agent at the
address set forth below under "-Exchange Agent" on or before the expiration
date or the guaranteed delivery procedures described below must be complied
with.
The term "agent's message" means a message, transmitted by DTC to,
and received by, the exchange agent and forming a part of a book-entry
confirmation, which states that DTC has received an express acknowledgment
from the tendering participant stating that the participant has received and
agrees to be bound by the terms of the letter of transmittal, and Cenveo
Corporation may enforce the letter of transmittal against the participant.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the old notes wishes to tender the old
notes and the old notes are not immediately available, or time will not
permit the holder's old notes or other required documents to reach the
exchange agent before the expiration date, or the procedure for book-entry
transfer cannot be completed on time, a tender may be effected if:
(1) the tender is made through an eligible institution;
(2) prior to the expiration date, the exchange agent has received
from the eligible institution:
(a) a completed and signed letter of transmittal, or a
facsimile;
(b) notice of guaranteed delivery substantially in the form
provided by Cenveo Corporation, setting forth the
name and address of the holder of the old notes and the
amount of old notes, stating that the tender is being
made by that holder and guaranteeing that within three
New York Stock Exchange trading days after the date of
execution of the notice of guaranteed delivery the
certificates for all physically tendered old notes, in
proper form for transfer, or a book-entry confirmation,
and any other documents required by the letter of
transmittal will be deposited by the eligible institution
with the exchange agent; and
(3) the certificates for all physically tendered old notes, in
proper form for transfer, or a book-entry confirmation and all
other documents required by the letter of transmittal, are
received by the exchange agent within three New York Stock
Exchange trading days after the date of signing the notice of
guaranteed delivery.
ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon satisfaction or waiver of all of the conditions to the
exchange offer, we will accept, promptly after the expiration date, all old
notes properly tendered and will then promptly issue the new notes. For
purposes of the
22
exchange offer, we will be deemed to have accepted properly tendered old
notes for exchange when, as and if we have given either oral or written
notice to the exchange agent. Oral notices will promptly be confirmed in
writing. Holders whose old notes are accepted for exchange will be deemed to
have waived the right to receive any accrued but unpaid interest on the old
notes.
In all cases, the issuance of new notes for old notes that are
accepted for exchange pursuant to the exchange offer will be made only after
timely receipt by the exchange agent of certificates for the old notes or a
timely book-entry confirmation of the old notes into the exchange agent's
account at DTC, a completed and signed letter of transmittal, or an agent's
message, and all other required documents. If any tendered old notes are not
accepted, or if old notes are submitted for a greater amount than the holder
desires to exchange, the unaccepted or non-exchanged old notes will be
returned without expense to the tendering holder as promptly as practicable
after the exchange offer expires or terminates. In the case of old notes
tendered by book-entry procedures described above, the non-exchanged old
notes will be credited to an account maintained with DTC designated by the
tendering holder as promptly as practicable after the exchange offer expires
or terminates.
CONDITIONS OF THE EXCHANGE OFFER
Notwithstanding any other term of the exchange offer, we will not
be required to accept for exchange, or to issue new notes in exchange for,
any old notes. We may terminate or amend the exchange offer prior to the
expiration date if any of the conditions to the exchange offer are not met.
These conditions include that the exchange offer, or the making of any
exchange by a holder of old notes, does not violate applicable law or any
applicable interpretation of the staff of the Commission. The conditions
also include that none of the following has occurred which in our judgment
would reasonably be expected to impair our ability to proceed with the
exchange offer:
(1) institution or threat of an action or proceeding in any court
or by or before any governmental agency or body with respect
to the exchange offer;
(2) adoption or enactment of any law, statute, rule or regulation;
(3) declaration of a banking moratorium by United States federal
or New York State authorities; or
(4) suspension of trading on the New York Stock Exchange or
generally in the United States over-the-counter market by
order of the Commission or any other governmental authority.
In addition, we may impose such other conditions as may be reasonably
acceptable to the initial purchasers of the old notes. We will give written
notice of any termination to the holders of the old notes as promptly as
practicable.
WITHDRAWAL RIGHTS
Tenders of old notes may be withdrawn at any time prior to the
expiration date. For a withdrawal to be effective, a written notice of
withdrawal must be received by the exchange agent at the address set forth
below under "--Exchange Agent." Any notice of withdrawal must specify the
name of the person who tendered the old notes to be withdrawn, identify the
old notes to be withdrawn, including the amount of the old notes, and
specify the name in which the old notes are registered, if different from
that of the withdrawing holder. If certificates for old notes have been
delivered or otherwise identified to the exchange agent, then, prior to the
release of the certificates the withdrawing holder must also submit the
serial numbers of the particular certificates to be withdrawn and a signed
notice of withdrawal with signatures guaranteed by an eligible institution
unless the holder is an eligible institution.
If old notes have been tendered pursuant to the procedure for
book-entry transfer described above, any notice of withdrawal must specify
the name and number of the account at DTC to be credited with the withdrawn
old notes and otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form and
eligibility of the notices, and our determination will be final and binding
on all parties. Any old notes so withdrawn will be deemed not to have been
validly tendered for exchange for purposes of the exchange offer. Any old
notes that have been tendered for exchange but that are not exchanged for
any reason will be returned to the holder without cost to the holder as soon
as practicable
23
after withdrawal, rejection of tender or termination of the exchange offer.
In the case of old notes tendered by book-entry transfer into the exchange
agent's account at DTC pursuant to the book-entry transfer procedures
described above, the old notes will be credited to an account with DTC
specified by the holder as soon as practicable after withdrawal, rejection
of tender or termination of the exchange offer. Properly withdrawn old notes
may be re-tendered by following one of the procedures for tendering old
notes as previously described at any time on or before the expiration date.
EXCHANGE AGENT
U.S. Bank National Association has been appointed as the exchange
agent for the exchange offer. All signed letters of transmittal should be
directed to the exchange agent at the address set forth below. Questions and
requests for assistance, requests for additional copies of this prospectus
or of the letter of transmittal and requests for notices of guaranteed
delivery should be directed to the exchange agent addressed as follows:
U.S. Bank National Association
Specialized Finance Department
60 Livingston Ave.
St. Paul, Minnesota 55107
Telecopier: 651-495-8158
Delivery of a letter of transmittal to an address other than as set
forth above or transmission of instructions via facsimile other than as set
forth above does not constitute a valid delivery of the letter of
transmittal.
FEES AND EXPENSES
We will pay the cash expenses we will incur in connection with the
exchange offer. Also, in connection with the registration statement for the
new notes, we will reimburse the holders for the reasonable fees and
disbursements of not more than one counsel, who shall be chosen by the
holders of a majority in principal amount of the old notes for whose benefit
the registration statement has been prepared.
ACCOUNTING TREATMENT
For accounting purposes, we will recognize no gain or loss as a
result of the exchange offer. The expenses of the exchange offer will be
amortized over the term of the new notes.
TRANSFER TAXES
Holders who tender their old notes for exchange will not be
required to pay any transfer taxes, except that holders who instruct
Cenveo Corporation to register new notes in the name of, or request
that old notes not tendered or not accepted in the exchange offer be
returned to, a person other than the registered tendering holder, will be
responsible for paying any applicable transfer tax.
REGULATORY MATTERS
We are not aware of any governmental or regulatory approvals
that are required in order to complete the exchange offer.
CONSEQUENCES OF FAILURE TO EXCHANGE
Participation in the exchange offer is voluntary. Holders of the
old notes are urged to consult their financial and tax advisors in making
their own decisions on what action to take. See "Certain U.S. Federal Income
Tax Considerations."
The old notes that are not exchanged for the new notes in the
exchange offer will remain restricted securities. Accordingly, those old
notes may only be transferred:
24
(1) to Cenveo Corporation or any of its subsidiaries,
(2) to a person whom the seller reasonably believes is a qualified
institutional buyer purchasing for its own account or for the
account of a qualified institutional buyer in a transaction
meeting the requirements of Rule 144A,
(3) in an offshore transaction meeting the requirements of Rule
903 or Rule 904 under the Securities Act,
(4) in a transaction meeting the requirements of Rule 144 under
the Securities Act,
(5) in accordance with another exemption from the registration
requirements of the Securities Act, and based upon an opinion
of counsel acceptable to Cenveo Corporation, or
(6) 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.
25
DESCRIPTION OF THE NEW NOTES
You can find the definitions of certain terms used in this
description under the subheading "Certain Definitions." In this description,
the word "Company" refers only to Cenveo Corporation and not to the
Parent Company or any subsidiaries of the Company.
The Company will issue the new notes under an Indenture dated
February 4, 2004 among itself, the Guarantors and U.S. Bank National
Association, as trustee. The terms of the new notes include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The following description is a summary of the material
provisions of the Indenture. It does not restate those provisions in their
entirety. You may obtain a copy of the indenture from us, and the Indenture
is also an exhibit to the registration statement of which this prospectus is
a part.
BRIEF DESCRIPTION OF THE NEW NOTES AND THE GUARANTEES
THE NEW NOTES.
The new notes:
(1) will be identical to the old notes in all material respects,
including the guarantees, except that the new notes are
registered under the federal securities laws and will not
contain any legends restricting their transfer.
(2) will be general unsecured obligations of the Company;
(3) will be subordinated in right of payment to all existing and
future Senior Debt of the Company;
(4) will be pari passu in right of payment to all existing and
future senior subordinated Indebtedness of the Company;
(5) will be senior in right of payment to any future junior
subordinated Indebtedness of the Company; and
(6) will be unconditionally guaranteed on a general unsecured
senior subordinated basis by each Guarantor.
THE GUARANTEES.
The new notes will be unconditionally guaranteed on a general
unsecured senior subordinated basis, jointly and severally, by the Parent
Company and substantially all of the current Subsidiaries of the Company.
The following is a list of the subsidiary guarantors (the "Subsidiary
Guarantors") as of the date of this prospectus:
1158673 Ontario, Inc.
Cenveo III, LLC (formerly known as Wisco III, L.L.C.)
Cenveo Commercial, Inc. (formerly known as Mail-Well Commercial
Printing, Inc.)
Cenveo Government Printing, Inc. (formerly known as Mail-Well
Government Printing, Inc.)
Cenveo Mexico Holdings, Inc. (formerly known as Mail-Well Mexico
Holdings, Inc.)
Cenveo Services, LLC (formerly known as Mail-Well Services LLC)
Cenveo Texas Finance, LP (formerly known as Mail-Well Texas Finance LP)
Cenveo West, Inc. (formerly known as Mail-Well West, Inc.)
Classic Envelope Plus, Ltd.
Discount Labels, Inc.
Innova Envelope Inc.
Mail-Well Alberta Finance LP
Mail-Well Canada Leasing Company
McLaren Morris & Todd Company
MM&T Packaging Company
National Graphics Company
PNG Inc.
26
Precision Fine Papers, Inc.
Quality Park, Inc. (formerly known as Poser Business Forms, Inc.)
Regional Enveloppe Products Inc.-Products Enveloppe
Regional Inc.
Supremex, Inc.
The new notes will be guaranteed by each new Restricted Subsidiary
that is a Significant Subsidiary formed under the laws of a state of the
United States (including the District of Columbia) and has its principal
place of business with the United States.
The Guarantees of these new notes:
(1) will be general unsecured obligations of each Guarantor;
(2) will be subordinated in right of payment to all existing and
future Senior Debt of each Guarantor;
(3) will be pari passu in right of payment to all existing and
future senior subordinated Indebtedness of each Guarantor; and
(4) will be senior in right of payment to any future junior
subordinated Indebtedness of each Guarantor.
Assuming we had completed the offering of the old notes and applied
the net proceeds as intended, as of December 31, 2003, the Company and the
Guarantors would have had Senior Debt of approximately $453.6 million, with
an additional $152.4 million (less any outstanding letters of credit)
available under our senior credit facility. The Indenture will permit the
Company and the Guarantors to incur additional Senior Debt under certain
circumstances.
As of the date of the Indenture, all of our Subsidiaries will be
"Restricted Subsidiaries." However, under the circumstances described below
under the subheading "Certain Covenants--Designation of Restricted and
Unrestricted Subsidiaries," we will be permitted to designate certain of our
subsidiaries as "Unrestricted Subsidiaries." Unrestricted Subsidiaries will
not be subject to many of the restrictive covenants in the Indenture.
Unrestricted Subsidiaries will not guarantee the new notes.
SUBORDINATION.
The payment of principal, premium, if any, interest, additional
interest, if any, and any other Obligations on, or relating to, the new
notes will be subordinated to the prior payment in full of all Senior Debt
of the Company.
The holders of Senior Debt will be entitled to receive payment in
full of all Obligations due in respect of Senior Debt before the Holders of
new notes will be entitled to receive any payment or distribution of any
kind or character with respect to any Obligations on, or relating to, the
new notes (except that Holders of new notes may receive and retain Permitted
Junior Securities and payments made from the trust described under "Legal
Defeasance and Covenant Defeasance" so long as the deposit of amounts
therein satisfied the relevant conditions specified in the Indenture at the
time of such deposit), in the event of any distribution to creditors of the
Company or any Guarantor:
(1) in a liquidation or dissolution of the Company or such
Guarantor;
(2) in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or such Guarantor
or its property;
(3) in an assignment for the benefit of creditors of the Company
or such Guarantor; or
(4) in any marshalling of the Company's or such Guarantor's assets
and liabilities.
The Company and the Guarantors also may not make any payment or
distribution of any kind or character with respect to any Obligations on, or
with respect to, the new notes or acquire any of the new notes for cash or
27
property or otherwise (except in Permitted Junior Securities or from the
trust described under "Legal Defeasance and Covenant Defeasance"); if:
(1) a payment default on any Designated Senior Debt occurs and is
continuing beyond any applicable grace period; or
(2) any other default occurs and is continuing on Designated
Senior Debt that permits holders of such Designated Senior
Debt to accelerate its maturity and the Trustee receives a
notice of such default ("Payment Blockage Notice") from the
representative of any Designated Senior Debt.
Payments on the new notes may and shall be resumed:
(1) in the case of a payment default, upon the date on which such
default is cured or waived; and
(2) in the case of a nonpayment default, the earliest of (x) the
date on which all nonpayment defaults are cured or waived (so
long as no other event of default exists), or (y) 179 days
after the date the applicable Payment Blockage Notice is
received unless the maturity of any Designated Senior Debt has
been accelerated.
No new Payment Blockage Notice may be delivered unless and until
360 days have elapsed since the delivery of the immediately prior Payment
Blockage Notice.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made,
the basis for a subsequent Payment Blockage Notice unless such default shall
have been cured or waived for a period of not less than 90 consecutive days.
The Company must promptly notify holders of Senior Debt or their
Representative if payment of the new notes is accelerated because of any
Event of Default; provided that any failure to give such notice shall have
no effect whatsoever on the subordination provisions described herein.
As a result of the subordination provisions described above, in the
event of a bankruptcy, liquidation or reorganization of the Company or any
Guarantor, Holders of the new notes may recover less ratably than creditors
of the Company or such Guarantor who are holders of Senior Debt. Payments
under the Guarantee of each Guarantor shall be subordinated to the prior
payment in full of all Senior Debt of such Guarantor, including all Senior
Debt of such Guarantor incurred after the Issue Date, on the same basis as
provided above with respect to subordination of payments on the new notes by
the Company to the prior payment in full of Senior Debt of the Company. See
"Risk Factors -- The notes will be contractually junior in right of payment
to our senior indebtedness, and the guarantees will be contractually junior
to all senior indebtedness of the guarantors."
PRINCIPAL, MATURITY AND INTEREST
We will issue the new notes initially with a maximum aggregate
principal amount of $320 million. We will issue the new notes in
denominations of $1,000 and integral multiples of $1,000. The new notes will
mature on December 1, 2013. Subject to our compliance with the covenant
described under the caption "--Certain Covenants--Incurrence of
Indebtedness," we may, without the consent of the holders, issue more notes
under the Indenture on the same terms and conditions and with the same CUSIP
numbers as the new notes being offered hereby in an unlimited principal
amount (the "Additional Notes"). Any such Additional Notes that are actually
issued will be treated as issued and outstanding notes (and as the same
class as the initial notes) for all purposes of the Indenture and this
"Description of the Notes" unless the context indicates otherwise.
Interest on these new notes will accrue at the rate of 7 7/8% per
annum and will be payable semiannually in arrears on June 1 and December 1
commencing on December 1, 2004. We will make each interest payment to the
Holders of record of these new notes immediately preceding May 15 and
November 15.
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Interest on these new notes will accrue from the date of original
issuance or, if interest has already been paid, from the date it was most
recently paid. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months.
Additional interest may accrue on the new notes in certain
circumstances pursuant to the Registration Rights Agreement.
NOTE GUARANTEES; RESTRICTIONS ON PARENT COMPANY AND SUBSIDIARIES
The Guarantors, which will include the Parent Company and
substantially all of the current Subsidiaries of the Company, will jointly
and severally guarantee the Company's obligations under the new notes. The
new notes will be guaranteed in the future by each new Restricted Subsidiary
that is a Significant Subsidiary formed under the laws of a state of the
United States (including the District of Columbia) and has its principal
place of business within the United States. Each Guarantee of the new notes
will be effectively subordinated to the prior payment in full of all Senior
Debt of that Guarantor and Guarantees of that Guarantor of the Company's
Senior Debt. Each Note Guarantee will be pari passu with all senior
subordinated obligations of that Guarantor and to the Guarantees of that
Guarantor of the Company's future senior subordinated obligations.
The obligations of each Guarantor under its Note Guarantee will be
limited as necessary to prevent that Note Guarantee from constituting a
fraudulent conveyance under applicable law.
Except in a transaction as a result of which a Subsidiary Guarantor
would be released from its Note Guarantee as provided in the Indenture and
described below, no Guarantor may sell or otherwise dispose of all or
substantially all of its assets, or consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person), another Person
(other than the Company or a Subsidiary Guarantor) unless:
(1) either: (a) such Guarantor is the surviving corporation; or
(b) the Person formed by or surviving any such consolidation
or merger (if other than such Guarantor) or to which such
sale, assignment, transfer, conveyance or other disposition
shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the
District of Columbia or the jurisdiction in which such
Guarantor is organized and under the laws of which it is
existing;
(2) the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor), or the Person to which
such sale, assignment, transfer, conveyance or other
disposition shall have been made assumes all the obligations
of such Guarantor under the Note Guarantees and the Indenture,
as applicable, pursuant to agreements reasonably satisfactory
to the Trustee;
(3) immediately after such transaction no Default or Event of
Default exists; and
(4) such Guarantor or the Person formed by or surviving an such
consolidation or merger (if other than such Guarantor) will
have Consolidated Net Worth immediately after the transaction
equal to or greater than the Consolidated Net Worth of such
Guarantor immediately preceding the transaction.
The Note Guarantee of a Subsidiary Guarantor will be released:
(1) in connection with any sale or other disposition of all or
substantially all of the assets of that Subsidiary Guarantor
(including by way of merger or consolidation), if the Company
applies the Net Proceeds of that sale or other disposition in
accordance with the applicable provisions of the Indenture; or
(2) in connection with any sale of all of the capital stock of a
Subsidiary Guarantor, if the Company applies the Net Proceeds
of that sale in accordance with the applicable provisions of
the Indenture.
See "Repurchase at the Option of Holders--Asset Sales."
29
OPTIONAL REDEMPTION
The new notes will not be redeemable at the Company's option prior
to December 1, 2008.
After December 1, 2008, the Company may redeem all or a part of the
new notes (which includes Additional Notes, if any) upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest thereon, if any, to the applicable redemption date, if redeemed
during the twelve-month period beginning on December 1 of the years
indicated below:
YEAR PERCENTAGE
2008................... 103.938%
2009................... 102.625%
2010................... 101.313%
2011 and
thereafter............. 100.000%
In addition, prior to December 1, 2006, the Company may at its
option on any one or more occasions redeem new notes (including Additional
Notes, if any) in an aggregate principal amount not to exceed 35% of the
aggregate principal amount of the new notes (including Additional Notes, if
any) originally issued at a redemption price of 107.875% of the principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
provided that:
(1) at least 65% of such aggregate principal amount of new notes
(including Additional Notes, if any) originally issued remains
outstanding immediately after the occurrence of such
redemption (other than new notes held directly or indirectly
by the Parent Company, the Company and its Affiliates); and
(2) each such redemption must occur within 90 days of the date of
the closing of such Equity Offering.
REPURCHASE AT THE OPTION OF HOLDERS
CHANGE OF CONTROL
If a Change of Control occurs, each Holder of new notes will have
the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of that Holder's new notes pursuant
to the offer described below (the "Change of Control Offer"). In the Change
of Control Offer, the Company will offer a "Change of Control Payment" in
cash equal to 101% of the aggregate principal amount of new notes
repurchased plus accrued and unpaid interest thereon, if any, to the date of
purchase. Within 30 days following any Change of Control, the Company will
mail a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase new notes on the
date specified in such notice (the "Change of Control Payment Date"),
pursuant to the procedures required by the Indenture and described in such
notice. The Company will comply with the requirements of Rule 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 new notes as a result of a Change of Control. To the
extent the provisions of any securities laws are inconsistent with the terms
of the Indenture, the Company will not be deemed to have breached this
covenant by complying with such laws.
On the Change of Control Payment Date, the Company will, to the
extent lawful;
(1) accept for payment all new notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of
Control Payment in respect of all new notes or portions
thereof so tendered; and
(3) deliver or cause to be delivered to the Trustee the new notes
so accepted together with an Officers' Certificate stating the
aggregate principal amount of new notes or portions thereof
being purchased by the Company.
30
The Paying Agent will promptly mail to each Holder of new notes so
tendered the Change of Control Payment for such new notes, and the Trustee
will promptly authenticate and mail (or cause to be transferred by
book-entry) to each Holder a new note equal in principal amount to any
unpurchased portion of the notes surrendered, if any; provided that each
such new note will be in a principal amount of $1,000 or an integral
multiple thereof. The Company will publicly announce the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
The provisions described above that require the Company to make a
Change of Control Offer following a Change of Control will be applicable
regardless of whether or not any other provisions of the Indenture are
applicable. Except as described above with respect to a Change of Control,
the Indenture does not contain provisions that permit the Holders of the new
notes to require that the Company repurchase or redeem the new notes in the
event of a takeover, recapitalization or similar transaction.
The Company will 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 the times and otherwise in compliance with the
requirements set forth in the Indenture applicable to a Change of Control
Offer made by the Company and purchases all new notes validly tendered and
not withdrawn under such Change of Control Offer.
The definition of Change of Control includes a phrase relating to
the sale, lease, transfer, conveyance or other disposition of "all or
substantially all" of the assets of the Company and its Subsidiaries taken
as a whole. Although there is a limited body of case law interpreting the
phrase "substantially all," there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a Holder of new
notes to require the Company to repurchase such new notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of
the assets of the Company and its Subsidiaries taken as a whole to another
Person or group may be uncertain. The Credit Facilities prohibit the Company
from repurchasing any new notes pursuant to a Change of Control Offer prior
to repayment in full of the Senior Debt under the Credit Facilities.
Accordingly, if a Change of Control were to occur, there can be no assurance
that the Company will have sufficient assets to satisfy its obligations under
the Credit Facilities or, thereafter, to purchase any of the new notes. Any
additional credit agreements or other agreements relating to Senior Debt to
which the Company becomes a party may contain similar restrictions and
provisions. Moreover, the Credit Facilities contain a "change of control"
provision that is similar to the provision in the Indenture relating to a
Change of Control, and the occurrence of such a "change of control" would
constitute a default under the Credit Facilities.
In the event that a Change of Control occurs at a time when the
Company is prohibited from repurchasing the new notes by the Credit
Facilities or any other agreement governing Senior Debt of the Company, the
Company shall seek either to repay such Senior Debt or to obtain the
requisite consents of the holders of such Senior Debt to commence a Change
of Control Offer to repurchase the new notes in accordance with the terms of
the Indenture. If the Company is unable to obtain such consents and/or repay
all such Senior Debt, the Company would remain prohibited from repurchasing
any new notes and, as a result, the Company could not commence a Change of
Control Offer to repurchase the new notes within 30 days of the occurrence
of the Change of Control, which would constitute an Event of Default under
the Indenture. The Company's failure to commence such a Change of Control
Offer would also constitute an event of default under the Credit Facilities
which would permit the lenders thereunder to accelerate all of the Company's
Senior Debt under the Credit Facilities. If a Change of Control were to
occur, there can be no assurance that the Company would have sufficient
assets to first satisfy its obligations under the Credit Facilities or other
agreements relating to Senior Debt, if accelerated, and then to repurchase
all of the new notes that might be delivered by holders seeking to accept a
Change of Control Offer. See "Risk Factors -- We may be unable to repurchase
the notes if we experience a change of control."
ASSET SALES
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
31
(1) the Company (or the Restricted 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 assets or Equity
Interests issued or sold or otherwise disposed of;
(2) such fair market value is determined by the Company's Board of
Directors and evidenced by a resolution of the Board of
Directors set forth in an Officers' Certificate delivered to
the Trustee; and
(3) at least 75% of the Net Proceeds received by the Company or
such Restricted Subsidiary is in the form of cash. For
purposes of this provision, each of the following shall be
deemed to be cash:
(a) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet), of
the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their
terms subordinated to the new notes or any Note
Guarantee) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that
releases the Company or such Restricted Subsidiary from
further liability; and
(b) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such
transferee that are contemporaneously (subject to
ordinary settlement periods) converted by the Company or
such Restricted Subsidiary into cash (to the extent of
the cash received in that conversion).
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or a Restricted Subsidiary must apply such Net Proceeds:
(1) to be reinvested in the business of the Company or a
Restricted Subsidiary;
(2) to repay or retire any Senior Debt; or
(3) to make an offer to purchase the new notes at 100% of
principal amount, plus accrued and unpaid interest, if any,
and if applicable, to make an offer to the holders of other
Indebtedness of the Company that ranks pari passu with the new
notes (the "Other Debt") and that by its terms requires the
Company to make an offer to purchase such Other Debt upon
consummation of an Asset Sale, to purchase such Other Debt on
a pro rata basis with the new notes.
Pending the final application of any Net Proceeds, the Company may
temporarily reduce revolving credit borrowings.
SELECTION AND NOTICE
If less than all of the new notes are to be redeemed at any time,
the Trustee will select new notes for redemption on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate.
No new notes of $1,000 or less shall be redeemed in part. Notices
of redemption shall be mailed by first class mail at least 30 but not more
than 60 days before the redemption date to each Holder of new notes to be
redeemed at its registered address. Notices of redemption may not be
conditional.
If any note is to be redeemed in part only, the notice of
redemption that relates to that note shall state the portion of the
principal amount thereof to be redeemed. A new note in principal amount
equal to the unredeemed portion of the original note will be issued in the
name of the Holder thereof upon cancellation of the original note. Notes
called for redemption become due on the date fixed for redemption. On and
after the redemption date, interest ceases to accrue on new notes or
portions of them called for redemption.
CERTAIN COVENANTS
RESTRICTED PAYMENTS
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
32
(1) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or
consolidation involving the Company or any of its Restricted
Subsidiaries) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity
Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests of the Company or to
the Company or a Restricted Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger
or consolidation involving the Company) any Equity Interests
of the Company or any direct or indirect parent of the Company
or any Restricted Subsidiary of the Company (other than any
such Equity Interests owned by the Company or any Restricted
Subsidiary of the Company);
(3) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any
Indebtedness that is pari passu with or subordinated to the
new notes or the Note Guarantees (other than the new notes or
the Note Guarantees), except a payment of interest or
principal at the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of the
covenant described below under the caption "--Incurrence of
Indebtedness"; and
(3) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its
Restricted Subsidiaries after December 31, 2003 (excluding
Restricted Payments permitted by clauses (3), (5), (7), (8)
and (9) of the next succeeding paragraph), is less than the
sum, without duplication, of
(a) 50% of the Consolidated Net Income (or, in each case such
Consolidated Net Income is a deficit, minus 100% of such
deficit) of the Company since December 31, 2003, plus
(b) the aggregate net cash proceeds received by the Company
after December 31, 2003 from the sale of Equity Interests
or any Indebtedness that is convertible into Capital
Stock and has been so converted, plus
(c) the aggregate cash received by the Company as capital
contributions after December 31, 2003, plus
(d) $30 million.
So long as no Default has occurred and is continuing or would be
caused thereby, the preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such
payment would have complied with the provisions of the
Indenture;
(2) the repurchase, redemption, defeasance, retirement or other
acquisition of any pari passu or subordinated Indebtedness of
the Company or any Guarantor or of any Equity Interests of the
Company or any Restricted Subsidiary in exchange for, or out
of the net cash proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of, Equity
Interests of the Company;
33
(3) the redemption, repurchase, defeasance, retirement or other
acquisition of pari passu or subordinated Indebtedness of the
Company or any Guarantor with the net cash proceeds from an
incurrence of Permitted Refinancing Indebtedness;
(4) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of its common Equity Interests on a pro
rata basis;
(5) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any member of the
Company's (or any of its Subsidiaries') management pursuant to
any management equity subscription agreement or stock option
agreement in effect as of the date of the Indenture; provided
that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not
exceed $1.5 million in any twelve-month period;
(6) the making of any Restricted Investment, directly or
indirectly, out of the net cash proceeds of substantially
concurrent sales (other than to a Subsidiary) of Equity
Interests of the Company;
(7) the repurchase, redemption, retirement or other acquisition of
Equity Interests of the Company or any Restricted Subsidiary
issued, or Indebtedness incurred, by the Company or any
Restricted Subsidiary in connection with the acquisition of
any Person or any assets to the former owners of such Person
or assets; and
(8) Permitted Payments to the Parent Company.
The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment. The fair market value of any assets or securities that are required
to be valued by this covenant shall be determined by the Board of Directors
whose resolution with respect thereto shall be delivered to the Trustee. The
Board of Directors' determination must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the fair market value exceeds $10 million. Not later than the
date of mailing any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required
by this "Restricted Payments" covenant, were computed, together with a copy
of any fairness opinion or appraisal required by the Indenture.
INCURRENCE OF INDEBTEDNESS
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness
(including Acquired Debt); provided, however, that the Company and any
Restricted Subsidiary may incur Indebtedness (including Acquired Debt), if
the Fixed Charge Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is
incurred would have been at least 2 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred at the beginning of such
four-quarter period.
The first paragraph of this covenant will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(1) the incurrence by the Company and any Restricted Subsidiary of
Indebtedness under Credit Facilities (including amounts
outstanding on the date the old notes were sold); provided
that the aggregate principal amount of all Indebtedness under
such Credit Facilities (including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any
Indebtedness incurred pursuant to this clause (1)) permitted
by this clause (1) does not exceed an amount equal to $375
million, less any repayments actually made thereunder with the
Net Proceeds of Asset Sales in accordance with clause (2) of
the second paragraph of the covenant described under
"Repurchase at the Option of the Holders--Asset Sales";
34
(2) the incurrence by the Company and its Subsidiaries of Existing
Indebtedness (excluding amounts outstanding under Credit
Facilities at the date the old notes were sold);
(3) the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the new notes and the Note
Guarantees issued on the date the old notes were sold;
(4) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of
financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment
used in the business of the Company or such Restricted
Subsidiary, in an aggregate principal amount (including all
Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to
this clause (4)) not to exceed $50 million at any time
outstanding;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange
for, or the net proceeds of which are used to refund,
refinance or replace, Indebtedness (other than intercompany
Indebtedness) that was permitted by the Indenture to be
incurred under the first paragraph of this covenant or clause
(1), (2), (3), (4) or (9) of this paragraph;
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the
Company and any of its Wholly Owned Restricted Subsidiaries;
provided, however, that:
(a) if the Company or any Subsidiary Guarantor is the obligor
on such Indebtedness and such Indebtedness is owed to or
held by a Restricted Subsidiary that is not a Subsidiary
Guarantor, such Indebtedness must be expressly
subordinated to the prior payment in full in cash of all
Obligations with respect to the new notes, in the case of
the Company, or the Note Guarantee of such Subsidiary
Guarantor, in the case of a Subsidiary Guarantor, and
(b) any subsequent issuance or transfer of Equity Interests
that results in any such Indebtedness being held by a
Person other than the Company or a Wholly Owned
Restricted Subsidiary thereof and (ii) any sale or other
transfer of any such Indebtedness to a Person that is not
either the Company or a Wholly Owned Restricted
Subsidiary thereof, shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may
be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the
purpose of hedging interest rate risk with respect to any
Indebtedness that is permitted by the terms of this Indenture
to be outstanding;
(8) the guarantee by the Company or any of its Restricted
Subsidiaries of Indebtedness of the Company or a Restricted
Subsidiary of the Company that was permitted to be incurred by
another provision of this covenant;
(9) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate
principal amount (or accrued value, as applicable) at any time
outstanding, including all Permitted Refinancing Indebtedness
incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (9), not to exceed $50
million;
(10) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted
Subsidiary, such event shall be deemed to constitute an
incurrence of Indebtedness by a Restricted Subsidiary of the
Company that was not permitted by this clause (10);
(11) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in respect of judgment, appeal,
surety, performance and other like bonds, bankers acceptances
and letters of credit provided by the Company and its
Subsidiaries in the ordinary course of business (including any
Indebtedness incurred to refinance, retire, renew, defease,
refund or otherwise replace any Indebtedness referred to in
this clause (11)); and
(12) indebtedness incurred by the Company or any of its
Subsidiaries arising from agreements or their respective
bylaws providing for indemnification, adjustment of purchase
price or similar obligations, or
35
from guarantees of letters of credit, surety bonds or
performance bonds securing the performance of the Company or
any of its Subsidiaries to any Person acquiring all or a
portion of such business or assets of a Subsidiary of the
Company.
For purposes of determining compliance with this "Incurrence of
Indebtedness" covenant, in the event that an item of proposed Indebtedness
meets the criteria of more than one of the categories of Permitted Debt
described in clauses (1) through (12) above, or is entitled to be incurred
pursuant to the first paragraph of this covenant, the Company will be
permitted to classify such item of Indebtedness on the date of its
incurrence in any manner that complies with this covenant.
LIENS
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
own any Lien of any kind securing Indebtedness, Attributable Debt or trade
payables on any asset now owned or hereafter acquired, except Permitted
Liens.
DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Company will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to
pay dividends or make any other distributions or pay Indebtedness to the
Company or any of the Company's Restricted Subsidiaries, or with respect to
any other interest or participation in, or measured by, its profits, or pay
any indebtedness owed to the Company or any of the Company's Restricted
Subsidiaries.
MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Company may not, directly or indirectly: (1) consolidate or
merge with or into another Person (whether or not the Company is the
surviving corporation); or (2) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of its properties or assets, in one or
more related transactions, to another Person; unless:
(1) either: (a) the Company is the surviving corporation; or (b)
the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale,
assignment, transfer, conveyance or other disposition shall
have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such
sale, assignment, transfer, conveyance or other disposition
shall have been made, expressly assumes all the obligations of
the Company under the new notes and the Indenture pursuant to
agreements reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of
Default exists; and
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company):
(a) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the
transaction; and
(b) will, on the date of such transaction after giving pro
forma effect thereto and any related financing
transactions as if the same had occurred at the beginning
of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the
first paragraph of the covenant described above under the
caption "Incurrence of Indebtedness."
In addition, the Company may not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Merger, Consolidation, or Sale of
Assets" covenant will not apply to a sale, assignment, transfer, conveyance
or other disposition of assets between or among
36
the Company and any of its Wholly Owned Subsidiaries. For the avoidance of
doubt, this covenant also will not apply to sales of the assets or stocks of
Subsidiaries the Company currently is holding for sale as part of its
strategic plan.
TRANSACTIONS WITH AFFILIATES
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each, an "Affiliate Transaction"), unless:
(1) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable
transaction by the Company or such Restricted Subsidiary with
an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate
consideration in excess of $5 million, a resolution of
the Board of Directors set forth in the Officers'
Certificate certifying that such Affiliate Transaction
complies with this covenant and that such Affiliate
Transaction has been approved by a majority of the
disinterested members of the Board of Directors; and
(b) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate
consideration in excess of $15 million, an opinion as to
the fairness to the Holders of such Affiliate Transaction
from a financial point of view issued by an accounting,
appraisal or investment banking firm of national
standing.
The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior
paragraph:
(1) any employment agreement entered into by the Company or any of
its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such
Restricted Subsidiary;
(2) indemnification agreements permitted by law entered into by
the Company or any of its Restricted Subsidiaries with any of
its Affiliates who are directors, employees or agents of the
Company or any of its Restricted Subsidiaries;
(3) transactions between or among the Company and/or its
Restricted Subsidiaries;
(4) payment of reasonable directors fees to Persons who are not
otherwise Affiliates of the Company; and
(5) Restricted Payments that are permitted by the provisions of
the Indenture described above under the caption "--Restricted
Payments."
ADDITIONAL SUBSIDIARY GUARANTEES
If after the date the old notes were sold the Company or any
Restricted Subsidiary of the Company acquires or creates another Restricted
Subsidiary (other than a special purpose financing vehicle) and such
Restricted Subsidiary is formed under the laws of a state of the United
States (including the District of Columbia) and has its principal place of
business within the United States, then at such time as such Restricted
Subsidiary first becomes a Significant Subsidiary of the Company, that newly
acquired or created Restricted Subsidiary must become a Guarantor and
execute a supplemental indenture satisfactory to the Trustee and deliver an
opinion of counsel to the Trustee within 10 Business Days of the date on
which it was acquired or created.
37
DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES
As of the date the old notes were sold all of the Subsidiaries of
the Company will be Restricted Subsidiaries. The Board of Directors may
designate any Subsidiary to be an Unrestricted Subsidiary if that
designation would not cause a Default. If a Subsidiary is designated as an
Unrestricted Subsidiary, all outstanding Investments owned by the Company
and its Subsidiaries in the Subsidiary so designated will be deemed to be an
Investment made as of the time of such designation and will reduce the
amount available for Restricted Payments under the first paragraph of the
covenant described above under the caption "--Restricted Payments" or
Permitted Investments, as applicable. All such outstanding Investments will
be valued at their fair market value at the time of such designation. In
addition, such designation will only be permitted if such Restricted Payment
would be permitted at that time and if such Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors may
redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the
redesignation would not cause a Default.
LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS
The Company will not permit any of its Restricted Subsidiaries that
is not a Guarantor of the new notes, directly or indirectly, to Guarantee or
pledge any assets to secure the payment of any other Indebtedness of the
Company or the Parent Company unless such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture providing for
the Guarantee of the payment of the new notes by such Restricted Subsidiary
to the same extent as such Guarantee of such other Indebtedness, which
Guarantee shall be senior to or pari passu with such Restricted Subsidiary's
Guarantee of or pledge to secure such other Indebtedness, unless such other
Indebtedness is Senior.
Notwithstanding the preceding paragraph, any Note Guarantee of the
new notes will provide by its terms that it will be automatically and
unconditionally released and discharged under the circumstances described
above under the caption "Note Guarantees; Restrictions on Parent Company and
Subsidiaries." The form of the Guarantee of the new notes will be attached
as an exhibit to the Indenture.
ANTI-LAYERING
The Company will not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate or junior
in right of payment to any Senior Debt of the Company and senior in any
respect in right of payment to the new notes. No Guarantor will incur,
create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to any Senior
Debt of such Guarantor and senior in any respect in right of payment to such
Guarantor's Guarantee of the new notes.
BUSINESS ACTIVITIES
The Company will not, and will not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses.
ADVANCES TO SUBSIDIARIES
All advances to Restricted Subsidiaries that are not Guarantors
made by the Company after the date of the Indenture will be evidenced by
Intercompany Notes in favor of the Company. Each Intercompany Note will be
payable upon demand and will bear interest at the same rate as the new
notes. A form of Intercompany Note will be attached as an exhibit to the
Indenture.
PAYMENTS FOR CONSENT
The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to or
for the benefit of any Holder of new notes for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of the
Indenture or the new notes unless such consideration is offered to be paid
and is paid to all Holders of the new notes that consent, waive or agree to
amend in the time frame set forth in the solicitation documents relating to
such consent, waiver or agreement.
38
REPORTS
Whether or not required by the Commission, so long as any new notes
are outstanding, the Company will furnish to the Holders of new notes,
within the time periods specified in the Commission's rules and regulations:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on
Forms 10-Q and 10-K, if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and, with
respect to the annual information only, a report on the annual
financial statements by the Company's certified independent
accountants; and
(2) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to
file such reports.
The quarterly and annual financial information required by the
preceding paragraph shall include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto, or in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, of the financial condition and results of operations of the
Company and its Subsidiary Guarantors separate from the financial condition
and results of operations of the other Subsidiaries of the Company.
In addition, whether or not required by the Commission, the Company
will file a copy of all of the information and reports referred to in clauses
(1) and (2) above with the Commission for public availability within the
time periods specified in the Commission's rules and regulations (unless the
Commission will not accept such a filing) and make such information available
to securities analysts and prospective investors upon request.
The foregoing reporting obligation may be satisfied by reports
prepared and filed by the Parent Company on a consolidated basis under the
requirements of the Exchange Act.
EVENTS OF DEFAULT AND REMEDIES
Each of the following is an Event of Default:
(1) default for 30 days in the payment when due of interest on, or
Liquidated Damages with respect to, the new notes (whether or
not prohibited by the subordination provisions of the
Indenture);
(2) default in payment when due of the principal of or premium, if
any, on the new notes (whether or not prohibited by the
subordination provisions of the Indenture);
(3) failure by the Company or any of its Restricted Subsidiaries
to comply with the provisions described under the captions
"--Change of Control," "--Asset Sales," "--Restricted
Payments" or "--Incurrence of Indebtedness";
(4) failure by the Company or any of its Restricted Subsidiaries
to comply with any of the other agreements in the Indenture
for 60 days after notice to the Company by the Trustee or the
Holders of at least 25% in aggregate principal amount of the
new notes then outstanding;
(5) default under any mortgage, indenture or instrument under
which they may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company
or any of its Restricted Subsidiaries (or the payment of which
is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of the Indenture, if that
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 (a "Payment Default"); or
(b) results in the acceleration of such Indebtedness prior to
its express maturity,
39
(c) 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 $25 million or more;
(6) failure by the Company or any of its Restricted Subsidiaries
to pay final judgments aggregating in excess of $25 million,
which judgments are not paid, discharged or stayed within 60
days following entry of judgment;
(7) except as permitted by the Indenture, any Note Guarantee shall
be held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any
Guarantor, shall deny or disaffirm its obligations under its
Note Guarantee; and
(8) certain events of bankruptcy or insolvency with respect to the
Company or any Restricted Subsidiary that is a Significant
Subsidiary, or any group of Restricted Subsidiaries that,
taken together, would constitute a Significant Subsidiary.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Restricted
Subsidiary that is a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
all outstanding new notes will become due and payable immediately without
further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of the then outstanding new notes may declare all the new notes to be due
and payable immediately.
Holders of the new notes may not enforce the Indenture or the new
notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding new notes
may direct the Trustee in its exercise of any trust or power.
The Holders of a majority in aggregate principal amount of the new
notes then outstanding by notice to the Trustee may on behalf of the Holders
of all of the new notes 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, the new notes.
The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture. Upon becoming aware of
any Default or Event of Default, the Company is required to deliver to the
Trustee a statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS
No director, officer, employee, incorporator or shareholder of the
Company or any Guarantor, as such, shall have any liability for any
obligations of the Company or the Guarantors under the new notes, the
Indenture, the Note Guarantees, or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of new notes
by accepting a new notes waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the new notes. The
waiver may not be effective to waive liabilities under the federal
securities laws.
SATISFACTION AND DISCHARGE OF THE INDENTURE
The Company may terminate its obligations and the obligations of
the Guarantors under the new notes, the Indenture, and the Guarantees when
(i) either (A) all outstanding new notes have been delivered to the Trustee
for cancellation or (B) all such new 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 indebtedness on the new notes not theretofore delivered to the
Trustee for cancellation, for principal of (premium, if any, on) and
interest to the date of deposit or Stated Maturity or date of redemption;
(ii) the Company has paid or caused to be paid all sums then due
40
and payable by the Company under the Indenture; and (iii) the Company has
delivered an Officers' Certificate and an opinion of counsel relating to
compliance with the conditions set forth in the Indenture.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all
of its obligations discharged with respect to the outstanding new notes
("Legal Defeasance"), except for:
(1) the rights of Holders of outstanding new notes to receive
payments in respect of the principal of, premium, if any, and
interest and Liquidated Damages on such old notes when such
payments are due from the trust referred to below;
(2) the Company's obligations with respect to the new notes
concerning issuing temporary new notes, registration of new
notes, mutilated, destroyed, lost or stolen new notes and the
maintenance of an office or agency for payment and money for
security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the
Trustee, and the Company's obligations in connection
therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect
to have the obligations of the Company released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any failure to comply with such obligations shall not constitute
a Default or Event of Default with respect to the new notes. In the event
Covenant Defeasance occurs, certain events (other than nonpayment,
bankruptcy, receivership, rehabilitation and insolvency events) described
under "Events of Default and Remedies" will no longer constitute an Event of
Default with respect to the new notes.
In order to exercise either Legal Defeasance or Covenant Defeasance,
(1) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the new notes, cash
in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any,
and interest and Liquidated Damages on the outstanding old
notes on the stated maturity or on the applicable redemption
date, as the case may be, and the Company must specify whether
the new notes are being defeased to maturity or to a
particular redemption date;
(2) in the case of Legal Defeasance, the Company shall deliver to
the Trustee an opinion of counsel in the United States
reasonably acceptable to the Trustee 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 the
old notes were sold, there has been a change in the applicable
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 new notes will not recognize
income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Legal
Defeasance had not occurred;
(3) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United
States reasonably acceptable to the Trustee confirming that
the Holders of the outstanding new notes will not recognize
income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to
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;
(4) no Event of Default or Default shall have occurred and be
continuing on the date of such deposit (other than an Event of
Default or Default resulting from the borrowing of funds to be
applied to such deposit);
41
(5) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under,
any Senior Debt or any other material agreement or instrument
(other than the 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;
(6) the Company must have delivered to the Trustee an opinion of
counsel to the effect that after the 91st day following the
deposit, the trust funds will not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally;
(7) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders of new notes
over the other creditors of the Company with the intent of
defeating, hindering, delaying or defrauding creditors of the
Company or others; and
(8) the Company must deliver to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all
conditions precedent provided for, in the case of the
Officers' Certificate, (1) through (7) and, in the case of the
opinion of counsel, clauses (2), (3), (5) and (6) of this
paragraph relating to the Legal Defeasance or the Covenant
Defeasance, as applicable, have been complied with.
AMENDMENT, SUPPLEMENT AND WAIVER
Except as provided in the next three succeeding paragraphs, the
Indenture or the new notes may be amended or supplemented with the consent
of the Holders of at least a majority in principal amount of the new notes
then outstanding.
Without the consent of each Holder affected, an amendment or waiver
may not (with respect to any new notes held by a non-consenting Holder):
(1) reduce the principal amount of new notes whose Holders must
consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any
new note or alter the provisions with respect to the
redemption of the new notes (other than provisions relating to
the covenants described above under the caption "--Repurchase
at the Option of Holders");
(3) reduce the rate of or change the time for payment of interest
on any new note;
(4) waive a Default or Event of Default in the payment of
principal or premium, if any, or Liquidated Damages or
interest on the new notes (except a rescission of acceleration
of the new notes by the Holders of at least a majority in
aggregate principal amount of the new notes and a waiver of
the payment default that resulted from such acceleration);
(5) make any new notes payable in money other than that stated in
the new notes;
(6) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of Holders of new notes
to receive payments of principal of or premium, if any, or
Liquidated Damages or interest on the new notes;
(7) waive a redemption payment with respect to any new note (other
than a payment required by one of the covenants described
above under the caption "--Repurchase at the Option of
Holders");
(8) release any Guarantor from any of its obligations under its
Note Guarantee or the Indenture, or amend the provisions of
the Indenture relating to the release of Guarantors, except as
set forth in the Indenture; or
(9) make any change in the preceding amendment and waiver
provisions.
In addition, any amendment to the subordination provisions of the
Indenture will require the consent of the Holders of at least 66 2/3% in
aggregate principal amount of the new notes then outstanding if such
amendment would adversely affect the rights of Holders of new notes.
42
Notwithstanding the preceding, without the consent of any Holder of
new notes, the Company and the Trustee may amend or supplement the Indenture
or the new notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated new notes in addition to or in
place of certificated new notes;
(3) to provide for the assumption of the Company's obligations to
Holders of new notes in the case of a merger or consolidation
or sale of all or substantially all of the Company's assets;
(4) to make any change that would provide any additional rights or
benefits to the Holders of new notes or that does not
adversely affect the legal rights under the Indenture of any
such Holder; or
(5) to comply with requirements of the Commission in order to
effect or maintain the qualification of the Indenture under
the Trust Indenture Act.
BOOK-ENTRY; DELIVERY AND FORM
The new notes will be issued in the form of one or more "Global
Notes." The Global Notes will be deposited with, or on behalf of, the
Depository Trust Company and registered in the name of DTC or its nominee,
who will be the Global Notes holder. Except as set forth below, the Global
Notes may be transferred, in whole and not in part, only to DTC or another
nominee of DTC. Investors may hold their beneficial interests in the Global
Notes directly through DTC if they are participating organizations or
"participants" in such system or indirectly through organizations that are
participants in such system. Except in the limited circumstances described
below, owners of beneficial interests in the Global Notes will not be
entitled to receive physical delivery of certificated notes (as defined
below).
DEPOSITORY PROCEDURES
The following description of the operations and procedures of DTC
are provided solely as a matter of convenience. These operations and
procedures are solely within the control of the respective settlement
systems and are subject to changes by them from time to time. We take no
responsibility for these operations and procedures and urge investors to
contact the system or their participants directly to discuss these matters.
DTC has advised us that DTC is a limited-purpose trust company that
was created to hold securities for its participants and to facilitate the
clearance and settlement of transactions in such securities between
participants through electronic book-entry changes in accounts of its
participants. The participants include securities brokers and dealers
(including the initial purchasers), banks and trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust
companies, which we refer to as "indirect participants," that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. Persons who are not participants may beneficially own securities
held by or on behalf of DTC only through the participants or the indirect
participants.
We expect that pursuant to procedures established by DTC (i) upon
deposit of the Global Notes, DTC will credit the accounts of participants
designated by the initial purchasers with portions of the principal amount
of the Global Notes and (ii) ownership of the new notes evidenced by the
Global Notes will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to the
interests of the participants), the participants and the indirect
participants.
Investors in the Global Notes may hold their interests therein
directly through DTC, if they are participants in such system, or indirectly
through organizations which are participants in such system. Investors may
hold their interests in the Global Notes through organizations that are DTC
participants. All interests in a Global Note may be subject to the
procedures and requirements of DTC. The laws of some states require that
certain persons take physical delivery in definitive form of securities that
they own. Consequently, the ability to transfer beneficial interests in a
Global Note to such persons will be limited to that extent. Because DTC can
act only on behalf of participants, which in turn act on behalf of indirect
participants and certain banks, the ability of a person having
43
beneficial interests in a Global Note to pledge such interests to persons or
entities that do not participate in the DTC systems, or otherwise take
actions in respect of such interests, may be affected by the lack of a
physical certificate evidencing such interests.
Except as described below, owners of interest in the Global Notes
will not have new notes registered in their names, will not receive physical
delivery of new notes in certificated form and will not be considered the
registered owners or "holders" thereof under the Indenture for any purpose.
Payments in respect of the principal of, premium, if any,
Liquidated Damages (as defined under "Exchange Offer; Registration Rights")
if any, and interest on a Global Note registered in the name of DTC or its
nominee will be payable to DTC in its capacity as the registered holder
under the Indenture. Under the terms of the Indenture, we and the trustee
will treat the persons in whose names the new notes, including the Global
Notes, are registered as the owners thereof for the purpose of receiving
such payments and for any and all other purposes whatsoever. Consequently,
neither the trustee nor any agent of us or the trustee has or will have any
responsibility or liability for (1) any aspect of DTC's records or any
participant's or indirect participant's records relating to or payments made
on account of beneficial ownership interests in the Global Notes, or for
maintaining, supervising or reviewing any of DTC's records or any
participant's or indirect participant's records relating to the beneficial
ownership interests in the Global Notes or (2) any other matter relating to
the actions and practices of DTC or any of its participants or indirect
participants. DTC has advised us that its current practice, upon receipt of
any payment in respect of securities such as the new notes (including
principal and interest), is to credit the accounts of the relevant
participants with the payment on the payment date, in amounts proportionate
to their respective holdings in the principal amount of beneficial interest
in the relevant security as shown on the records of DTC unless DTC has
reason to believe it will not receive payment on such payment date. Payments
by the participants and the indirect participants to the beneficial owners
of new notes will be governed by standing instructions and customary
practices and will be the responsibility of the participants or the indirect
participants and will not be the responsibility of DTC, the trustee or us.
Neither we nor the trustee will be liable for any delay by DTC or any of its
participants in identifying the beneficial owners of the new notes, and we
and the trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Interests in the Global Notes are expected to be eligible to trade
in DTC's Same-Day Funds Settlement System and secondary market trading
activity in such interests will, therefore, settle in immediately available
funds, subject in all cases to the rules and procedures of DTC and its
participants. See "--Same-Day Settlement and Payment."
Subject to the transfer restrictions set forth under "Transfer
Restrictions," transfers between participants in DTC will be effected in
accordance with DTC's procedures, and will be settled in same day funds.
DTC has advised us that it will take any action permitted to be
taken by a holder of new notes only at the direction of one or more
participants to whose account DTC has credited the interests in the Global
Notes and only in respect of such portion of the aggregate principal amount
of the new notes as to which such participant or participants has or have
given such direction. However, if there is an Event of Default under the new
notes, DTC reserves the right to exchange the Global Notes for legended
notes in certificated form, and to distribute such new notes to its
participants.
Although DTC has agreed to the foregoing procedures to facilitate
transfers of interests in the Global Notes among participants in DTC, it is
under no obligation to perform or to continue to perform such procedures,
and such procedures may be discontinued at any time. Neither we nor the
trustee nor any of their respective agents will have any responsibility for
the performance by DTC or its participants or indirect participants of their
respective obligations under the rules and procedures governing their
operations.
CERTIFICATED SECURITIES
Subject to certain conditions, any person having a beneficial
interest in a Global Note may, upon request to the trustee, exchange such
beneficial interest for new notes in the form of certificated securities.
Upon any such issuance, the trustee is required to register such certificated
securities in the name of, and cause the same to be
44
delivered to, such person or persons (or the nominee of any thereof). All
such certificated new notes would be subject to the legend requirements
described herein under "Notice to Investors." In addition, if:
(1) We notify the trustee in writing that DTC is no longer willing
or able to act as a depositary and we are unable to locate a
qualified successor within 90 days, or
(2) We, at our option, notify the trustee in writing that we elect
to cause the issuance of new notes in the form of certificated
securities under the Indenture, then, upon surrender by the
Global Notes holder of its Global Notes, notes in such form
will be issued to each person that the Global Notes holder and
DTC identify as being the beneficial owner of the related new
notes.
Neither we nor the trustee will be liable for any delay by the
Global Notes holder or DTC in identifying the beneficial owners of new notes
and we and the trustee may conclusively rely on, and will be protected in
relying on, instructions from the Global Notes holder or DTC for all
purposes.
SAME-DAY SETTLEMENT AND PAYMENT
The Indenture will require that payments in respect of the notes
represented by the Global Notes (including principal, premium, if any,
interest and Additional Interest, if any) be made by wire transfer of
immediately available funds to the accounts specified by the Global Notes
holder. With respect to certificated securities, we will make all payments of
principal, premium, if any, Liquidated Damages, if any, and interest by wire
transfer of immediately available funds to the accounts specified by the
holders thereof or, if no such account is specified, by mailing a check to
each such holder's registered address.
METHODS OF RECEIVING PAYMENTS ON THE NEW NOTES
If a holder has given wire transfer instructions to us, we will
make all principal, premium and interest payments on those new notes in
accordance with those instructions. All other payments on these new notes
will be made at the office or agency of the payment agent and registrar
within the City and State of New York unless we elect to make interest
payments by check mailed to the holders at their address set forth in the
register of holders.
PAYING AGENT AND REGISTRAR FOR THE NEW NOTES
The trustee will initially act as paying agent and registrar for
the new notes. We may change the paying agent or registrar without prior
notice to the holders of the new notes, and we or any of our subsidiaries
may act as paying agent or registrar.
TRANSFER AND EXCHANGE
A holder may transfer or exchange new notes in accordance with the
Indenture. The registrar and the trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and we
may require a holder to pay any taxes and fees required by law or permitted
by the Indenture. We are not required to transfer or exchange any senior
note selected for redemption. Also, we are not required to transfer or
exchange any senior note for a period of 15 days before a selection of new
notes to be redeemed.
The registered holder of a senior note will be treated as the owner
of it for all purposes.
CONCERNING THE TRUSTEE
If the trustee becomes a creditor of us, the Indenture limits its
right to obtain payment of claims in certain cases, or to realize on certain
property received in respect of any such claim as security or otherwise. The
trustee will be permitted to engage in other transactions; however, if it
acquires any conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue or resign.
45
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture.
Reference is made to the Indenture for a full disclosure of all such terms,
as well as any other capitalized terms used herein for which no definition is
provided.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of
such specified Person, whether or not such Indebtedness is
incurred in connection with, or in contemplation of, such
other Person merging with or into, or becoming a Subsidiary
of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired
by such specified Person.
"Affiliate" of any specified Person means any other 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," 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 that beneficial
ownership of 10% or more of the Voting Stock of a Person shall be deemed to
be control. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" shall have correlative
meanings.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets
or rights, including sales and leasebacks, but excluding sales
of inventory and equipment in the ordinary course of business
consistent with past practices; provided that the sale, lease,
conveyance or other disposition of all or substantially all of
the assets of the Company and its Restricted Subsidiaries
taken as a whole will be governed by the provisions of the
Indenture described above under the caption "--Change of
Control ", and/or the provisions described above under the
caption "--Merger, Consolidation or Sale of Assets" and not by
the provisions of the Asset Sale covenant; and
(2) the issuance of Equity Interests by any of the Company's
Restricted Subsidiaries or the sale of Equity Interests in any
of its Subsidiaries.
Notwithstanding the preceding, the following items shall not be
deemed to be Asset Sales:
(a) any single transaction or series of related transactions that:
(a) involves assets having a fair market value of less than
$7.5 million; or (b) results in net proceeds to the Company
and its Restricted Subsidiaries of less than $7.5 million;
(b) a transfer of assets between or among the Company and its
Wholly Owned Restricted Subsidiaries;
(c) an issuance of Equity Interests by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned
Restricted Subsidiary; and
(d) a Restricted Payment that is permitted by the covenant
described above under the caption "Restricted Payments."
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of
the lessee for net rental payments during the remaining term of the lease
included in such sale and leaseback transaction including any period for
which such lease has been extended or may, at the option of the lessor, be
extended. Such present value shall be calculated using a discount rate equal
to the rate of interest implicit in such transaction, determined in
accordance with GAAP.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as such term is used in
Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to have
beneficial ownership of all
46
securities that such "person" has the right to acquire, whether such right
is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or
limited); and
(4) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Change of Control" means the occurrence of any of the following:
(1) the sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole to
any "person" (as such term is used in Section 13(d)(3) of the
Exchange Act) other than a Principal or a Related Party of a
Principal;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which
is that any "person" (as defined above), other than the
Principals and their Related Parties, becomes the Beneficial
Owner, directly or indirectly, of more than 35% of the Voting
Stock of the Company or the Parent Company, measured by voting
power rather than number of shares;
(4) the first day on which a majority of the members of the Board
of Directors of the Company or the Parent Company are not
Continuing Directors; or
(5) the Company or the Parent Company consolidates with, or merges
with or into, any Person, or any Person consolidates with, or
merges with or into, the Company or the Parent Company, in any
such event pursuant to a transaction in which any of the
outstanding Voting Stock of the Company or the Parent Company
is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting
Stock of the Company or the Parent Company outstanding
immediately prior to such transaction is converted into or
exchanged for Voting Stock of the surviving or transferee
Person constituting a majority of the outstanding shares of
such Voting Stock of such surviving or transferee Person
immediately after giving effect to such issuance. For the
avoidance of doubt, the sales of the assets or stocks of
Subsidiaries that the Company is currently holding for sale as
part of its strategic plan will not constitute a Change of
Control.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale, to the extent such
losses were deducted in computing such Consolidated Net
Income; plus
(2) provision for taxes based on income or profits of such Person
and its Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component
of any deferred payment obligations, the interest component of
all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Debt,
commissions, discounts and other fees
47
and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments, if any,
pursuant to Hedging Obligations), to the extent that any such
expense was deducted in computing such Consolidated Net
Income; plus
(4) depreciation, amortization (including amortization of goodwill
and other intangibles) and other non-cash expenses of such
Person and its Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses
were deducted in computing such Consolidated Net Income; minus
(5) non-cash items increasing such Consolidated Net Income for
such period, other than items that were accrued in the
ordinary course of business, in each case on a consolidated
basis.
Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other
non-cash charges of, a Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company
only to the extent that a corresponding amount would be permitted at the
date of determination to be dividended to the Company by such Subsidiary
without prior approval (that has not been obtained), pursuant to the terms
of its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary
or its shareholders.
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and
its Restricted Subsidiaries for such period, on a consolidated basis,
provided that:
(1) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity
method of accounting shall be included only to the extent of
the amount of dividends or distributions paid in cash to the
specified Person or a Wholly Owned Subsidiary thereof;
(2) the Net Income of any non-Guarantor Restricted Subsidiary
shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that
non-Guarantor Restricted Subsidiary of that Net Income is not
at the date of determination permitted without any prior
governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that
non-Guarantor Restricted Subsidiary or its shareholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded;
(4) the Net Income (but not loss) of any Unrestricted Subsidiary
shall be excluded, whether or not distributed to the specified
Person or one of its Subsidiaries; and
(5) any writedowns with respect to, or losses on dispositions of,
Subsidiaries and assets and all restructuring charges incurred
by the Company, the Parent Company and the Subsidiaries, shall
be excluded;
(6) non-recurring fees, expenses or charges (including, without
limitation, the write-off of deferred financing charges)
incurred in connection with the Transactions shall be
excluded; and
(7) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of
any date, the sum of:
(1) the consolidated equity of the common shareholders of such
Person and its consolidated Subsidiaries as of such date; plus
(2) the respective amounts reported on such Person's balance sheet
as of such date with respect to any series of preferred stock
that by its terms is not entitled to the payment of dividends
unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and
payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock.
48
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company or the Parent Company who:
(1) was a member of such Board of Directors on the date the old
notes were sold; or
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing
Directors who were members of the Board of Directors of the
Parent Company at the time of such nomination or election.
"Credit Facilities" means, with respect to the Company or any
Restricted Subsidiary, one or more debt facilities or commercial paper
facilities, in each case with banks or other institutional lenders providing
for revolving credit loans, term loans, receivables financing (including
through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or
other asset securitizations or letters of credit, in each case, as amended,
restated, modified, renewed, refunded, replaced or refinanced in whole or in
part from time to time.
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"Designated Senior Debt" means, (i) all Senior Debt under the
Credit Facilities; and (ii) any Senior Debt permitted under this Indenture
the principal amount of which is $50 million or more and that has been
designated by the Company as "Designated Senior Debt."
"Equity Interests" mean Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any private or underwritten public offering
of common stock of the Company or the Parent Company in which the gross
proceeds to the Company or the Parent Company, as applicable, are at least
$50 million and, in the case of an offering by the Parent Company, the net
proceeds are contributed to the Company.
"Exchange Offer Registration Statement" means that certain
registration statement filed by the Company with the Commission to register
the Exchange Offer.
"Exchange Offer" means the offer made to the Holders of the new
notes to exchange their old notes for the Exchange Notes.
"Exchange Notes" means those notes, having terms substantially
identical to the old notes, offered to the Holders of the old notes under
the Exchange Offer Registration Statement.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the date the old notes were sold.
"Fixed Charges" means, with respect to any Person for any period,
the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment
obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect
to Attributable Debt, commissions, discounts, and other fees
and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments, if any,
pursuant to Hedging Obligations; plus
(2) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such
period; plus
49
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or
one of its Restricted Subsidiaries, whether or not such
Guarantee or Lien is called upon; plus
(4) cash dividend payments on any series of preferred stock of
such Person or any of its Restricted Subsidiaries.
"Fixed Charge Coverage Ratio" means, with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such
Person and its Restricted Subsidiaries for such period to the Fixed Charges
of such Person for such period. In the event that the specified Person or
any of its Restricted Subsidiaries incurs, assumes, Guarantees or redeems
any Indebtedness or issues or redeems preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated but prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation
Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect to such incurrence, assumption, Guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period; provided, however, borrowings in the ordinary course of business
under any revolving credit agreement shall not be given pro forma effect and
shall be included in the calculation of the Fixed Charge Coverage Ratio only
to the extent such borrowings were actually outstanding during the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or
any of its Restricted Subsidiaries, including through mergers
or consolidations and including any related financing
transactions, during the four-quarter reference period or
subsequent to such reference period and on or prior to the
Calculation Date shall be deemed to have occurred on the first
day of the four-quarter reference period and Consolidated Cash
Flow for such reference period shall be calculated without
giving effect to clause (3) of the proviso set forth in the
definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and
operations or businesses disposed of prior to the Calculation
Date, shall be excluded; and
(3) the Fixed Charges attributable to discontinued operations, as
determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be
excluded.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements, and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant
segment of the accounting profession, which are in effect from time to time.
"Guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business,
direct or indirect, in any manner including, without limitation, by way of a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) the Parent Company,
(2) each Subsidiary Guarantor; and
(3) any other Subsidiary that executes a Note Guarantee in
accordance with the provisions of the Indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under:
50
(1) interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements;
(2) other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or the value of
foreign currencies purchased or received by such Person in the
ordinary course of business; and
(3) any commodity futures or option contract or other similar
commodity hedging contract designed to protect such person
against fluctuations in commodity prices.
"Holder" means the Person in whose name a new note is registered on
the Registrar's books.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement agreements in respect
thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued
expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of the specified Person prepared in accordance with GAAP. In addition,
the term "Indebtedness" includes all Indebtedness of others secured by a
Lien on any asset of the specified Person (whether or not such Indebtedness
is assumed by the specified Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other
Person.
The amount of any Indebtedness outstanding as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
(2) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means the Indenture dated February 4, 2004 among the
Company, the Guarantors and U.S. Bank National Association, as trustee.
"Intercompany Notes" means the intercompany notes issued by
Restricted Subsidiaries of the Company that are not Guarantors in favor of
the Company or a Guarantor to evidence advances by the Company or such
Guarantor, in each case, in the form attached as Exhibit F to the Indenture.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct
or indirect loans (including guarantees of Indebtedness or other
obligations), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that would be classified as investments on a balance sheet prepared in
accordance with GAAP excluding Hedging Obligations. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a
51
Restricted Subsidiary of the Company, the Company shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give
any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person and its Restricted Subsidiaries, determined in
accordance with GAAP and before any reduction in respect of preferred stock
dividends, excluding, however:
(1) any gain (but not loss), together with any related provision
for taxes on such gain (but not loss), realized in connection
with: (a) any Asset Sale; or (b) the disposition of any
securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and
(2) any extraordinary or nonrecurring gain or loss, together with
any related provision for taxes on such extraordinary or
nonrecurring gain or loss.
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale, including, without
limitation, legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof, in each case after taking into account
any available tax credits or deductions and any tax sharing arrangements and
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender;
and
(2) no default with respect to which (including any rights that
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
(other than the new notes) of the Company or any of its
Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Businesses" means the printing business generally
including the business conducted by the Company and its Subsidiaries as of
the date the old notes were sold and any other business or businesses
ancillary, complementary or related thereto.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(2) any Investment in Cash Equivalents;
52
(3) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person if as a result of such Investment:
(A) such Person becomes a Restricted Subsidiary of the
Company; or
(B) such Person is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and
in compliance with the covenant described above under the
caption "--Repurchase at the Option of Holder--Asset Sales";
(5) Investments existing as of the date the old notes were sold;
(6) any acquisition of assets solely in exchange for the issuance
of Equity Interests of the Company;
(7) accounts receivable, endorsements for collection, deposits or
similar Investments arising in the ordinary course of
business;
(8) any Investment by the Company or a Restricted Subsidiary in
assets of a Permitted Business or assets to be used in a
Permitted Business;
(9) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to
the Company or any Subsidiary or in satisfaction of judgments;
(10) the acceptance of notes payable from employees of the Company
or its Subsidiaries in payment for the purchase of Capital
Stock by such employees; and
(11) any other Investment in any Person having an aggregate fair
market value (measured on the date each such Investment was
made and without giving effect to subsequent changes in
value), when taken together with all other Investments made
pursuant to this clause (11) since the date the old notes were
sold and existing at the time such Investment was made, did
not exceed $30 million.
"Permitted Junior Securities" means Equity Interests in the Company
or debt securities that are subordinated to all Senior Debt (any debt
securities issued in exchange for Senior Debt) to substantially the same
extent as, or to a greater extent than, the new notes are subordinated to
Senior Debt.
"Permitted Liens" means:
(1) Liens securing Senior Debt;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens when the new notes are secured by such Lien on an equal
and ratable basis unless the Obligation secured by any such
Lien is subordinate or junior in right of payment to the new
notes, in which case the Lien securing such Obligation must be
subordinate and junior to the Lien securing the new notes with
the same or lesser relative priority as such Obligation shall
have been with respect to the new notes;
(4) Liens on property of a Person existing at the time such Person
becomes a Restricted Subsidiary or is merged with or into or
consolidated with the Company or any Restricted Subsidiary of
the Company, provided that such Liens were in existence prior
to the contemplation of such acquisition, merger or
consolidation and do not extend to any assets other than those
of the Person acquired or merged into or consolidated with the
Company or the Restricted Subsidiary;
(5) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company,
provided that such Liens were in existence prior to the
contemplation of such acquisition;
(6) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations
of a like nature incurred in the ordinary course of business;
53
(7) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of the second paragraph
of the covenant entitled "Incurrence of Indebtedness" covering
only the assets acquired with such Indebtedness;
(8) Liens existing on the date of the Indenture;
(9) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with
GAAP shall have been made therefor;
(10) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation,
unemployment insurance and other types of social security, old
age pension or public liability obligations or to secure the
payment or performance of bids, tenders, statutory or
regulatory obligations, surety, stay, or appeal bonds,
performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(11) easements, rights-of-way, restrictions, defects or
irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the
business of the Company or any of its Subsidiaries;
(12) purchase money liens (including extensions and renewals
thereof);
(13) Liens securing reimbursement obligations with respect to
letters of credit which encumber only documents and other
property relating to such letters of credit and the products
and proceeds thereof;
(14) judgment and attachment Liens not giving rise to an Event of
Default;
(15) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty
requirements;
(16) Liens arising out of consignment or similar arrangements for
the sale of goods;
(17) any interest or title of a lessor in property subject to any
Capital Lease Obligation or operating lease;
(18) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and
other Liens imposed by law incurred in the ordinary course of
business for sums not yet delinquent or being contested in
good faith by appropriate proceeding, if such reserve or other
appropriate provision, if any, as shall be required by GAAP
shall have been made in respect thereof;
(19) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in
respect of bankers' acceptances issued or created for the
account of such Person to facilitate the purchase, shipment,
or storage of such inventory or other goods;
(20) Liens securing Hedging Obligations that are otherwise
permitted under the Indenture;
(21) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company
and its Subsidiaries;
(22) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(23) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of custom duties in connection
with the importation of goods;
(24) Liens in favor of collecting or payor banks having a right of
setoff, revocation, refund or chargeback with respect to money
or instruments of the Company or any Subsidiary on deposit
with or in possession of such bank;
(25) Liens to secure Non-Recourse Debt; and
(26) Liens to secure any Permitted Refinancing Indebtedness (or
successive Permitted Refinancing Indebtedness) which
refinances as a whole, or in part, any Indebtedness secured by
any Lien referred to in the foregoing clauses (1), (4), (5),
(7), (8) and (12); provided, however, that:
54
(a) such new Lien shall be limited to all or part of the same
property that secured the original Lien (plus
improvements to or on such property) and
(b) the Indebtedness secured by such Lien at such time is not
increased to any amount greater than the sum of:
(i) the outstanding principal amount or, if greater,
committed amount of the Indebtedness secured by
Liens described under clauses (1), (4), (5), (7),
(8) or (12) at the time the original Lien became a
Permitted Lien under the Indenture and
(ii) an amount necessary to pay any fees and expenses,
including premiums, related to such Permitted
Refinancing Indebtedness; and
(27) Liens not otherwise permitted by clauses (1) through (26) that
are incurred in the ordinary course of business of the Company
or any Subsidiary of the Company with respect to obligations
that do not exceed $15 million at any one time outstanding.
"Permitted Payments to Parent Company" means:
(1) payments to the Parent Company in an amount sufficient to
permit the Parent Company to pay reasonable and necessary
operating expenses and other general corporate expenses to the
extent such expenses relate or are fairly allocable to the
Company and its Subsidiaries including any reasonable
professional fees and expenses not in excess of $1 million in
the aggregate during any consecutive 12-month period;
(2) payment to the Parent Company to enable the Parent Company to
pay foreign, federal, state or local tax liabilities ("Tax
Payment"), not to exceed the amount of any tax liabilities
that would be otherwise payable by the Company and its
Subsidiaries to the appropriate taxing authorities if they
filed separate tax returns, to the extent that the Parent
Company has an obligation to pay such tax liabilities relating
to the operations, assets or capital of the Company or its
Subsidiaries; provided, however that (a), notwithstanding the
foregoing, in the case of determining the amount of a Tax
Payment that is permitted to be paid by the Company and any of
its U.S. Subsidiaries in respect of their Federal income tax
liability, such payment shall be determined assuming that the
Company is the parent company of an affiliated group (the
"Company Affiliated Group") filing a consolidated Federal
income tax return and that the Parent Company and each such
U.S. Subsidiary is a member of the Company Affiliated Group
and (b) any Tax Payments shall either be used by the Parent
Company to pay such tax liabilities within 90 days of the
Parent Company's receipt of such payment or refunded to the
party from whom the Parent Company received such payments; and
(3) payments to the Parent Company in an amount sufficient to
permit the Parent Company to repurchase, redeem or other
acquire or retire for value any Equity Interests of the Parent
Company or any Restricted Subsidiary of the Parent Company
held by any member of the Parent Company's (or any of its
Subsidiaries') management pursuant to any management equity
subscription agreement or stock option agreement in effect as
of the date of the Indenture; provided that the aggregate
price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $1.5 million in any
twelve-month period.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease
or refund other Indebtedness of the Company or any of its Restricted
Subsidiaries (other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus
accrued interest on the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith including
premiums paid, if any, to the Holder thereof);
55
(2) such Permitted Refinancing Indebtedness has a final maturity
date either later than the final maturity date of the
Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded or 91 days following the maturity of the
new notes, and has a Weighted Average Life to Maturity equal
to or greater than the Weighted Average Life to Maturity of,
the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(3) If the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of
payment to the new notes, such Permitted Refinancing
Indebtedness has a final maturity date later than the final
maturity date of, and is subordinated in right of payment to,
the new notes on terms at least as favorable to the Holders of
new notes as those contained in the documentation governing
the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or agency or political subdivision thereof
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or
business).
"Principals" means the officers and directors of the Parent Company
at the date the old notes were sold, their Affiliates (as such term is
defined under the Exchange Act) and the Parent Company's and Company's
Employee Stock Ownership Plan and Trust.
"Registration Rights Agreement" means that certain agreement among
the Company, the Guarantors and the initial purchaser requiring the Company
to file the Exchange Offer Registration Statement and the Shelf registration
statement.
"Related Party" with respect to any Principal means:
(1) any controlling shareholder, 80% or more owned Subsidiary, or
spouse or immediate family member (in the case of an
individual) of such Principal; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, shareholders, partners, owners or Persons
beneficially holding an 80% or more controlling interest which
consist of such Principal and/or such other Persons, referred
to in the immediately preceding clause (1).
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Senior Debt" means, (i) all Indebtedness outstanding under Credit
Facilities and all Hedging Obligations with respect thereto; (ii) any other
Indebtedness permitted to be incurred by the Company or any Restricted
Subsidiary under the terms of this Indenture unless the instrument under
which such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the new notes; and (iii)
all Obligations with respect to the items listed in the preceding clauses
(i) and (ii). Notwithstanding anything to the contrary in the preceding,
Senior Debt will not include: (i)any liability for federal, state, local or
other taxes owed or owing by the Company; (ii) any Indebtedness of the
Company to any of its Subsidiaries or other Affiliates; (iii) any trade
payables; or (iv) any Indebtedness that is incurred in violation of this
Indenture other than Indebtedness under a Credit Facility that is incurred
on the basis of a representation by the Company to the applicable lenders
that it is permitted to incur such as Indebtedness under this Indenture.
"Shelf registration statement" means that certain shelf
registration statement filed by the Company with the Commission to register
resales of the old notes or the new notes.
56
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act of 1933, as such Regulation
is in effect on the date hereof.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly
or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any
combination thereof).
"Transactions" means the incurrence of the new notes and the
retirement of the Company's 8 3/4 Senior Subordinated Notes due 2008.
"Unrestricted Subsidiary" means any Subsidiary of the Company that
is designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not a party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the
Company or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of
the Company;
(3) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or
(b) to maintain or preserve such Person's financial condition
or to cause such Person to achieve any specified levels of
operating results;
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or
any of its Restricted Subsidiaries; and
(5) has at least one director on its board of directors that is
not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive
officer that is not a director or executive officer of the
Company or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by the covenant described above under
the caption "Certain Covenants--Restricted Payments." If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under the caption
"Incurrence of Indebtedness," the Company shall be in default of such
covenant. The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that
such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any
57
outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall only be permitted if (1) such Indebtedness is permitted
under the covenant described under the caption "Certain Covenants--Incurrence
of Indebtedness," calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period; and (2) no
Default or Event of Default would be in existence following such
designation.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that
will elapse between such date and the making of such payment;
by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person and/or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
58
DESCRIPTION OF CERTAIN INDEBTEDNESS
The following descriptions of certain indebtedness of the Company and
the Parent Company do not purport to be complete and are qualified in their
entirety by reference to the provisions of the various agreements and
indentures related thereto, copies of which have been filed with the SEC and
to which reference is hereby made.
SENIOR CREDIT FACILITY
On March 24, 2004, the Company entered into a Second Amended and
Restated Credit Agreement with Bank of America, N.A. acting as
administrative agent for a syndicate of financial institutions. This senior
credit facility, which replaced our previous senior credit facility,
provides us with a revolving line of credit of up to $300 million, based on
the Company's available borrowing base consisting of eligible accounts
receivable, eligible inventory and eligible equipment, all as defined in the
senior credit facility. The equipment portion of the borrowing base is
automatically reduced as we sell certain assets and through quarterly
amortization.
Interest on borrowings under the senior credit facility is based on the
prime rate charged by Bank of America, N.A. or on London Interbank Offer
Rate ("LIBOR") at the borrower's election, plus applicable margin, as defined
in the senior credit facility. The applicable margin varies based on our
fixed charge coverage ratio, as defined in the senior credit facility.
The obligations of the Company under the senior credit facility are
guaranteed by our Parent Company and by each of our existing or
after-acquired U.S. and Canadian subsidiaries, as provided in the senior
credit facility. Pursuant to a security agreement, the obligations under the
senior credit facility are further secured by substantially all of our
assets and the assets of our Parent Company and U.S. and Canadian
subsidiaries, including the shares of capital stock of the Company and the
U.S. and Canadian subsidiaries.
The senior credit facility contains covenants and provisions that
restrict, among other things, the Company and its subsidiaries' ability to:
(1) incur liens;
(2) dispose of assets outside the ordinary course of business;
(3) effect certain mergers, consolidations or bulk asset sales;
(4) make certain loans or investments;
(5) incur additional secured indebtedness and certain contingent
obligations;
(6) transfer money or property to, purchase or repurchase any stock or
indebtedness of, or become liable on any guaranty of the
obligations of our affiliates, except for ordinary course cash
management transactions, the incurrence of certain intercompany
debts and transactions in the ordinary course of business that are
no less favorable to us than a comparable arm's-length transaction
would be;
(7) pay dividends and other distributions on, and make repurchases or
redemptions of, capital stock; and
(8) modify or prepay certain debt.
The events of default under the senior credit facility include the
following:
(1) failure to pay principal or interest when due;
(2) breach of any representation or warranty;
(3) failure to perform any covenant or agreement in the senior credit
facility (in some cases only if the failure continues for a
certain period of time);
(4) certain defaults under other agreements, debts and other
obligations, including certain contingent obligations;
(5) imposition of certain judgments or decrees against the Company or
any subsidiary;
(6) certain events of bankruptcy, insolvency or reorganization;
59
(7) certain violations of the Employee Retirement Income Security Act;
(8) certain changes of control of the Company; and
(9) other customary provisions.
9 5/8% SENIOR NOTES
The Company has outstanding $350 million in 9 5/8% senior notes due
2012 issued under an indenture among the Company, the Parent Company and
certain of its subsidiaries as guarantors, and U.S. Bank National
Association as trustee, a copy of which has been filed with the SEC. The $350
million outstanding principal amount of 2012 senior notes mature on March
15, 2012. The Parent Company has unconditionally guaranteed the due and
punctual payment of principal of (and premium, if any) and interest on the
2012 senior notes. At the present time, the capital stock of the Company is
substantially the only asset of the Parent Company, and therefore the Parent
Company's guarantee is effectively subordinated to all indebtedness and
other liabilities and commitments of the Parent Company's subsidiaries, as
well as to all senior indebtedness of the Parent Company. Certain of the
Company's significant subsidiaries have also unconditionally guaranteed the
due and punctual payment of principal of (and premium, if any) and interest
on the 2012 senior notes. The 2012 senior notes may also be guaranteed by
one or more of the Company's other subsidiaries from time to time under
certain circumstances. The senior subordinated notes indenture is subject to
and governed by the Trust Indenture Act.
The 2012 senior notes are unsecured indebtedness of the Company ranking
pari passu with all other existing and future senior indebtedness of the
Company. The payment of the principal of, premium, if any, and interest on
the 2012 senior notes is effectively subordinated to any secured obligations
of the Company to the extent of the value of the assets securing such
obligations, including the senior secured credit facility. The 2012 senior
notes are senior in right of payment to existing and any future subordinated
indebtedness of the Company, including the old note and the new notes.
The 2012 senior notes indenture contains certain covenants which,
subject to certain conditions, limitations and exceptions,
(1) restrict the ability of the Company and its subsidiaries:
(a) to incur additional indebtedness;
(b) to declare or pay dividends or distributions on shares of the
Company's capital stock; to purchase, redeem, acquire or
retire for value capital stock of the Company or a
subsidiary;
(c) to retire prior to scheduled maturity indebtedness that is
pari passu with or subordinated to the 2012 senior notes; to
make loans, advances or payments to the Parent Company or the
Company's employee stock ownership plan; to guaranty
indebtedness of affiliates; or to make investments;
(d) to enter into transactions with affiliates;
(e) to create liens on their property or assets; and
(f) to effect asset sales;
(2) restrict the ability of the Company to merge, consolidate or
convey, transfer or lease its properties and assets substantially
as an entirety; and
(3) restrict the ability of the Company's subsidiaries:
(a) to issue preferred stock; and
(b) to guaranty indebtedness without guaranteeing the 2012 senior
notes.
In addition, upon a change of control, the Company must offer to repurchase
the 2012 senior notes at 101% of their principal amount, plus accrued
interest. In connection with any such offer, the Company would comply with
the applicable tender offer rules, including Rule 14e-1, under the Exchange
Act. The Company is currently prohibited by the senior credit facility from
making such an offer to purchase the 2012 senior notes, and failure to do so
if
60
required would constitute a default under the 2012 senior notes indenture.
Other events of default under the 2012 senior notes indenture
include default on the payment of principal on the 2012 senior notes when
due; default on the payment of interest on the 2012 senior notes for a
period of 30 days after it is due; default on the payment (or the
acceleration) of certain other indebtedness; default in other covenants
under the 2012 senior notes indenture (in certain cases after the passage of
a period of time or the giving of notice by the holders or the trustee or
both); failure to pay certain final judgments or orders; and certain events
of bankruptcy or insolvency.
The 2012 senior notes are redeemable at a premium to par value on
or after March 15, 2007, which premiums decline annually. At any time on or
after March 15, 2010, the 2012 senior notes are redeemable at par value. In
addition, prior to March 15, 2005, we may redeem notes in an aggregate
principal amount not to exceed 35% of the aggregate principal amount of
notes originally issued at a redemption price of 109.625% with the net cash
proceeds of certain equity offerings.
DESCRIPTION OF CAPITAL STOCK
The capital stock of Cenveo Corporation consists of 1,000 shares of
common stock, par value $0.01 per share. Holders of the common stock are
entitled to one vote per share at all meetings of stockholders. Dividends
that may be declared on the common stock will be paid in an equal amount to
the holder of each share. No pre-emptive rights are conferred upon the
holders of such stock and there are no liquidation or conversion rights, nor
are there any redemption or sinking fund provisions and there is no
liability to further calls or to assessments by Cenveo Corporation. All of
the shares of common stock are issued and outstanding and are held by
Cenveo, Inc.
61
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of certain of the expected
material United States federal income tax considerations with respect to the
new notes relevant to each registered holder who, except as noted below, is
a U.S. holder of the old notes, and who:
(1) purchased the old notes from Cenveo Corporation for cash,
(2) exchanges the old notes for new notes in this exchange offer,
and
(3) holds the old notes and the new notes as capital assets.
The term "U.S. holder" means a beneficial owner of a new note that is, for
U.S. federal income tax purposes,
(1) an individual who is a citizen or resident of the United
States,
(2) a corporation or other entity taxable as a corporation created
or organized in the United States or under the laws of the
United States or of any U.S. state or the District of
Columbia,
(3) an estate the income of which is includable in gross income
for U.S. federal income tax purposes regardless of its source,
or
(4) a trust if a U.S. court is able to exercise primary
supervision over the trust's administration and one or more
U.S. persons have authority to control all substantial
decisions of such trust.
This discussion does not purport to deal with the tax consequences
of owning the new notes to all categories of investors, some of which, such
as insurance companies, tax-exempt organizations, financial institutions,
dealers in securities, investors who own 5% or more of our shares, and
investors whose functional currency is not the U.S. dollar, may be subject
to special rules. We advise prospective holders of new notes to consult
their own tax advisors concerning the overall tax consequences arising in
their own particular situations under U.S. federal, state, local or foreign
law of the ownership of the new notes.
FEDERAL INCOME TAX CONSIDERATIONS
This discussion is based on currently existing provisions of the
Internal Revenue Code of 1986, as amended, existing, temporary and proposed
Treasury regulations promulgated under the I.R.C., and administrative and
judicial interpretations of the I.R.C. and the regulations under it, all as
in effect or proposed on the date of this prospectus and all of which are
subject to change, possibly with retroactive effect, or different
interpretations. This discussion does not address the tax consequences to
subsequent purchasers of new notes and is limited to purchasers who hold the
new notes as capital assets within the meaning of section 1221 of the I.R.C.
Moreover, this discussion is for general information only and does not
address all of the tax consequences that may be relevant to particular
registered holders in light of their personal circumstances, including, for
example, persons subject to the alternative minimum tax provisions of the
I.R.C., or to certain types of initial purchasers, such as certain financial
institutions, insurance companies, tax-exempt entities, dealers in
securities, persons holding new notes as part of a hedging or conversion
transaction, straddle or other risk reduction transactions or U.S.
expatriates or persons who have hedged the risk of owning a senior note, and
purchasers whose functional currency is not U.S. dollars. This discussion
also does not address any aspect of foreign, state or local tax law, or U.S.
federal estate and gift tax law.
Holders are urged to consult their own tax advisors as to the
particular tax consequences to them of the exchange, ownership and
disposition of the new notes, including the applicability of any U.S.
federal tax laws or any foreign, state or local tax laws, and any changes or
proposed changes in applicable tax laws or interpretations of them.
U.S. FEDERAL INCOME TAXATION OF THE EXCHANGE OF OLD NOTES FOR NEW NOTES
The federal income tax regulations provide that gain or loss is
realized on the sale of property or on the
62
"exchange of property for other property differing materially, either in
kind or in extent." Treas. Reg. Section 1.1001-1(a). In 1991, the United
State Supreme Court reviewed this regulation in Cottage Savings Association
v. Commissioner, 499 U.S. 554 (1991). In Cottage, a savings and loan
association engaged in a series of purchases and sales of mortgage
participation interests. In each transaction, the taxpayer sold mortgage
participation interests to another financial institution and purchased
substantially identical mortgage participation interests from the other
institution. Although cast as sales and purchases, the holders exchanged
mortgage participation interests. The taxpayer treated the exchanges as
realization events under section 1001 of the I.R.C. and claimed losses. The
I.R.S. sought to disallow the losses on the ground that the exchanged
properties were economically equivalent and thus did not differ materially
within the meaning of Section 1.1001-1(a) of the regulations.
The Court held that the taxpayer had realized a loss. After
concluding that Section 1.001-1 of the regulations is a reasonable
interpretation of section 1001(a) of the I.R.C., the Court determined that,
because the participation interests exchanged by the taxpayer were derived
from loans made to different obligors and secured by different homes, the
exchanged interests embodied legally distinct entitlements and therefore
were materially different. Thus, the transaction resulted in a taxable sale
or disposition under section 1001 of the I.R.C.
In response to the issues raised by the Cottage decision, and in an
effort to provide certainty, the I.R.S. issued regulations under section
1001 of the I.R.C. to deal explicitly with the modification of debt
instruments. The regulations define when a modification will be deemed to be
an exchange of the original instrument or a modified instrument that differs
materially either in kind or in extent.
The new regulations are found in Treas. Reg. Section 1.1001-3.
Under the general rule, a "significant modification" of a debt instrument is
treated as an exchange of the original instrument for a modified instrument
that differs materially either in kind or extent. Modifications that are not
significant modifications are not exchanges.
TAXATION OF INTEREST
This discussion assumes that the new notes will be treated as debt,
not equity, for U.S. federal income tax purposes. Interest paid or accrued
on a new note will be taxable to a U.S. holder as ordinary interest income,
generally at the time it is received or accrued, in accordance with such
holder's regular method of accounting for U.S. federal income tax purposes.
We intend to take the position, which generally will be binding on
all U.S. holders, that the new notes are not issued with "OID," or original
issue discount, for U.S. federal income tax purposes and that no amounts
other than stated interest will be treated as interest. This position is
based on the assumption that the price at which the new notes are sold to
the public will equal their face amount, or will be within the de minimis
exception for OID. This position also is based on the view that the
likelihood of the payment of liquidated damages, as of the date the new
notes are issued, is remote. In the unlikely event that liquidated damages
are paid, then such liquidated damages may be treated as OID, includable by
a U.S. holder in income as such interest accrues, in advance of receipt of
any cash payment of such interest.
SALE, REDEMPTION OR RETIREMENT OF THE NEW NOTES
Upon the sale, redemption, retirement at maturity or other taxable
disposition of a new note, a U.S. holder generally will recognize gain or
loss equal to the difference, if any, between
(1) the sum of cash plus the fair market value of all other
property received on disposition, except to the extent such
cash or property is attributable to accrued but unpaid
interest not previously included in income, which will be
taxable as ordinary income, and
(2) the U.S. holder's tax basis in the new note, which is
generally its cost.
Gain or loss recognized on the disposition of a new note generally
will be capital gain or loss and will be long-term capital gain or loss if,
at the time of disposition, the new note had been held for more than one
year. In the case of a U.S. holder who is an individual, the maximum
long-term capital gains rate is 20%.
63
BACKUP WITHHOLDING AND INFORMATION REPORTING
Information reporting requirements may apply to certain payments
made by a U.S. paying agent or other U.S. intermediary of principal,
premium, if any, and interest on a new note and to proceeds of the sale or
other disposition of a new note. In addition, backup withholding at the rate
of 31% may apply to these payments if a U.S. holder fails to furnish its
taxpayer identification number, which is its social security or employer
identification number, certify that the number is correct, certify that the
U.S. holder is not subject to backup withholding or otherwise comply with
the applicable requirements of the backup withholding rules. Certain U.S.
holders, including corporations, generally are not subject to backup
withholding and information reporting. Recently issued Treasury Regulations
modify some of the certification requirements for backup withholding. These
modifications generally will apply to payments made after December 31, 1998.
Any amounts withheld under the backup withholding rules from a payment to a
U.S. holder generally will be allowed as a credit against the U.S. holder's
U.S. federal income tax and may entitle the U.S. holder to a refund,
provided that the required information is furnished to the Internal Revenue
Service.
U.S. FEDERAL INCOME TAXATION OF NON-U.S. HOLDERS
The following discussion is limited to the U.S. federal income tax
consequences relevant to a holder of a new note that is not a U.S. holder.
We refer to these holders as "non-U.S. holders."
PAYMENT OF INTEREST ON NEW NOTES
Payment of interest on the new notes to a non-U.S. holder generally
will be exempt from U.S. federal income and withholding tax if the interest
is not effectively connected with the conduct of a trade or business within
the United States by the non-U.S. holder and the non-U.S. holder:
(1) does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of
Cenveo Corporation;
(2) is not a controlled foreign corporation with respect to which
Cenveo Corporation is a "related person" within the
meaning of the I.R.C.; and
(3) certifies, under penalties of perjury, that the holder is not
a U.S. person and provides the holder's name and address.
SALE, REDEMPTION OR RETIREMENT OF THE NEW NOTES
A non-U.S. holder generally will not be subject to U.S. federal
income tax, and generally no tax will be withheld, with respect to gain
realized on the sale, redemption, retirement at maturity or other
disposition of a new note unless:
(1) the non-U.S. holder is an individual who is present in the
United States for 183 or more days in the taxable year of the
sale, redemption, retirement at maturity or other disposition
of the new note and certain other conditions are met; or
(2) the gain is treated as effectively connected with a U.S. trade
or business conducted by the non-U.S. holder.
WITHHOLDING, REPORTING AND CERTIFICATION REQUIREMENTS
New regulations effective for payments made after December 31,
1999, do not alter the substantive withholding and incorporation reporting
requirements, but unify current certification procedures regarding
withholding, backup withholding and information reporting on certain amounts
paid to persons other than "United States persons" within the meaning of the
I.R.C. Prospective investors should consult their tax advisors concerning
the effect, if any, of these new regulations on an investment in the new
notes.
64
THE FOREGOING SUMMARY OF UNITED STATES TAX CONSEQUENCES IS BASED ON THE
APPLICABLE UNITED STATES LAW AND REGULATIONS, ADMINISTRATIVE RULINGS AND
PRACTICES OF THE UNITED STATES, ALL AS THEY EXIST AS OF THE DATE OF THIS
PROSPECTUS. THIS SUMMARY DOES NOT DISCUSS ALL ASPECTS THAT MAY BE RELEVANT
TO PROSPECTIVE INVESTORS IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH
RESPECT TO THEIR OWN PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICABILITY
AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS, ESTATE TAX LAWS AND
PROPOSED CHANGES IN APPLICABLE LAWS.
65
PLAN OF DISTRIBUTION
Each broker-dealer that receives new notes for its own account
pursuant to this exchange offer must acknowledge that it will deliver a
prospectus in connection with any resale of the new notes. A broker-dealer
may use this prospectus, as it may be amended or supplemented from time to
time, in connection with resales of new notes received in exchange for old
notes where such old notes were acquired as a result of market-making
activities or other trading activities. We have agreed to make this
prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until ______________,
2004, all dealers effecting transactions in the new notes may be required to
deliver a prospectus.
We will not receive any proceeds from any sale of new notes by any
broker-dealer. New notes received by broker-dealers for their own account
pursuant to this exchange offer may be sold from time to time in one or more
transactions in the following manners:
o in the over-the-counter market;
o in negotiated transactions;
o through the writing of options on the new notes;
o through a combination of such methods of resale.
The sales may be at any of the following prices:
o market prices prevailing at the time of resale;
o prices related to such prevailing market prices;
o negotiated prices.
Any resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions
or concessions from any such broker-dealer or the purchasers of any such new
notes.
Any broker-dealer that resells new notes that were received by it
for its own account pursuant to this exchange offer and any broker or dealer
that participates in a distribution of such new notes may be deemed to be an
"underwriter" within the meaning of the Securities Act. Any profit on any
such resale of new notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the
Securities Act. The letter of transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
For a period of 180 days after the expiration date of the exchange
offer, we will promptly send additional copies of this prospectus and any
amendment or supplement to this prospectus to any broker-dealer that
requests such documents in the letter of transmittal. We have agreed to pay
all expenses incident to the exchange offer (including the expenses of one
counsel for the registered holders of the old notes) other than commissions
or concessions of any brokers or dealers, and will indemnify the holders,
including any broker-dealers, against certain liabilities, including
liabilities under the Securities Act.
We have not entered into any arrangements or understandings with
any person to distribute the new notes to be received in this exchange
offer.
There is no existing market for the new notes and although the new
notes will be traded in the over-the-counter market, there can be no
assurance as to the liquidity of any market that may develop for the new
notes, the
66
ability of the holders of the new notes to sell their new notes or the price
at which holders would be able to sell their new notes. Future trading
prices of the new notes will depend on many factors, including, among other
things:
o prevailing interest rates;
o our operating results;
o the market for similar securities.
The initial purchasers of the old notes have advised us that they
are making a market in the old notes, and intend to make a market in the new
notes, subject to the limits imposed by the Securities Act and the Exchange
Act; however, they are not obligated to do so, and may discontinue such
market-making at any time without notice. Therefore, no assurance can be
given as to the liquidity of the trading market for the new notes. In
addition, such market-making activities may be limited during the exchange
offer and the pendency of any shelf registration statement relating to the
new notes.
This prospectus does not constitute an offer to purchase or a
solicitation of an offer to sell any of the new notes in any jurisdiction in
which such an offer or a solicitation is unlawful.
LEGAL MATTERS
Faegre & Benson LLP, Denver, Colorado, will pass upon the validity
of the new notes for us.
EXPERTS
The consolidated financial statements of Cenveo, Inc. appearing
in Cenveo, Inc.'s Annual Report (Form 10-K) for the year ended December
31, 2003, have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon included therein and incorporated herein
by reference. Such consolidated financial statements are incorporated herein
by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
EXCHANGE AGENT
We have appointed U.S. Bank National Association as exchange agent
in connection with the exchange offer. Holders should have letters of
transmittal or notices of guaranteed delivery to the exchange agent as
follows:
U.S. Bank National Association
Specialized Finance Department
60 Livingston Avenue
St. Paul, Minnesota 55107
Telecopier No.: 651-495-8158
67
[OUTSIDE BACK COVER PAGE]
Dealer Prospectus Delivery Obligation
Until _________, 2004, all dealers that effect transactions in the
new notes, whether or not participating in the exchange offer, may be
required to deliver a prospectus. This is in addition to the dealers'
obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS, MANAGERS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL")
empowers a Delaware corporation to indemnify any person who was or is, or is
threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation),
by reason of the fact that such person is or was a director, officer,
employee or agent of such corporation, or is or was serving at the request
of such corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding, if such person
acted in good faith and in a manner such person reasonably believed to be in
or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful.
Section 145 of the DGCL also provides that a Delaware corporation
may indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that the person is or was a director, officer, employee or agent of
such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees) actually and reasonably incurred by the person
in connection with the defense or settlement of such action or suit if the
person acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of the corporation and except
that no indemnification is permitted without judicial approval if the person
is adjudged to be liable to the corporation. Where an person is successful
on the merits or otherwise in the defense of any action referred to above,
the corporation must indemnify such person against the expenses which such
person actually and reasonably incurred.
Cenveo Corporation's Certificate of Incorporation provides
that Cenveo Corporation shall indemnify its officers and directors, and
may indemnify its employees and agents, to the fullest extent permitted by
the DGCL.
Section 102(b)(7) of the DGCL permits a corporation's certificate
of incorporation to include a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director for: (i)
any breach of the director's duty of loyalty to the corporation or its
stockholders; (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) transactions
under Section 174 of the DGCL (unlawful payment of dividends or unlawful
stock purchases or redemptions) or (iv) any transaction from which the
director derived an improper personal benefit.
Cenveo Corporation's Certificate of Incorporation provides
that a director shall not be liable to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director, except to
the extent such exemption is not permitted under the DGCL.
ITEM 21. EXHIBITS
(1) See Exhibit Index immediately following the signature pages.
ITEM 22. UNDERTAKINGS
(A) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
II-1
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement, or the
most recent post-effective amendment thereof, which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered, if the total dollar value of securities
offered would not exceed that which was registered, and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities
Act, if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(B) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(C) The undersigned registrants hereby undertake:
(1) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of
this Amendment No. 1 to Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail
or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(2) To supply by means of a post-effective amendment all
information concerning the merger, and the company being acquired
involved therein, that was not the subject of and included in the
registration statement when it became effective.
II-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO CORPORATION
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board, President &
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President & Chief Executive Officer
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Director, Vice President-General Counsel & Secretary
-------------------------------------
Mark L. Zoeller
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director, Sr. Vice President - Corporate Development
------------------------------------- and Chief Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CLASSIC ENVELOPE PLUS, LTD.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Executive Vice President
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Director, Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Stephanie Lavigne
* Director & Senior Vice President
-------------------------------------
Michel Salbaing
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director, President
-------------------------------------
Charlie MacLean
* Director
-------------------------------------
Giles Cyr
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CML INDUSTRIES, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Director, Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Stephanie Lavigne
* Director & Senior Vice President
-------------------------------------
Michel Salbaing
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director, President
-------------------------------------
Charlie MacLean
* Director
-------------------------------------
Giles Cyr
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
DISCOUNT LABELS, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board and President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director & Senior Vice President
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
* Director, Sr. Vice President - Corporate Development and Chief
------------------------------------- Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
MAIL-WELL ALBERTA FINANCE LP
By: GRAPHIC ARTS CENTER MEXICO, S.A. de C.V.
its general partner
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board, President &
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President & Chief Executive Officer
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
MAIL-WELL CANADA LEASING COMPANY INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board & Executive
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Director, Senior Vice President
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Chairman of the Board & Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board, President &
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President & Chief Executive Officer
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director
-------------------------------------
Frank P. Diassi
* Director
-------------------------------------
Frank J. Hevrdeis
* Director
-------------------------------------
Thomas E. Costello
* Director
-------------------------------------
Jerome W. Pickholz
* Director
-------------------------------------
Susan O. Rheney
* Director
-------------------------------------
David M. Olivier
* Director
-------------------------------------
Martin J. Maloney
* Director
-------------------------------------
Alister W. Reynolds
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO COMMERCIAL, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Director, Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Director, Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, President & Chief Executive Officer
-------------------------------------
Gordon A. Griffiths
* Director, Senior Vice President
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director & Senior Vice President - Corporate Development and
------------------------------------- Chief Legal Officer
Herbert H. Davis
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO GOVERNMENT PRINTING, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Director & Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Sr. Vice President
------------------------------------- (Principal Financial Officer)
Michel Salbaing
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
* Director & Senior Vice President - Corporate Development and
------------------------------------- Chief Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO MEXICO HOLDINGS, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board, President &
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President & Chief Executive Officer
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
* Director & Senior Vice President - Corporate Development and
------------------------------------- Chief Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO SERVICES, LLC
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board, President &
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President & Chief Executive Officer
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO TEXAS FINANCE LP
By: CENVEO CORPORATION
its general partner
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board, President &
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President & Chief Executive Officer
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
/s/ Mark L. Zoeller Director, Vice President - General Counsel & Secretary
-------------------------------------
Mark L. Zoeller
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director, Sr. Vice President - Corporate Development and Chief
------------------------------------- Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO WEST, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board, President &
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President & Chief Executive Officer
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
* Director & Sr. Vice President - Corporate Development and
------------------------------------- Chief Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
MCLAREN MORRIS AND TODD COMPANY
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director - Vice President & General Counsel
-------------------------------------
Mark L. Zoeller
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
MM&T PACKAGING COMPANY
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board & President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board & President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
NATIONAL GRAPHICS COMPANY
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board & President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board & President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
* Director & Sr. Vice President - Corporate Development and
------------------------------------- Chief Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
PNG INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Director & Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board & Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director & President
-------------------------------------
Charlie MacLean
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Stephanie Lavigne
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director & General Manager
-------------------------------------
Giles Cyr
* Director & Sr. Vice President
-------------------------------------
Michel P. Salbaing
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
QUALITY PARK, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board & President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board & President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director & Senior Vice President - Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
* Director & Sr. Vice President - Corporate Development and
------------------------------------- Chief Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
PRECISION FINE PAPERS, INC.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Chairman of the Board & Executive
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board & Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Stephanie Lavigne
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director & General Manager
-------------------------------------
Giles Cyr
* Director & President
-------------------------------------
Charlie MacLean
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-21
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
SUPREMEX, INC.
By /s/ Charlie MacLean, by Mark L. Zoeller, as attorney-in-fact
----------------------------------------------------------------
Director & President
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board & Executive Vice President
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Stephanie Lavigne
* Vice President
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
* Director & General Manager
-------------------------------------
Giles Cyr
* Director & President
-------------------------------------
Charlie MacLean
* Director & Senior Vice President
-------------------------------------
Michel P. Salbaing
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this amendment no. 1 to the registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Englewood, State of Colorado, on the 4th day of
June, 2004.
CENVEO III, L.L.C.
By /s/ Paul V. Reilly, by Mark L. Zoeller, as attorney-in-fact
------------------------------------------------------------
Paul V. Reilly
Chairman of the Board, President &
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
amendment no. 1 to the registration statement has been signed on the 4th day
of June, 2004, by the following persons in the capacities indicated:
* Chairman of the Board, President & Chief Executive Officer
------------------------------------- (Principal Executive Officer)
Paul V. Reilly
* Director, Senior Vice President & Chief Financial Officer
------------------------------------- (Principal Financial Officer)
Michel P. Salbaing
* Vice President & Controller
------------------------------------- (Principal Accounting Officer)
William W. Huffman, Jr.
/s/ Mark L. Zoeller Director & Vice President - General Counsel
-------------------------------------
Mark L. Zoeller
* Director & Sr. Vice President - Corporate Development and
------------------------------------- Chief Legal Officer
Herbert H. Davis
By: /s/ Mark L. Zoeller
-------------------------------------
Attorney-in-Fact
II-23
INDEX OF EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- --------------------------------------------------------------
3.1 Certificate of Incorporation of Mail-Well Corporation--
incorporated by reference from Mail-Well I Corporation's Form
S-4 filed March 15, 1999 (Reg. No. 333-74409).
3.2 Certificate of Amendment of Certificate of Incorporation of
Mail-Well Corporation--incorporated by reference from
Mail-Well I Corporation's Form S-4 filed March 15, 1999 (Reg.
No. 333-74409).
3.3 Certificate of Correction Filed to Correct Certain Error in
the Certificate of Amendment of Mail-Well 1 Corporation Filed
in the Office of the Secretary of State of Delaware on
September 11, 1995--incorporated by reference from Mail-Well I
Corporation's Form S-4 filed March 15, 1999 (Reg. No.
333-74409).
3.4 Certificate of Change of Registered Agent and Registered
Office--incorporated by reference from Mail-Well I
Corporation's Form S-4 filed March 15, 1999 (Reg. No.
333-74409).
3.5* Certificate of Amendment of Certificate of Incorporation of
Cenveo Corporation (formerly known as Mail-Well Corporation)
3.6 Bylaws of Mail-Well I Corporation--incorporated by reference
from Mail-Well I Corporation's Form S-4 filed March 15, 1999
(Reg. No. 333-74409).
4.1 Indenture dated as of March 13, 2002 between Mail-Well I
Corporation and State Street Bank and Trust Company, as
Trustee relating to Mail-Well I Corporation's $350,000,000
aggregate principal amount of 9 5/8% Senior Notes due
2012--incorporated by reference to Exhibit 10.30 to Mail-Well,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2002.
4.2 Form of Senior Note and Guarantee relating to Mail-Well I
Corporation's $350,000,000 aggregate principal amount 9 5/8%
due 2012--incorporated by reference to Exhibit 10.31 to
Mail-Well, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2002.
4.3* Form of Senior Note and Guarantee relating to Mail-Well I
Corporation's $320,000,000 aggregate principal amount 7 7/8%
due 2013.
4.4 Indenture dated as of February 4, 2004 between Mail-Well I
Corporation and U.S. Bank National Association, as Trustee
relating to Mail-Well I Corporation's $320,000,000 aggregate
principal amount of 7 7/8% Subordinated Senior Notes due 2013
- incorporated by reference to Exhibit 4.5 to Form 10-K for
the year ended December 31, 2003.
5* Opinion of Faegre & Benson LLP re: legality of Mail-Well I
Corporation's $320,000,000 aggregate principal amount of
7 7/8% Senior Notes due 2013.
10.1 Form of Indemnity Agreement between Mail-Well, Inc. and each
of its officers and directors--incorporated by reference from
Exhibit 10.17 of Mail-Well, Inc.'s Registration Statement on
Form S-1 dated March 25, 1994.
10.2 Form of Indemnity Agreement between Mail-Well I Corporation
and each of its officers and directors--incorporated by
reference from Exhibit 10.18 of Mail-Well, Inc.'s Registration
Statement on Form S-1 dated March 25, 1994.
10.3 Form of M-W Corp. Employee Stock Ownership Plan effective as
of February 23, 1994 and related Employee Stock Ownership Plan
Trust Agreement--incorporated by reference from Exhibit 10.19
of Mail-Well, Inc.'s Registration Statement on Form S- 1 dated
March 25, 1994.
10.4 Form of M-W Corp. 401(k) Savings Retirement Plan--
incorporated by reference from Exhibit 10.20 of Mail-Well,
Inc.'s Registration Statement on Form S-1 dated March 25,
1994.
II-24
EXHIBIT
NO. DESCRIPTION
- ------- --------------------------------------------------------------
10.5 Mail-Well, Inc. 1994 Stock Option Plan, as amended on May 7,
1997--incorporated by reference from Exhibit 10.56 of
Mail-Well, Inc.'s Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997.
10.6 Form of Mail-Well, Inc. Incentive Stock Option
Agreement--incorporated by reference from Exhibit 10.22 of
Mail-Well, Inc.'s Registration Statement on Form S-1 dated
March 25, 1994.
10.7 Form of Mail-Well, Inc. Nonqualified Stock Option
Agreement--incorporated by from Exhibit 10.23 of Mail-Well,
Inc.'s Registration Statement on Form S-1 dated March 25,
1994.
10.8 Mail-Well, Inc. 1997 Non-Qualified Stock Option Plan--
incorporated by reference from exhibit 10.54 of Mail-Well,
Inc.'s Form 10-Q for the quarter ended March 31, 1997.
10.9 1997 Non-Qualified Stock Option Agreement--incorporated by
reference from exhibit 10.54 of Mail-Well, Inc.'s Form 10-Q
for the quarter ended March 31, 1997.
10.10 Mail-Well, Inc. 1998 Incentive Stock Option Plan--incorporated
by reference from Exhibit 10.58 to the Company's Quarterly
report on Form 10-Q for the quarter ended March 31, 1998.
10.11 Mail-Well, Inc. 1998 Incentive Stock Option Plan Incentive
Stock Option Agreement-- incorporated by reference from
Exhibit 10.59 to the Company's Quarterly report on Form 10-Q
for the quarter ended March 31, 1998.
10.12 Participation Agreement dated as of December 15, 1997, among
Mail-Well I Corporation, Keybank National Association, as
Trustee and other financial institutions party thereto--
incorporated by reference from Exhibit 10.62 to Mail-Well,
Inc.'s Form 10-Q for the quarter ended March 31, 1998.
10.13 Equipment Lease dated as of December 15, 1997 among Mail-Well
I Corporation, Keybank National Association, as Trustee and
other financial institutions party thereto-- incorporated by
reference from Exhibit 10.63 to Mail-Well, Inc.'s Form 10-Q
for the quarter ended March 31, 1998.
10.14 Guaranty Agreement dated as of December 15, 1997, among
Mail-Well, Inc., Graphic Arts Center, Inc., Griffin Envelope
Inc., Murray Envelope Corporation, Shepard Poorman
Communications Corporation, Wisco Envelope Corp., Wisco II,
LLC, Wisco III, LLC, Mail-Well I Corporation, Keybank National
Association, as Trustee and other financial institutions party
thereto--incorporated by reference from Exhibit 10.64 to
Mail-Well, Inc.'s Form 10-Q for the quarter ended March 31,
1998.
10.15 Merger Agreement and Plan of Merger by and among American
Business Products, Inc., Mail-Well, Inc., and Sherman
Acquisition Corporation dated January 13, 2000 - Incorporated
by reference from the Annual Report on Form 10-K for
Mail-Well, Inc.
10.16 Change of Control Agreement dated November 15, 1999, between
the Company and Paul V. Reilly - Incorporated by reference
from the Company's Annual Report on Form 10-K for the year
ended December 31, 1999.
10.17 Change of Control Agreement dated November 15, 1999, between
the Company and Robert Meyer - Incorporated by reference from
the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.
10.18 Change of Control Agreement dated November 15, 1999, between
the Company and Michael A. Zawalski - Incorporated by
reference from the Company's Annual Report on Form 10-K for
the year ended December 31, 1999.
10.19 Amended and Restated Credit Agreement dated June 27, 2002
among Mail-Well, Inc., Mail-Well I Corporation, the domestic
subsidiaries of
II-25
EXHIBIT
NO. DESCRIPTION
- ------- --------------------------------------------------------------
Mail-Well I Corporation named in the agreement, the financial
institutions from time to time parties thereto, and Bank of
America, N.A., as administrative agent -- Incorporated by
reference to from the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2002.
10.20 Amended and Restated Security Agreement, dated June 27, 2002
among Mail-Well, Inc., Mail-Well I Corporation, the domestic
subsidiaries of Mail-Well I Corporation named in the
agreement, and Bank of America, N.A., as agent - Incorporated
by reference from the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 2002.
10.21 Amendment No. 1 to Amended and Restated Credit Agreement,
dated September 27, 2002 among Mail-Well, Inc., Mail-Well I
Corporation, certain subsidiaries of Mail-Well I, the lenders
under the Amended and Restated Credit Agreement, and Bank of
America, N.A., as administrative agent for the lenders -
Incorporated by reference from the Company's S-4 filed on
October 8, 2002.
10.22 Mail-Well, Inc. 2001 Long-Term Equity Incentive Plan --
Incorporated by reference from the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 2001.
10.23 Form of Non-Qualified Stock Option Agreement under 2001
Long-Term Equity Incentive Plan - Incorporated by reference
from the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001.
10.24 Form of Incentive Stock Option Agreement under 2001 Long-Term
Equity Incentive Plan -- Incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2001.
10.25 Form of Restricted Stock Award Agreement under 2001 Long-Term
Equity Incentive Plan - Incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2001.
10.26 Registration Rights Agreement dated February 4, 2004, between
Mail-Well I Corporation and Credit Suisse First Boston LLC
relating to Mail-Well I Corporation's $320,000,000 aggregate
principal amount 7 7/8% notes due 2013 - Incorporated by
reference from the Company's Annual Report on Form 10-K for
the year ended December 31, 2003.
10.27* Purchase Agreement dated February 4, 2004, between Mail-Well I
Corporation and Credit Suisse First Boston LLC relating to
Mail-Well I Corporation's $320,000,000 aggregate principal
amount 7 7/8% notes due 2013.
12* Calculation of ratio of earnings to fixed charges.
21* Subsidiaries of the Registrant.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of Faegre & Benson LLP (included in Exhibit 5.1).
24 Powers of Attorney--Incorporated by reference from the Company's
S-4 filed on April 8, 2004.
25* Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of U.S. Bank National Association, as trustee
under the indenture, relating to the old notes and the new
notes (separately bound).
99.1* Form of Letter of Transmittal.
99.2* Form of Notice of Guaranteed Delivery.
99.3* Form of letter to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees.
99.4* Form of Letter to Clients.
<FN>
* Filed herewith
II-26