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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 25049
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event reported): January 15, 1999.
Wallace Computer Services, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-6528 36-2515832
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(State or other jurisdiction (Commission file (IRS Employer Identification
of incorporation) Number) Number)
2275 Cabot Drive, Lisle, Illinois 60532 60532
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code: (630) 588-5000
Not applicable
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(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) -- (b) Not applicable.
(c) Exhibits.
Final Form of Purchase Agreement
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
WALLACE COMPUTER SERVICES, INC.
Date: January 18, 1999 By: /s/ Michael T. Leatherman
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Michael T. Leatherman
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Description of Exhibit Page
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3 Final Form of Purchase Agreement 1
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Draft dated as of January 15, 1999
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WALLACE COMPUTER SERVICES, INC.
$200,000,000
$65,000,000 6.92% Senior Notes Due January 15, 2006
$135,000,000 7.26% Senior Notes Due January 15, 2009
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PURCHASE AGREEMENT
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Dated as of January 15, 1999
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TABLE OF CONTENTS
(Not a part of the Agreement)
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SECTION HEADING PAGE
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SECTION 1. AUTHORIZATION OF NOTES...............................1
SECTION 2. SALE AND PURCHASE OF NOTES...........................1
Section 2.1. Sale and Purchase of Notes...........................1
Section 2.2. Indenture for the Notes..............................2
SECTION 3. CLOSING..............................................2
SECTION 4. CONDITIONS TO CLOSING................................3
Section 4.1. Representations and Warranties.......................3
Section 4.2. Direction of Indenture Trustee.......................3
Section 4.3. Documents Required by Indenture; Basis for
Authentication...................................3
Section 4.4. Performance; No Default..............................3
Section 4.5. Compliance Certificates..............................3
Section 4.6. Opinions of Counsel..................................4
Section 4.7. Purchase Permitted By Applicable Law, Etc............4
Section 4.8. Sale of Other Notes..................................4
Section 4.9. Funding Instructions.................................4
Section 4.10. Payment of Special Counsel Fees......................4
Section 4.11. Changes in Corporate Structure.......................4
Section 4.11. NAIC Certificate.....................................5
Section 4.12. Proceedings and Documents............................5
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........5
Section 5.1. Organization; Power and Authority....................5
Section 5.2. Authorization, Etc...................................5
Section 5.3. Disclosure...........................................5
Section 5.4. Organization and Ownership of Shares of
Restricted Subsidiaries; Affiliates..............6
Section 5.5. Financial Statements.................................7
Section 5.6. Compliance with Laws, Other Instruments, Etc.........7
Section 5.7. Governmental Authorization, Etc......................7
Section 5.8. Litigation; Observance of Agreements,
Statutes and Orders..............................8
Section 5.9. Taxes................................................8
Section 5.10. Licenses, Permits, Etc...............................8
Section 5.11. Compliance with ERISA................................8
Section 5.12. Use of Proceeds; Margin Regulations..................9
Section 5.13. Existing Indebtedness; Future Liens.................10
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<TABLE>
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Section 5.14. Foreign Assets Control Regulations, Etc.............10
Section 5.15. Status under Certain Statutes.......................10
Section 5.16. Notes Rank Pari Passu...............................10
Section 5.17. Environmental Matters...............................10
Section 5.18. Year 2000 Compliance................................11
SECTION 6. REPRESENTATIONS OF THE PURCHASER....................11
Section 6.1. Purchase............................................11
Section 6.2. Source of Funds.....................................11
SECTION 7. INFORMATION AS TO THE COMPANY.......................12
Section 7.1. Financial and Business Information..................12
Section 7.2. Officer's Certificate...............................15
Section 7.3. Inspection..........................................16
Section 7.4. Reporting Treatment of Unrestricted Subsidiaries....16
SECTION 8. LIST OF NOTEHOLDERS; SUBSTITUTION OF NOTES;
CERTAIN RESTRICTIONS RELATING TO TRANSFER OF NOTES..17
Section 8.1. List of Noteholders.................................17
Section 8.2. Transfer of Notes...................................17
Section 8.3. Replacement of Notes................................17
Section 8.4. Certain Restriction Relating to Transfer
of the Notes....................................17
SECTION 9. PAYMENTS ON NOTES...................................17
Section 9.1. Place of Payment....................................17
Section 9.2. Home Office Payment.................................17
SECTION 10. EXPENSES, ETC.......................................18
Section 10.1. Transaction Expenses................................18
Section 10.2. Survival............................................18
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT....................................18
SECTION 12. AMENDMENT AND WAIVER................................19
Section 12.1. Requirements........................................19
Section 12.2. Solicitation of Holders of Notes....................19
Section 12.3. Binding Effect, Etc.................................19
Section 12.4. Notes Held by Company, Etc..........................20
SECTION 13. NOTICES.............................................20
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SECTION 14. REPRODUCTION OF DOCUMENTS...........................20
SECTION 15. CONFIDENTIAL INFORMATION............................21
SECTION 16. SUBSTITUTION OF PURCHASER...........................22
SECTION 17. MISCELLANEOUS.......................................22
Section 17.1. Successors and Assigns..............................22
Section 17.2. Severability........................................22
Section 17.3. Construction........................................22
Section 17.4. Counterparts........................................22
SECTION 17.5. GOVERNING LAW.......................................23
Section 17.6. Legal Holidays......................................23
Signature...................................................................24
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SCHEDULE A -- INFORMATION RELATING TO PURCHASER
SCHEDULE B -- DEFINED TERMS
SCHEDULE 4.12 -- Form of NAIC Certificate
SCHEDULE 5.4 -- Restricted Subsidiaries of the Company;
Ownership of Subsidiary Stock, Etc.
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.13 -- Existing Indebtedness
EXHIBIT 1 -- First Supplemental Indenture
EXHIBIT 4.6(a) -- Form of Opinion of Counsel for the Company
EXHIBIT 4.6(b) -- Form of Opinion of Special Counsel for the Purchasers
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WALLACE COMPUTER SERVICES, INC.
2275 CABOT DRIVE
LISLE, ILLINOIS 60532
$65,000,000 6.92% Senior Notes Due January 15, 2006
$135,000,000 7.26% Senior Notes Due January 15, 2009
Dated as of January 15, 1999
TO THE PURCHASER LISTED IN THE ATTACHED
SCHEDULE A WHO IS A SIGNATORY HERETO:
Ladies and Gentlemen:
WALLACE COMPUTER SERVICES, INC., a Delaware corporation (the
"Company"), agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $65,000,000 aggregate
principal amount of its 6.92% Senior Notes due January 15, 2006 (the "6.92%
Notes") and (b) $135,000,000 aggregate principal amount of its 7.26% Senior
Notes due January 15, 2009 (the "7.26% Notes"; the 6.92% Notes and the 7.26%
Notes being hereinafter collectively referred to as the "Notes", such term to
include any such notes issued in substitution therefor pursuant to Sections 2.7
and 2.8 of the Indenture). Certain capitalized terms used in this Agreement are
defined in SCHEDULE B; references to a "SCHEDULE" or an "EXHIBIT" are, unless
otherwise specified, to a SCHEDULE or an EXHIBIT attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Section 2.1. Sale and Purchase of Notes. Subject to the terms and
conditions of this Agreement, the Company will issue and sell to you and you
will purchase from the Company, at the Closing provided for in SECTION 3, Notes
in the principal amount and of the maturity specified opposite your name in
SCHEDULE A at the purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company is entering
into separate Purchase Agreements (the "Other Agreements" and, together with
this Agreement, the "Purchase Agreements") identical with this Agreement with
each of the other purchasers named in SCHEDULE A (the "Other Purchasers"),
providing for the sale at such Closing to each of the Other Purchasers of Notes
in the principal amount and of the maturity specified opposite its name in
SCHEDULE A. Your obligation hereunder, and the obligations of the Other
Purchasers under the Other Agreements, are several and not joint obligations,
and you shall have no
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obligation under any Other Agreement and no liability to any Person for the
performance or nonperformance by any Other Purchaser thereunder.
Section 2.2. Indenture for the Notes. The Notes will be issued under
and will be entitled to the benefits of that certain Indenture dated as of
January 15, 1999 (the "Original Indenture") between the Company and The Bank of
New York, a New York banking corporation (the "Indenture Trustee"), to be
supplemented and amended by a First Supplemental Indenture to be dated as of
January 15, 1999 (the "First Supplemental Indenture") which is in the form
attached hereto as EXHIBIT 1. The Original Indenture, as supplemented and
amended by the First Supplemental Indenture, is hereinafter referred to as the
"Indenture."
The 6.92% Notes will be substantially in the form attached as
Annex A to the First Supplemental Indenture, will be dated the date of
issuance thereof, will be in the denominations of $300,000 and multiples
of $50,000 in excess thereof, will bear interest on the unpaid principal
balance thereof from the date of the Notes at the rate of 6.92% per
annum, payable semiannually on the first day of each April and October
in each year and at maturity, commencing on April 1, 1999, until the
principal amount thereof becomes due and payable, and will bear interest
(to the extent legally enforceable) on overdue principal (including any
optional prepayment of principal) and Make-Whole Amount, if any, and on
any overdue installment of interest at the Overdue Rate, whether by
acceleration or otherwise, until paid, and will be expressed to mature
on January 15, 2006.
The 7.26% Notes will be substantially in the form attached as
Annex B to the First Supplemental Indenture, will be dated the date of
issuance thereof, will be issued in denominations of $300,000 and
multiples of $50,000 in excess thereof, will bear interest on the
unpaid principal balance thereof from the date of the Notes at the rate
of 7.26% per annum, payable semiannually on the first day of each April
and October in each year and at maturity, commencing on April 1, 1999,
until the principal amount thereof becomes due and payable, and will
bear interest (to the extent legally enforceable) on overdue principal
(including any optional prepayment of principal) and Make-Whole Amount,
if any, and on any overdue installment of interest at the Overdue Rate,
whether by acceleration or otherwise, until paid, and will be expressed
to mature on January 15, 2009.
Interest on the Notes will be computed on the basis of a 360-day year of twelve
thirty-day months. The Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity date except upon the
terms and conditions and in the amounts and with the premium, if any, set forth
in Section 2.06 of the First Supplemental Indenture.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by you shall occur
at the offices of Chapman and Cutler, 111 West Monroe, Chicago, Illinois, at
9:00 A.M., at a closing (the "Closing") on January 15, 1999 or on such other
Business Day thereafter on or prior to January 29, 1999 as may be agreed upon by
the Company, you and the Other Purchasers. At the Closing the Company will
deliver to you the Notes of the maturity to be purchased by you in the
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form of a single Note (or such greater number of Notes in denominations of at
least $300,000 or a multiple of $50,000 in excess thereof as you may request)
dated the date of the Closing and registered in your name (or in the name of
your nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer for the account of the Company to account number 8666910256 at Bank of
America National Trust & Savings Association, 231 South LaSalle Street, Chicago,
IL 60697, ABA # 071000039. If at the Closing the Company shall fail to tender
such Notes to you as provided above in this SECTION 3, or any of the conditions
specified in SECTION 4 shall not have been fulfilled to your satisfaction, you
shall, at your election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by reason of such
failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
Section 4.2. Direction of Indenture Trustee. You shall receive
confirmation from the Company, in form and substance reasonably satisfactory to
you and your special counsel, that the Indenture Trustee has been directed to
make payments becoming due on any Note in accordance with the terms of Section
2.04 of the First Supplemental Indenture.
Section 4.3. Documents Required by Indenture; Basis for Authentication.
The Company shall have furnished to the Indenture Trustee the resolutions,
certificates and other instruments and cash, if any, required to be delivered
prior to or upon the issuance of the Notes pursuant to the provisions of the
Indenture. The Company shall have requested the Indenture Trustee to and the
Indenture Trustee shall have authenticated the Notes pursuant to Article II of
the Original Indenture.
Section 4.4. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement and
the Indenture required to be performed or complied with by it prior to or at the
Closing, and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by the Prospectus), no
Default or Event of Default shall have occurred and be continuing. Neither the
Company nor any Restricted Subsidiary shall have entered into any transaction
since December 1, 1998 that would have been prohibited by the Indenture had the
Indenture applied since such date.
Section 4.5. Compliance Certificates. (a) Officer's Certificates. The
Company shall have delivered to you an Officer's Certificate, dated the date of
the Closing, certifying that the conditions specified in SECTIONS 4.1, 4.3, 4.4
and 4.11 have been fulfilled.
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(b) Secretary's Certificates. The Company shall have delivered to you a
certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes, this Agreement, the Other Agreements and the Indenture.
Section 4.6. Opinions of Counsel. You shall have received opinions in
form and substance satisfactory to you, dated the date of the Closing (a) from
Sidley & Austin, independent counsel for the Company, and Steven L. Carson,
Esq., General Counsel of the Company, as appropriate, covering the matters set
forth in EXHIBIT 4.6(A) and covering such other matters incident to the
transactions contemplated hereby as you or your special counsel may reasonably
request (and the Company hereby instructs its counsel to deliver such opinion to
you), and (b) from Chapman and Cutler, your special counsel in connection with
such transactions, substantially in the form set forth in EXHIBIT 4.6(B) and
covering such other matters incident to such transactions as you may reasonably
request.
Section 4.7. Purchase Permitted By Applicable Law, Etc. On the date of
the Closing your purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
Section 4.8. Sale of Other Notes. Contemporaneously with Closing, the
Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as specified in
SCHEDULE A.
Section 4.9. Funding Instructions. At least three Business Days prior
to the date of Closing, you shall have received written instructions executed by
a Responsible Officer of the Company directing the manner of the payment of
funds and setting forth (a) the name and address of the transferee bank, (b)
such transferee bank's ABA number, (c) the account name and number into which
the purchase price of the Notes is to be deposited, and (d) the name and
telephone number of the account representative responsible for verifying receipt
of such funds.
Section 4.10. Payment of Special Counsel Fees. Without limiting the
provisions of SECTION 10.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
SECTION 4.6 to the extent reflected in a statement of such counsel rendered to
the Company one Business Day prior to the Closing.
Section 4.11. Changes in Corporate Structure. The Company shall not
have changed its jurisdiction of incorporation or been a party to any merger or
consolidation and the Company
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shall not have succeeded to all or any substantial part of the liabilities of
any other entity, at any time following the date of the most recent financial
statements referred to in SECTION 5.5.
Section 4.12. NAIC Certificate. On or prior to the date of the Closing,
the Company shall deliver to you and each Other Purchaser a certificate
certifying as to the answers to the questions set forth in SCHEDULE 4.12
regarding the status of the Company's internal computer systems and the impact
that advent of the Year 2000 will have on such computer systems, which
certificate shall be in form and substance satisfactory to the Holders and may
be filed by the Holders with the National Association of Insurance
Commissioners.
Section 4.13. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement, the Notes and
the Indenture, and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement, the Notes and the
Indenture have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement and the Indenture constitute, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and except that
equitable remedies lie in the discretion of a court and may be unenforceable.
Section 5.3. Disclosure. The Prospectus fairly describes, in all
material respects, the general nature of the business and principal properties
of the Company and its Restricted Subsidiaries. This Agreement, the Prospectus
(including the documents incorporated therein by reference) and the documents,
certificates or other writings delivered to you by or on behalf of the Company
in connection with the transactions contemplated hereby, taken as a whole, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary to
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make the statements therein not misleading in light of the circumstances under
which they were made. As of the date hereof: (i) the Registration Statement, as
amended as of any time, the Prospectus, as amended or supplemented as of any
such time, and the Indenture complies in all material respects with the
applicable requirements of the Securities Act, the Exchange Act and the Trust
Indenture Act, and the respective rules and regulations of the Commission
thereunder, (ii) the Registration Statement, as amended as of any such time,
does not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) the Prospectus, as amended or supplemented as
of the date hereof, does not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties contained in this
SECTION 5.3 shall not apply to the Statement of Eligibility (Form T-1) of the
Indenture Trustee. Since the respective dates as of which information is given
in the Prospectus, there has been no change in the financial condition,
operations, business or properties of the Company or any Restricted Subsidiary
except changes that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
Section 5.4. Organization and Ownership of Shares of Restricted
Subsidiaries; Affiliates. (a) Except as disclosed in SCHEDULE 5.4, the
Prospectus (including the documents incorporated by reference) lists (i) all of
the Company's Restricted Subsidiaries, showing, as to each Restricted
Subsidiary, the correct name thereof, the jurisdiction of its organization, and
the percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Restricted Subsidiary,
(ii) all of the Company's Affiliates, other than Restricted Subsidiaries, and
(iii) all of the Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Restricted Subsidiary shown in SCHEDULE 5.4 as being owned by
the Company and its Restricted Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable and are owned by the Company or
another Restricted Subsidiary free and clear of any Lien (except as otherwise
disclosed in SCHEDULE 5.13).
(c) Each Restricted Subsidiary identified in SCHEDULE 5.4 is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Restricted Subsidiary has the
corporate or other power and authority to own or hold under lease the properties
it purports to own or hold under lease and to transact the business it transacts
and proposes to transact.
(d) No Restricted Subsidiary is a party to, or otherwise subject to,
any legal restriction or any agreement (other than this Agreement, the Other
Agreements, the agreements listed on SCHEDULE 5.4 and customary limitations
imposed by corporate law statutes) restricting the ability
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of such Restricted Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Company or any of its Restricted
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Restricted Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Restricted
Subsidiaries set forth on SCHEDULE 5.5. All of said financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Company and its
Restricted Subsidiaries as of the respective dates specified in such financial
statements and the consolidated results of their operations and cash flows for
the respective periods so specified and have been prepared in accordance with
GAAP consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. (a) The
execution, delivery and performance by the Company of this Agreement, the Notes
and the Indenture will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Restricted Subsidiary under, any other
indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or by-laws, or any other agreement or instrument to which the
Company or any Restricted Subsidiary is bound or by which the Company or any
Restricted Subsidiary or any of their respective properties may be bound or
affected, (ii) contravene or result in a breach of any of the terms, conditions
or provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental Authority applicable to the Company or any Restricted Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Restricted Subsidiary,
which in any such case could reasonably be expected to have a Material Adverse
Effect.
(b) Neither the Company nor any Restricted Subsidiary is in default
under any term of any agreement or instrument to which it is a party or by which
it is bound, or any order, judgment, decree or ruling of any court, arbitrator
or Governmental Authority or is in violation of any applicable law, ordinance,
rule or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(c) The Notes are being sold pursuant to an effective registration
statement and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for such purpose has been instituted
and the Notes are transferable under the Securities Act.
Section 5.7. Governmental Authorization, Etc. Except to the extent
expressly required by the Securities Act, the Exchange Act and the Trust
Indenture Act, no consent, approval or authorization of, or registration, filing
or declaration with, any Governmental Authority is required in connection with
the execution, delivery or performance by the Company of this Agreement, the
Notes or the Indenture.
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Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders. There are no actions, suits or proceedings pending or, to the knowledge
of the Company, threatened against or affecting the Company or any Restricted
Subsidiary or any property of the Company or any Restricted Subsidiary in any
court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Restricted Subsidiaries have
filed all tax returns that are required to have been filed in any jurisdiction,
and have paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the aggregate
Material or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Restricted Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. No Responsible Officer of
the Company has any knowledge of any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Restricted Subsidiaries in
respect of Federal, state or other taxes for all fiscal periods are adequate.
The Federal income tax liabilities of the Company and its Restricted
Subsidiaries have been determined by the Internal Revenue Service and paid for
all fiscal years up to and including the fiscal year ended July 31, 1993.
Section 5.10. Licenses, Permits, Etc. (a) The Company and its
Restricted Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and trade names,
or rights thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others;
(b) to the knowledge of any Responsible Officer of the Company, no
product of the Company infringes in any respect upon any license, permit,
franchise, authorization, patent, copyright, service mark, trademark, trade name
or other right owned by any other Person, other than infringements that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect; and
(c) to the knowledge of any Responsible Officer of the Company, there
is no violation by any Person of any right of the Company or any of its
Restricted Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or any of its
Restricted Subsidiaries, other than violations that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
Section 5.11. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event,
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transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in Section 4001 of ERISA and the terms "current value" and
"present value" have the meanings specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
Section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Restricted Subsidiaries is not Material.
(e) Neither the execution and delivery of this Agreement and the
Indenture, nor the issuance, sale and delivery of the Notes hereunder, will
involve any transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the first
sentence of this SECTION 5.11(E) is made in reliance upon and subject to the
accuracy of your representation in SECTION 6.2 as to the sources of the funds
used to pay the purchase price of the Notes to be purchased by you.
Section 5.12. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes as set forth in the Prospectus. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Restricted Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 1% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of buying
or carrying" shall have the meanings assigned to them in said Regulation U.
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<PAGE> 15
Section 5.13. Existing Indebtedness; Future Liens. (a) SCHEDULE 5.13
sets forth a complete and correct list of all outstanding Indebtedness of the
Company and its Restricted Subsidiaries as of December 31, 1998, since which
date there has been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturities of the Indebtedness of the Company and
its Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary
is in default and no waiver of default is currently in effect, in the payment of
any principal or interest on any Indebtedness of the Company or such Restricted
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Restricted Subsidiary that would permit (or that with notice
or the lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in SCHEDULE 5.13, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Sections 4.13 and 4.14 of the Indenture.
Section 5.14. Foreign Assets Control Regulations, Etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
Section 5.15. Status under Certain Statutes. Neither the Company nor
any Restricted Subsidiary is an "investment company" or a company "Controlled"
by an "investment company" registered or required to be registered or is subject
to regulation under the Investment Company Act of 1940, as amended, or is
subject to regulation under the Public Utility Holding Company Act of 1935, as
amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act,
as amended.
Section 5.16. Notes Rank Pari Passu. The obligations of the Company
under this Agreement, the Indenture and the Notes rank at least pari passu in
right of payment with all other senior unsecured Indebtedness (actual or
contingent) of the Company, including, without limitation, all senior unsecured
Indebtedness of the Company described in SCHEDULE 5.13.
Section 5.17. Environmental Matters. Neither the Company nor any
Restricted Subsidiary has knowledge of any claim or has received any notice of
any claim, and no proceeding has been instituted raising any claim against the
Company or any of its Restricted Subsidiaries or any of their respective real
properties now or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of any Environmental
Laws, except, in each case and in the aggregate, such as could not reasonably be
expected to result in a Material Adverse Effect.
(a) Neither the Company nor any Restricted Subsidiary has
knowledge of any facts which would give rise to any claim, public or
private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related
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<PAGE> 16
to real properties now or formerly owned, leased or operated by any of
them or to other assets or their use, except, in each case, such as
could not reasonably be expected to result in a Material Adverse
Effect;
(b) neither the Company nor any of its Restricted
Subsidiaries has stored any Hazardous Materials on real properties now
or formerly owned, leased or operated by any of them or has disposed of
any Hazardous Materials in a manner contrary to any Environmental Laws
in each case in any manner that could reasonably be expected to result
in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Restricted Subsidiaries are in
compliance with applicable Environmental Laws, except where failure to
comply could not reasonably be expected to result in a Material Adverse
Effect.
Section 5.18. Year 2000 Compliance. The Company and its Subsidiaries
are in the process of taking steps to address the impact of the Year 2000 on
their business operations and to be in Year 2000 Compliance upon the occurrence
of the Year 2000.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase. You represent that you are purchasing the Notes
for your own account or for one or more separate accounts maintained by you or
for the account of one or more pension or trust funds and not with a view to the
distribution thereof; provided that the disposition of your or their property
shall at all times be within your or their control.
Section 6.2. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan all plans maintained by the
same employer (or affiliate thereof, as such term is defined in PTE
95-60) or by the same employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceed ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with the state of domicile of the
insurance company; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or
employee
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<PAGE> 17
organization beneficially owns more than 10% of all assets allocated
to such pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part l(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a Person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If you or any subsequent transferee of the Notes indicates that you or
such transferee are relying on any representation contained in paragraph (b),
(c) or (e) above, the Company shall deliver on the date of Closing and on the
date of any applicable transfer a certificate, which shall either state that (i)
it is neither a party in interest nor a "disqualified person" (as defined in
Section 4975(e)(2) of the Code), with respect to any plan identified pursuant to
paragraphs (b) or (e) above, or (ii) with respect to any plan, identified
pursuant to paragraph (c) above, neither it nor any "affiliate" (as defined in
Section V(c) of the QPAM Exemption) has at such time, and during the immediately
preceding one year, exercised the authority to appoint or terminate said QPAM as
manager of any plan identified in writing pursuant to paragraph (c) above or to
negotiate the terms of said QPAM's management agreement on behalf of any such
identified plan. As used in this SECTION 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO THE COMPANY.
Section 7.1. Financial and Business Information. The Company shall
deliver to each Holder of Notes that is an Institutional Investor:
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<PAGE> 18
(a) Quarterly Statements -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(i) a consolidated balance sheet of the Company
and its Restricted Subsidiaries as at the end of such
quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal
year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments; provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Commission shall be deemed to satisfy the requirements of this SECTION
7.1(A) so long as such Forms 10-Q contain quarterly statements
reflecting the financial position and results of operations of the
Company and its Restricted Subsidiaries for such quarters in the form
required by clause (i) and (ii) hereof;
(b) Annual Statements -- within 105 days after the end
of each fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company
and its Restricted Subsidiaries, as at the end of such
year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by:
(1) an opinion thereon of independent certified
public accountants of recognized national standing,
which opinion shall state that such financial
statements present fairly, in all material respects,
the financial position of the companies being
reported upon and their results of operations and
cash flows and have been prepared in conformity
with GAAP, and that the examination of such
accountants in connection with such financial
statements has been made in accordance with
generally accepted auditing standards, and that
such audit provides a reasonable basis for such
opinion in the circumstances, and
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<PAGE> 19
(2) a certificate of such accountants stating
that they have reviewed this Agreement and the
Indenture and stating further whether, in making
their audit, they have become aware of any condition
or event that then constitutes a Default or an Event
of Default, and, if they are aware that any such
condition or event then exists, specifying the nature
and period of existence thereof (it being understood
that such accountants shall not be liable, directly
or indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted
auditing standards or did not make such an audit),
provided that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year (together
with the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance
with the requirements therefor and filed with the Commission, together
with the accountant's certificate described in clause (2) above, shall
be deemed to satisfy the requirements of this SECTION 7.1(b) so long as
such annual reports to shareholders and its annual reports on Forms
10-K together contain annual statements reflecting the financial
position and result of operations of the Company and its Restricted
Subsidiaries for such years in the form required by clause (i) and (ii)
hereof;
(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Restricted Subsidiary to
public securities holders generally, and (ii) each regular or periodic
report, each registration statement (without exhibits except as
expressly requested by such Holder), and each prospectus and all
amendments thereto filed by the Company or any Restricted Subsidiary
with the Commission;
(d) Notice of Default or Event of Default -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default under the Indenture (including, without limitation, any claimed
Event of Default of the type referred to in Section 6.1(f) of the
Indenture under the Credit Facility) under the Indenture, a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within 30
days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in Section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
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<PAGE> 20
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any written
notice to the Company or any Restricted Subsidiary from any Federal or
state Governmental Authority relating to any order, ruling, statute or
other law or regulation that could reasonably be expected to have a
Material Adverse Effect;
(g) Certain Notices Under the Indenture -- true, correct and
complete copies of any notices delivered by the Company directly to any
holder of any of the Securities issued and outstanding pursuant to the
terms and provisions of the Indenture; and
(h) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Restricted Subsidiaries or relating to the ability of the
Company to perform its obligations hereunder and under the Notes and
the Indenture as from time to time may be reasonably requested by any
such Holder of the Notes, including, without limitation, such
information as the Holders of the Notes may request with respect to the
Company's internal computer system as it relates to Year 2000
Compliance and the impact the Year 2000 would have on such system.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a Holder of Notes pursuant to SECTION 7.1(a) or SECTION 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Sections 4.12
through 4.15 and 5.1 of the Indenture during the quarterly or annual
period covered by the statements then being furnished (including with
respect to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such
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<PAGE> 21
Sections, and the calculation of the amount, ratio or percentage in
existence as of the last day of the financial period covered by such
financial statements); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms of this Agreement and the Indenture and has
made, or caused to be made, under his or her supervision, a review of
the transactions and conditions of the Company and its Restricted
Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default
or an Event of Default or, if any such condition or event existed or
exists (including, without limitation, any such event or condition
resulting from the failure of the Company or any Restricted Subsidiary
to comply with any Environmental Law), specifying the nature and period
of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives
of each Holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such Holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Restricted Subsidiaries with the Company's officers and (with the
consent of the Company, which consent will not be unreasonably
withheld) the independent public accountants of the Company and (with
the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and
each Restricted Subsidiary, all at such reasonable times and as often
as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Restricted Subsidiary, to examine
all their respective books of account, records, reports and other
papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the
Company authorizes said accountants to discuss the affairs, finances
and accounts of the Company and its Restricted Subsidiaries), all at
such reasonable times and as often as may be reasonably requested in
the manner contemplated by SECTION 13.
Section 7.4. Reporting Treatment of Unrestricted Subsidiaries.
Notwithstanding anything to the contrary contained in this Agreement, so long as
the Unrestricted Subsidiaries continue to constitute, in the aggregate, less
than 7% of Consolidated Total Capitalization in any fiscal period, the Company
shall be permitted to include, for purposes of the financial reporting
requirements contained in SECTIONS 7.1(a) and (b), and only for purposes of such
Sections, the financial information of such entities on a consolidated basis. If
at any time the Unrestricted Subsidiaries shall constitute, in the aggregate, 7%
or more of Consolidated Total Capitalization in any fiscal period, the Company
shall, notwithstanding that SECTION 7.1(a) and (b) permit
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<PAGE> 22
the Company to comply therewith by delivery of its Quarterly Reports on Form
10-Q and Annual Reports on Form 10-K, either: (a) provide consolidating
financial statements setting forth separately the financial information for the
Unrestricted Subsidiaries for such period, together with the financial
information of such entities on a consolidated basis for purposes of the
financial reporting requirements contained in SECTIONS 7.1(a) and b) and only
for purposes of such Sections or (b) exclude the financial information on a
consolidated basis for the Unrestricted Subsidiaries from the consolidated
financial statements required to be delivered by the Company for such period
pursuant to SECTIONS 7.1(a) and (b). In no event shall the Company include
financial information of the Unrestricted Subsidiaries for purposes of any
determination of compliance with any of the covenants contained in the
Indenture.
SECTION 8. LIST OF NOTEHOLDERS; SUBSTITUTION OF NOTES; CERTAIN RESTRICTIONS
RELATING TO TRANSFER OF NOTES.
Section 8.1. List of Noteholders. The Company shall give to any Holder
of a Note that is an Institutional Investor promptly, upon request therefor, a
complete and correct copy of the names and addresses of all registered Holders
of the Notes.
Section 8.2. Transfer of Notes. Except as otherwise expressly provided
herein, any transfer, exchange or substitution of the Notes shall be governed by
the terms and provisions of the Indenture. Notes shall not be transferred in
denominations of less than $300,000; provided that if necessary to enable the
registration of transfer by a Holder of its entire holding of Notes, any Note
may be in a denomination of less than $300,000. Any transferee, by its
acceptance of a Note registered in its name (or the name of its nominee), shall
be deemed to have made the representations set forth in SECTION 6.1 and in
SECTION 6.2.
Section 8.3. Replacement of Notes. In the case of an Institutional
Investor, notice from such Institutional Investor of its ownership and its loss,
theft, destruction or mutilation of a Note shall be accepted as evidence thereof
by the Company and the Indenture Trustee. If the Holder of any Note is an
Institutional Investor, or a nominee thereof, such Institutional Investor's own
unsecured agreement of indemnity shall be deemed to be satisfactory by the
Company and the Indenture Trustee.
Section. 8.4. Certain Restriction Relating to Transfer of the Notes.
You, the Other Purchasers and each of their respective transferees of the Notes,
by their acceptance thereof, understand and agree that they will not transfer
the Notes or any part or portion thereof to a Competitor.
SECTION 9. PAYMENTS ON NOTES.
Section 9.1. Place of Payment. Subject to SECTION 9.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made at the Corporate Trust Office of the Indenture Trustee.
Section 9.2. Home Office Payment. So long as an original purchaser or
its nominee shall be the Holder of any Note, and notwithstanding anything
contained in SECTION 9.1, in such Note
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<PAGE> 23
or in the Indenture to the contrary, the Company will pay all sums becoming due
on such Note for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below such original
purchaser's name in SCHEDULE A to this Agreement, or by such other method or at
such other address as it shall have from time to time specified to the Company
in writing for such purpose, without the presentation or surrender of such Note
or the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, each original purchaser shall surrender such
Note for cancellation, reasonably promptly after any such request, to the
Company at the Corporate Trust Office of the Indenture Trustee. Prior to any
sale or other disposition of any Note held by an original purchaser of the Notes
or its nominee, such purchaser will, at its election, either endorse thereon the
amount of principal paid thereon and the last date to which interest has been
paid thereon or surrender such Note to the Indenture Trustee in exchange for a
new Note or Notes pursuant to the Indenture. The Company will afford the
benefits of this provision to each Institutional Investor that is the direct or
indirect transferee of any Note purchased by an original purchaser of the Notes
and that has made the same written agreement relating to such Note as such
purchaser has made in this Agreement.
SECTION 10. EXPENSES, ETC.
Section 10.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each Other Purchaser or
Holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement, the Notes
or the Indenture (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses incurred
in enforcing or defending (or determining whether or how to enforce or defend)
any rights under this Agreement, the Notes or the Indenture or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the Notes or the Indenture, or by reason of
being a Holder of any Note, and (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Restricted Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the Notes and the
Indenture. The Company will pay, and will save you and each other Holder of a
Note harmless from, all claims in respect of any fees, costs or expenses, if
any, of brokers and finders (other than those retained by you).
Section 10.2. Survival. The obligations of the Company under this
SECTION 10 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement, the Notes or the
Indenture, and the termination of this Agreement.
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any
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<PAGE> 24
subsequent Holder of a Note, regardless of any investigation made at any time by
or on behalf of you or any other Holder of a Note. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement,
the Indenture and the Notes embody the entire agreement and understanding
between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 12. AMENDMENT AND WAIVER.
Section 12.1. Requirements. This Agreement may be amended, and the
observance of any term hereof may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of SECTION 1, 2, 3, 4, 5, 6 or 16 hereof, or any defined term (as it
is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
the Holder of each Note at the time outstanding affected thereby, (i) change the
percentage of the principal amount of the Notes the Holders of which are
required to consent to any such amendment or waiver, or (ii) amend any of this
SECTION 12 or SECTION 15. No term or provision of the Notes may be amended or
waived except as otherwise permitted in the First Supplemental Indenture.
Section 12.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each Holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such Holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Indenture. The Company will deliver executed or true and
correct copies of each amendment, waiver or consent effected pursuant to the
provisions of this SECTION 12 to each Holder of outstanding Notes promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite Holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any Holder of Notes as
consideration for or as an inducement to, or otherwise in connection with the
consideration of, the entering into by any Holder of Notes of any waiver or
amendment of any of the terms and provisions hereof or of the Indenture, unless
such remuneration is concurrently paid, or security is concurrently granted, on
the same terms, ratably to each Holder of Notes then outstanding even if such
Holder did not consent to such waiver or amendment.
Section 12.3. Binding Effect, Etc. Any amendment or waiver consented to
as provided in this SECTION 12 applies equally to all Holders of Notes and is
binding upon them and upon each future Holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended
-19-
<PAGE> 25
or waived or impair any right consequent thereon. No course of dealing between
the Company and the Holder of any Note nor any delay in exercising any rights
hereunder or under any Note or the Indenture shall operate as a waiver of any
rights of any Holder of such Note. As used herein, the term "this Agreement" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
Section 12.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the Holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding have approved or consented to any
amendment, waiver or consent to be given under this Agreement, or have directed
the taking of any action provided herein to be taken upon the direction of the
Holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of
its Affiliates shall be deemed not to be outstanding.
SECTION 13. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in SCHEDULE A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other Holder of any Note, to such Holder at
such address as such other Holder shall have specified to the Company
in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Treasurer, or at such
other address as the Company shall have specified to the Holder of each
Note in writing.
Notices under this SECTION 13 will be deemed given only when actually received.
SECTION 14. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
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<PAGE> 26
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This SECTION 14
shall not prohibit the Company or any other Holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 15. CONFIDENTIAL INFORMATION.
For the purposes of this SECTION 15, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified in writing when received by you as being
confidential information of the Company or such Subsidiary; provided that such
term does not include information that (a) was publicly known or otherwise known
to you prior to the time of such disclosure, (b) subsequently becomes publicly
known through no act or omission by you or any Person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to you under
SECTION 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you; provided that you may deliver or disclose Confidential
Information to (i) your directors, trustees, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this SECTION 15, (iii) any other Holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this SECTION 15), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this SECTION 15),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes, this Agreement and the
Indenture. Each Holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of this SECTION 15
as though it were a party to this Agreement. On reasonable request by the
Company in connection with the delivery to any Holder of a Note of information
required to be delivered to such Holder under this Agreement or requested by
such Holder (other than a Holder that is a party to this Agreement or its
nominee), such Holder will enter into an agreement with the Company embodying
the provisions of this SECTION 15.
-21-
<PAGE> 27
SECTION 16. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in SECTION 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this SECTION 16), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this SECTION
16), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original Holder of the
Notes under this Agreement.
SECTION 17. MISCELLANEOUS.
Section 17.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent Holder of a Note) whether so expressed or
not.
Section 17.2. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 17.3. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 17.4. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.
-22-
<PAGE> 28
SECTION 17.5. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF ILLINOIS, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.
Section 17.6. Legal Holidays. If a payment date is any day that is not a
Business Day at a place of payment, payment may be made at the place on the next
succeeding Business Day, and no interest shall accrue for the intervening
period.
* * * * *
-23-
<PAGE> 29
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
WALLACE COMPUTER SERVICES, INC.
By
-------------------------------
Its
Accepted as of ____________________.
[VARIATION]
By
-------------------------------
Its
-24-
<PAGE> 30
INFORMATION RELATING TO PURCHASERS
PRINCIPAL AMOUNT AND MATURITY
NAME AND ADDRESS OF PURCHASER OF NOTES TO BE PURCHASED
SCHEDULE A
(to Note Purchase Agreement)
<PAGE> 31
DEFINED TERMS
(a) As used herein, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such term:
"Affiliate" is defined in the First Supplemental Indenture.
"Business Day", means any day except Saturday, Sunday or a legal
holiday in The City of New York or the City of Chicago, Illinois on which
banking institutions are authorized or required by law, regulation or executive
order to close.
"Capital Stock" means and includes any and all shares, interests,
participations or other equivalents (however designated) of ownership in any
corporation or other Person.
"Closing" is defined in SECTION 3.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Commission" means the United States Securities and Exchange
Commission.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of the Indenture, and thereafter "Company"
shall mean such successor Person.
"Competitor" shall mean (a) American Pad & Paper, Inc., a Delaware
corporation, The Moore Corporation Ltd., a Canadian corporation, The Standard
Register Company, an Ohio corporation, The Reynolds and Reynolds Company, an
Ohio corporation, Banta Corporation, a Wisconsin corporation, Mail-Well, Inc., a
Colorado corporation, Quebecor Inc., a Canadian corporation, Big Flower
Holdings, Inc., a Delaware corporation, World Color Press, Inc., a Delaware
corporation, R.R. Donnelly & Sons Company, a Delaware corporation, Consolidated
Graphics, Inc., a Texas corporation, and Ennis Business Forms, Inc., a Texas
corporation, (b) any other Person which is engaged in the business of
manufacturing or distributing consumable business supplies and information
management products, including paper and electronic business forms, office
supplies, labels and commercial and promotional printed materials, or (c) any
Person which at the time owns more than fifty percent (50%) of the Voting Stock
of any Person described in the foregoing clause (a) or clause (b) and in
connection therewith exercises control over management of a Person that is
engaged in the business of manufacturing and distributing consumable business
supplies or information management products, including paper and electronic
business forms, office supplies and labels, or commercial and promotional
printed materials, provided in any event that:
SCHEDULE B
(to Note Purchase Agreement)
<PAGE> 32
(i) the provision of investment advisory services by one
Person to a Plan which has been established or is maintained by another
Person which is a Competitor shall not cause such first Person to be
deemed a Competitor;
(ii) an Institutional Investor shall not be deemed a
Competitor unless such Institutional Investor owns or holds more than
50% of the Voting Stock of, and in connection therewith exercises
control over management of, a Person that is engaged in the business of
manufacturing and distributing consumable business supplies or
information management products, including paper and electronic
business forms, office supplies and labels, or commercial and
promotional printed materials;
(iii) an Institutional Investor shall not be deemed a
Competitor if such Institutional Investor is a pension plan which has
been established or is maintained by a Person which is a Competitor but
which is a regular investor in privately placed securities and such
pension plan has established procedures which will prevent Confidential
Information supplied to such pension plan by the Company from being
transmitted or otherwise made available to such Person unless such
pension plan has been established or is maintained by a Person which is
named in the foregoing clause (a), in which event such pension plan
shall be deemed a Competitor; and
(iv) an Institutional Investor that would otherwise be deemed
a Competitor pursuant to the foregoing provisions of this definition by
virtue of its ownership or control as a portfolio investment of the
equity securities of any Person primarily engaged in the business of
manufacturing and distributing consumable business supplies or
information management products, including paper and electronic
business forms, office supplies and labels, or commercial and
promotional printed materials, shall not be deemed a Competitor if such
Institutional Investor has established procedures which will prevent
Confidential Information supplied to such Institutional Investor by the
Company from being transmitted or otherwise made available to such
Person.
"Confidential Information" is defined in SECTION 15.
"Consolidated Total Capitalization" shall have the meaning specified
in the Indenture.
"Credit Facility" is defined in the First Supplemental Indenture.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default under the Indenture.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
B-2
<PAGE> 33
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under Section 414 of the Code.
"Event of Default" shall have the meaning assigned thereto in the
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"First Supplemental Indenture" is defined in SECTION 2.2.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any state,
municipality or other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Restricted Subsidiary conducts all or any part of its
business, or which asserts jurisdiction over any properties of
the Company or any Restricted Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government, including without limitation any federal, state or
municipal commission, board or other administrative agency or any other
public authority.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"Holder" means a Person in whose name a Note is registered, in the
register as such term is defined in Section 1.1 of the Indenture.
"Indebtedness" is defined in the Indenture.
"Indenture" is defined in SECTION 2.2.
B-3
<PAGE> 34
"Indenture Trustee" is defined in SECTION 2.2.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any Holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, (c) any broker or dealer registered under the
Exchange Act, and (d) any other Person which may be within the definition of
"qualified institutional buyer" as such term is used in Rule 144A promulgated
under the Securities Act, as from time to time in effect, promulgated under the
Securities Act.
"Lien" means any mortgage, pledge, security interest, encumbrance,
easement, lease, reservation, restriction, servitude, charge or similar right or
lien of any kind, including, without limitation, any conditional sale or other
title retention agreement, any lease in the nature thereof, any filing of, or
agreement to give, any financing statement under the Uniform Commercial Code of
any jurisdiction, and any defect or irregularity in record title.
"Make-Whole Amount" is defined in the First Supplemental Indenture.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement, the Notes and the
Indenture, or (c) the validity or enforceability of this Agreement, the Notes or
the Indenture.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Notes" is defined in SECTION 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"Original Indenture" is defined in SECTION 2.2.
"Other Agreements" is defined in SECTION 2.1.
"Other Purchasers" is defined in SECTION 2.1.
"Overdue Rate" means that rate of interest that is the greater of (i)
1% per annum above the rate of interest stated in the first paragraph of the
Notes of the applicable maturity and (ii) 1% over the rate of interest publicly
announced by Citibank, N.A., in New York, New York as its "base" or "prime"
rate.
B-4
<PAGE> 35
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, corporation, limited liability company,
association, partnership, joint venture, trust or unincorporated organization or
any Governmental Authority.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Prospectus" means the Prospectus Supplement and attached Prospectus,
dated January 15, 1999 and May 12, 1998, respectively, as filed with the
Commission pursuant to Rule 424(b) on January 15, 1999.
"Purchase Agreements" is defined in SECTION 2.1.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Registration Statement" means that certain Commission Registration
Statement on Form S-3 (file number 333-46807) first filed with the Commission on
February 29, 1998, as amended by Amendment No. 1 filed with the Commission on
April 10, 1998.
"Required Holders" means, at any time, the Holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Subsidiary" means any Subsidiary of the Company as of the
date of Closing and each Subsidiary thereafter created or acquired, unless
expressly excluded by resolution of the Board of Directors before, or within 120
days following, such creation or acquisition.
"Securities" is defined in the Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
B-5
<PAGE> 36
"7.26% Notes" is defined in SECTION 1.
"6.92% Notes" is defined in SECTION 1.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Unrestricted Subsidiary" means any Subsidiary which is not a
Restricted Subsidiary.
"Voting Stock" means "securities" of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
For purposes of this definition, "securities" shall have the same meaning as in
Section 2(1) of the Securities Act.
"Wholly-owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary all of the shares of voting Capital Stock and other voting equity
interests (except directors' qualifying shares) and other equity interests of
which are owned by the Company and/or the Company's other Wholly-owned
Restricted Subsidiaries at such time.
"Year 2000" means the year beginning January 1, 2000.
"Year 2000 Compliance" means programming of key software, tradeware,
telecommunications, physical plant and automated processees of the Company and
its Restricted Subsidiaries so that such software, tradeware,
telecommunications, physical plant and automated processees accurately recognize
the advent of Year 2000.
(b) Words and phrases not otherwise defined above or set forth in the
Section hereof identified in the definition of such defined term shall have the
meanings assigned thereto in the Indenture.
B-6
<PAGE> 37
FORM OF NAIC CERTIFICATE
YEAR 2000 DUE DILIGENCE NOTICE
As part of its credit assessment procedures for not-rated securities,
the Securities Valuation Office has an obligation to conduct due diligence on
the obligor of each security before it can assign the security a National
Association of Insurance Commissioners Designation. The Securities Valuation
Office has become increasingly aware in recent months of the need to assess a
company's Year 2000 preparedness as part of this due diligence. The Securities
Valuation Office has, therefore, drafted a series of questions relating to Year
2000 compliance to be answered by the issuers/obligors of all not-rated
securities filed with the Securities Valuation Office. Please include a response
to this questionnaire with each initial or annual update submission to the
Securities Valuation Office of securities not rated by an NRSRO. If a response
is not included as part of the submission, the filer will be contacted and asked
for the response before the submission can be assigned a National Association of
Insurance Commissioners Designation for the current year.
YEAR 2000 (Y2K) DUE DILIGENCE QUESTIONS
1. What is the company doing to prepare its internal computer systems
and software for the year 2000?
2. What is the company doing to prepare its internal operating systems
and equipment with embedded chip technology for the year 2000?
3. Will the year 2000 problem affect the company's products, services
and/or business activities (e.g., disruption of service or discontinuance of
product lines)?
4. Who in the company is responsible for directing its year 2000
efforts and what has been the Board of Directors' role in reviewing and
approving the company's year 2000 plan?
5. What is the company's schedule for fixing and testing its systems?
Please identify any third party or industry-wide testing in which the company
plans to participate.
6. If the company does not plan to do all its year 2000 work itself,
please identify whether any outside consultants or vendors have been or will be
employed to do all or part of the work. If the company plans to obtain a
certificate of year 2000 compliance from any outside organization, please
identify.
7. What has the company done to survey its vendors, suppliers, trading
partners, service providers or other third parties with whom it interacts to
ascertain what their status is with respect to year 2000 readiness?
SCHEDULE B
(to Note Purchase Agreement)
<PAGE> 38
8. What is the company's contingency plan if some or all of the
company's systems will not be remediated in time for the year 2000?
9. How do the company's costs to address the year 2000 problem affect
its bottom line? Do these costs have a material financial effect? Can I see
something in the company's recent reports or other public statements in which
the company discusses its approach to the year 2000 problem?
10. Even if the company does not believe that the costs or potential
effects of the year 2000 are material, can you tell me how much the year 2000
problem will cost the company?
11. Please identify any additional insurance the company has obtained,
including any directors and officers personal liability insurance, specifically
for the year 2000 problem?
12. If your company is a manufacturer or supplier of any hardware,
software or equipment systems, what are your concerns about the potential
liabilities associated with the company's products or services? What is your
best assessment of corporate exposure to legal actions arising from equipment or
software failures associated with the company's products or services?
<PAGE> 39
RESTRICTED SUBSIDIARIES OF THE COMPANY
AND OWNERSHIP OF RESTRICTED SUBSIDIARY STOCK
[SEE COPIES OF FORM 10-K, PART 2]
SCHEDULE 5.4
(to Note Purchase Agreement)
<PAGE> 40
SCHEDULE 5.5
FINANCIAL STATEMENTS
(1) Consolidated balance sheets as of July 31, 1997 and 1998.
(2) Consolidated statements of income, stockholders' equity and cash
flows for each of the three fiscal years in the period ended July 31, 1998.
<PAGE> 41
WALLACE COMPUTER SERVICES, INC.
SCHEDULE OF INDEBTEDNESS
AS OF __________
<PAGE> 42
EXHIBIT 1
FIRST SUPPLEMENTAL INDENTURE
SCHEDULE 5.13
(to Note Purchase Agreement)
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EXHIBIT 4.6(A)
FORM OF OPINION OF COUNSEL FOR THE COMPANY
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EXHIBIT 4.6(B)
FORM OF OPINION OF SPECIAL COUNSEL FOR THE PURCHASERS
