<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 25, 2000
Commission file number 1-5064
Jostens, Inc.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Minnesota 41-0343440
- ------------------------------------------------ ------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification number)
5501 Norman Center Drive, Minneapolis, Minnesota 55437
- ------------------------------------------------ ------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (952) 830-3300
<PAGE>
Item 1. Change in Control of Registrant
On December 27, 1999, Jostens, Inc. entered into a merger agreement
with Saturn Acquisition Corporation, an entity organized for the sole purpose of
effecting a merger on behalf of certain affiliates of Investcorp S.A. and other
investors. On May 10, 2000, Saturn Acquisition Corporation merged with and into
Jostens, with Jostens as the surviving corporation. As a result of the
transaction, and pursuant to the merger agreement, affiliates of Investcorp and
the other investors acquired approximately 92% of the post-merger common stock
of Jostens. The remaining 8% of the common stock was retained by existing
shareholders and five members of Jostens senior management. As a result of the
merger, Jostens shares will be de-listed from the New York Stock Exchange.
The merger was approved by a majority of Jostens' shareholders at a
special meeting held on May 9, 2000. Each share not retained by existing
shareholders, including the five members of Jostens senior management, was
converted into $25.25 in cash, representing in the aggregate, cash payments of
approximately $823.1 million. Holders of outstanding stock options of Jostens
converted their options into cash at $25.25 per underlying share (less
applicable exercise price) with aggregate payments of approximately $9.7
million.
In connection with the transaction, affiliates of Investcorp and the
other investors made cash common equity contributions of $208.7 million to
Saturn Acquisition Corporation, and Jostens obtained gross proceeds of $215.9
million through the issuance of 225,000 Units consisting of 12 3/4% Senior
Subordinated Notes due 2010 and warrants to purchase 425,060 shares of Jostens
common stock and $60.0 million through the issuance of 14.0% Preferred Stock
that is mandatorily redeemable in 2011 and warrants to purchase 531,325 shares
of Jostens common stock. In connection with the merger, Jostens also entered
into a new $645.0 million secured credit facility with Deutsche Bank Securities,
Inc., Chase Securities Inc., and Goldman Sachs Credit Partners L.P. as co-lead
arrangers, Bankers Trust Company as syndication agent, The Chase Manhattan Bank
as administration agent and Goldman Sachs Credit Partners L.P. as documentation
agent.
Item 7. Financial Statements and Exhibits
(a) Not Applicable
(b) Pro Forma Financial Information
JOSTENS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial
statements have been derived by the application of pro forma adjustments to our
historical consolidated financial statements.
The unaudited pro forma condensed consolidated statements of operations
for the periods presented give effect to the recapitalization as if it had
occurred on January 2, 1999 and exclude non-recurring items directly
attributable to the recapitalization. The unaudited pro forma condensed
consolidated balance sheet gives effect to the recapitalization as if it had
occurred on April 1, 2000. The adjustments are described in the accompanying
notes.
The unaudited pro forma adjustments are based upon available
information and certain assumptions that Jostens believes are reasonable. The
unaudited pro forma condensed consolidated statements of operations do not
purport to present what Jostens' results of operations would actually have been
had the recapitalization occurred on January 2, 1999, or to project Jostens'
results of operations for any future period. The unaudited pro forma condensed
consolidated balance sheet data does not purport to present what Jostens'
financial position actually would have been had the recapitalization occurred on
April 1, 2000, or to project Jostens' financial position at any future date. The
unaudited pro forma condensed consolidated financial statements should be read
in conjunction with our historical consolidated financial statements and notes
thereto filed with the Securities and Exchange Commission. The pro forma
adjustments were applied to the historical consolidated financial statements to
reflect and account for the merger as a recapitalization. Accordingly, the
historical basis of our assets and liabilities have not been impacted by the
merger.
2
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months Ended April 1, 2000
-----------------------------------------------
Pro Forma Pro Forma
Historical Adjustments (e) (f)
---------- ----------- ---------
(in millions, except share and per-share data)
<S> <C> <C> <C>
Net sales $174.6 $-- $174.6
Cost of products sold 66.6 -- 66.6
------ ------ ------
Gross profit 108.0 -- 108.0
Selling and administrative expenses 87.3 0.4 (a) 87.7
------ ------ ------
Operating income 20.7 (0.4) 20.3
Net interest expense 1.7 19.4 (b) 21.1
------ ------ ------
Income before income taxes 19.0 (19.8) (0.8)
Income taxes 7.7 (7.9)(c) (0.2)
------ ------ ------
Net income (loss) 11.3 (11.9) (0.6)
Dividends and accretion on redeemable preferred stock -- 2.7 (d) 2.7
------ ------ ------
Net income (loss) attributable to common shareholders $ 11.3 $(14.6) $ (3.3)
====== ====== ======
Ratio of earnings to combined fixed charges and
preferred stock dividend 9.4x (g)
Net income (loss) attributable to common shareholders
per share:
Basic $0.34 $(0.37)
Diluted $0.34 $(0.37)
Weighted average number of common shares used in per
share computations:
Basic 33,263,000 8,993,199
Diluted 33,451,000 8,993,199
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Statements of Operations.
3
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended January 1, 2000
-----------------------------------------------
Pro Forma Pro Forma
Historical Adjustments (e) (f)
---------- ----------- ---------
(in millions, except share and per-share data)
<S> <C> <C> <C>
Net sales $782.4 $ -- $782.4
Cost of products sold 349.7 -- 349.7
------ ------ ------
Gross profit 432.7 -- 432.7
Selling and administrative expenses 330.8 1.5 (a) 332.3
Special charge 20.2 -- 20.2
------ ------ ------
Operating income 81.7 (1.5) 80.2
Net interest expense 7.0 77.5 (b) 84.5
------ ------ ------
Income before income taxes 74.7 (79.0) (4.3)
Income taxes 31.5 (31.6) (c) (0.1)
------ ------ ------
Net income (loss) 43.2 (47.4) (4.2)
Dividends and accretion on redeemable preferred stock -- 10.1 (d) 10.1
------ ------ ------
Net income (loss) attributable to common shareholders $ 43.2 $(57.5) $(14.3)
====== ====== ======
Ratio of earnings to combined fixed charges and
preferred stock dividend 8.9x (g)
Net income (loss) attributable to common shareholders
per share:
Basic $1.27 $(1.59)
Diluted $1.27 $(1.59)
Weighted average number of common shares used in
per share computations:
Basic 34,004,000 8,993,199
Diluted 34,093,000 8,993,199
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Statements of Operations.
4
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions)
<TABLE>
<CAPTION>
Three Months
Ended Year Ended
April 1, 2000 January 1, 2000
------------- ---------------
<S> <C> <C>
(a) Reflects the amortization of prepaid management advisory and consulting
services fees that will be paid to Investcorp International Inc. The
fees will be amortized over the five-year term of the management
consulting agreement.
(b) Reflects the following:
Elimination of historical net interest expense including historical
amortization of debt issuance costs of retired debt $ (1.7) $ (7.0)
Interest on borrowings under the $150.0 million revolving credit
facility at an interest rate of LIBOR plus 3.00% (1) (2) 0.6 2.5
Interest on borrowings under the $150.0 million Tranche A term loan at
an interest rate of LIBOR plus 3.00% (2) 3.4 13.6
Interest on borrowings under the $345.0 million Tranche B term loan at
an interest rate of LIBOR plus 3.50% (2) 8.3 33.1
Interest on $225.0 million of senior subordinated notes at an interest
rate of 12.75% 7.2 28.7
Amortization of $19.8 million discount on notes over the ten-year term
of the senior subordinated notes 0.5 2.0
Amortization of debt issuance costs of $34.7 million associated with
the financings over the respective terms of the related indebtedness 1.1 4.6
----- -----
$19.4 $77.5
===== =====
(1) Due to the seasonal nature of our business, the borrowings under
the revolving credit facility will fluctuate throughout the year.
Based on an analysis of our historical working capital, interest
expense is calculated assuming a $20.0 million outstanding seasonal
balance plus a 0.50% fee on the unused portion.
(2) A 0.125% change in the interest rates on the amount of outstanding
indebtedness under the senior credit facility would change the
three month and annual pro forma interest expense by $0.2 million
and $0.6 million, respectively.
(c) Reflects the tax effect of the foregoing adjustments at our effective tax
rate of 40%.
Three Months
Ended Year Ended
April 1, 2000 January 1, 2000
------------- ---------------
(d) Reflects the following:
Dividends on the redeemable preferred stock calculated based on an
annual rate of 14.00% and a liquidation value of $60.0 million. $2.4 $ 8.8
Accretion of preferred stock discount of $14.0 million over the
eleven-year term of the redeemable preferred stock. 0.3 1.3
---- -----
$2.7 $10.1
==== =====
</TABLE>
5
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(CONTINUED)
(in millions)
<TABLE>
<CAPTION>
Three Months
Ended Year Ended
April 1, 2000 January 1, 2000
------------- ---------------
<S> <C> <C>
(e) The unaudited pro forma financial results exclude the effects of the
following items:
Cost savings related to employee terminations (1) $0.9 $7.1
Elimination of certain unprofitable businesses (2) -- 4.0
Excess rebates related to JDS program (3) -- 2.8
Costs associated with closing the Mexico manufacturing facility (4) -- 2.7
Excess labor costs associated with our Recognition segment (5) -- 1.7
(1) As part of the business refocusing that we announced in December
1999, we will eliminate approximately 100 full-time positions from
all levels of employment, primarily in corporate staff and
executive functions. For the three months ended April 1, 2000 and
the year ended January 1, 2000, the cost savings reflect the salary
and benefit costs associated with the employees identified for
termination, excluding those employees associated with the exiting
of our non-core business lines.
(2) As part of the business refocusing announced in December 1999, we
will exit some of our non-core business lines, primarily our college
alumni direct marketing business. The 1999 net cash losses
associated with these business lines was approximately $4.0
million.
(3) Due to a change in vendors, we incurred certain operational
difficulties in the administration of our JDS program in 1999. In
order to maintain favorable customer relationships with our
affected customer base, we processed approximately $2.8 million
incremental rebates in 1999.
(4) In connection with the closing of the Mexico manufacturing facility
during the first quarter of 1999, we incurred certain non-recurring
charges. These charges included, among other things, costs to
transfer equipment back to the United States, severance payments,
retention bonuses and the write-off of certain assets.
Additionally, certain employees in our Denton and Mexico
manufacturing facilities and their related costs were eliminated
when the Mexico facility closed.
(5) During 1999, we installed a new computer system for our Recognition
business. We encountered significant problems when the new system
was implemented in March. These system issues necessitated the
hiring of significant temporary labor that was required to properly
process orders, manufacture goods, and coordinate shipments. By the
fourth quarter of 1999, the system inefficiencies were corrected,
and the majority of this temporary labor cost has been eliminated.
These items have been excluded from the pro forma operating results
as they do not qualify as pro forma adjustments under Regulation
S-X promulgated under the Securities Act and constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1996.
(f) The unaudited pro forma condensed consolidated statements of operations
exclude the following non-recurring items that are directly
attributable to the merger. All of the following items will be recorded
as period costs at the time of the merger.
(1) $38.0 million of estimated fees and expenses to be incurred by
us in connection with the merger.
(2) $9.7 million compensation expense charge resulting from the
cancellation of outstanding stock options in exchange for cash
payments in connection with the merger, and related income tax
benefit of $3.9 million.
(3) $1.0 million compensation charge resulting from the
accelerated vesting of restricted stock in connection with the
merger, and related income tax benefit of $0.4 million.
(g) For purposes of this calculation "earnings" consist of income before
income taxes and fixed charges and "combined fixed charges and preferred
stock dividends" consist of interest, amortization of debt issuance
costs, the component of rent expense believed by management to be
representative of the interest factor thereon and the amount of pre-tax
earnings required to cover accretion on preferred stock dividends and
accretion of the preferred stock discount. On a pro forma basis for the
three months ended April 1, 2000 and year ended January 1, 2000,
earnings would have been inadequate to cover combined fixed charges and
the preferred stock dividend. The coverage deficiency for such periods
would have been $4.8 million and $21.2 million, respectively.
</TABLE>
6
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
As of April 1, 2000
--------------------------------------------------------
Pro Forma Pro
Historical Adjustments Forma
----------------- ----------------- -------------
(in millions)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 14.3 $ (9.8) $ 4.5
Accounts receivable, net 132.3 132.3
Inventories 109.6 109.6
Deferred income taxes 17.4 17.4
Salespersons overdrafts, net 24.2 24.2
Prepaid expenses and other current assets 9.8 9.8
------ ------- -------
Total current assets 307.6 (9.8) 297.8
Property, plant and equipment, net 80.8 80.8
Goodwill and other intangible assets, net 18.6 18.6
Other assets 18.9 42.2 (b) 61.1
------ ------- -------
Total assets $425.9 $ 32.4 $ 458.3
====== ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 24.5 $ -- $ 24.5
Accrued liabilities 67.5 67.5
Customer deposits 155.8 155.8
Income taxes payable 22.7 22.7
Other accrued liabilities 27.0 27.0
Short-term debt, including current maturities of long-term debt 75.0 (75.0) (c) --
------ ------- -------
Total current liabilities 372.5 (75.0) 297.5
Long-term debt net of current maturities -- 700.2 (d) 700.2
Other noncurrent liabilities 12.6 (3.6) (e) 9.0
------ ------- -------
Total liabilities 385.1 621.6 1,006.7
Redeemable preferred stock -- 46.0 (f) 46.0
Shareholders' equity (deficit):
Common shares 11.1 (10.9) (g) 0.2
Retained earnings (deficit) 35.4 (624.3) (g) (588.9)
Accumulated other comprehensive loss (5.7) (5.7)
------ ------- -------
40.8 (635.2) (594.4)
------ ------- -------
Total liabilities and shareholders' equity (deficit) $425.9 $ 32.4 $ 458.3
====== ======= =======
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Balance Sheet.
7
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
<S> <C>
(a) Reflects the following sources and uses of funds related to the
financing of the merger:
Total sources:
Borrowings under the new senior secured credit facility (1) $ 495.0
Cash on hand 9.8
Proceeds of the units (2) 215.9
Proceeds from issuance of redeemable preferred stock (3) 60.0
Proceeds from issuance of 8,265,075 shares of common stock at $25.25 per share (4) 208.7
-------
$ 989.4
=======
Total uses:
Payment for 32,610,835 existing shares of Jostens common stock at $25.25 per share (4) $ 823.4
Refinancing of existing short-term debt 75.0
Repayment of existing industrial revenue bonds 3.6
Payment for 2,948,531 outstanding options at a weighted average exercise price of
$21.96 per share 9.7
Estimated transaction fees and expenses 77.7
-------
$ 989.4
=======
(b) Reflects the following:
Estimated debt issuance costs related to the transaction (5) $ 34.7
Management fees prepaid to Investcorp International Inc. as part of the transaction 7.5
-------
$ 42.2
=======
(c) Reflects the refinancing of the existing short-term debt.
(d) Reflects the following:
Borrowings under the new senior secured credit facility (1) $ 495.0
Issuance of the senior subordinated notes (2) 205.2
-------
$ 700.2
=======
(e) Reflects the repayment of the existing industrial revenue bonds.
(f) Reflects the issuance of redeemable preferred stock (3)
(g) Reflects the following:
Issuance of 8,265,075 common shares at $25.25 per share (4) $ 208.7
Issuance of warrants (2) (3) 24.7
Payment for 32,610,835 existing common shares - par value (4) (10.9)
Payment for 32,610,835 existing common shares - additional paid-in capital (4) (812.5)
Payment for 2,948,531 outstanding options at a weighted average exercise price of
$21.96 per share (9.7)
Loans to shareholders (6) (1.8)
Estimated transaction fees and expenses (38.0)
Tax benefit to certain transaction costs 4.3
-------
$(635.2)
=======
</TABLE>
8
<PAGE>
JOSTENS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
(in millions)
(1) We also expect to have additional available borrowing under a $150.0
million revolving credit facility, none of which will be drawn at the
time of closing.
(2) Proceeds to Jostens from the issuance of the units will total $215.9
million. Of this amount, $205.2 million will be ascribed to the senior
subordinated notes and $10.7 million will be ascribed to the warrants.
(3) Proceeds to Jostens from the issuance of the redeemable preferred stock
and detachable warrants will total $60.0 million. Based on a discounted
cash flow analysis, of the $60.0 million in total proceeds, $46.0
million will be ascribed to the redeemable preferred stock and $14.0
million will be ascribed to the warrants.
(4) At April 1, 2000 we had 33,338,959 common shares outstanding and
immediately following the merger there will be 8,993,199 shares
outstanding. The number of shares outstanding after the merger will be
comprised of 8,265,075 shares issued to affiliates of Investcorp and
its co-investors, 188,532 share to be retained by five members of
Jostens senior management and 539,592 shares to be retained by other
public shareholders.
(5) Includes the approximately $12.7 million advisory fee which will be
paid to Investcorp International Inc. in connection with obtaining the
financing for the merger.
(6) At the effective time of the merger, we expect to extend loans totaling
approximately $1.8 million to the five members of Jostens senior
management as part of our stock loan program. The five members of
Jostens senior management are expected to use these proceeds to repay
existing loans to a third party lender at the effective time.
(c) Exhibits
4.1 Indenture, dated as of May 10, 2000, including
therein the form of Note, between Jostens, Inc. and
The Bank of New York, as Trustee, providing for 12
3/4% Senior Subordinated Notes due 2010.
4.2 Registration Rights Agreement, dated as of May 10,
2000, between Jostens, Inc. and American Yearbook
Company, Inc. as Issuers, and Deutsche Bank
Securities Inc., UBS Warburg LLC and Goldman, Sachs &
Co. as Initial Purchasers.
4.3 Certificate of Designation, effective May 10, 2000,
of the Powers, Preferences and Rights of the 14%
Senior Redeemable Payment-In-Kind Preferred Stock,
and Qualifications, Limitations and Restrictions
Thereof.
4.4 Warrant Agreement, dated May 10, 2000, including
therein the form of Warrant, between Jostens, Inc.
and The Bank of New York, as Warrant Agent.
4.5 Warrant Registration Rights Agreement, dated May 10,
2000, between Jostens, Inc. and Deutsche Bank
Securities Inc., UBS Warburg LLC and Goldman, Sachs &
Co.
4.6 Purchase Agreement, dated May 10, 2000, for 14%
Senior Redeemable Payment In Kind Preferred Stock
with Warrants to Purchase Shares of Class E Common
Stock, between Jostens, Inc. and DB Capital
Investors, L.P.
4.7 Warrant Agreement, dated May 10, 2000, including
therein the form of Warrant, between Jostens, Inc.
and The Bank of New York, as Warrant Agent.
9
<PAGE>
4.8 Preferred Stock Registration Rights Agreement, dated
May 10, 2000, between Jostens, Inc. and DB Capital
Investors, L.P.
4.9 Shareholder Agreement, dated May 10, 2000, between
Jostens, Inc., and DB Capital Investors, L.P. and
Certain Other Holders of Stock of Jostens, Inc.
4.10 Shareholder Agreement, dated May 10, 2000, between
Jostens, Inc., and First Union Leveraged Capital, LLC
and Certain Other Holders of Stock of Jostens, Inc.
4.11 Common Equity Registration Rights Agreement, dated
May 10, 2000, between Jostens, Inc., and Certain
Holders as Defined Therein.
4.12 Purchase Agreement dated May 5, 2000, for 225,000
Units Consisting of $225,000,000 12 3/4% Senior
Subordinated Notes due 2010 and Warrants to Purchase
425,060 Shares of Class E Common Stock, between
Jostens, Inc. and American Yearbook Company, and
Deutsche Bank Securities Inc., UBS Warburg LLC and
Goldman, Sachs & Co.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
JOSTENS, INC.
Registrant
Date: May 25, 2000 By /s/ William N. Priesmeyer
-----------------------------------
William N. Priesmeyer
Senior Vice President and Chief
Financial Officer
(Chief Accounting Officer)
11
<PAGE>
EXHIBIT 4.1
JOSTENS, INC.
12 3/4 % Senior Subordinated Notes due 2010
INDENTURE
Dated as of May 10, 2000
THE BANK OF NEW YORK
Trustee
<PAGE>
TABLE OF CONTENTS
ARTICLE I Definitions and Incorporation by Reference.........................1
SECTION 1.01. Definitions..............................................1
SECTION 1.02. Other Definitions.......................................22
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.......23
SECTION 1.04. Rules of Construction...................................24
ARTICLE II The Securities...................................................24
SECTION 2.01. Form and Dating.........................................24
SECTION 2.02. Execution and Authentication............................26
SECTION 2.03. Registrar and Paying Agent..............................26
SECTION 2.04. Paying Agent to Hold Money in Trust.....................27
SECTION 2.05. Securityholder Lists....................................28
SECTION 2.06. Transfer and Exchange...................................28
SECTION 2.07. Replacement Securities..................................29
SECTION 2.08. Outstanding Securities..................................29
SECTION 2.09. Temporary Securities....................................30
SECTION 2.10. Cancellation............................................30
SECTION 2.11. Defaulted Interest......................................30
SECTION 2.12. CUSIP Numbers...........................................30
SECTION 2.13. Book-Entry Provisions for Global Securities.............31
SECTION 2.14. Special Transfer Provisions.............................31
ARTICLE III Redemption......................................................33
SECTION 3.01. Notices to Trustee......................................33
SECTION 3.02. Selection...............................................34
SECTION 3.03. Notice..................................................34
SECTION 3.04. Effect of Notice of Redemption..........................35
SECTION 3.05. Deposit of Redemption Price.............................35
SECTION 3.06. Securities Redeemed in Part.............................35
SECTION 3.07. Optional Redemption.....................................35
SECTION 3.08. No Sinking Fund.........................................36
SECTION 3.09. Repurchase Offers.......................................36
ARTICLE IV Covenants........................................................39
SECTION 4.01. Payment of Securities...................................39
SECTION 4.02. Reports.................................................40
SECTION 4.03. Incurrence of Debt and Issuance of Preferred Stock......40
SECTION 4.04. Restricted Payments.....................................42
SECTION 4.05. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.................................45
SECTION 4.06. Asset Sales.............................................47
i
<PAGE>
SECTION 4.07. Transactions with Affiliates............................48
SECTION 4.08. Change of Control.......................................49
SECTION 4.09. Compliance Certificate..................................50
SECTION 4.10. Limitations on Designations of Unrestricted
Subsidiaries............................................50
SECTION 4.11. Liens...................................................51
SECTION 4.12. Additional Security Guarantees..........................51
SECTION 4.13. Business Activities.....................................51
SECTION 4.14. No Senior Subordinated Debt.............................51
SECTION 4.15. Corporate Existence.....................................52
ARTICLE V Successor Company.................................................52
SECTION 5.01. Merger, Consolidation or Sale of All or
Substantially All Assets of the Company.................52
SECTION 5.02. Merger, Consolidation or Sale of All or
Substantially All Assets of a Guarantor.................53
ARTICLE VI Defaults and Remedies............................................54
SECTION 6.01. Events of Default and Remedies..........................54
SECTION 6.02. Acceleration............................................56
SECTION 6.03. Other Remedies..........................................56
SECTION 6.04. Waiver of Past Defaults.................................56
SECTION 6.05. Control by Majority.....................................57
SECTION 6.06. Limitation on Suits.....................................57
SECTION 6.07. Rights of Holders to Receive Payment....................57
SECTION 6.08. Collection Suit by Trustee..............................57
SECTION 6.09. Trustee May File Proofs of Claim........................58
SECTION 6.10. Priorities..............................................58
SECTION 6.11. Undertaking for Costs...................................58
SECTION 6.12. Waiver of Stay or Extension Laws........................58
ARTICLE VII Trustee.........................................................59
SECTION 7.01. Duties of Trustee.......................................59
SECTION 7.02. Rights of Trustee.......................................60
SECTION 7.03. Individual Rights of Trustee............................61
SECTION 7.04. Trustee's Disclaimer....................................61
SECTION 7.05. Notice of Defaults......................................61
SECTION 7.06. Reports by Trustee to Holders...........................62
SECTION 7.07. Compensation and Indemnity..............................62
SECTION 7.08. Replacement of Trustee..................................63
SECTION 7.09. Successor Trustee by Merger.............................64
SECTION 7.10. Eligibility; Disqualification...........................64
SECTION 7.11. Preferential Collection of Claims Against Company.......64
ii
<PAGE>
ARTICLE VIII Discharge of Indenture; Defeasance.............................65
SECTION 8.01. Legal Defeasance and Covenant Defeasance................65
SECTION 8.02. Conditions to Legal or Covenant Defeasance..............66
SECTION 8.03. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions................67
SECTION 8.04. Repayment to Company....................................67
SECTION 8.05. Reinstatement...........................................68
SECTION 8.06. Satisfaction and Discharge of Indenture.................68
ARTICLE IX Amendments.......................................................69
SECTION 9.01. Without Consent of Holders..............................69
SECTION 9.02. With Consent of Holders.................................70
SECTION 9.03. Compliance with Trust Indenture Act.....................71
SECTION 9.04. Revocation and Effect of Consents and Waivers...........71
SECTION 9.05. Notation on or Exchange of Securities...................71
SECTION 9.06. Trustee to Sign Amendments..............................72
SECTION 9.07. Payment for Consent.....................................72
ARTICLE X Subordination.....................................................72
SECTION 10.01. Agreement To Subordinate...............................72
SECTION 10.02. Liquidation, Dissolution, Bankruptcy...................72
SECTION 10.03. Default on Senior Debt.................................73
SECTION 10.04. Acceleration of Payment of Securities..................73
SECTION 10.05. When Distribution Must Be Paid Over....................73
SECTION 10.06. Subrogation............................................73
SECTION 10.07. Relative Rights........................................74
SECTION 10.08. Subordination May Not Be Impaired by Company...........74
SECTION 10.09. Rights of Trustee and Paying Agent.....................74
SECTION 10.10. Distribution or Notice to Representative...............74
SECTION 10.11. Article X Not to Prevent Events of Default or Limit
Right to Accelerate....................................74
SECTION 10.12. Trust Moneys Not Subordinated..........................75
SECTION 10.13. Trustee Entitled To Rely...............................75
SECTION 10.14. Trustee To Effectuate Subordination....................75
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt.......75
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
Provisions.............................................76
SECTION 10.17. Trustee's Compensation Not Prejudiced..................76
SECTION 10.18. Payments May Be Paid Prior to Dissolution..............76
ARTICLE XI Security Guarantees..............................................76
SECTION 11.01. Security Guarantees....................................76
SECTION 11.02. Limitation on Liability; Release.......................78
SECTION 11.03. Successors and Assigns.................................79
iii
<PAGE>
SECTION 11.04. No Waiver..............................................79
SECTION 11.05. Modification...........................................79
ARTICLE XII Subordination of the Security Guarantees........................79
SECTION 12.01. Agreement To Subordinate...............................79
SECTION 12.02. Liquidation, Dissolution, Bankruptcy...................79
SECTION 12.03. Default on Senior Debt of a Guarantor..................80
SECTION 12.04. Demand for Payment.....................................80
SECTION 12.05. When Distribution Must Be Paid Over....................80
SECTION 12.06. Subrogation............................................81
SECTION 12.07. Relative Rights........................................81
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor.......81
SECTION 12.09. Rights of Trustee and Paying Agent.....................81
SECTION 12.10. Distribution or Notice to Representative...............82
SECTION 12.11. Article XII Not to Prevent Events of Default or
Limit Right to Accelerate..............................82
SECTION 12.12. Trustee Entitled To Rely...............................82
SECTION 12.13. Trustee To Effectuate Subordination....................82
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of
a Guarantor............................................82
SECTION 12.15. Reliance by Holders of Senior Debt of a Guarantor
on Subordination Provisions............................83
SECTION 12.16. Payments May Be Paid Prior to Dissolution..............83
ARTICLE XIII Miscellaneous..................................................83
SECTION 13.01. Trust Indenture Act Controls...........................83
SECTION 13.02. Notices................................................83
SECTION 13.03. Communication by Holders with Other Holders............84
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.....84
SECTION 13.05. Statements Required in Certificate or Opinion..........85
SECTION 13.06. When Securities Disregarded............................85
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar...........85
SECTION 13.08. Legal Holidays.........................................85
SECTION 13.09. GOVERNING LAW..........................................85
SECTION 13.10. No Recourse Against Others.............................86
SECTION 13.11. Successors.............................................86
SECTION 13.12. Multiple Originals.....................................86
SECTION 13.13. Table of Contents; Headings............................86
SECTION 13.14. Severability...........................................86
SECTION 13.15. No Adverse Interpretation of Other Agreements..........86
iv
<PAGE>
CROSS-REFERENCE TABLE
---------------------
TIA Section Indenture Section
----------- -----------------
310(a)(1)..........................................................7.10
(a)(2).............................................................7.10
(a)(3)..............................................................N/A
(a)(4)..............................................................N/A
(b)..........................................................7.08; 7.10
(c).................................................................N/A
311(a).............................................................7.11
(b)................................................................7.11
(c).................................................................N/A
312(a).............................................................2.05
(b)...............................................................13.03
(c)...............................................................13.03
313(a).............................................................7.06
(b)(1)..............................................................N/A
(b)(2).............................................................7.06
(c)...............................................................13.02
(d)................................................................7.06
314(a).......................................................4.02; 4.09
(b).................................................................N/A
(c)(1)............................................................13.04
(c)(2)............................................................13.04
(c)(3)............................................................13.04
(d).................................................................N/A
(e)...............................................................13.05
(f).................................................................N/A
315(a).............................................................7.01
(b).........................................................7.05; 13.02
(c)................................................................7.01
(d)................................................................7.01
(e)................................................................6.11
316(a)(last sentence).............................................13.06
(a)(1)(A)..........................................................6.05
(a)(1)(B)..........................................................6.04
(a)(2)..............................................................N/A
(b)................................................................6.07
317(a)(1)..........................................................6.08
(a)(2).............................................................6.09
(b)................................................................2.04
318(a)............................................................13.01
N/A means Not Applicable
----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
<PAGE>
INDENTURE dated as of May 10, 2000, among JOSTENS, INC., a Minnesota
corporation (the "Company"), AMERICAN YEARBOOK COMPANY, INC., a Kansas
corporation, as guarantor (the "Initial Guarantor"), and THE BANK OF NEW YORK, a
New York banking corporation (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of (i) the Company's 12 3/4 %
Senior Subordinated Notes due 2010 issued on the date hereof, (ii) any
Additional Securities (as defined herein) that may be issued on any other Issue
Date (all such Securities in clauses (i) and (ii) being referred to collectively
as the "Initial Securities"), (iii) if and when issued as provided in a
Registration Rights Agreement of the Company's 12 3/4 % Senior Subordinated
Notes due 2010 issued in a Registered Exchange Offer (as defined below) in
exchange for any Initial Securities (the "Exchange Securities") and (iv), if and
when issued as provided in a Registration Rights Agreement, the Private Exchange
Securities (as defined) issued in a Private Exchange (as defined) (the "Private
Exchange Securities," and together with the Initial Securities and any Exchange
Securities issued hereunder, the "Securities"). Except as otherwise provided
herein, the Securities will be limited to $350,000,000 in aggregate principal
amount outstanding, of which $225,000,000 in aggregate principal amount will be
initially issued on the date hereof. Subject to the conditions set forth herein,
the Company may issue up to an additional $125,000,000 aggregate principal
amount of Securities.
ARTICLE I
Definitions and Incorporation by Reference
------------------------------------------
SECTION 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person, (i) Debt
of any other Person existing at the time such other Person is merged with or
into or became a Restricted Subsidiary of such specified Person, including Debt
incurred in connection with, or in contemplation of, such other Person's merging
with or into or becoming a Restricted Subsidiary of such specified Person and
(ii) Debt secured by a Lien encumbering any asset acquired by such specified
Person.
"Additional Securities" shall mean up to $125,000,000 in aggregate
principal amount of Initial Securities initially issued subsequent to the date
hereof pursuant to Article II and in compliance with Section 4.03.
"Affiliate" of any specified Person means (i) any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person, (ii) any other Person that owns,
directly or indirectly, 5% or more of such specified Person's Voting Stock or
(iii) any Person who is a director or officer (a) of such Person, (b) of any
Subsidiary of such Person or (c) of any Person described in clause (i) or (ii)
above. For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the
<PAGE>
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.
"Applicable Premium" means, with respect to a Security at any
redemption date, the greater of (i) 1.0% of the principal amount of such
Security or (ii) the excess of (A) the present value at such time of (1) the
redemption price of such Security at May1, 2005 (such redemption price being set
forth in the tables in Section 3.07) plus (2) all required interest payments due
on such Security through May1, 2005 (excluding accrued but unpaid interest),
computed using a discount rate equal to the Treasury Rate plus 50 basis points,
over (B) the principal amount of such Security, if greater.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition
of any assets or rights (including by way of a sale and leaseback) (provided
that the sale, lease, conveyance or other disposition of all or substantially
all of the assets of the Company and its Restricted Subsidiaries taken as a
whole will be governed by Section 5.01 or 5.02 and not by Section 4.06), and
(ii) the issue or sale by the Company or any of its Restricted Subsidiaries of
Equity Interests of any of the Company's Subsidiaries (other than director's
qualifying shares), in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of 1.0% of Total Assets or (b) for Net Proceeds in excess
of 1.0% of Total Assets. Notwithstanding the foregoing, (1) the following will
not be Asset Sales: (i) a transfer of assets or an issuance of Equity Interests
by a Restricted Subsidiary to the Company or to another Restricted Subsidiary or
a transfer of assets by the Company to a Restricted Subsidiary, (ii) a
Restricted Payment or Permitted Investment that is permitted by Section 4.04
(including any formation of or contribution of assets to a Subsidiary or joint
venture), (iii) leases or subleases to third parties, of real property owned in
fee or leased by the Company or its Subsidiaries or a disposition of a lease of
real property, in each case, in the ordinary course of business, (iv) any
disposition of property or assets (including inventory, accounts receivable and
licensing agreements) of the Company or any of its Subsidiaries in the ordinary
course of business, or that in the reasonable judgment of the Company, have
become uneconomic, obsolete or worn out, (v) the disposition of Cash Equivalents
or cash, and (vi) sales of accounts or other receivables and related assets (or
a fractional undivided interest therein) for the fair market value thereof, in a
Qualified Receivables Transaction.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person, or (except if used in the definition of "Change of
Control") any authorized committee of the Board of Directors of such Person.
"Borrowing Base" means, as of any date, an amount equal to the sum of
(i) 85% of the aggregate book value of all accounts receivable of the Company
and its Restricted Subsidiaries and (ii) 60% of the aggregate book value of all
inventory owned by the Company and its Restricted Subsidiaries, all calculated
on a consolidated basis and in accordance with GAAP. To the extent that
information is not available as to the amount of accounts receivable or
inventory as of a specific date, the Company shall use the most recent available
information for purposes of calculating the Borrowing Base.
"Business Day" means a day other than a Saturday, Sunday or other day
on which banking institutions in New York State are authorized or required by
law to close.
2
<PAGE>
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iii) in
the case of an association or other business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
stock.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States government or any agency or
instrumentality thereof, (ii) certificates of deposit and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any commercial bank or trust company having capital
and surplus in excess of $300 million, (iii) repurchase obligations with a term
of not more than seven days for underlying securities of the types described in
clauses (i) and (ii) above entered into with any financial institution meeting
the qualifications specified in clause (ii) above, (iv) commercial paper having
the highest rating obtainable from Moody's Investors Service, Inc. ("Moody's")
or Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies,
Inc. ("S&P") and in each case maturing within one year after the date of
acquisition, (v) readily marketable direct obligations issued by any state of
the United States of America or any political subdivision thereof having one of
the two highest rating categories obtainable from either Moody's or S&P, (vi)
Debt with a rating of "A" or higher from S&P or "A2" or higher from Moody's, and
(vii) investment funds investing at least 95% of their assets in securities of
the types described in clauses (i) through (iv) above.
"Change of Control" means the occurrence of any of the following
events:
(i) prior to the first public offering after the Closing
Date of Voting Stock of the Company, the Initial Control Group ceases
to be the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of more than 50% of the
total voting power of the Voting Stock of the Company, whether as a
result of the issuance of securities of the Company, any merger,
consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities by the Initial Control Group or
otherwise (for purposes of this clause (i) and clause (ii) below, the
Initial Control Group shall be deemed to beneficially own any Voting
Stock of an entity (the "specified entity") held by any other entity
(the "parent entity") so long as the Initial Control Group beneficially
owns (as so defined), directly or indirectly, in the aggregate a
majority of the voting power of the Voting Stock of the parent entity);
(ii) following the first public offering after the Closing
Date of Voting Stock of the Company, (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), other than one
or more members of the Initial Control Group, is or becomes the
beneficial owner (as defined in clause (i) above directly or
indirectly, of more than 40% of the total voting power of the Voting
Stock of the Company, and (B) the Initial Control Group "beneficially
owns" (as defined in clause (i) above), directly or indirectly, in the
aggregate a lesser percentage of the total voting
3
<PAGE>
power of the Voting Stock of the Company, than such other person and
does not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of the Company (for purposes of this clause (ii), such other
person shall be deemed to beneficially own any Voting Stock of a
specified entity held by a parent entity, if such other person
"beneficially owns" (as defined in clause (i) above), directly or
indirectly, in the aggregate more than 40% of the voting power of the
Voting Stock of such parent entity and the Initial Control Group
"beneficially owns" (as defined in clause (i) above), directly or
indirectly, in the aggregate a lesser percentage of the voting power of
the Voting Stock of such parent entity and does not have the right or
ability by voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors of such parent
entity); or
(iii) at any time after the first public offering of common
stock of the Company, any person other than the Initial Control Group
(or their designated Board of Directors), (A)(I) nominates one or more
individuals for election to the Board of Directors of the Company and
(II) solicits proxies, authorizations or consents in connection
therewith and (B) such number of nominees elected to serve on the Board
of Directors in such election and all previous elections after the
Closing Date represents a majority of the Board of Directors of the
Company following such election.
"Closing Date" shall mean May 10, 2000.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commodity Hedging Agreements" means any futures contract or other
similar agreement or arrangement designed to protect the Company or any
Restricted Subsidiary against fluctuations in commodities prices.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period (A) plus, to
the extent deducted in computing such Consolidated Net Income, (i) Consolidated
Interest Expense and the amortization of debt issuance costs, commissions, fees
and expenses of such Person and its Restricted Subsidiaries for such period,
(ii) provision for taxes based on income or profits (including franchise taxes)
of such Person and its Restricted Subsidiaries for such period, (iii)
depreciation and amortization expense, including amortization of inventory
write-up under APB 16, amortization of intangibles (including goodwill and the
non-cash costs of Interest Rate Agreements, Commodity Hedging Agreements or
Currency Agreements, license agreements and non-competition agreements),
amortization of management fees, non-cash amortization of Capital Lease
Obligations, and organization costs, (iv) expenses and charges related to any
equity offering or incurrence of Debt permitted to be incurred by this Indenture
(including any such expenses or charges relating to the Recapitalization), (v)
the amount of any restructuring or other type of special charge or reserve, (vi)
unrealized gains and losses from hedging, foreign currency or commodities
translations and transactions, (vii) expenses consisting of internal
4
<PAGE>
software development costs that are expensed during the period but could have
been capitalized in accordance with GAAP, (viii) any write-downs, write-offs,
and other non-cash charges, items and expenses, (ix) the amount of any expense
relating to any minority interest of Restricted Subsidiaries, and (x) costs of
surety bonds in connection with financing activities, and (B) minus any cash
payment for which a reserve or charge of the kind described in clause (v),
(viii) or (ix) above was taken previously during such period.
"Consolidated Coverage Ratio" means with respect to any Person, the
ratio of the Consolidated Cash Flow of such Person and its Restricted
Subsidiaries for the four full fiscal quarters ending on or prior to the date
the transaction giving rise to the need to calculate the Consolidate Coverage
Ratio (the "Calculation Date") for which financial statements are available to
the Consolidated Interest Expense of such Person and its Restricted Subsidiaries
for such period. In the event that the Company or any of its Restricted
Subsidiaries incurs, assumes, Guarantees or redeems any Debt (other than working
capital borrowings) or issues or redeems Preferred Stock subsequent to the
commencement of the period for which the Consolidated Coverage Ratio is being
calculated but prior to Calculation Date, then the Consolidated Coverage Ratio
shall be calculated giving pro forma effect to such incurrence, assumption,
Guarantee or redemption of Debt, or such issuance or redemption of Preferred
Stock, as if the same had occurred at the beginning of the applicable
four-quarter reference period.
For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers and consolidations that have been made by
the Company or any of its Restricted Subsidiaries during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date, and discontinued operations determined in accordance with GAAP
on or prior to the Calculation Date, shall be given effect on a pro forma basis
assuming that all such Investments, acquisitions, dispositions, mergers and
consolidations or discontinued operations (and the reduction or increase of any
associated Consolidated Interest Expense, and the change in Consolidated Cash
Flow, resulting therefrom, including because of Pro Forma Cost Savings) had
occurred on the first day of the four-quarter reference period. If since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Investment, acquisition,
disposition, merger or consolidation or determined a discontinued operation,
that would have required adjustment pursuant to this definition, then the
Consolidated Coverage Ratio shall be calculated giving pro forma effect thereto
for such period as if such Investment, acquisition, disposition, merger or
consolidation or discontinued operations had occurred at the beginning of the
applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a financial or accounting officer of the Company. If any Debt to which pro
forma effect is given bears interest at a floating rate, the interest expense on
such Debt shall be calculated as if the rate in effect on the Calculation Date
had been the applicable interest rate for the entire period (taking into account
any Interest Rate Agreement in effect on the Calculation Date). Interest on a
Capital Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of the
Company to be the rate of interest implicit in such Capital Lease Obligation in
accordance with GAAP. Interest on Debt that may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate,
5
<PAGE>
or other rate, shall be deemed to have been based upon the rate actually chosen,
or, if none, then based upon such optional rate chosen as the Company may
designate.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication, of (i) the consolidated net interest
expense of such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including amortization of original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings or any Qualified
Receivables Transaction, and net payments (if any) pursuant to Hedging
Obligations relating to Interest Rate Agreements or Currency Agreements with
respect to Debt, excluding, however (a) amortization of debt issuance costs,
commissions, fees and expenses and (b) customary commitment, administrative and
transaction fees and charges), (ii) dividends paid in respect of any
Disqualified Stock of the Company or any Restricted Subsidiary, or cash
dividends paid in respect of any Preferred Stock of a Restricted Subsidiary of
the Company held by Persons other than the Company or a Subsidiary and (iii)
commissions, discounts and other fees and charges incurred in connection with a
Qualified Receivables Transaction of the Company or any Restricted Subsidiary,
in each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary of
such Person and the net losses of any such Person shall only be included to the
extent funded with cash or property from the Company or a Restricted Subsidiary,
(ii) the Net Income of any Restricted Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been obtained)
or, directly or indirectly, prohibited by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders unless such restriction with respect to the payment of dividends
has been permanently waived, (iii) except for purposes of calculating the
Consolidated Coverage Ratio, the Net Income of any Person acquired in a pooling
of interests transaction for any period prior to the date of such acquisition
shall be excluded, (iv) the cumulative effect of a change in accounting
principles shall be excluded (effected either through cumulative effect
adjustment or a retroactive application, in each case, in accordance with GAAP),
(v) to the extent deducted in determining Net Income, the fees, expenses and
other costs incurred in connection with the Recapitalization, including payments
to management contemplated by the Recapitalization Agreement or in connection
with the Company's transition to new ownership, in each case, to the extent that
such fee, expense, cost or payment was disclosed in the Offering Memorandum,
shall be excluded, and (vi) with respect to periods prior to the Closing Date,
Consolidated Net Income shall include (without duplication) all adjustments
relating to reductions in costs related to employee terminations, elimination of
certain unprofitable businesses, excess rebates related to the Company's JDS
program, closing the Mexico manufacturing facility, excess labor costs
6
<PAGE>
associated with the recognition segment and other items in each case of the type
reflected in the calculation of Adjusted EBITDA set forth in footnote 5 to
"Summary Consolidated Historical and Unaudited Pro Forma Financial Data" in the
Offering Memorandum. To the extent that all employee terminations referred to
above have not been completed before the Closing Date, such costs shall be added
back to Consolidated Net Income in periods after the Closing Date; provided
however, that if Consolidated Net Income is being calculated after September 30,
2000, the expected cost savings of such employee terminations with respect to
employees that have not been terminated prior to the date of such calculation
shall not be added back to Consolidated Net Income.
"Credit Facilities" means, with respect to the Company and its
Restricted Subsidiaries, one or more unsubordinated debt facilities (including
the New Credit Facility) or commercial paper facilities with banks, insurance
companies or other institutional lenders providing for unsubordinated revolving
credit loans, unsubordinated term loans, unsubordinated notes, factoring or
other receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from or issue securities
to such lenders against such receivables) or unsubordinated letters of credit or
other unsubordinated credit facilities, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement to which the Company or any
Restricted Subsidiary is a party or of which it is a beneficiary.
"Debt" means, with respect to any Person (without duplication): (a) any
Debt of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) of banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property, which purchase price is due more than six
months after the date of placing such property in final service or taking final
delivery thereof, or representing any Hedging Obligations, except any such
balance that constitutes an accrued expense or trade payable, if and to the
extent any of the foregoing Debt (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP; (b) all Debt under clause (a) of other Persons
secured by a Lien on any asset of such Person (whether or not such Debt is
assumed by such Person) provided that the amount of Debt of such Person shall be
the lesser of: (a) the fair market value of such asset at such date of
determination; and (b) the amount of such Debt of such other Persons, and (c) to
the extent not otherwise included, the Guarantee by such Person of any Debt
under clause (a) of any other Person; provided, however, that the Debt shall not
include: (i) obligations and liabilities in respect of synthetic lease
facilities that are accounted for as operating leases in accordance with GAAP
(including Guarantees of loans then outstanding by the lenders under any such
facility to the lessor thereunder); (ii) obligations of the Company or any of
its Restricted Subsidiaries arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, assets or a Subsidiary, other than
guarantees of Debt incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such acquisition;
provided, however,
7
<PAGE>
that: (A) such obligations are not reflected on the balance sheet of the Company
or any Restricted Subsidiary (contingent obligations referred to in a footnote
to financial statements and not otherwise reflected on the balance sheet will
not be deemed to be reflected on such balance sheet for purposes of this clause
(A)); and (B) the maximum assumable liability in respect of all such obligations
shall at no time exceed the gross proceeds including noncash proceeds (the fair
market value of such noncash proceeds being measured at the time received and
without giving effect to any subsequent changes in value) actually received by
the Company and its Restricted Subsidiaries in connection with such disposition;
(iii) (A) obligations under (or constituting reimbursement obligations with
respect to) letters of credit, performance bonds, surety bonds, appeal bonds,
completion guarantees or similar instruments issued in connection with the
ordinary course of a Permitted Business, including letters of credit in respect
of workers' compensation claims, security or lease deposits and self-insurance;
provided, however, that upon the drawing of such letters of credit or other
instrument, such obligations are reimbursed within 30 days following such
drawing, and (B) obligations arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
(except in the case of day-light overdrafts) drawn against insufficient funds in
the ordinary course of business; provided, however, that such obligations are
extinguished within three business days of incurrence; (iv) purchase price
holdbacks in connection with purchasing in the ordinary course of business of
the Company and its Restricted Subsidiaries; (v) leases of precious metals used
in the ordinary course of business of the Company and its Restricted
Subsidiaries, whether or not accounted for as operating leases under GAAP; or
(vi) customer deposits in the ordinary course of business. Except as otherwise
expressly provided in this definition, the amount of any Debt outstanding as of
any date shall be: (a) the accreted value thereof, in the case of any Debt
issued at a discount to par value; and (b) the principal amount thereof in the
case of any other Debt.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Securities" means Securities that are in the form of
Exhibit A, Exhibit B or Exhibit C attached hereto that do not include the Global
Securities Legend therein.
"Depository" means, with respect to the Securities issuable or issued
in whole or in part in global form, the person specified in Section 2.03 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depository" shall mean or include such successor.
"Designated Senior Debt" means (i) any Senior Debt outstanding under
the New Credit Facility and (ii) any other Senior Debt permitted under this
Indenture the outstanding principal amount of which is $10.0 million or more and
that has been designated by the Company by notice to the Trustee as "Designated
Senior Debt."
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed or is
redeemable at the option of the holder of such class or series of Capital Stock
at any time on or prior to the date that is 91 days after the Stated Maturity of
the Securities; or (ii) convertible into or exchangeable at the option of the
holder thereof for Capital Stock referred to in clause (i) above or Debt having
a scheduled
8
<PAGE>
maturity on or prior to the date that is 91 days after the Stated Maturity of
the Securities. Notwithstanding the preceding sentence, (A) if such Capital
Stock is issued to any plan for the benefit of employees or by any such plan to
such employees, in each case in the ordinary course of business of the Company
or its Subsidiaries, such Capital Stock shall not constitute Disqualified Stock
solely because it may be required to be repurchased by the Company in order to
satisfy applicable statutory or regulatory obligations, (B) any Capital Stock
that would constitute Disqualified Stock solely because the holders of the
Capital Stock have the right to require the Company to repurchase such Capital
Stock upon the occurrence of a Change of Control or an Asset Sale will not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company may not repurchase or redeem any such Capital Stock pursuant to such
provisions prior to the Company's purchase of such Securities as are required to
be repurchased pursuant to Section 4.08 and (C) the Senior Preferred Stock
having the terms and conditions set forth in the Certificate of Designation for
the Senior Preferred Stock as in effect on the Closing Date shall not constitute
Disqualified Stock under the Indenture. For purposes hereof, the amount of any
Disqualified Stock shall be equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any. The "maximum fixed repurchase price" of any
Disqualified Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were purchased on any date as of which the Consolidated
Coverage Ratio shall be required to be determined pursuant to the Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Stock, such fair market value shall be determined reasonably and in
good faith by the Board of Directors of the issuer of such Disqualified Stock.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
other than a Foreign Subsidiary.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Debt" means Debt of the Company and its Restricted
Subsidiaries (other than Debt under the New Credit Facility) in existence on the
Closing Date, until such amounts are repaid.
"Foreign Subsidiary" means any Subsidiary of the Company formed under
the laws of any jurisdiction other than the United States or any political
subdivision thereof substantially all of the assets of which are located outside
of the United States or that conducts substantially all of its business outside
of the United States.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, including those set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting
9
<PAGE>
profession. All ratios and computations based on GAAP contained in this
Indenture shall be computed in conformity with GAAP as in effect as of the
Closing Date.
"Global Security" means a Security that is in the form of Exhibit A,
Exhibit B or Exhibit C hereto that includes the Global Securities Legend
therein.
"Global Securities Legend" means the legend set forth in the first
paragraph of Exhibit A hereto.
"Government Notes" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Debt.
"Guarantors" means (i) each of the Company's Restricted Subsidiaries on
the Closing Date other than any (a) Foreign Subsidiary and (b) Subsidiary that
is a Receivables Subsidiary; and (ii) each Restricted Subsidiary that executes
and delivers a Security Guarantee and a supplemental indenture assuming the
obligations of a Guarantor under this Indenture after the Closing Date, and
their respective successors and assigns, in each case until released from its
Security Guarantee in accordance with the terms of this Indenture.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under Interest Rate Agreements, Currency Agreements
or Commodity Hedging Agreements.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Initial Control Group" means Investcorp S.A., Deutsche Bank Securities
Inc. and their respective Affiliates, any Person acting in the capacity of an
underwriter or initial purchaser in connection with a public or private offering
of the Company's Capital Stock, or any Permitted Transferee of any of the
foregoing Persons.
"Initial Purchasers" means Deutsche Bank Securities Inc., UBS Warburg
LLC and Goldman, Sachs & Co.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, repurchase agreement, futures contract or other
financial agreement or arrangement designed to protect the Company or any
Restricted Subsidiary against fluctuations in interest rates.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (but excluding Guarantees
10
<PAGE>
of Debt not otherwise prohibited to be incurred under this Indenture (to the
extent that such Guarantees of Debt do not then require cash payments by the
Company and in the event that cash payments are then required, such payments
shall constitute an Investment under this Indenture only 90 days subsequent to
such payment)), advances or capital contributions (excluding commission, travel,
payroll, entertainment, relocation and similar advances to officers and
employees and profit sharing plan contributions made in the ordinary course of
business), and purchases or other acquisitions for consideration of Debt, Equity
Interests or other securities. If the Company or any Subsidiary of the Company
sells or otherwise disposes of any Equity Interests of any direct or indirect
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of in an amount determined as provided in the
second to last paragraph of Section 4.04(b).
"Issue Date" means the date on which any Initial Securities are
originally issued.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement or any lease
in the nature thereof); provided that in no event shall an operating lease be
deemed to constitute a Lien.
"Liquidated Damages" shall have the meaning set forth in a Registration
Rights Agreement.
"Net Income" means, with respect to any Person and any period, the net
income (or loss) of such Person (but not any Subsidiaries) for such period,
determined in accordance with GAAP and before any reduction in respect of
Preferred Stock dividends of such Person (but not any Subsidiaries), excluding,
however, (i) any extraordinary or non-recurring gains or losses or charges
(including non-cash charges resulting from any write-up, write-down or write-off
of amounts in connection with the Recapitalization) and gains or losses or
charges from the sale of assets outside the ordinary course of business,
together with any related provision for taxes on such gain or loss or charges
and (ii) deferred financing costs written off in connection with the early
extinguishment of Debt; provided, however, that Net Income shall be deemed to
include any increases during such period to shareholder's equity of such Person
attributable to tax benefits from net operating losses and the exercise of stock
options that are not otherwise included in Net Income for such period.
"Net Proceeds" means the aggregate cash proceeds or Cash Equivalents
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including any cash received upon the sale or other disposition of
any non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including legal, accounting and investment banking
fees, and brokerage and sales commissions) and any relocation, redundancy and
closing costs incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts applied to the repayment of principal,
premium, if any, and interest on Debt that is not subordinated to the Securities
required (other than required by clause (a) of the third paragraph
11
<PAGE>
of Section 4.06) to be paid as a result of such transaction, all distributions
and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Sale, and any deduction
of appropriate amounts to be provided by the Company as a reserve in accordance
with GAAP against any liabilities associated with the asset disposed of in such
transaction and retained by the Company after such sale or other disposition
thereof, including pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction.
"New Credit Facility" means the Credit Agreement dated as of May 10,
2000, among the Company, the Subsidiaries of the Company party thereto and the
financial institutions named therein, and any related notes, collateral
documents, letters of credit and Guarantees, including any appendices, exhibits
or schedules to any of the foregoing (as the same may be in effect from time to
time), in each case, as such agreements may be amended, modified, supplemented
or restated from time to time, or refunded, refinanced, restructured, replaced,
renewed, repaid or extended from time to time (whether with the original agents
and lenders or other agents or lenders or otherwise, and whether provided under
the original credit agreement or other credit agreements or otherwise).
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, Guarantees and other liabilities
payable under the documentation governing any Debt, in each case whether now or
hereafter existing, renewed or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred, whether or
not arising on or after the commencement of a proceeding under Title 11, U.S.
Code or any similar federal or state law for the relief of debtors (including
post-petition interest) and whether or not allowed or allowable as a claim in
any such proceeding.
"Offering Memorandum" shall mean the offering memorandum dated May 5,
2000, relating to the sale of $225,000,000 aggregate principal amount of the
Initial Securities.
"Officers" means any of the following: Chairman, President, Chief
Executive Officer, Treasurer, Chief Financial Officer, Executive Vice President,
Senior Vice President, Vice President, Assistant Vice President, Secretary,
Assistant Secretary or any other officer reasonably acceptable to the Trustee.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Pari Passu Debt" means any Debt of the Company or any Guarantor that
ranks pari passu with the Securities or the relevant Security Guarantee.
"payment" means, for purposes of Articles X and XII and with respect to
the Securities, any payment, whether in cash or other assets or property, of
interest, principal (including redemption price and purchase price), premium,
Liquidated Damages or any other amount on, of
12
<PAGE>
or in respect of the Securities, any other acquisition of Securities and any
deposit into the trust described in Article VIII. The verb "pay" has a
correlative meaning.
"Permitted Business" means the businesses conducted by the Company and
its Subsidiaries as of the date of this Indenture and any other business
reasonably related, complementary or incidental to any of those businesses
including the provision of goods or services related to educational
institutions.
"Permitted Investments" means (a) any Investment in the Company or in a
Restricted Subsidiary (including in any Equity Interests of a Restricted
Subsidiary); (b) any Investment in (i) cash or Cash Equivalents (ii) to the
extent determined by the Company in good faith to be necessary for local
currency working capital requirements of a Foreign Subsidiary, other cash
equivalents, provided in the case of clause (ii), the Investment is made by the
Foreign Subsidiary having such operations; (c) any Investment by the Company or
any Restricted Subsidiary of the Company in a Person, if as a result of such
Investment (i) such Person becomes a Restricted Subsidiary or (ii) such Person,
in one transaction or a series of substantially concurrent related transactions,
is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary; (d) any securities received or other Investments made as
a result of the receipt of non-cash consideration from an Asset Sale that was
made pursuant to and in compliance with Section 4.06 or in connection with any
other disposition of assets not constituting an Asset Sale; (e) any acquisition
of assets solely in exchange for the issuance of Equity Interests (other than
Disqualified Stock) of the Company; (f) any Investments relating to a
Receivables Subsidiary; (g) loans or advances to employees (or guarantees of
third party loans to employees) in the ordinary course of business or pursuant
to a stock loan program; (h) stock, obligations or securities received in
satisfaction of judgments, foreclosure of liens or settlement of debts (whether
pursuant to a plan of reorganization or similar arrangement); (i) receivables
owing to the Company or any Restricted Subsidiary, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms (including such concessionary terms as the Company or such
Restricted Subsidiary deems reasonable); (j) any Investment existing on the
Closing Date or made pursuant to legally binding written commitments in
existence on the Closing Date which Investment is disclosed in the Offering
Memorandum; (k) Investments in Interest Rate Agreements, Currency Agreements and
Commodity Hedging Agreements not otherwise prohibited under this Indenture; (l)
any Investment in a Permitted Business having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (l) that
are at that time outstanding, not to exceed 10.0% of Total Assets at the time of
such Investment (with the fair market value of each Investment being measured at
the time made and without giving effect to subsequent changes in value); and (m)
additional Investments having an aggregate fair market value, taken together
with all other Investments made pursuant to this clause (m) that are at that
time outstanding, not to exceed 2.5% of Total Assets at the time of such
Investment (with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value).
"Permitted Junior Securities" means debt or equity securities of the
Company, any Guarantor or any successor corporation to the Company or such
Guarantor issued pursuant to a plan of reorganization or readjustment of the
Company or such Guarantor that are subordinated
13
<PAGE>
to the payment of all then outstanding Senior Debt of the Company or such
Guarantor, as applicable, at least to the same extent that (i) in the case of
the Company, the Securities are subordinated to the payment of all Senior Debt
on the Closing Date and (ii) in the case of such Guarantor, that the Security
Guarantee of such Guarantor is subordinated to the payment of Senior Debt of
such Guarantor on the Closing Date, so long as (i) the effect of the use of this
defined term in Article X and XII is not to cause the Securities or the Security
Guarantee, as applicable, to be treated as part of (a) the same class of claims
as the Senior Debt of the Company or such Guarantor, as applicable, or (b) any
class of claims pari passu with, or senior to, the Senior Debt of the Company or
such Guarantor, as applicable, for any payment or distribution in any case or
proceeding or similar event relating to the liquidation, insolvency, bankruptcy,
dissolution, winding up or reorganization of the Company or such Guarantor and
(ii) to the extent that any Senior Debt of the Company or such Guarantor, as
applicable, outstanding on the date of consummation of any such plan of
reorganization or readjustment is not paid in full in cash on such date, either
(a) the holders of any such Senior Debt not so paid in full in cash have
consented to the terms of such plan of reorganization or readjustment or (b)
such holders receive securities which constitute Senior Debt of the Company or
such Guarantor, as applicable, and which have been determined by the relevant
court to constitute satisfaction in full in money or money's worth of any Senior
Debt of the Company or such Guarantor, as applicable, not paid in full in cash.
"Permitted Liens" means (i) Liens securing Senior Debt of the Company
or Debt of a Restricted Subsidiary (in each case including related Obligations)
that was permitted by the terms of this Indenture to be incurred; (ii) Liens in
favor of the Company or any Restricted Subsidiary; (iii) Liens on property (a)
existing at the time of acquisition thereof or (b) of a Person existing at the
time such Person is merged into or consolidated with or acquired by the Company
or any Restricted Subsidiary of the Company; provided, that such Liens were in
existence prior to the contemplation of such acquisition, merger or
consolidation and do not extend to any assets other than those acquired or to
those of the Person merged into or consolidated with the Company or a Restricted
Subsidiary, as the case may be; (iv) Liens that secure Debt of a Person existing
at the time any such Person becomes a Restricted Subsidiary of the Company;
provided, that such Liens do not extend to any assets other than those of the
Person that became a Restricted Subsidiary of the Company; (v) banker's Liens,
rights of setoff and liens to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business; (vi)
without limitation of clause (i) above, Liens to secure Debt (including Capital
Lease Obligations) permitted by Section 4.03(b)(iv) covering only the assets
acquired, leased, constructed or improved with such Debt; (vii) Liens existing
on the Closing Date; (viii) customary Liens incurred in connection with a
Qualified Receivables Transaction; (ix) (a) carriers', warehousemen's,
mechanics', landlords', materialmen's, repairmen's or other like Liens arising
in the ordinary course of business and (b) Liens for taxes, assessments or
governmental charges or claims, in each case, that are not yet due or delinquent
or that are bonded or that are being contested in good faith and by appropriate
proceedings; provided that any reserve or other appropriate provision as shall
be required in conformity with GAAP shall have been made therefor; (x) Liens,
pledges or deposits in connection with (a) workmen's compensation, obligations
and general liability exposure of the Company and its Restricted Subsidiaries
and (b) unemployment insurance and other social security legislation; (xi) Liens
on goods (and the proceeds thereof) and documents of title and the
14
<PAGE>
property covered thereby securing Debt in respect of commercial letters of
credit; (xii) (a) mortgages, Liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by any
developer, landlord or other third party on property over which the Company or
any Restricted Subsidiary of the Company has easement rights or on any real
property leased by the Company or any Restricted Subsidiary on the Closing Date
and subordination or similar agreements relating thereto and (b) any
condemnation or eminent domain proceedings affecting any real property; (xiii)
Liens arising by reason of a judgment, decree or court order, to the extent not
otherwise resulting in an Event of Default, and any Liens that are required to
protect or enforce any rights in any administrative, arbitration or other court
proceedings in the ordinary course of business; (xiv) Liens securing Hedging
Obligations entered into in the ordinary course of business; (xv) without
limitation of clause (i) above, Liens securing Refinancing Debt permitted to be
incurred under this Indenture or amendments or renewals of Liens that were
permitted to be incurred; provided, in each case, that such Liens do not extend
to any additional property or asset of the Company or a Restricted Subsidiary;
(xvi) any provision for the retention of title to an asset by the vendor or
transferor of such asset which asset is acquired by the Company or any
Restricted Subsidiary in a transaction entered into in the ordinary course of
business of the Company or such Restricted Subsidiary; (xvii) Liens that secure
Debt incurred by Foreign Subsidiaries for working capital purposes (including
acquisitions), and by the Company or any of its Restricted Subsidiaries of
Guarantees of Debt of Foreign Subsidiaries or foreign joint ventures; provided
that the aggregate principal amount of such Debt and of the Debt so Guaranteed
at any time outstanding does not exceed $30.0 million or was permitted to be
incurred pursuant to the Coverage Ratio Exception; and (xviii) Liens incurred in
the ordinary course of business of the Company or any Restricted Subsidiary of
the Company with respect to obligations that do not exceed $5.0 million at any
one time outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or such Restricted
Subsidiary.
"Permitted Refinancing Debt" means any Debt of the Company or any of
its Restricted Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund other Debt of
the Company or any of its Restricted Subsidiaries incurred in compliance with
this Indenture; provided that: (i) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Debt does not exceed the principal
amount of (or accreted value, if applicable), plus accrued interest on, the Debt
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable premium and fees and expenses incurred in connection
therewith); (ii) in the case of term Debt, principal payments required under
such Permitted Refinancing Debt have a Stated Maturity no earlier than the
earlier of (a) the Stated Maturity of those under the Debt being refinanced and
(b) the maturity date of the Securities and such Permitted Refinancing Debt has
a Weighted Average Life to Maturity equal to or greater than the lesser of the
Weighted Average Life to Maturity of the Debt being extended, refinanced,
renewed, replaced, defeased or refunded and the Weighted Average Life to
Maturity of the Securities; (iii) if the Debt being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Securities, such Permitted Refinancing Debt has a final maturity date later
than the final maturity date of, and is subordinated in right of payment to, the
Securities on terms at least as favorable to the Holders of Securities as those
contained in the documentation governing the Debt being extended,
15
<PAGE>
refinanced, renewed, replaced, defeased or refunded; and (iv) such Debt is
incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Debt being extended, refinanced, renewed, replaced, defeased or
refunded or by the Company.
The Company may incur Permitted Refinancing Debt not more than six
months prior to the application of the proceeds thereof to repay the Debt to be
refinanced; provided that upon the incurrence of such Permitted Refinancing
Debt, the Company shall provide written notice thereof to the Trustee,
specifically identifying the Debt to be refinanced with Permitted Refinancing
Debt.
"Permitted Transferee" means, with respect to any Person, (i) any other
Person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person and (ii) any investment fund
or investment entity that is a subsidiary of such Person or a Permitted
Transferee of such Person.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" means, with respect to any Person, any Capital Stock
of such Person (however designated) that is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over shares
of Capital Stock of any other class of such Person. With respect to the Company,
"Preferred Stock" includes the Senior Preferred Stock.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security that is due or overdue or is to become
due at the relevant time.
"Private Exchange" shall have the meaning set forth in a Registration
Rights Agreement.
"Private Exchange Securities" means Securities of the Company to be
delivered in a Private Exchange pursuant to a Registration Rights Agreement.
"Pro Forma Cost Savings" means, with respect to any period ended on any
Calculation Date, the reductions in costs with respect to the applicable
four-quarter reference period that (1) are directly attributable to any
Investments, acquisitions, dispositions, mergers, consolidations or discontinued
operations and calculated on a basis that is consistent with Article 11 of
Regulation S-X under the Securities Act as in effect on the date of this
Indenture or (2) have begun to be implemented prior to the Calculation Date by,
or have been identified and approved in good faith by the Board of Directors of,
the Company, any Restricted Subsidiary or the business that was subject of any
such Investments, acquisitions, dispositions, mergers, consolidations or
discontinued operations pursuant to a formalized plan, in the case of each of
clause (1) and (2), based on a supportable, good faith estimate of the Chief
Financial Officer or other senior financial officer of the Company and
determined on a pro forma basis as if all such reductions in costs had been
effected as of the beginning of such period, decreased by any incremental
expenses (other than capitalized expenses) incurred or to be incurred during the
four-quarter reference period in order to achieve such reduction in costs.
16
<PAGE>
"Purchase Agreement" means (i) with respect to the Initial Securities
issued on the date hereof, the Purchase Agreement dated May 5, 2000, for the
purchase of $225,000,000 principal amount of Initial Securities among the
Company, the Initial Guarantor and the Initial Purchasers as such agreement may
be amended, modified or supplemented from time to time in accordance with the
terms thereof and (ii) with respect to any Additional Securities, any purchase
or underwriting agreement entered into by the Company, any Guarantors and the
initial purchasers or underwriters with respect thereto, as such agreement may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company, any Restricted Subsidiary
or any Receivables Subsidiary pursuant to which the Company, any Restricted
Subsidiary or any Receivables Subsidiary may sell, convey or otherwise transfer
to, or grant a security interest in for the benefit of, (a) a Receivables
Subsidiary (in the case of a transfer or encumbrancing by the Company or a
Restricted Subsidiary) and (b) any other Person, accounts and other receivables
(whether now existing or arising in the future) of the Company or a Restricted
Subsidiary which arose in the ordinary course of business of the Company or a
Restricted Subsidiary, and any assets related thereto, including all collateral
securing such receivables, all contracts and all guarantees or other obligations
in respect of such receivables, proceeds of such receivables and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization or factoring
transactions involving receivables.
"Recapitalization" means the recapitalization of the Company pursuant
to which Saturn Acquisition Corporation was merged with and into the Company and
the financing transactions related thereto.
"Recapitalization Agreement" means the Agreement and Plan of Merger
dated as of December 27, 1999 by and between the Company and Saturn Acquisition
Corporation, as amended through the Closing Date.
"Receivables Subsidiary" means a Wholly Owned Subsidiary of the Company
which engages in no activities other than in connection with the financing of
receivables and related assets which is designated by the Board of Directors of
the Company (as provided below) as a Receivables Subsidiary (a) no portion of
any Debt or any other obligations (contingent or otherwise) of which directly or
indirectly, contingently or otherwise, (1) is guaranteed by the Company or a
Restricted Subsidiary of the Company (excluding Standard Securities
Undertakings), (2) is recourse to or obligates the Company or a Restricted
Subsidiary of the Company in any way other than pursuant to Standard
Securitization Undertakings, or (3) subjects any asset of the Company or a
Restricted Subsidiary of the Company to the satisfaction thereof, other than
Standard Securitization Undertakings, (b) with which neither the Company nor a
Restricted Subsidiary of the Company has any material contract, agreement,
arrangement or understanding other than those customarily entered into in
connection with Qualified Receivables Transactions, and (c) with which neither
the Company nor a Restricted Subsidiary of the Company has any obligation,
directly or indirectly, contingently or otherwise, to maintain or preserve such
Subsidiary's financial condition or cause such Subsidiary to achieve certain
levels of operating results. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by the filing with the Trustee a
certified copy of the resolution
17
<PAGE>
of the Board of Directors of the Company giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"Registration Rights Agreement" means (i) with respect to the Initial
Securities issued on the date hereof, the Registration Rights Agreement dated
May 10, 2000, among the Company, the Initial Guarantor and the Initial
Purchasers, as such agreement may be amended, modified, or supplemented from
time to time in accordance with the terms thereof and (ii) with respect to any
Additional Securities, any registration rights agreement entered into among the
Company, any Guarantors and the relevant initial purchasers or underwriters, as
the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Registered Exchange Offer" means an offer made by the Company pursuant
to a Registration Rights Agreement and under an effective registration statement
under the Securities Act to exchange Exchange Securities for outstanding Initial
Securities substantially identical in all material respects to such Initial
Securities (except for the differences provided for therein).
"Representative" means any agent or representative in respect of any
Designated Senior Debt; provided that if, and for so long as, any Designated
Senior Debt lacks such a representative, then the Representative for such
Designated Senior Debt shall at all times constitute the holders of a majority
in outstanding principal amount of such Designated Senior Debt.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Securities Legend" means the legend set forth in the second
and third paragraphs of Exhibit A hereto.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Secured Debt" means any Debt of the Company or any Guarantor secured
by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities" has the meaning stated in the recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture. For all purposes of this Indenture, the term "Securities" shall
include any Exchange Securities and any Private Exchange Securities to be issued
and exchanged for any Initial Securities pursuant to a Registration Rights
Agreement and this Indenture. From and after the issuance of any Additional
Securities (but not for purposes of determining whether such issuance is
permitted hereunder), "Securities" shall include such Additional Securities for
purposes of this Indenture and all Exchange Securities and Private Exchange
Securities from time to time issued with respect to any Initial Securities that
constitute such Additional Securities. All Securities, including any such
Additional Securities, shall vote together as one series of Securities under
this Indenture.
18
<PAGE>
"Securities Custodian" or "Custodian" means the custodian with respect
to any Global Security (as appointed by the Depository), or any successor entity
thereto covered in 2.03.
"Security Guarantee" means the unconditional Guarantee by each
Guarantor pursuant to Article XI herein of the Company's Obligations under the
Securities.
"Senior Debt" means (i) all Debt of the Company or any Guarantor
outstanding under the New Credit Facility and all Hedging Obligations with
respect thereto, (ii) any other Debt (including Acquired Debt) permitted to be
incurred by the Company or any Guarantor under the terms of this Indenture,
unless the instrument under which such Debt is incurred expressly provides that
it is on a parity with or subordinated in right of payment to the Securities or
the relevant Security Guarantee and (iii) all Obligations with respect to the
foregoing. Notwithstanding anything to the contrary in the foregoing, Senior
Debt will not include (v) any liability for federal, state, local or other taxes
owed or owing by the Company, (w) any Debt of the Company or any Guarantor to
any of its Subsidiaries or other Affiliates (other than Debt under any Credit
Facility to any such Affiliate), (x) any trade payables, (y) that portion of
Debt incurred in violation of Section 4.03 (but as to any such Debt under any
Credit Facility, no such violation shall be deemed to exist for purposes of this
clause (y) if the lenders have obtained a representation from a responsible
financial officer of the Company to the effect that the issuance of such Debt
does not violate such Section) or (z) any Debt or obligation of the Company or
any Guarantor which is expressly subordinated in right of payment to any other
Debt or obligation of the Company or such Guarantor, as applicable, including
any Subordinated Debt of the Company.
"Senior Officer" means the Chief Executive Officer or the Chief
Financial Officer of the Company.
"Significant Subsidiary" means (a) any Restricted Subsidiary that would
be a "significant subsidiary" as defined in Article I, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such regulation is in effect
on the Closing Date or (b) any one or more Restricted Subsidiaries of the
Company that (1) are not otherwise Significant Subsidiaries, (2) as to which any
event described in clause (6), (7), (8) or (9) of Section 6.01 herein has
occurred and is continuing and (3) would together constitute a Significant
Subsidiary under clause (a) of this definition.
"Specified Affiliate Payments" means: (i) the direct or indirect
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Restricted Subsidiary of the Company,
held by any future, present or former employee, director, officer or consultant
of the Company (or any of its Restricted Subsidiaries) pursuant to any
management equity subscription agreement, stock option agreement or plan, stock
ownership plan, put agreement, stockholder agreement or similar agreement that
may be in effect from time to time; provided that the aggregate price paid for
all such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $5.0 million in any calendar year (with unused amounts in any calendar
year being carried over to succeeding calendar years subject to a maximum amount
of repurchases, redemptions or other acquisitions or retirements pursuant to
this clause (i) (without giving effect to the immediately following proviso) of
$10.0 million in any calendar year) and no payment default on Senior Debt or the
Securities shall have occurred and
19
<PAGE>
be continuing; provided further that such amount in any calendar year may be
increased by an amount not to exceed (A) the cash proceeds received by the
Company (including by way of capital contribution) since the Closing Date from
the sale of Equity Interests of the Company to employees, directors, officers or
consultants of the Company or its Subsidiaries that occurs in such calendar year
(it being understood that such cash proceeds shall be excluded from Section
4.04(a)(3)(ii)) plus (B) the cash proceeds from key man life insurance policies
received by the Company and its Restricted Subsidiaries in such calendar year
(including proceeds from the sale of such policies to the person insured
thereby); and provided further that cancellation of Debt owing to the Company
from employees, directors, officers or consultants of the Company or any of its
Subsidiaries in connection with a repurchase of Equity Interests of the Company
will not be deemed to constitute a Restricted Payment for purposes of this
Indenture; (ii) repurchases of Equity Interests deemed to occur upon exercise of
stock options or warrants as a result of the payment of all or a portion of the
exercise price of such options or warrants with Equity Interests; and (iii)
payments by the Company to shareholders or members of management of the Company
and its Subsidiaries in connection with the Recapitalization that are reflected
as adjustments to the pro forma financial statements included in the Offering
Memorandum.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or a
Restricted Subsidiary which are reasonably customary in a receivables
securitization transaction.
"Stated Maturity" means, with respect to any installment of interest or
principal of, or any other amount payable in respect of, any series of Debt, the
date on which such interest principal or other amount was scheduled to be paid
in the documentation governing such Debt, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest principal or other
amount prior to the date scheduled for the payment thereof.
"Subordinated Debt" means any Debt of the Company or any Guarantor
(whether outstanding on the Closing Date or thereafter incurred) that is
subordinate or junior in right of payment to the Securities or the applicable
Security Guarantee pursuant to written agreement.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Non-Guarantor" means any Subsidiary of the Company that is
not a Guarantor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture, unless as stated in
Section 9.03 hereof.
20
<PAGE>
"Total Assets" means, at any time, the total consolidated assets of the
Company and its Restricted Subsidiaries at such time determined in accordance
with GAAP. For the purposes of Section 4.03(b)(iv), Total Assets shall be
determined giving pro forma effect to the lease, acquisition, construction or
improvement of the assets being leased, acquired, constructed or improved with
the proceeds of the relevant Debt.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the Restricted Securities Legend.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the redemption
date (or, if such Statistical Release is no longer published, any publicly
available source or similar market data)) most nearly equal to the period from
the redemption date to May 1, 2005, provided, however, that if the period from
the redemption date to May 1, 2005 is not equal to the constant maturity of a
United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from the redemption date to May 1, 2005 is less than one year, the weekly
average yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Uniform Commercial Code" means the New York Uniform Commercial Code as
in effect from time to time.
"Unrestricted Subsidiary" means (1) any Subsidiary of the Company that
is designated an Unrestricted Subsidiary by the Board of Directors of the
Company in the manner provided in Section 4.10, and (2) any Subsidiary of an
Unrestricted Subsidiary; but, in each case, only to the extent permissible under
this Indenture, as described in Section 4.10.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Debt at
any date, the number of years obtained by dividing (i) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the number
21
<PAGE>
of years (calculated to the nearest one-twelfth) that will elapse between such
date and the making of such payment, by (ii) the then outstanding principal
amount of such Debt.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interest of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. Other Definitions.
Term Defined in Section
----------------------------------------- --------------------------------
"Accredited Investors"......................................2.01(b)
"Affiliate Transaction".....................................4.07(a)
"Agent Members".............................................2.13(a)
"Asset Sale Offer"..........................................4.06
"automatic stay"............................................8.02(f)
"Bankruptcy Law"............................................6.01
"Change of Control Offer"...................................3.09(a)
"Change of Control Payment".................................4.08(a)
"Covenant Defeasance".......................................8.01(c)
"Coverage Ratio Exception"..................................4.03(a)
"CUSIP".....................................................2.12
"Custodian".................................................6.01
"Designation"...............................................4.10(a)
"DTC".......................................................2.03
"estate"....................................................8.02(f)
"Event of Default"..........................................6.01
"Excess Proceeds"...........................................4.06
"Excess Proceeds Offer".....................................3.09(a)
"Guaranteed Obligations"...................................11.01
"Guarantor payment default"................................12.03
"Guarantor non-payment default"............................12.03
"Guarantor Payment Blockage Notice"........................12.03
"IAIs"......................................................2.01(b)
"IAI Global Security".......................................2.01(b)
"incur".....................................................4.03(a)
"Indemnified Party".........................................7.07
"Legal Defeasance"..........................................8.01(b)
"Legal Holiday"............................................13.08
"Material Adverse Effect"...................................4.15
22
<PAGE>
"non-payment default"......................................10.03
"Notice of Default".........................................6.01
"Offer Amount"..............................................3.09(a)
"Offer Period"..............................................3.09(a)
"Option of Holder to Elect Purchase"........................3.09
"outstanding"...............................................8.01(b)
"Paying Agent"..............................................2.03
"Payment Blockage Notice"..................................10.03
"payment default"..........................................10.03
"Permanent Regulation S Global Security"....................2.01
"Permitted Debt"............................................4.03(b)
"Physical Securities".......................................2.01(c)
"protected purchaser".......................................2.07
"Purchase Date".............................................3.09(a)
"QIBs"......................................................2.01(b)
"QIB Global Security".......................................2.01(b)
"qualified institutional buyers"............................2.01(b)
"Registrar".................................................2.03
"Regulation S"..............................................2.01(b)
"Regulation S Global Security"..............................2.01(b)
"Repurchase Offer"..........................................3.09(a)
"Restricted Payments".......................................4.04(a)
"Restricted Payments Basket"................................4.04(a)(3)
"Revocation"................................................4.10(b)
"Rule 144A".................................................2.01(b)
"Senior Preferred Stock"....................................4.04(b)(vii)
"Temporary Regulation S Global Security"....................2.01(b)
"Trustee"...................................................8.03
"U.S. Global Securities"....................................2.01(b)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Security Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
23
<PAGE>
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or
junior to Secured Debt merely by virtue of its nature as unsecured
Debt;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the Company dated such date
prepared in accordance with GAAP and accretion of principal on such
security shall not be deemed to be the incurrence of Debt; and
(8) the principal amount of any Preferred Stock shall be (i)
the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater.
ARTICLE II
The Securities
--------------
SECTION 2.01. Form and Dating. (a) The Initial Securities issued on the
date hereof and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture, and as otherwise provided in this
Article II. Any Exchange Securities or Permanent Regulation S Global Securities
and the Trustee's certificate of authentication shall be substantially in the
form of Exhibit B, which is hereby incorporated in and expressly made a part of
this Indenture, and as otherwise provided in this Article II. Any Private
Exchange Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit C, which is hereby incorporated in and
expressly made a part of this Indenture, and as otherwise provided in this
Article II. Any Additional Securities shall be issued in the form of either (i)
Exhibit A, if such Security is a Transfer Restricted Security, or (ii) Exhibit
B, if such Security is not a Transfer Restricted Security. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company or any Guarantor is subject, if any,
24
<PAGE>
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in Exhibit A, Exhibit B
and Exhibit C are part of the terms of this Indenture. The Securities shall be
issuable only in registered form without coupons and only in denominations of
$1,000 and integral multiples thereof.
(b) The Initial Securities issued on the date hereof are being offered
and sold by the Company pursuant to the Purchase Agreement. The Initial
Securities will be offered and sold by the Initial Purchasers only (i) to
"qualified institutional buyers" (as defined in Rule 144A under the Securities
Act ("Rule 144A")) ("QIBs") and (ii) in reliance on Regulation S under the
Securities Act ("Regulation S"). Initial Securities in the form of Additional
Securities may be issued and sold as provided in the related Purchase Agreement.
After such initial offers and sales, Initial Securities that are Transfer
Restricted Securities may be transferred to, among others, QIBS, in reliance on
Regulation S and to institutional "Accredited Investors" (within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) ("IAIs") in accordance
with certain transfer restrictions. Initial Securities that are offered and sold
in reliance on Rule 144A shall be issued initially in the form of one or more
permanent Global Securities substantially in the form set forth in Exhibit A
(collectively, the "QIB Global Security") deposited with the Trustee, as
Securities Custodian, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. Initial Securities that are offered and sold in
offshore transactions in reliance on Regulation S shall be issued initially in
the form of one or more temporary Global Securities substantially in the form
set forth in Exhibit A (collectively, the "Temporary Regulation S Global
Security") deposited with the Trustee, as Securities Custodian, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. At any
time on or after June 19, 2000, upon receipt by the Trustee and the Company of a
certificate substantially in the form of Exhibit G hereto, one or more permanent
Global Securities substantially in the form set forth in Exhibit B
(collectively, the "Permanent Regulation S Global Security"; and together with
the Temporary Regulation S Global Security, the "Regulation S Global Security")
duly executed by the Company and authenticated by the Trustee as hereinafter
provided, shall be deposited with the Trustee, as Securities Custodian. Initial
Securities resold or otherwise transferred to IAIs shall be issued substantially
in the form set forth in Exhibit A (collectively, the "IAI Global Security" and,
together with the QIB Global Security, the "U.S. Global Securities"). The QIB
Global Security, the Regulation S Security and the IAI Global Security shall
each be issued with separate CUSIP numbers. The aggregate principal amount of
each Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as Securities Custodian.
Transfers of Initial Securities between QIBs and IAIs and to or by purchasers
pursuant to Regulation S shall be represented by appropriate increases and
decreases to the respective amounts of the appropriate Global Securities, as
more fully provided in Section 2.14.
(c) Except as otherwise provided in the related Purchase Agreement,
Initial Securities offered and sold other than as described in the preceding two
paragraphs, if any, shall be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in Exhibit A
attached hereto without the Global Securities Legend (the "Physical
Securities").
25
<PAGE>
SECTION 2.02. Execution and Authentication. One or more Officers of the
Company shall sign the Securities by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery upon a
written order of the Company signed by two of its Officers (1) Initial
Securities for original issue on the date hereof in an aggregate principal
amount of $225,000,000, (2) subject to Section 4.03, Additional Securities in an
aggregate principal amount of up to $125,000,000 and (3) (A) Exchange Securities
for issue only in a Registered Exchange Offer, and (B) Private Exchange
Securities for issue only in a Private Exchange, in the case of each of (A) and
(B) pursuant to a Registration Rights Agreement and for Initial Securities for a
like principal amount of Initial Securities exchanged pursuant thereto. Such
order shall specify the amount of the Securities to be authenticated, the date
on which the original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities, Additional Securities, Exchange
Securities or Private Exchange Securities. The aggregate principal amount of
Securities outstanding at any time may not exceed $350,000,000 except as
provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer of the Trustee, a copy of
which shall be furnished to the Company. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. After any such appointment, each reference in this Indenture
to authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Company will give prompt notice to the Trustee of
26
<PAGE>
any such designation or rescission and of any change in the location of any such
other office or agency.
The Company initially designates the Corporate Trust Office of the
Trustee specified in Section 13.02 as such office of the Company in accordance
with this Section 2.03.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. Either
the Company or any domestically organized Wholly Owned Restricted Subsidiary may
act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depository with respect to the Global Securities, and the Trustee shall
initially be the Securities Custodian with respect to the Global Securities.
The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee, provided that no
such removal shall become effective until (1) acceptance of an appointment by a
successor as evidenced by an appropriate agreement entered into by the Company
and such successor Registrar or Paying Agent, as the case may be, and delivered
to the Trustee or (2) notification to the Trustee that the Trustee shall serve
as Registrar or Paying Agent until the appointment of a successor in accordance
with clause (1) above. The Registrar or Paying Agent may resign at any time upon
not less than three Business Days' prior written notice to the Company;
provided, however, that the Trustee may resign as Paying Agent or Registrar only
if the Trustee also resigns as Trustee in accordance with Section 7.08.
SECTION 2.04. Paying Agent to Hold Money in Trust. Prior to 10:00 a.m.
on each due date of the principal and interest on any Security, the Company
shall deposit with the Paying Agent (or if the Company or a permitted Wholly
Owned Restricted Subsidiary is acting as Paying Agent, segregate and hold in
trust for the benefit of the Persons entitled thereto) a sum sufficient to pay
such principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest on the
Securities and shall notify the Trustee in writing of any default by the Company
in making any such payment within one Business Day thereof. If the Company or a
permitted Wholly Owned Restricted Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and to account for any funds disbursed by the Paying Agent.
Upon complying with this Section, the Paying Agent shall have no further
liability for the money delivered to the Trustee.
27
<PAGE>
Any money deposited with any Paying Agent, or then held by the Company
or a permitted Wholly Owned Restricted Subsidiary in trust for the payment of
principal or interest on any Security and remaining unclaimed for two years
after such principal and interest has become due and payable shall be paid to
the Company at its request, or, if then held by the Company or a permitted
Wholly Owned Restricted Subsidiary, shall be discharged from such trust; and the
Securityholders shall thereafter, as general unsecured creditors, look only to
the Company for payment thereof, and all liability of the Paying Agent with
respect to such money, and all liability of the Company or such permitted Wholly
Owned Restricted Subsidiary as trustee thereof, shall thereupon cease.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish, or cause the Registrar to furnish, to the
Trustee, in writing at least five Business Days before each interest payment
date and at such other times as the Trustee may request in writing, a list in
such form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar or a
co-registrar with a request to register a transfer, the Registrar shall register
the transfer as requested if the requirements of Section 8-401 of the Uniform
Commercial Code are met. When Securities are presented to the Registrar or a
co-registrar with a request to exchange them for an equal principal amount of
Securities of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-registrar's request. The Company may require
payment of a sum sufficient to pay all taxes, assessments or other governmental
charges in connection with any transfer or exchange pursuant to this Section.
The Company shall not be required to make, and the Registrar need not register,
transfers or exchanges of Securities selected for redemption (except, in the
case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or transfers or exchanges of any Securities for a period of 15 days
before a selection of Securities to be redeemed.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Guarantors, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the Person in whose name a
Security is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and accrued and unpaid interest and Liquidated
Damages, if any, on such Security and for all other purposes whatsoever, whether
or not such Security is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by notice to
the contrary.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book-entry system maintained by (i) the Holder of
such Global Security (or its agent) or (ii) any holder of such beneficial
interest, and that ownership of a beneficial interest in such Global Security
shall be required to be reflected in a book entry.
28
<PAGE>
All Securities issued upon any transfer or exchange pursuant to this
Section 2.06 will evidence the same debt and will be entitled to the same
benefits under this Indenture as the Securities surrendered upon such transfer
or exchange.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Persons who have
accounts with the Depository or beneficial owners of interests in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by the terms of, this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Holder (i)
satisfies the Company or the Trustee within a reasonable time after he has
notice of such loss, destruction or wrongful taking and the Registrar does not
register a transfer prior to receiving such notification, (ii) makes such
request to the Company or the Trustee prior to the Security being acquired by a
protected purchaser as defined in Section 8-303 of the Uniform Commercial Code
(a "protected purchaser") and (iii) satisfies any other reasonable requirements
of the Trustee and the Company including evidence of the destruction, loss or
theft of the Security. Such Holder shall furnish an indemnity bond sufficient in
the judgment of the Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss that any of them may
suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security including the payment of a sum
sufficient to cover any tax or other governmental charge that may be required.
In the event any such mutilated, lost, destroyed or wrongfully taken Security
has become or is about to become due and payable, the Company in its discretion
may pay such Security instead of issuing a new Security in replacement thereof.
Every replacement Security is an additional obligation of the Company.
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a protected purchaser.
29
<PAGE>
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.09. Temporary Securities. Until Definitive Securities and
Global Securities are ready for delivery, the Company may prepare and the
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Definitive
Securities and deliver them in exchange for temporary Securities upon surrender
of such temporary Securities at the office or agency of the Company, without
charge to the Holder.
SECTION 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver canceled Securities to the Company in accordance with
the Trustee's customary procedures. The Company may not issue new Securities to
replace Securities they have redeemed, paid or delivered to the Trustee for
cancellation. The Trustee shall not authenticate Securities in place of canceled
Securities other than pursuant to the terms of this Indenture.
SECTION 2.11. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, the Company shall pay the defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail or cause to be
mailed to each Securityholder a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
The Company may make payment of any defaulted interest in any other
lawful manner not inconsistent with the requirements (if applicable) of any
securities exchange on which the Securities may be listed, and upon such notice
as may be required by such exchange, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this paragraph, such manner of
payment shall be deemed practicable by the Trustee.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be
30
<PAGE>
affected by any defect in or omission of such numbers. The Company will promptly
notify the Trustee of any change in "CUSIP" numbers.
SECTION 2.13. Book-Entry Provisions for Global Securities.
(a) Each Global Security initially shall (i) be registered in the name
of the Depository for such Global Security or the nominee of such Depository and
(ii) be delivered to the Trustee as the initial Securities Custodian for such
Depository. Beneficial interests in Global Securities may be held indirectly
through members of or participants in ("Agent Members") the Depository
(including Clearstream Banking and Euroclear in the case of the Regulation S
Global Security).
Agent Members shall have no rights under this Indenture with respect to
any Global Security held on their behalf by the Depository, or the Trustee as
Securities Custodian, or under such Global Security, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or shall impair, as between the Depository and its Agent Members, the operation
of customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of a Global Security shall be limited to transfers of
such Global Security in whole, but not in part, to the Depository, its
successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures
of the Depository (and Agent Member, if applicable) and the provisions of
Section 2.14. The Trustee shall register the transfer of Physical Securities to
all beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depository notifies the Company that it is unwilling or
unable to continue as Depository for such Global Security or the Depository
ceases to be a clearing agency registered under the Exchange Act, at a time when
the Depository is required to be so registered in order to act as Depository,
and in each case a successor Depository is not appointed by the Company within
90 days of such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Security shall
be so exchangeable or (iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depository to permit such
transfers.
Notwithstanding the previous sentence, in no event shall Physical
Securities be delivered to investors who purchased Securities in reliance on
Regulation S prior to the day that is forty days after the Issue Date with
respect to such Securities.
(c) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action that a Holder is
entitled to take under this Indenture or the Securities.
SECTION 2.14. Special Transfer Provisions. Unless and until a Transfer
Restricted Security is transferred or exchanged under an effective registration
statement under the Securities Act, the following provisions shall apply:
31
<PAGE>
(a) Transfers to Non-QIB IAIs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Transfer
Restricted Security to any IAI that is not a QIB (other than pursuant to
Regulation S):
(i) The Registrar shall register the transfer of any Transfer
Restricted Security by a Holder if (x) the requested transfer is (I) at
least two years after the later of (A) the Issue Date with respect to
such Transfer Restricted Security and (B) the date such Transfer
Restricted Security was acquired from an affiliate of the Company and
(II) at least three months after the last date such Holder was an
affiliate of the Company or (y) the proposed transferee has delivered
to the Registrar a letter substantially in the form set forth in
Exhibit D hereto.
(ii) If the proposed transferee is an Agent Member and the
Transfer Restricted Security to be transferred consists of a beneficial
interest in the QIB Global Security or the Regulation S Global
Security, upon receipt by the Registrar of (x) the letter, if any,
required by paragraph (i) above and (y) instructions given in
accordance with the Depository's and the Registrar's procedures
therefor, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the IAI Global Security in
an amount equal to the principal amount of the beneficial interest in
the QIB Global Security or the Regulation S Global Security to be so
transferred and the Registrar shall reflect on its books and records
the date and an appropriate decrease in the principal amount of such
QIB Global Security or Regulation S Global Security.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Transfer Restricted
Security to a QIB (other than pursuant to Regulation S):
(i) The Registrar shall register the transfer of a Transfer
Restricted Security by a Holder if (x) the requested transfer is (I) at
least two years after the later of (A) the Issue Date with respect to
such Transfer Restricted Security and (B) the date such Transfer
Restricted Security was acquired from an affiliate of the Company and
(II) at least three months after the last date such Holder was an
affiliate of the Company or (y) such transfer is being made by a
proposed transferor who has provided the Registrar with a letter
substantially in the form set forth in Exhibit E hereto.
(ii) If the proposed transferee is an Agent Member and the
Transfer Restricted Security to be transferred consists of an interest
in the IAI Global Security or the Regulation S Global Security, upon
receipt by the Registrar of (x) the letter, if any, required by
paragraph (i) above and (y) instructions given in accordance with the
Depositary's and the Registrar's procedures therefor, the Registrar
shall reflect on its books and records the date and an increase in the
principal amount of the QIB Global Security in an amount equal to the
principal amount of the beneficial interest in the IAI Global Security
or the Regulation S Global Security to be so transferred, and the
Registrar shall reflect on its books and records the date and an
appropriate decrease in the principal amount of such IAI Global
Security or Regulation S Global Security.
32
<PAGE>
(c) Transfers Pursuant to Regulation S. The Registrar shall register
the transfer of any Permanent Regulation S Global Security without requiring any
additional certification. The following provisions shall apply with respect to
registration of any proposed transfer of a Transfer Restricted Security pursuant
to Regulation S:
(i) The Registrar shall register any proposed transfer of a
Transfer Restricted Security by a Holder if (x) the requested transfer
is at least two years after the Issue Date with respect to such
Transfer Restricted Security and at least three months after the last
date such Holder was an affiliate of the Company or (y) upon receipt of
a letter substantially in the form set forth in Exhibit F hereto from
the proposed transferor.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in a U.S. Global Security, upon receipt by the
Registrar of (x) the letter, if any, required by paragraph (i) above
and (y) instructions in accordance with the Depositary's and the
Registrar's procedures therefor, the Registrar shall reflect on its
books and records the date and an increase in the principal amount of
the Regulation S Global Security in an amount equal to the principal
amount of the beneficial interest in such U.S. Global Security to be
transferred, and the Registrar shall reflect on its books and records
the date and an appropriate decrease in the principal amount of the
applicable U.S. Global Security.
(d) Restricted Securities Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear the Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Restricted Securities Legend, the Registrar shall deliver only Securities that
bear the Restricted Securities Legend unless either (i) the circumstances
contemplated by paragraph (a)(i)(x), (b)(i)(x) or (c)(i)(x) of this Section
exist or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(e) General. By its acceptance of any Security bearing the Restricted
Securities Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Restricted
Securities Legend and agrees that it shall transfer such Security only as
provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to this Section 2.14. The Company shall
have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.
ARTICLE III
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to Section 3.07, it shall notify the Trustee in writing of
the redemption date, the principal amount
33
<PAGE>
of Securities to be redeemed and the paragraph of the Securities pursuant to
which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein. If fewer than all the
Securities are to be redeemed, the record date relating to such redemption shall
be selected by the Company and given to the Trustee, which record date shall be
not fewer than 15 days after the date of notice to the Trustee. Any such notice
may be canceled at any time prior to notice of such redemption being mailed to
any Holder and shall thereby be void and of no effect.
SECTION 3.02. Selection. If less than all of the Securities are to be
redeemed at any time, selection of Securities for redemption will be made by the
Trustee in compliance with the requirements of the principal national securities
exchange, if any, on which the Securities are listed, or, if the Securities are
not so listed, on a pro rata basis, by lot or by such method as the Trustee
shall deem fair and appropriate; provided that no Securities of $1,000 or less
shall be redeemed in part; provided further, however, that if a partial
redemption is made with the proceeds of a public offering of common stock,
selection of the Securities or portions thereof for redemption shall be made by
the Trustee on a pro rata basis only or on as nearly a pro rata basis as is
practicable (subject to DTC procedures), unless such method is otherwise
prohibited. If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. On and after the redemption date,
interest ceases to accrue on Securities or portions of them called for
redemption.
SECTION 3.03. Notice. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each Holder of Securities to be redeemed at its registered address. Notices of
redemption may not be conditional. The Trustee shall notify the Company promptly
of the Securities or portions of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers and principal amounts of the
particular Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this
34
<PAGE>
Indenture, interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request (which may be revoked at any time in writing
prior to the time at which the Trustee shall have given such notice to the
Holders), the Trustee shall give the notice of redemption in the Company's name
and at the Company's expense. In such event, the Company shall provide the
Trustee with the information required by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
is mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest and Liquidated Damages, if any, to
the redemption date; provided that if the redemption date is after a regular
record date and on or prior to the interest payment date, the accrued interest
shall be payable to the Securityholder of the redeemed Securities registered on
the relevant record date. If mailed in the manner herein, the notice shall be
conclusively presumed to have been given whether or not the Holder receives such
notice. Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Wholly Owned Restricted Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of and
accrued interest and Liquidated Damages, if any, on all Securities to be
redeemed on the redemption date other than Securities or portions of Securities
called for redemption that have been delivered by the Company to the Trustee for
cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder (at the Company's expense) a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. Optional Redemption.
(a) Except as set forth in Section 3.07(b) or (c), the Securities may
not be redeemed prior to May 1, 2005. Thereafter, the Securities will be subject
to redemption at any time at the option of the Company, in whole or in part, at
the redemption prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest and Liquidated Damages thereon, if any,
to the applicable redemption date, (subject to the right of Holders on the
relevant
35
<PAGE>
record date to receive interest due on the relevant interest payment date), if
redeemed during the twelve-month period beginning on May 1 of the years
indicated below:
Period Price
------ -----
2005 106.375%
2006 104.250%
2007 102.125%
2008 and thereafter 100.000%
(b) In addition, at any time and from time to time, prior to May 1,
2003, the Company may redeem up to 35% of the aggregate principal amount of
Securities under this Indenture at a redemption price of 112.75% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the redemption date, (subject to the right of
Holders on the relevant record date to receive interest due on the relevant
interest payment date), with the net cash proceeds of a public offering of
common stock of the Company; provided that at least 65% of the aggregate
principal amount of Securities issued under this Indenture remains outstanding
immediately after the occurrence of such redemption; and provided further that
such redemption shall occur within 90 days of the date of the closing of such
public offering.
(c) At any time on or prior to May 1, 2005, the Securities may be
redeemed as a whole but not in part at the option of the Company upon the
occurrence of a Change of Control (but in no event may any such redemption occur
more than 120 days after the occurrence of such Change of Control) at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest and Liquidated
Damages, if any, to, the redemption date, subject to the right of Holders on the
relevant record date to receive interest due on the relevant interest payment
date.
SECTION 3.08. No Sinking Fund. There shall be no sinking fund for the
payment of principal on the Securities to the Securityholders.
SECTION 3.09. Repurchase Offers.
(a) In the event that the Company shall be required to commence an
offer to all Holders to purchase Securities (a "Repurchase Offer") pursuant to
Section 4.06 hereof (an "Excess Proceeds Offer") or pursuant to Section 4.08
hereof (a "Change of Control Offer") the Company shall follow the procedures
specified in this Section 3.09:
(i) Within 30 days after (A) a Change of Control (unless (1)
the Company is not required to make such offer pursuant to Section
4.08(b) or (2) all Securities have been called for redemption pursuant
to Section 3.07(c)) or (B) the Company is required to make an Asset
Sale Offer pursuant to Section 4.06, the Company shall (x) commence a
Repurchase Offer, which shall remain open for a period of at least 20
Business Days
36
<PAGE>
following its commencement (the "Offer Period") and (y) send, by first
class mail, a notice to the Trustee and each of the Holders which shall
contain all instructions and materials necessary to enable such Holders
to tender Securities pursuant to such Repurchase Offer. The notice,
which shall govern the terms of the Repurchase Offer, shall describe
the transaction or transactions that constitute the Change of Control
or Asset Sale requiring an Asset Sale Offer, as the case may be, and
shall state:
(A) that the Repurchase Offer is being made pursuant
to this Section 3.09 and Section 4.06 or 4.08, as the case may
be, as applicable;
(B) the principal amount of Securities required to be
purchased pursuant to Section 4.06, in case of an Excess
Proceeds Offer, or that the Company is required to offer to
purchase all of the outstanding principal amount of
Securities, in the case of a Change of Control Offer (such
amount, the "Offer Amount"), the purchase price and, that on
the date specified in such notice (the "Purchase Date"), which
date shall be no earlier than 30 days and no later than 60
days from the date such notice is mailed, the Company shall
repurchase all Securities validly tendered and not withdrawn
pursuant to this Section 3.09 and Section 4.06 or 4.08, as
applicable;
(C) that any Security not tendered or accepted for
payment shall continue to accrue interest;
(D) that, unless the Company defaults in making such
payment, Securities accepted for payment pursuant to the
Repurchase Offer shall cease to accrue interest after the
Purchase Date;
(E) that Holders electing to have a Security
purchased pursuant to a Repurchase Offer may elect to have all
or any portion of such Security purchased;
(F) that Holders electing to have a Security
purchased pursuant to any Repurchase Offer shall be required
to surrender the Security, with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Security, or
such other customary documents of surrender and transfer as
the Company may reasonably request, duly completed, or
transfer by book-entry transfer, to the Company, the
Depository, or the Paying Agent at the address specified in
the notice prior to the Purchase Date;
(G) that Holders shall be entitled to withdraw their
election if the Company, the Depository or the Paying Agent,
as the case may be, receives, not later than the expiration of
the Offer Period, a telegram, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of
the Security the Holder delivered for purchase and a statement
that such Holder is withdrawing its election to have such
Security purchased;
(H) that, in the case of an Excess Proceeds Offer, if
the aggregate principal amount of Securities surrendered by
Holders thereof exceeds the Offer Amount, the Trustee shall
select the Securities to be purchased on a pro rata basis
37
<PAGE>
(based upon the outstanding principal amount thereof), with
such adjustments as may be deemed appropriate by the Company
so that only Securities in denominations of $1,000, or
integral multiples thereof, shall be purchased;
(I) that Holders whose Securities are purchased only
in part shall be issued new Securities equal in principal
amount to the unpurchased portion of the Securities
surrendered (or transferred by book-entry transfer); and
(J) the CUSIP number, if any, printed on the
Securities being repurchased and that no representation is
made as to the correctness or accuracy of the CUSIP number, if
any, listed in such notice or printed on the Securities.
(ii) On (or at the Company's election, before) the Purchase
Date, the Company shall, (A) to the extent lawful, accept for payment,
on a pro rata basis to the extent necessary in the case of an Excess
Proceeds Offer, the Securities or portions thereof tendered pursuant to
the Repurchase Offer and not theretofore withdrawn, or if Securities
aggregating less than the Offer Amount have been tendered, all
Securities tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Securities or portions thereof were
accepted for payment by the Company in accordance with the terms of
this Section 3.09, (B) deposit with the Paying Agent an amount equal to
the payment required in respect of all Securities or portions thereof
so tendered and (C) deliver or cause to be delivered to the Trustee the
Securities so accepted together with an Officers' Certificate stating
the aggregate principal amount of Securities or portions thereof being
purchased by the Company. The Company, the Depository or the Paying
Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each
tendering Holder an amount equal to the Change of Control Payment or
the payment due to each respective Holder in respect of the Excess
Proceeds Offer, as applicable, with respect to the Securities tendered
by such Holder and accepted by the Company for purchase, and the
Company shall promptly issue a new Security, and the Trustee, upon
written request from the Company, shall authenticate and mail or
deliver such new Security to such Holder, in a principal amount equal
to any unpurchased portion of the Securities so surrendered, provided
that each such new Security shall be in a principal amount of $1,000 or
an integral multiple thereof. Any Security not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. On
the Purchase Date, all Securities purchased by the Company shall be
delivered to the Trustee for cancellation. All Securities or portions
thereof purchased pursuant to the Repurchase Offer will be canceled by
the Trustee. The Company shall publicly announce the results of the
Repurchase Offer on or as soon as practicable after the Purchase Date,
but in no case more than five Business Days thereafter.
If the Company complies with the provisions of the preceding paragraph,
on and after the Purchase Date interest shall cease to accrue on the Securities
or the portions of Securities repurchased. If a Security is repurchased on or
after an interest record date but on or prior to the related interest payment
date, then any accrued and unpaid interest shall be paid to the Person in whose
name such Security was registered at the close of business on such record date.
If any Security called is not repurchased upon surrender because of the failure
of the Company to
38
<PAGE>
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the Purchase Date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case at
the rate provided in the Securities and in Section 4.01 hereof.
(b) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations to the extent
such laws and regulations are applicable in connection with the Repurchase
Offer. To the extent that the provisions of any applicable securities laws or
regulations conflict with this Section 3.09, the Company shall comply with such
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section by virtue thereof.
(c) Prior to complying with the provisions of this Section 3.09, but in
any event within 90 days following a Change of Control Offer or Asset Sale
Offer, as applicable, the Company shall either repay all outstanding Senior Debt
of the Company or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Debt of the Company to permit the repurchase of
Securities required by this Section 3.09 and Section 4.06 or 4.08, as
applicable.
(d) Once notice of repurchase is mailed in accordance with this Section
3.09, all Securities validly tendered and not withdrawn (or, in the case of an
Excess Proceeds Offer, if the Company is not required to repurchase all of such
Securities then the pro rata portion of such Securities that the Company may be
required to purchase pursuant to Section 3.02 and/or 4.06 hereof, as applicable)
become irrevocably due and payable on the Purchase Date at the purchase price
specified herein. A notice of repurchase may not be conditional.
(e) Other than as specifically provided in this Section 3.09 or Section
4.06 or 4.08, as applicable, any purchase pursuant to this Section 3.09 shall be
made pursuant to Sections 3.02 and 3.06 hereof.
ARTICLE IV
Covenants
---------
SECTION 4.01. Payment of Securities. The Company shall promptly pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent (but only if other than the Company or a Wholly Owned Restricted
Subsidiary) holds by 11:00 a.m., New York City time, in accordance with this
Indenture available funds sufficient to pay all principal and interest then due
and the Trustee or the Paying Agent, as the case may be, is not prohibited from
paying such money to the Securityholders on that date pursuant to the terms of
this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
39
<PAGE>
SECTION 4.02. Reports. Notwithstanding that the Company may not be
required to remain subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, to the extent permitted by the Exchange Act, the Company
shall file with the SEC, and provide, within 15 days after the Company is
required to file the same with the SEC, the Trustee and the Holders with the
annual reports and the information, documents and other reports that are
specified in Sections 13 and 15(d) of the Exchange Act. In the event the Company
is not permitted to file such reports, documents and information with the SEC,
the Company will provide substantially similar information to the Trustee and
the Holders, as if the Company were subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act. The Company also shall comply with the
other provisions of TIA ss. 314(a).
SECTION 4.03. Incurrence of Debt and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Debt (including Acquired Debt) or
issue any Disqualified Stock and the Company shall not permit any of its
Restricted Subsidiaries to issue any shares of Preferred Stock; provided,
however, that if no Default or Event of Default shall have occurred and be
continuing at the time of or as a consequence of the incurrence or issuance of
any such Debt, the Company or any Guarantor or Foreign Subsidiary of the Company
may incur Debt (including Acquired Debt) or issue shares of Disqualified Stock,
and Guarantors may issue Preferred Stock, if, in any such case, the Consolidated
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such additional Debt is incurred or such Disqualified Stock or
other Preferred Stock is issued would have been at least 2.00 to 1.00 if such
incurrence or issuance is on or before May 1, 2002 or at least 2.25 to 1.00 if
such incurrence or issuance is thereafter, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Debt had been incurred, or the Disqualified Stock or Preferred Stock
had been issued, as the case may be, at the beginning of such four-quarter
period (the "Coverage Ratio Exception").
(b) The provisions of Section 4.03(a) will not apply to the incurrence
of any of the following items of Debt (collectively, "Permitted Debt"):
(i) the incurrence by the Company or any of its Restricted
Subsidiaries of term and revolving Debt and letters of credit (with
letters of credit being deemed to have a principal amount equal to the
undrawn face amount thereof) under Credit Facilities (including
Guarantees of such Debt by the Company or any of its Subsidiaries);
provided that the aggregate principal amount of such Debt outstanding
pursuant to this clause (i) without duplication, does not exceed an
amount equal to the sum of (a) $500.0 million and (b) the greater of
$170.0 million and the Borrowing Base at the time such Debt is
incurred;
(ii) the incurrence by the Company and its Restricted
Subsidiaries of Existing Debt;
40
<PAGE>
(iii) the incurrence by the Company of Debt represented by the
Securities issued on the Closing Date and by the Guarantors of Debt
represented by the Security Guarantees;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of (a) Acquired Debt or (b) Debt (including Capital Lease
Obligations) for the purpose of financing or refinancing all or any
part of the lease, purchase price or cost of construction or
improvement of any property (real or personal) or other assets that are
used or useful in the business of the Company or such Restricted
Subsidiary (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets and whether such Debt is
owed to the seller or Person carrying out such construction or
improvement or to any third party), in an aggregate principal amount at
the date of such incurrence (including all Permitted Refinancing Debt
incurred to refund, refinance or replace any other Debt incurred
pursuant to this clause (iv)) not to exceed an amount equal to $35.0
million; provided that such Debt exists at the date of such purchase or
transaction, or is created within 180 days thereafter;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Debt in exchange for, or the net
proceeds of which are used to refund, refinance or replace Debt (other
than intercompany Debt) incurred pursuant to the Coverage Ratio
Exception, or pursuant to clause (ii), (iii) or (iv) of this Section
4.03(b);
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Debt or Preferred Stock owed or issued to
and held by the Company and any of its Restricted Subsidiaries
including any Indebtedness arising in connection with a Qualified
Receivables Transaction, provided, however, that (a) any such Debt of
the Company shall be subordinated and junior in right of payment to the
Securities and (b)(I) any subsequent issuance or transfer of Equity
Interests or other action that results in any such Debt or Preferred
Stock being held by a Person other than the Company or a Restricted
Subsidiary and (II) any sale or other transfer of any such Debt or
Preferred Stock to a Person that is not either the Company or a
Restricted Subsidiary shall be deemed, in each case, to constitute an
incurrence of such Debt or issuance of such Preferred Stock by the
Company or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred (a) for the
purpose of fixing or hedging interest rate risk with respect to any
floating rate Debt that is permitted by the terms of this Indenture to
be outstanding in a notional amount not exceeding the amount of such
Debt or (b) for the purpose of fixing or hedging currency exchange rate
risk or commodity price risk incurred in the ordinary course of
business, and in each case, not for speculative purposes;
(viii) the guarantee by the Company or any Guarantor of Debt
of the Company or a Restricted Subsidiary of the Company or by any
Restricted Subsidiary of Debt of any other Restricted Subsidiary that
is not a Guarantor, in each case, that was permitted to be incurred by
another provision of this Section 4.03;
41
<PAGE>
(ix) the incurrence by Foreign Subsidiaries of Debt for
working capital purposes (including acquisitions), and by the Company
or any of its Restricted Subsidiaries of Guarantees of Debt of Foreign
Subsidiaries or foreign joint ventures, provided that the aggregate
principal amount of such Debt and of the Debt so Guaranteed at any time
outstanding does not exceed $30.0 million; and
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Debt (which may comprise Debt under the New
Credit Facility) in an aggregate principal amount (or accreted value,
as applicable) at any time outstanding, pursuant to this clause (x) not
to exceed an amount equal to $50.0 million.
Notwithstanding any other provision in this Section 4.03, the maximum
amount of Debt that the Company or any Restricted Subsidiary may incur pursuant
to this Section 4.03 shall not be deemed to be exceeded as a result of
fluctuations in the exchange rates of currencies. For purposes of determining
compliance with this Section 4.03: (a) the outstanding principal amount of any
particular Debt shall be counted only once and any obligation arising under any
guarantee, Lien, letter of credit or similar instrument supporting such Debt
shall be disregarded; (b) in the event that an item of Debt meets the criteria
of more than one of the categories of Permitted Debt described in clauses (i)
through (x) above or is entitled to be incurred pursuant to Section 4.03(a), the
Company shall, in its sole discretion, classify such item of Debt in any manner
that complies with this Section 4.03 and such item of Debt will be treated as
having been incurred pursuant to only one of such clauses or pursuant to Section
4.03(a); provided that all outstanding Debt under the New Credit Facility
immediately following the Recapitalization shall be deemed to have been incurred
pursuant to Section 4.03(b)(i); and (c) accrual of interest and the accretion of
accreted value will not be deemed to be an incurrence of Debt.
SECTION 4.04. Restricted Payments.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make
any other distribution (including any payment by the Company or any Restricted
Subsidiary in connection with any merger or consolidation involving the Company
or any of its Restricted Subsidiaries) on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) and dividends
payable to the Company or any Restricted Subsidiary), (ii) purchase, redeem or
otherwise acquire or retire for value (including any acquisition or retirement
by the Company or any Restricted Subsidiary in connection with any merger or
consolidation) any Equity Interests of the Company, (iii) make any payment on or
with respect to, or purchase, redeem, defease or otherwise acquire or retire for
value, any Subordinated Debt of the Company or any Guarantor, except (A) a
payment of interest, principal or other related Obligations at Stated Maturity
and (B) the purchase, repurchase or other acquisition or retirement of
Subordinated Debt of the Company or such Guarantor in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of purchase, repurchase or other acquisition or
retirement or (iv) make any Restricted Investment, (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively referred
to as "Restricted Payments"), unless, at the time of and after giving effect to
such Restricted Payment:
42
<PAGE>
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(2) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Debt pursuant
to Section 4.03(a); and
(3) such Restricted Payment, together with (without
duplication) the aggregate amount of all other Restricted Payments made
by the Company and its Restricted Subsidiaries after the Closing Date,
is less than the sum (without duplication) (the "Restricted Payments
Basket") of:
(i) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from the
beginning of the fiscal quarter during which the Closing Date
occurs to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available
at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is negative, 100% of
such negative amount); plus
(ii) 100% of the aggregate net cash proceeds, and the
fair market value of any property other than cash, received by
the Company from the issue or sale (other than to a
Subsidiary) of, or from capital contributions with respect to,
Equity Interests of the Company (other than Disqualified Stock
and all warrants, options or other rights to acquire
Disqualified Stock (but excluding any debt security that is
convertible into, or exchangeable for, Disqualified Stock)),
in either case after the Closing Date; plus
(iii) the amount by which the aggregate principal
amount (or accreted value, if less) of Debt or Disqualified
Stock of the Company or any Restricted Subsidiary is reduced
on the Company's consolidated balance sheet upon the
conversion or exchange after the Closing Date of any Debt
convertible into or exchangeable for Equity Interests (other
than Disqualified Stock) of the Company, together with the net
cash proceeds received by the Company at the time of such
conversion; plus
(iv) 100% of the aggregate net cash proceeds received
by the Company or a Restricted Subsidiary of the Company since
the Closing Date (to the extent not included in Consolidated
Net Income of the Company) from (A) Restricted Investments,
whether through interest payments, principal payments,
dividends or other distributions and payments, or the sale or
other disposition (other than to the Company or a Restricted
Subsidiary) thereof made by the Company and its Restricted
Subsidiaries (less the cost of such sale or disposition, if
any) and (B) a cash dividend from, or the sale (other than to
the Company or a Restricted Subsidiary) of the stock of, an
Unrestricted Subsidiary; plus
43
<PAGE>
(v) upon the redesignation as a Restricted Subsidiary
of any Subsidiary that was designated an Unrestricted
Subsidiary after the Closing Date, the fair market value of
the Restricted Investments of the Company and its Restricted
Subsidiaries (other than such Subsidiary) in such Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at said date of declaration such payment
would have complied with the provisions of this Section 4.04;
(ii) the redemption, repurchase, retirement, defeasance or
other acquisition of Equity Interests or Subordinated Debt of the
Company, in exchange for, or out of the net cash proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary of
the Company) of, other Equity Interests (other than any Disqualified
Stock) of, or a capital contribution to, the Company; provided, that
the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition
shall not increase the Restricted Payments Basket;
(iii) the redemption, repurchase, retirement, defeasance or
other acquisition of Subordinated Debt of the Company (a) made by an
exchange for, or with the net cash proceeds from a substantially
concurrent incurrence of, Permitted Refinancing Debt or (b) upon a
Change of Control or Asset Sale to the extent required by the agreement
governing such Subordinated Debt but only if the Company shall have
complied with Section 4.06 or Section 4.08 herein, as the case may be,
and purchased all Securities validly tendered pursuant to the relevant
offer prior to purchasing or repaying such Subordinated Debt;
(iv) the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its common Equity Interests on a pro rata
basis;
(v) to the extent constituting Restricted Payments, the
Specified Affiliate Payments;
(vi) Restricted Payments in an aggregate amount not to exceed
$15.0 million; and
(vii) without limitation of the parenthetical at the end of
Section 4.04(a)(i) above the payment of any dividends in respect of the
14% Senior Redeemable Payment-In-Kind Preferred Stock of the Company
(the "Senior Preferred Stock") in the form of additional shares of
Senior Preferred Stock having the terms and conditions set forth in the
Certificate of Designation relating to the Senior Preferred Stock as in
effect on the Closing Date.
In determining the aggregate amount of Restricted Payments made after
the Closing Date in accordance with Section 4.04(a)(3), amounts expended
pursuant to clauses (i) (without duplication) and (iv) (but not amounts under
clauses (ii), (iii), (v), (vi) or (vii)) shall be included in such calculation;
provided that any amounts expended pursuant to such clause (iv) relating to
44
<PAGE>
dividends paid to the Company or one of its Restricted Subsidiaries shall not be
included in such calculation.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment or any property other
than cash that increases the Restricted Payments Basket shall be determined in
good faith by the Board of Directors of the Company.
In making the computations required by this Section 4.04: (a) the
Company or the relevant Restricted Subsidiary shall use audited financial
statements for the portions of the relevant period for which audited financial
statements are available on the date of determination and unaudited financial
statements and other current financial data based on the books and records of
the Company for the remaining portion of such period; and (b) the Company or the
relevant Restricted Subsidiary will be permitted to rely in good faith on the
financial statements and other financial data derived from the books and records
of the Company and the Restricted Subsidiary that are available on the date of
determination.
If the Company makes a Restricted Payment that, at the time of the
making of such Restricted Payment, would in the good faith determination of the
Company or any Restricted Subsidiary be permitted under the requirements of this
Indenture, such Restricted Payment will be deemed to have been made in
compliance with this Indenture notwithstanding any subsequent adjustments made
in good faith to the Company's or any Restricted Subsidiary's financial
statements, affecting Consolidated Net Income of the Company for any period. For
the avoidance of doubt, it is expressly agreed that no payment or other
transaction permitted by subclauses (i), (iv), (vi), (vii) and (viii) of Section
4.07(b) and no payment contemplated by or otherwise arising pursuant to the
Recapitalization, shall be considered a Restricted Payment for purposes of, or
otherwise restricted by, this Indenture.
SECTION 4.05. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries. The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary to (i)(a) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries (1) on
its Capital Stock or (2) with respect to any other interest or participation in,
or measured by, its profits, or (b) pay any Debt owed to the Company or any of
its Restricted Subsidiaries, (ii) make loans or advances to the Company or any
of its Restricted Subsidiaries or (iii) transfer any of its properties or assets
to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of:
(1) contracts in effect on the Closing Date as in effect on
the Closing Date, including the New Credit Facility and other Existing
Debt and the related documentation;
(2) this Indenture, the Securities, the Security Guarantees
and any other agreement entered into after the Closing Date, provided
that the encumbrances or
45
<PAGE>
restrictions in such agreements are not materially more restrictive
than those contained in the foregoing agreements;
(3) any agreement or other instrument of a Person acquired by
the Company or any of its Restricted Subsidiaries as in effect at the
time of such acquisition (but not created in connection with or in
contemplation of such acquisition), which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person,
so acquired;
(4) purchase money obligations (including Capital Lease
Obligations) for property acquired in the ordinary course of business
that impose restrictions of the nature described in subclause (iii)
above on the property so acquired;
(5) Debt or other contractual requirements in connection with
a Qualified Receivables Transaction that, in the good faith
determination of the Board of Directors or senior management of the
Company, are necessary or advisable to effect such Qualified
Receivables Transaction;
(6) in the case of subclause (iii) above, any encumbrance or
restriction (i) that restricts in a customary manner the subletting,
assignment, or transfer of any property or asset that is subject to a
lease, license or similar contract or (ii) contained in security
agreements or mortgages securing Debt to the extent such encumbrance or
restriction restricts the transfer of the property subject to such
security agreements or mortgages;
(7) in the case of subclause (iii) above, any Lien on property
or assets of the Company or any Restricted Subsidiary not otherwise
prohibited by this Indenture;
(8) any restriction under an agreement (including an option or
right) to sell property or assets of, or Equity Interests in, the
Company or any Restricted Subsidiary pending the closing of such sale,
which sale is permitted under this Indenture;
(9) restrictions on cash or other deposits or net worth
imposed by leases or other agreements entered into in the ordinary
course of business;
(10) customary provisions in joint venture agreements and
other similar agreements (in each case relating solely to the
respective joint venture or similar entity or the Equity Interests
therein) entered into in the ordinary course of business;
(11) any encumbrances or restrictions created with respect to
(i) Debt or Preferred Stock of Guarantors permitted to be incurred or
issued subsequent to the Closing Date pursuant to Section 4.03 and (ii)
Debt or Preferred Stock of Subsidiary Non-Guarantors permitted to be
incurred or issued subsequent to the Closing Date pursuant to Section
4.03, provided that in the case of this clause (ii) the Board of
Directors of the Company determines (as evidenced by a resolution of
the Board of Directors) in good faith at the time such encumbrances or
restrictions are created that such encumbrances or restrictions would
not reasonably be expected to impair the ability
46
<PAGE>
of the Company to make payments of interest and scheduled payments of
principal on the Securities in each case as and when due;
(12) any encumbrances or restrictions required by any
governmental, local or regulatory authority having jurisdiction over
the Company or any of its Restricted Subsidiaries or any of their
businesses in connection with any development grant made or other
assistance provided to the Company or any of its Restricted
Subsidiaries by such governmental authority; or
(13) any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (1)
through (l2) above, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings, taken as a whole, are, in the good faith
judgment of the Company, not materially more restrictive with respect
to such encumbrances or restrictions than those contained in the
contracts, instruments or obligations prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
SECTION 4.06. Asset Sales. The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of
and (ii) at least 75% of the consideration therefor received by the Company or
such Restricted Subsidiary is in the form of cash or Cash Equivalents and/or
property or assets that will be used or useful in a Permitted Business of the
Company or any of its Restricted Subsidiaries; provided that this clause (ii)
shall not apply to any sale of Equity Interests of or other Investments in
Unrestricted Subsidiaries.
For purposes of this Section 4.06, each of the following shall be
deemed to be cash: (a) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Securities or, in the case of liabilities of a Guarantor,
the Security Guarantee of such Guarantor) that are assumed by the transferee of
any such assets, or from which the Company and its Restricted Subsidiaries are
released; and (b) any notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash (to the extent of the cash
received) within 90 days after receipt.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds, at its option (a) to repay Senior
Debt or to repay Debt of any Restricted Subsidiary, (b) to make capital
expenditures or to acquire properties and assets that will be used or useful in
the business of the Company or any of its Subsidiaries or (c) to the acquisition
of a controlling interest in another entity engaged in a Permitted Business;
provided that if during such 360-day period the Company or a Restricted
Subsidiary enters into a definitive agreement committing it to apply such Net
Proceeds in accordance with the requirements of clause (b) or (c) or if the
application of such Net Proceeds is part of a project
47
<PAGE>
authorized by the Board of Directors in good faith that will take longer than
360 days to complete and such project has begun, such 360 day period will be
extended with respect to the amount of Net Proceeds so committed until required
to be paid in accordance with such agreement (or, if earlier, until termination
of such agreement) or, until completion of such project, as the case may be.
Pending the final application of any Net Proceeds, the Company or any Restricted
Subsidiary may temporarily reduce borrowings under a Credit Facility or
otherwise invest such Net Proceeds in any manner that is not prohibited by this
Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the first sentence of this paragraph will be deemed to constitute
"Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $20.0
million, the Company shall (i) make an offer to all Holders of Securities, and
(ii) prepay, purchase or redeem (or make an offer to do so) any Pari Passu Debt
of the Company in accordance with provisions governing such Debt requiring the
Company to prepay, purchase or redeem such Debt with the proceeds from any Asset
Sales (or offer to do so), pro rata in proportion to the respective principal
amounts of the Securities and such other Debt required to be prepaid, purchased
or redeemed or tendered for, in the case of the Securities pursuant to such
offer (an "Asset Sale Offer") to purchase the maximum principal amount of
Securities that may be purchased out of such pro rata portion of the Excess
Proceeds, at an offer price in cash in an amount equal to 100% of their
principal amount plus accrued and unpaid interest and Liquidated Damages (if
any) to the date of purchase, in accordance with the procedures set forth in
Section 3.09. To the extent that the aggregate principal amount of Securities
and Pari Passu Debt tendered pursuant to an Asset Sale Offer or other offer is
less than the Excess Proceeds, the Company may use any remaining Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Securities surrendered by holders thereof exceeds the pro
rata portion of such Excess Proceeds to be used to purchase Securities, the
Trustee shall select the Securities to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero. Notwithstanding anything to the contrary in the foregoing, the
Company may commence an Asset Sale Offer prior to the expiration of 360 days
after the occurrence of an Asset Sale.
SECTION 4.07. Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee or other transaction with, or for the
benefit of, any Affiliate of the Company (each of the foregoing, an "Affiliate
Transaction"), unless (i) such Affiliate Transaction is on terms that, taken as
a whole, are no less favorable to the Company or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person and (ii)
the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction entered into after the Closing Date involving aggregate
consideration in excess of $4.0 million, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the members of the Board of Directors and (b) with
respect to any Affiliate Transaction involving aggregate consideration in excess
of $10.0 million, an opinion as to the fairness to the Company or such
Restricted Subsidiary of such Affiliate Transaction from a
48
<PAGE>
financial point of view issued by an investment banking, appraisal or accounting
firm of national standing.
(b) The provisions of Section 4.07(a) shall not prohibit (and the
following shall not be deemed to be Affiliate Transactions): (i) any employment
agreements, non-competition agreements, stock purchase or option agreements,
collective bargaining agreements, employee benefit plans or arrangements
(including vacation plans, health and life insurance plans, deferred
compensation plans, stock loan programs, long-term incentive plans, directors'
and officers' indemnification agreements and retirement, savings or similar
plans), related trust agreements or any similar arrangements, in each case in
respect of employees, officers or directors and entered into in the ordinary
course of business, any payments or other transactions contemplated by any of
the foregoing and any other payments of compensation to employees, officers,
directors or consultants in the ordinary course of business or in connection
with the Company's transition to new ownership; (ii) transactions between or
among (A) the Company and/or its Restricted Subsidiaries or (B) the Company
and/or one or more of its Restricted Subsidiaries and any joint venture;
provided no Affiliate of the Company (other than a Restricted Subsidiary) owns
Capital Stock of any such joint venture; (iii) Permitted Investments and
Restricted Payments that are permitted by Section 4.04; (iv) loans or advances
to employees (or guarantees of third party loans to employees) in the ordinary
course of business or pursuant to a stock loan program; (v) transactions among
the Company and/or one or more of its Subsidiaries effected as part of a
Qualified Receivables Transaction; (vi) payments to Investcorp and its
Affiliates (whether or not such Persons are Affiliates of the Company) for
annual management, consulting and advisory fees and related expenses, which fees
shall not exceed $1.5 million per year; provided, however, that such fees with
respect to the first five years after the Closing Date shall be paid on the
Closing Date; (vii) any agreement as in effect on the Closing Date (including
the Recapitalization Agreement) or any amendment thereto (so long as any such
amendment is not disadvantageous to the holders of the Securities in any
material respect) or any transaction pursuant thereto (including the payment of
all fees and expenses related to the Recapitalization); (viii) transactions with
customers, clients, suppliers, or purchasers or sellers of goods or services, in
each case in the ordinary course of business and otherwise in compliance with
the terms of this Indenture which are fair to the Company or its Restricted
Subsidiaries, or are on terms at least as favorable as might reasonably have
been obtained at such time from an unaffiliated party, in each case in the
reasonable determination of the Board of Directors of the Company or the senior
management thereof; (ix) Debt permitted by Section 4.03(b)(x) on terms that,
taken as a whole, are no less favorable to the Company or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction with an unrelated Person, or, if there is no comparable transaction,
have been negotiated in good faith by the parties thereto and, if any member of
management is then a member of the Board of Directors of the Company or the
relevant Restricted Subsidiary, also approved by such member; (x) any
transaction on arm's length terms with non-affiliates that become Affiliates as
a result of such transaction; and (xi) the issuance of common stock of the
Company.
SECTION 4.08. Change of Control.
(a) Upon the occurrence of a Change of Control, unless all Securities
have been called for redemption pursuant to Section 3.07, each Holder of
Securities shall have the right to require the Company to repurchase all or any
part (equal to $1,000 or an integral multiple
49
<PAGE>
thereof) of such Holder's Securities pursuant to a Change of Control Offer made
pursuant to Section 3.09 at an offer price in cash (the "Change of Control
Payment") equal to 101% of the aggregate principal amount thereof plus accrued
and unpaid interest and Liquidated Damages thereon, if any, to the date of
purchase.
(b) The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in Section 3.09 applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
SECTION 4.09. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do have such knowledge, the certificate
shall describe the Default, its status and what action the Company is taking or
proposes to take with respect thereto. The Company also shall comply with
Section 314(a)(4) of the TIA.
The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default, an Officers' Certificate setting
forth the details of such Event of Default or Default and the action which the
Company proposes to take with respect thereto.
SECTION 4.10. Limitation on Designations of Unrestricted Subsidiaries
(a) The Board of Directors may designate (a "Designation") any
Restricted Subsidiary (including any newly acquired or newly formed Subsidiary
of the Company) to be an Unrestricted Subsidiary unless such Subsidiary owns any
Capital Stock of, or owns or holds any Lien on any property of, the Company or
any Restricted Subsidiary, so long as such Designation would not cause a
Default; provided that (i) any then existing Guarantee by the Company or any
Restricted Subsidiary of any Debt of the Subsidiary being so designated shall be
deemed an "incurrence" of such Debt at the time of such Designation and (ii)
either (A) the Subsidiary to be so designated has total assets of $1.0 million
or less or (B) if such Subsidiary has assets greater than $1.0 million, the
"incurrence" of Debt referred to in clause (1) of this provision would be
permitted under Section 4.03.
For purposes of making the determination of whether such Designation
would cause a Default, the portion of the fair market value of the net assets of
any Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary that is represented by the interest of the Company and
its Restricted Subsidiaries (excluding Permitted Investments) in such
Subsidiary, in each case as determined in good faith by the Board of Directors
of the Company, shall be deemed to be a Restricted Payment. Such Designation
will only be permitted if such Restricted Payment would be permitted at such
time.
50
<PAGE>
(b) The Board of Directors may revoke any Designation of a Subsidiary
as an Unrestricted Subsidiary (a "Revocation"); provided that (i) no Default or
Event of Default shall have occurred and be continuing at the time of or after
giving effect to such Revocation and (ii) all Liens and Debt of such
Unrestricted Subsidiary outstanding immediately after such Revocation would, if
incurred at such time, have been permitted to be incurred (and shall be deemed
to have been incurred) for all purposes of this Indenture.
(c) Any such Designation or Revocation by the Board of Directors after
the Closing Date shall be evidenced to the Trustee by promptly filing with the
Trustee a copy of the resolution of the Board of Directors giving effect to such
Designation or Revocation and an Officers' Certificate certifying that such
Designation or Revocation complied with the foregoing provisions.
SECTION 4.11. Liens. The Company shall not, and shall not permit any of
its Restricted Subsidiaries to, create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind securing Debt or trade
payables (other than Permitted Liens) upon any of their property or assets, now
owned or hereafter acquired, unless all payments due under this Indenture and
the Securities are secured on an equal and ratable basis with the obligations so
secured until such time as such obligations are no longer secured by a Lien,
provided that (i) if such other Debt constitutes Subordinated Debt or is
otherwise subordinate or junior in right of payment to the Obligations under
this Indenture, the Securities or the relevant Security Guarantee, as the case
may be, such Lien is expressly made prior and senior in priority to the Lien
securing such other Debt or (ii) in any other case, such Lien ranks equally and
ratably with the Lien securing the other Debt or obligations so secured.
SECTION 4.12. Additional Security Guarantees. All current and future
Subsidiaries of the Company other than Foreign Subsidiaries, Receivables
Subsidiaries and Subsidiaries that have been properly designated as Unrestricted
Subsidiaries in accordance with this Indenture for so long as they continue to
constitute Unrestricted Subsidiaries, will be Guarantors in accordance with the
terms of this Indenture to the extent such Subsidiaries are guarantors or are
otherwise obligors under any Credit Facility incurred under Section 4.03(b)(i).
Notwithstanding the foregoing, if any Foreign Subsidiary that is a Restricted
Subsidiary shall Guarantee any Debt of the Company or any Domestic Subsidiary
while the Securities are outstanding, then such Foreign Subsidiary shall become
a Guarantor under this Indenture and shall execute a Security Guarantee in
accordance with Article XI herein.
SECTION 4.13. Business Activities. The Company shall not, and shall not
permit any Restricted Subsidiary to, engage in any business other than Permitted
Businesses, except to such extent as is not material to the Company and its
Restricted Subsidiaries taken as a whole.
SECTION 4.14. No Senior Subordinated Debt. The Company shall not incur
any Debt that is expressly subordinate in right of payment to any Senior Debt
and senior in any respect in right of payment to the Securities. No Guarantor
shall incur any Debt that is expressly subordinate in right of payment to any
Senior Debt and senior in any respect in right of payment to the Security
Guarantee of such Guarantor.
51
<PAGE>
SECTION 4.15. Corporate Existence. Except as otherwise permitted by
Article V, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each of its Restricted Subsidiaries
in accordance with the respective organizational documents of each such
Restricted Subsidiary and the rights (charter and statutory) and material
franchises of each of its Restricted Subsidiaries; provided, however, that the
Company shall not be required to preserve any such right, franchise or corporate
existence with respect to each such Restricted Subsidiary if the Board of
Directors of the Company shall determine that the loss thereof would not,
individually or in the aggregate, have a material adverse effect on the
business, financial condition or results of operations of the Company and its
Restricted Subsidiaries taken as a whole.
ARTICLE V
Successor Company
-----------------
SECTION 5.01. Merger, Consolidation or Sale of All or Substantially All
Assets of the Company. The Company shall not consolidate or merge with or into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another Person
unless:
(i) the Company is the surviving corporation or the Person
formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state
thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have
been made assumes all the obligations of the Company under the
Securities, this Indenture and any Registration Rights Agreement
pursuant to a supplemental indenture reasonably satisfactory to the
Trustee;
(iii) immediately before and immediately after giving effect
to such transaction (including giving effect to any Debt being incurred
in connection in with the transaction) no Default or Event of Default
exists; and
(iv) except in the case of a merger of the Company with or
into a Wholly Owned Restricted Subsidiary of the Company, the Company
or the Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made
will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, either (x) be permitted to incur at
least $1.00 of additional Debt pursuant to the Coverage Ratio Exception
or (y) have a Consolidated Coverage Ratio at least equal to the
Consolidated Coverage Ratio of the Company for such four-quarter
reference period.
52
<PAGE>
Notwithstanding clauses (iii) and (iv) above, (a) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company, and (b) the Company may merge with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction.
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of related transactions) of all
or substantially all of the properties and assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the assets and properties of the Company (determined on a
consolidated basis for the Company and its Subsidiaries), shall be deemed to be
the transfer of all or substantially all of the properties and assets of the
Company.
Upon any consolidation or merger in which the Company is not the
continuing corporation, or any transfer of all or substantially all of the
assets of the Company in each case in accordance with the foregoing, the
surviving corporation or the Person formed by or surviving any such
consolidation or merger shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under the Notes, this Indenture
and the Registration Rights Agreement with the same effect as if such surviving
corporation or the Person formed by or surviving any such merger or
consolidation had been named as such.
This Section 5.01 shall not apply to the merger of Saturn Acquisition
Corporation with and into the Company on the Closing Date.
SECTION 5.02. Merger, Consolidation or Sale of All or Substantially All
Assets of a Guarantor. No Guarantor may consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) another Person (other
than the Company or another Guarantor) unless:
(i) subject to the provisions of the following paragraph, the
Person formed by or surviving any such consolidation or merger (if
other than such Guarantor) assumes all the obligations of such
Guarantor under the Security Guarantee of such Guarantor, the Indenture
and any Registration Rights Agreement pursuant to a supplemental
indenture reasonably satisfactory to the Trustee; and
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists.
Notwithstanding the foregoing clause (ii) above, (a) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to any Guarantor and (b) any Guarantor may merge with an
Affiliate incorporated solely for the purpose of reincorporating such Guarantor
in another jurisdiction.
Upon any consolidation or merger in which a Guarantor is not the
continuing corporation in accordance with the foregoing, the surviving
corporation or the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) shall succeed to, and be substituted for,
and may exercise every right and power of, such Guarantor under its Guarantee,
this Indenture and the Registration Rights Agreement with the same effect as if
such surviving
53
<PAGE>
corporation or the Person formed by or surviving any such consolidation or
merger (if other than such Guarantor) had been named as such.
ARTICLE VI
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default and Remedies.
(a) An "Event of Default" occurs if:
(1) default for 30 days in the payment when due of interest
on, or Liquidated Damages with respect to, the Securities (whether or
not prohibited by Article X herein);
(2) default in payment when due of the principal of or
premium, if any, on the Securities (including the failure to make a
payment to purchase Securities tendered pursuant to a Change of Control
Offer or an Asset Sale Offer) (whether or not prohibited by Article X
herein);
(3) failure by the Company for 30 days after receipt of notice
from the Trustee or the holders of at least 25% in principal amount of
the then outstanding Securities to comply with Section 4.03, 4.04,
4.06, 4.08 or 5.01;
(4) failure by the Company for 60 days after receipt of notice
from the Trustee or the holders of at least 25% in principal amount of
the then outstanding Securities specifying such failure to comply with
any of its other agreements in this Indenture or the Securities;
(5) the failure by the Company or any Restricted Subsidiary
that is a Significant Subsidiary to pay any Debt within any applicable
grace period after final maturity or acceleration by the holders
thereof because of a default if the total amount of all such Debt
unpaid or accelerated at the time exceeds $25.0 million;
(6) any judgment or decree for the payment of money in excess
of $25.0 million (net of any insurance or indemnity payments actually
received in respect thereof prior to or within 60 days from the entry
thereof, or to be received in respect thereof in the event any appeal
thereof shall be unsuccessful) is entered against the Company or any
Significant Subsidiary that is a Restricted Subsidiary and is not
discharged, waived or stayed and either (A) an enforcement proceeding
has been commenced by any creditor upon such judgment or decree or (B)
there is a period of 60 days following the entry of such judgment or
decree during which such judgment or decree is not discharged, waived
or the execution thereof stayed;
(7) any Security Guarantee by a Guarantor that is a
Significant Subsidiary shall be held in any judicial proceeding to be
unenforceable or invalid or, except as permitted by this Indenture,
shall cease for any reason to be in full force and effect or any
54
<PAGE>
Guarantor, or any Person acting on behalf of any Guarantor, shall deny
or disaffirm its obligations under its Security Guarantee;
(8) the Company or any Restricted Subsidiary that is a
Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency; or
(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Restricted Subsidiary that is a Significant Subsidiary in an
involuntary case;
(B) appoints a Custodian of the Company or any
Restricted Subsidiary that is a Significant Subsidiary or for
any substantial part of its property; or
(C) orders the winding up or liquidation of the
Company or any Restricted Subsidiary that is a Significant
Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree relating thereto remains unstayed and in effect for 60 days.
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effect by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, United States Code, or any
similar federal or state law for the relief of debtors. For purposes of this
Section, the term "Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clause (3) or (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities notify the Company in writing by registered or certified
mail, return receipt requested, of the Default and the Company does not cure
such Default within the time specified in clauses (3) and (4) after
55
<PAGE>
receipt of such notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default."
SECTION 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default specified in
Section 6.01(a)(8) or (9) with respect to the Company) occurs and is continuing,
the Trustee by notice to the Company in writing, or the Holders of at least 25%
in aggregate principal amount of the outstanding Securities by notice in writing
to the Company, may declare the principal of and accrued but unpaid interest on
all the Securities to be due and payable. Upon such a declaration, such
principal and interest shall be due and payable immediately. Notwithstanding the
foregoing, if an Event of Default specified in Section 6.01(a)(8) or (9) occurs,
the principal of and interest on all the Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholders.
(b) At any time after a declaration of acceleration with respect to the
Securities as described in Section 6.02(a), the Holders of a majority in
aggregate principal amount of the Securities may rescind and cancel such
declaration and its consequences: (i) if the rescission would not conflict with
any judgment or decree; (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely
because of the acceleration; (iii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid; and (iv) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances. No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative (to the
extent permitted by law).
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Securities then outstanding by written notice
to the Trustee may on behalf of the Holders of all of the Securities waive any
existing Default or Event of Default and its consequences under this Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of or premium on, the Securities. When a Default is waived, it
is deemed cured and ceases to exist and any Event of Default arising therefrom
shall be deemed to have been cured and waived for every purpose under this
Indenture, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any consequent right.
56
<PAGE>
SECTION 6.05. Control by Majority. The Holders of a majority in
aggregate principal amount of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee by this Indenture.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or, subject to Section 7.01, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium, if any, interest or Liquidated Damages
when due, no Securityholder may pursue any remedy with respect to this Indenture
or the Securities unless:
(1) such Holder has previously given the Trustee notice that
an Event of Default is continuing;
(2) Holders of at least 25% in aggregate principal amount of
the outstanding Securities have made a written request to the Trustee
to pursue the remedy;
(3) such Holders have offered the Trustee security or
indemnity reasonably satisfactory to it against any loss, liability or
expense;
(4) the Trustee has not complied with request within 60 days
after the receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in aggregate principal amount of
the outstanding Securities have not given the Trustee a direction
inconsistent with such request within such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and Liquidated Damages and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a)(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
57
<PAGE>
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, any Subsidiary or
any Guarantor, their creditors or their property and, unless prohibited by law
or applicable regulations, may vote on behalf of the Holders in any election of
a trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article VI, it shall pay out the oney or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to the holders of Senior Debt to the extent required
by Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, and any Liquidated
Damages without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal, any Liquidated
Damages and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company nor
any Guarantor (to the extent they may lawfully do so) shall at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company and each Guarantor (to the extent that they may
lawfully do so) hereby expressly waive all benefit or advantage of any such law,
and shall not
58
<PAGE>
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE VII
Trustee
-------
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of such Person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section
7.01(b);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
59
<PAGE>
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. Subject to Section 7.01:
(a) The Trustee may conclusively rely, and shall be protected in acting
or refraining from acting, upon any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in any such document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of such counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Securities at the
time outstanding, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company and shall
incur no liability or additional liability of any kind by reason of such inquiry
or investigation.
60
<PAGE>
(g) The Trustee shall not be required to give any note, bond or surety
in respect of the execution of the trusts and powers under this Indenture.
(h) The permissive rights of the Trustee to take any action enumerated
in this Indenture shall not be construed as a duty to take such action.
(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer has actual knowledge thereof or unless a
Trust Officer receives written notice thereof at its Corporate Trust Office
specified in Section 13.02, from the Company or a Holder that such Default or
Event of Default has occurred, and such notice references the Securities and
this Indenture.
(j) The rights, privileges, protections, immunities and benefits given
to the Trustee, including its right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder, and to
each agent, custodian and other Person employed to act hereunder.
(k) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is continuing
and is known to the Trustee, the Trustee shall mail to each Holder notice of the
Default within the earlier of 90 days after it occurs or 30 days after it is
known to a Trust Officer or written notice of it is received by the Trustee.
Except in the case of a Default in the payment of principal of, premium, if any,
interest or Liquidated Damages on any Security, the Trustee may withhold notice
if and so long as a committee of its trust officers in good faith determines
that withholding notice is in the interests of Securityholders. If a Default
occurs and is continuing and a Senior Officer of the Company has actual
knowledge of such Default, the Company shall deliver to the Trustee written
notice of such Default, which notice shall include the status of such Default
and any action being taken or proposed to be taken by the Company with respect
thereto. Notwithstanding anything to the contrary expressed in this Indenture,
the Trustee shall not be
61
<PAGE>
deemed to have knowledge of any Default or Event of Default hereunder, except in
the case of an Event of Default under Section 6.01(a)(1) or (2) hereof (provided
that the Trustee is Paying Agent), unless and until a Trust Officer receives
written notice thereof at its Corporate Trust Office specified in Section 13.02,
from the Company or a Holder that such Default or Event of Default has occurred.
SECTION 7.06. Reports by Trustee to Holders. The Trustee shall transmit
to the Holders such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the TIA at the times and in the manner
provided pursuant thereto. To the extent that any such report is required by the
TIA with respect to any 12-month period, such report shall cover the 12-month
period ending May 15 and shall be transmitted by the next succeeding July 15.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation as is agreed to in writing by the
Trustee and Company for the Trustee's services hereunder. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket disbursements, advances and expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company and each Guarantor, jointly but not severally, shall
indemnify the Trustee and its officers, directors, shareholders, agents and
employees (each, an "Indemnified Party") for and hold each Indemnified Party
harmless against any and all loss, damage, claims, liability or expense
(including reasonable attorneys' fees and expenses) including taxes (other than
taxes based upon, measured by or determined by the income of the Trustee)
incurred by them without negligence or bad faith on their part arising out of or
in connection with the acceptance or administration of this Indenture or the
Securities and the performance of their duties hereunder, including the cost and
expense of enforcing this Indenture against the Company (including this Section
7.07), and defending itself against any claim (whether asserted by a Holder or
any other person) The Trustee and its officers, directors, shareholders, agents
and employees in its capacity as Paying Agent, Registrar, Custodian and agent
for service of notice and demands shall have the full benefit of the foregoing
indemnity as well as all other benefits, rights and privileges accorded to the
Trustee in this Indenture when acting in such other capacity. The Trustee shall
notify the Company of any claim for which it may seek indemnity promptly upon
obtaining actual knowledge thereof; provided that any failure so to notify the
Company shall not relieve the Company or any Guarantor of its indemnity
obligations hereunder. The Company shall defend the claim and the Indemnified
Party shall provide reasonable cooperation at the Company's expense in the
defense. Such Indemnified Parties may have separate counsel and the Company
shall pay the fees and expenses of such counsel; provided that the Company shall
not be required to pay such fees and expenses if it assumes such Indemnified
Parties' defense and, in such Indemnified Parties' reasonable judgment, there is
no conflict of interest between the Company and such parties in
62
<PAGE>
connection with such defense. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by an Indemnified
Party through such party's own willful misconduct, negligence or bad faith. The
Company need not pay any settlement made without its consent (which consent
shall not be unreasonably withheld).
To secure the Company's payment obligations in this Section and all
other obligations to the Trustee pursuant to this Indenture, including all fees,
expenses, and rights to indemnification, the Trustee shall have a lien on all
money or property held or collected by the Trustee other than money or property
held in trust to pay principal of and interest and any Liquidated Damages on
particular Securities. Such lien shall survive the satisfaction and discharge of
this Indenture and the resignation or removal of the Trustee. The Trustee's
right to receive payment of any amounts due under this Indenture shall not be
subordinated to any other Debt of the Company and the Securities shall be
subordinate to the Trustee's rights to receive such payment.
The Company's payment obligations pursuant to this Section shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any Bankruptcy Law or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(a)(8) or (9) with respect to the Company,
the expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company in writing. The Holders of a majority in
principal amount of the Securities may remove the Trustee by so notifying the
Trustee and the Company in writing and may appoint a successor Trustee. The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
63
<PAGE>
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
at least 10% in aggregate principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee at
the expense of the Company.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee, provided, that such Person shall be
qualified and eligible under this Article VII.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated therein.
64
<PAGE>
ARTICLE VIII
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.01(b) or 8.01(c) hereof be applied to all outstanding
Securities upon compliance with the conditions set forth below in this Article
VIII.
(b) Upon the Company's exercise under Section 8.01(a) hereof of the
option applicable to this Section 8.01(b), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Securities and any Security Guarantee on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and each Guarantor shall be deemed to
have paid and discharged the entire Debt represented by the outstanding
Securities and any Security Guarantee, which Securities and Security Guarantees
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.03 hereof and the other Sections of this Indenture referred to in (i) and (ii)
below, and to have satisfied all their other obligations under such Securities
and this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (i) the rights of Holders of outstanding Securities to
receive solely from the trust fund described in Article VIII hereof, as more
fully set forth in such Article, payments in respect of the principal of,
premium, if any, and interest and Liquidated Damages, if any, on such Securities
when such payments are due, (ii) the Company's obligations with respect to the
Securities under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.09, 7.07 and 7.08,
which shall survive until the Securities have been paid in full (thereafter, the
Company's obligations in Section 7.07 shall survive), and (iii) this Article
VIII. Subject to compliance with this Article VIII, the Company may exercise its
option under this Section 8.01(b) notwithstanding the prior exercise of its
option under Section 8.01(c) hereof.
(c) Upon the Company's exercise under Section 8.01(a) hereof of the
option applicable to this Section 8.01(c), the Company and each Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.02 hereof,
be released from their obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 (with respect to Restricted
Subsidiaries only) and 5.01(iv) hereof with respect to the outstanding
Securities on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Securities shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration of act of Holders (and the consequences of any thereof) in
connection with such Sections, but shall continue to be deemed "outstanding" for
all the other purposes hereunder (it being understood that such Securities and
the related Security Guarantees shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect of any
term, condition or limitation set forth in any such Section, whether directly or
indirectly, by reason of any reference elsewhere herein to
65
<PAGE>
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Securities
shall be unaffected thereby. In addition, upon the Company's exercise under
Section 8.01(a) hereof of the option applicable to this Section 8.01(c) hereof,
subject to the satisfaction of the conditions set forth in Section 8.02,
Sections 6.01(3), 6.01(4) (with respect to compliance with Sections 4.02, 4.05,
4.07, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.15 (with respect to Restricted
Subsidiaries only)), 6.01(5), 6.01(6), 6.01(7), 6.01(8) (with respect to
Subsidiaries of the Company only) or Section 6.01(9) (with respect to the
Subsidiaries of the Company only) shall not constitute Events of Default.
SECTION 8.02. Conditions to Legal or Covenant Defeasance. The following
shall be the conditions to the application of either Section 8.01(b) or 8.01(c)
hereof to the outstanding Securities:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, Government Notes,
or a combination thereof, in such amounts as will be sufficient (without
reinvestment), in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest and
Liquidated Damages on the outstanding Securities on the Stated Maturity or on
the applicable redemption date, as the case may be, and the Company must specify
whether the Securities are being defeased to maturity or to a particular
redemption date;
(b) in the case of an election under Section 8.01(b) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, subject to customary assumptions and
exclusions, the Holders of the outstanding Securities will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of an election under Section 8.01(c) hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States, reasonably acceptable to the Trustee confirming that, subject to
customary assumptions and exclusions, the Holders of the outstanding Securities
will not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit and the
grant of any Lien securing such borrowing);
66
<PAGE>
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel, subject to customary assumptions and exclusions, to the effect that
after the 91st day following the deposit pursuant to Section 8.02(a), the trust
funds will not be part of any "estate" formed by the bankruptcy or
reorganization of the Company or subject to the "automatic stay" under the
Bankruptcy Law, or in the case of a Covenant Defeasance, will be subject to a
first priority Lien in favor of the Trustee for the benefit of the Holders;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders over any other creditors of the Company or the
Guarantors, as applicable, or with the intent of defeating, hindering, delaying
or defrauding any other creditors of the Company or the Guarantors, as
applicable, or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject
to customary assumptions and exclusions), each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance have been
complied with.
SECTION 8.03. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.04 hereof, all money
and Government Notes (including the proceeds thereof) deposited with the Trustee
(or other qualifying trustee, collectively for purposes of this Section 8.03,
the "Trustee") pursuant to Section 8.02 hereof in respect of the outstanding
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as Paying
Agent) as the Trustee may determine, to the Holders of such Securities of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or Government Notes held by it as provided in Section
8.02 hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.02(a) hereof), are
in excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.04. Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on any Security and remaining unclaimed for two years after such principal,
premium and Liquidated Damages, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the
67
<PAGE>
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company, cause to be published once, in the New York Times
(national edition) and the Wall Street Journal (national edition), notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 8.05. Reinstatement. If the Trustee or Paying Agent is unable
to apply any United States dollars or Government Notes in accordance with this
Article VIII by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article VIII until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with this Article VIII; provided, however,
that, if the Company or any Guarantor makes any payment of principal of, premium
and Liquidated Damages, if any, or interest on any Security following the
reinstatement of its obligations, the Company or any Guarantor, as the case may
be, shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.
SECTION 8.06. Satisfaction and Discharge of Indenture. Upon the request
of the Company, this Indenture will cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of the Securities, as
expressly provided for herein or pursuant hereto), the Company and the
Guarantors will be discharged from their obligations under the Securities and
the Security Guarantees, and the Trustee, at the expense of the Company, will
execute proper instruments acknowledging satisfaction and discharge of the
Indenture, the Security Guarantees, any Registration Rights Agreement and the
Securities when:
(a) either (i) all the Securities theretofore authenticated and
delivered (other than mutilated, destroyed, lost or stolen Securities that have
been replaced or paid and Securities that have been subject to defeasance under
this Article VIII) have been delivered to the Trustee for cancellation or (ii)
all Securities not theretofore delivered to the Trustee for cancellation (A)
have become due and payable, (B) will become due and payable at maturity within
one year or (C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company, and the Company,
in the case of (A), (B) or (C) above, has irrevocably deposited or caused to be
deposited with the Trustee funds in trust for such purpose in an amount
sufficient to pay and discharge the entire Debt on such Securities not
theretofore delivered to the Trustee for cancellation, for principal (and
premium, if any, on) and interest on the Securities to the date of such deposit
(in the case of Securities that have become due and payable) or to the Stated
Maturity or redemption date, as the case may be;
(b) the Company has paid or caused to be paid all sums payable under
this Indenture by the Company; and
68
<PAGE>
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent provided
in this Indenture relating to the satisfaction and discharge of this Indenture,
the Security Guarantees, the security agreements relating thereto and the
Securities have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 7.07 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(ii) of this Section,
the obligations of the Trustee under Section 8.03 and Section 2.04 shall
survive.
ARTICLE IX
Amendments
----------
SECTION 9.01. Without Consent of Holders. The Company, the Guarantors
and the Trustee may amend or supplement this Indenture, the Securities or the
Security Guarantees without notice to or consent of any Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Securities in addition to or
in place of certificated Securities (provided that the uncertificated
Securities are issued in registered form for purposes of Section 163(f)
of the Code, or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code);
(3) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Securities in the case of a
merger, consolidation or sale of assets;
(4) to release any Security Guarantee in accordance with the
provisions of this Indenture;
(5) to provide for additional Guarantors;
(6) to make any change that would provide any additional
rights or benefits to the Holders of Securities or that, as determined
by the Board of Directors of the Company in good faith, does not
adversely affect the legal rights of any such Holder under this
Indenture, the Securities or the Security Guarantees;
(7) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA; or
(8) to make any change to Article II, Section 4.01 or the
Exhibits hereto that applies only to Additional Securities (other than
a change relating to other provisions of this Indenture incorporated or
referenced in Article II, Section 4.01 or any such Exhibit).
69
<PAGE>
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company, the Guarantors and
the Trustee may amend or supplement this Indenture, the Securities or the
Security Guarantees without notice to any Securityholder but with the written
consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Securities), and any
existing default or compliance with any provisions of this Indenture, the
Securities or the Security Guarantees may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Securities
(including consents obtained in connection with a tender offer or exchange offer
for Securities. Notwithstanding the foregoing, without the consent of each
Securityholder affected, an amendment or waiver may not (with respect to any
Securities held by a non-consenting Holder):
(i) reduce the principal amount of Securities whose Holders
must consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of
any Security, reduce any premium payable upon optional redemption of
the Securities or otherwise alter the provisions with respect to the
redemption of the Securities (other than provisions relating to
Sections 4.06, 4.08 and 3.09);
(iii) reduce the rate of or change the time for payment of
interest on any Security;
(iv) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Securities (except
a rescission of acceleration of the Securities by the Holders of at
least a majority in aggregate principal amount of the Securities and a
waiver of the payment default that resulted from such acceleration);
(v) make any Security payable in money other than that stated
in the Securities;
(vi) impair the rights of Holders of Securities to receive
payments of principal of or premium, if any, or interest or Liquidated
Damages on the Securities;
(vii) modify or change any provision of this Indenture, or the
related definitions, affecting the subordination or ranking of the
Securities or the Security Guarantees in a manner which adversely
affect the Holders of Securities;
70
<PAGE>
(viii) make any change in the foregoing amendment or waiver
provisions; or
(ix) except as permitted by this Indenture, release any
Security Guarantee.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Debt then outstanding
unless the holders of such Senior Debt (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives written notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder. Except if
otherwise specified in such amendment or waiver, an amendment or waiver becomes
effective once the requisite number of consents are received by the Company or
the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
71
<PAGE>
SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture that such amendment is
the legal, valid and binding obligation of the Company and the Guarantors
enforceable against them in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof (including Section 9.03).
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE X
Subordination
-------------
SECTION 10.01. Agreement To Subordinate. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Debt evidenced by the
Securities is subordinated in right of payment, to the extent and in the manner
provided in this Article X, to the prior payment in full in cash or Cash
Equivalents of all existing and future Senior Debt of the Company and that the
subordination is for the benefit of and enforceable by the holders of Senior
Debt of the Company. The Securities shall in all respects rank pari passu with
all other Pari Passu Debt of the Company and only Debt of the Company that is
Senior Debt shall rank senior to the Securities in accordance with the
provisions set forth herein. For purposes of these subordination provisions, the
Debt evidenced by the Securities is deemed to include the Liquidated Damages
payable pursuant to the provisions set forth in the Securities and the
applicable Registration Rights Agreement. All provisions of this Article X shall
be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution to creditors of the Company in a liquidation or dissolution of
the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property, an assignment for
the benefit of creditors or any marshaling of the Company's assets and
liabilities, the holders of Senior Debt of the Company shall be entitled to
receive payment in full, in cash or Cash Equivalents, of all Obligations due in
respect of such Senior Debt (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior Debt, whether or
not allowed or allowable in such proceeding) before the Holders of Securities
will be entitled to receive any payment with respect to the Securities, and
until all Obligations with respect to such Senior Debt are paid in full, in cash
or Cash Equivalents, any payment or distribution to which the Holders of
Securities would be entitled shall be made to the holders of such Senior Debt
(except that Holders of Securities may
72
<PAGE>
receive and retain (i) Permitted Junior Securities and (ii) payments made from
the trust described in Article VIII so long as, on the date or dates the
respective amounts were paid into the trust, such payments were made with
respect to the Securities without violating this Article X).
SECTION 10.03. Default on Senior Debt. The Company shall not make any
payment or distribution upon or in respect of the Securities (except from the
trust described in Article VIII) if (i) a default in the payment of any
Designated Senior Debt of the Company occurs and is continuing beyond any
applicable grace period (a "payment default") or any other default on Designated
Senior Debt of the Company occurs and the maturity of such Designated Senior
Debt is accelerated in accordance with its terms or (ii) a default, other than a
payment default, occurs and is continuing with respect to Designated Senior Debt
of the Company that permits holders of the Designated Senior Debt of the Company
as to which such default relates to accelerate its maturity (a "non-payment
default") and, in the case of this clause (ii) only, the Trustee receives a
notice of such default (a "Payment Blockage Notice") from the Company, a
Representative for, or the holders of a majority of the outstanding principal
amount of, any such issue of Designated Senior Debt of the Company. Payments on
the Securities may and shall be resumed (a) in the case of a payment default,
upon the date on which such default is cured or waived and, in the case of
Designated Senior Debt of the Company that has been accelerated, such
acceleration has been rescinded, and (b) in case of a non-payment default, the
earlier of (I) the date on which such non-payment default is cured or waived,
(II) 179 days after the date on which the applicable Payment Blockage Notice is
received or (III) the date on which the Trustee receives notice from the
Representative for such Designated Senior Debt of the Company rescinding the
Payment Blockage Notice, unless the maturity of any Designated Senior Debt of
the Company has been accelerated. No new period of payment blockage may be
commenced on account of any non-payment default unless and until 360 days have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No non-payment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90 days.
SECTION 10.04. Acceleration of Payment of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company shall
promptly notify the Representative of the lenders under the New Credit Facility
of the acceleration. If any Debt under the New Credit Facility is outstanding,
the Company may not make any payment on account of such accelerated Securities
until five Business Days after such holders of such Debt receive notice of such
acceleration and, thereafter, may pay the Securities only if this Article X
otherwise permits payment at that time.
SECTION 10.05. When Distribution Must Be Paid Over. If a distribution
is made to Securityholders that because of this Article X should not have been
made to them, the Securityholders who receive such distribution shall hold it in
trust for holders of Senior Debt of the Company and pay it over to them as their
interests may appear.
SECTION 10.06. Subrogation. After all Senior Debt of the Company is
paid in full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Debt of the Company to receive
distributions applicable to Senior Debt of the Company. A distribution made
under this Article X to holders of Senior Debt of the Company which
73
<PAGE>
otherwise would have been made to Securityholders is not, as between the Company
and Securityholders, a payment by the Company on Senior Debt of the Company.
SECTION 10.07. Relative Rights. This Article X defines the relative
rights of Securityholders and holders of Senior Debt of the Company. Nothing in
this Indenture shall:
(1) impair, as between the Company and Security holders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default, subject to the rights of holders
of Senior Debt of the Company to receive distributions otherwise
payable to Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Debt of the Company to enforce the subordination of the
Debt evidenced by the Securities shall be impaired by any act or failure to act
by the Company or by its failure to comply with this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than three
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article X. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt of the Company may give the notice;
provided, however, that, if an issue of Senior Debt of the Company has a
Representative, only the Representative may give the notice. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Debt of the Company
(or a Representative of such holder) to establish that such notice has been
given by a holder of such Senior Debt of the Company or Representative thereof.
The Trustee (or any authenticating agent hereunder) in its individual
or any other capacity may hold Senior Debt of the Company with the same rights
it would have if it were not Trustee (or authenticating agent hereunder). The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee (and any authenticating agent hereunder) shall be entitled
to all the rights set forth in this Article X with respect to any Senior Debt of
the Company which may at any time be held by it, to the same extent as any other
holder of Senior Debt of the Company; and nothing in Article VII shall deprive
the Trustee (or any authenticating agent hereunder) of any of its rights as such
holder. Nothing in this Article X shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt of the
Company, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article X Not to Prevent Events of Default or Limit
Right to Accelerate. The failure to make a payment pursuant to the Securities by
reason of any provision
74
<PAGE>
in this Article X shall not be construed as preventing the occurrence of a
Default. Nothing in this Article X shall have any effect on the right of the
Securityholders or the Trustee to accelerate the maturity of the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of
Government Notes held in trust under Article VIII by the Trustee for the payment
of principal of and interest on the Securities shall not be subordinated to the
prior payment of any Senior Debt or subject to the restrictions set forth in
this Article X, and none of the Securityholders shall be obligated to pay over
any such amount to the Company or any holder of Senior Debt of the Company or
any other creditor of the Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Security holders or (iii) upon the Representative for the holders of Senior Debt
of the Company for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt of
the Company and other Debt of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article X. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Debt of the Company to participate in any
payment or distribution pursuant to this Article X, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Debt of the Company held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
other facts pertinent to the rights of such Person under this Article X, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. Sections 7.01 and 7.02 shall be applicable to all actions or omissions
of actions by the Trustee pursuant to this Article X.
SECTION 10.14. Trustee To Effectuate Subordination. Each Securityholder
by accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Securityholders and the holders of Senior Debt of the
Company as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Debt. With
respect to the holders of Senior Debt of the Company, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article X. The Trustee shall not be deemed to owe
any fiduciary or other duty to the holders of Senior Debt of the Company and
shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Securityholders or the Company or any other Person, money or
assets to which any holders of Senior Debt of the Company shall be entitled by
virtue of this Article X or otherwise.
75
<PAGE>
SECTION 10.16. Reliance by Holders of Senior Debt on Subordination
Provisions. Each Securityholder by accepting a Security acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt of the Company,
whether such Senior Debt was created or acquired before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Debt and such holder of Senior Debt shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold, or
in continuing to hold, such Senior Debt.
SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing in this
Article shall apply to amounts due to the Trustee pursuant to other sections of
this Indenture.
SECTION 10.18. Payments May Be Paid Prior to Dissolution. Nothing
contained in this Article X or elsewhere in this Indenture shall prevent (i) the
Company, except under the conditions described in Sections 10.02 and 10.03, from
making payments at any time for the purpose of making payments of principal of
and interest on the Securities, or from depositing with the Trustee any moneys
for such payments, or (ii) in the absence of actual knowledge by the Trustee
that a given payment would be prohibited by Section 10.02 or 10.03, the
application by the Trustee of any moneys deposited with it for the purpose of
making payments of principal of, and interest on, the Securities to the Holders
entitled thereto unless at least three Business Days prior to the date upon
which such payment would otherwise become due and payable a Trust Officer of the
Trustee shall have received a Payment Blockage Notice provided for in Section
10.03(ii) (provided, that notwithstanding the foregoing, the Holders receiving
any payments made in contravention of Section 10.02 and/or 10.03 (and the
respective payments) shall otherwise be subject to the provisions of Sections
10.02 and 10.03). The Company shall give prompt written notice to the Trustee of
any dissolution, winding-up, liquidation or reorganization of the Company,
although any delay or failure to give any such notice shall have no effect on
the subordination provisions contained herein.
ARTICLE XI
Security Guarantees
-------------------
SECTION 11.01. Security Guarantees. Each Guarantor hereby jointly and
severally unconditionally and irrevocably guarantees as a primary obligor and
not merely as a surety, to each Holder and to the Trustee and its successors and
assigns (a) the full and punctual payment of principal of, premium, if any, and
interest and Liquidated Damages, if any, on the Securities when due, whether at
maturity, by acceleration, by redemption or otherwise, subject to any applicable
grace period, and all other monetary obligations of the Company under this
Indenture (including obligations to the Trustee) and the Securities and (b) the
full and punctual performance within applicable grace periods of all other
obligations of the Company whether for expenses, indemnification or otherwise
under this Indenture and the Securities (all of the foregoing being hereinafter
collectively called the "Guaranteed Obligations"). Each Guarantor further agrees
that the Guaranteed Obligations may be extended or renewed, in whole or in part,
without notice or further assent from each such Guarantor, and that each such
Guarantor shall remain bound under this Article XI notwithstanding any extension
or renewal of any Guaranteed Obligation.
76
<PAGE>
Each Guarantor waives presentation to, demand of, payment from and
protest to the Company of any of the Guaranteed Obligations and also waives
notice of protest for nonpayment. Each Guarantor waives notice of any default
under the Securities or the Guaranteed Obligations. The obligations of each
Guarantor hereunder shall not be affected by (a) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under this Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any Guaranteed
Obligations; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Guaranteed Obligations or any of them; (e) the failure of any Holder or Trustee
to exercise any right or remedy against any other guarantor of the Guaranteed
Obligations; or (f) any change in the ownership of such Guarantor, except as
provided in Section 11.02(b).
Each Guarantor further agrees that its Security Guarantee herein
constitutes a Guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Guaranteed Obligations.
The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense of setoff, counterclaim, recoupment or termination
whatsoever or by reason of the invalidity, illegality or unenforceability of the
Guaranteed Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any remedy under this Indenture, the
Securities or any other agreement, by any waiver or modification of any thereof,
by any default, failure or delay, willful or otherwise, in the performance of
the Guaranteed Obligations, or by any other act or thing or omission or delay to
do any other act or thing which may or might in any manner or to any extent vary
the risk of any Guarantor or would otherwise operate as a discharge of any
Guarantor as a matter of law or equity.
Each Guarantor further agrees that its Security Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Guaranteed
Obligation is rescinded or must otherwise be restored by any Holder or the
Trustee upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest, premium or Liquidated Damages, if any, on any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any other
Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt
of written demand by the Trustee, forthwith pay, or cause to be paid, in cash,
to the Holders or the Trustee an amount equal to the sum of (i) the unpaid
principal amount of such Guaranteed Obligations, (ii) accrued
77
<PAGE>
and unpaid interest, premium and Liquidated Damages, if any, on such Guaranteed
Obligations (but only to the extent not prohibited by law) and (iii) all other
monetary Guaranteed Obligations of the Company to the Holders and the Trustee.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article VI for
the purposes of any Security Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Guaranteed Obligations guaranteed hereby, and (y) in the event of any
declaration of acceleration of such Guaranteed Obligations as provided in
Article VI, such Guaranteed Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section.
Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 11.02. Limitation on Liability; Release.
(a) Any term or provision of this Indenture to the contrary
notwithstanding, the maximum, aggregate amount of the obligations guaranteed
hereunder by any Guarantor shall not exceed the maximum amount that can be
guaranteed (after giving effect to all its Guarantees of Debt under the New
Credit Facility) without rendering this Indenture, as it relates to any
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
(b) This Guarantee as to any Subsidiary Guarantor shall terminate and
be of no further force or effect, and any such Subsidiary Guarantor shall be
released and relieved of any obligations under its Security Guarantee and this
Indenture, upon (i) the designation (in accordance with the provisions of this
Indenture) of such Subsidiary Guarantor as an Unrestricted Subsidiary or (ii)
the sale or other disposition of all of the assets of such Subsidiary Guarantor
in accordance with the terms of this Indenture, by way of merger, consolidation
or otherwise, or a sale or other disposition of all of the Capital Stock of any
Subsidiary Guarantor then held by the Company and its Restricted Subsidiaries;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with Section 4.06, to the extent such Section is applicable to such
disposition, (iii) the sale or other disposition of Capital Stock of any
Subsidiary Guarantor if (A) as a result of such disposition, such Person ceases
to be a Subsidiary of the Company and (B) the Net Proceeds of such sale are
applied in accordance with Section 4.06, to the extent such Section is
applicable to such disposition, or (iv) the release of such Subsidiary Guarantor
from its guarantee and all other obligations under all Credit Facilities
incurred under Section 4.03(b)(i). If the Security Guarantee of any Subsidiary
Guarantor terminates pursuant to the foregoing provisions, such Person shall
cease to be a Subsidiary, a Guarantor or otherwise a party to this Indenture
and, upon request by the Company, the Trustee shall execute appropriate
instruments acknowledging such termination and the release of such Person from
its obligations hereunder.
78
<PAGE>
SECTION 11.03. Successors and Assigns. This Article XI shall be binding
upon each Guarantor and its successors and assigns and shall enure to the
benefit of the successors and assigns of the Trustee and the Holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges conferred upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.04. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article XI shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Article XI at law,
in equity, by statute or otherwise.
SECTION 11.05. Modification. No modification, amendment or waiver of
any provision of this Article XI, nor the consent to any departure by any
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Guarantor in any case shall entitle such Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
ARTICLE XII
Subordination of the Security Guarantees
----------------------------------------
SECTION 12.01. Agreement To Subordinate. Each Guarantor agrees, and
each Securityholder by accepting a Security agrees, that such Guarantor's
obligations under its Security Guarantee are subordinated in right of payment,
to the extent and in the manner provided in this Article XII, to the prior
payment in full in cash or Cash Equivalents of all existing and future Senior
Debt of such Guarantor and that the subordination is for the benefit of and
enforceable by the holders of Senior Debt of such Guarantor. The obligations of
a Guarantor under this Article XII shall in all respects rank pari passu with
all other Pari Passu Debt of such Guarantor, and only Debt of such Guarantor
that is Senior Debt shall rank senior to the obligations of such Guarantor in
this Article XII in accordance with the provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution to creditors of any Guarantor in a liquidation or dissolution of
such Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such Guarantor or its property, an assignment for
the benefit of creditors or any marshaling of such Guarantor's assets and
liabilities, the holders of Senior Debt of such Guarantor shall be entitled to
receive payment in full, in cash or Cash Equivalents, of all Obligations due in
respect of such Senior Debt (including interest after the commencement of any
such proceeding at the rate specified in the applicable Senior Debt, whether or
not allowed or allowable in such proceeding) before the Holders of Securities
will be entitled to receive any payment with respect to the Securities, and
until all Obligations with respect to such Senior Debt are paid in full, in cash
or
79
<PAGE>
Cash Equivalents, any payment or distribution to which the Holders of Securities
would be entitled shall be made to the holders of such Senior Debt (except that
Holders of Securities may receive and retain (i) Permitted Junior Securities and
(ii) payments made from the trust described in Article VIII so long as, on the
date or dates the respective amounts were paid into the trust, such payments
were made with respect to the Securities without violating this Article XII).
SECTION 12.03. Default on Senior Debt of a Guarantor. A Guarantor shall
not make any payment or distribution upon or in respect of its Security
Guarantee if (i) a default in the payment of any Designated Senior Debt of such
Guarantor occurs and is continuing beyond any applicable grace period (a
"Guarantor payment default") or any other default on Designated Senior Debt of
such Guarantor occurs and the maturity of such Designated Senior Debt is
accelerated in accordance with its terms or (ii) a default, other than a
Guarantor payment default, occurs and is continuing with respect to Designated
Senior Debt of such Guarantor that permits holders of the Designated Senior Debt
of such Guarantor as to which such default relates to accelerate its maturity (a
"Guarantor non-payment default") and, in the case of this clause (ii) only, the
Trustee receives a notice of such default (a "Guarantor Payment Blockage
Notice") from the Company, a Representative for, or the holders of a majority of
the outstanding principal amount of, any such issue of Designated Senior Debt of
such Guarantor. Payments on the Security Guarantee of such Guarantor may and
shall be resumed (a) in the case of a Guarantor payment default, upon the date
on which such default is cured or waived and, in the case of Designated Senior
Debt of such Guarantor that has been accelerated, such acceleration has been
rescinded, and (b) in case of a Guarantor non-payment default, the earlier of
(I) the date on which such Guarantor non-payment default is cured or waived,
(II) 179 days after the date on which the applicable Guarantor Payment Blockage
Notice is received or (III) the date on which the Trustee receives notice from
the Representative for such Designated Senior Debt rescinding the Guarantor
Payment Blockage Notice, unless the maturity of any Designated Senior Debt of
such Guarantor has been accelerated. No new period of payment blockage may be
commenced on account of any Guarantor non-payment default unless and until 360
days have elapsed since the initial effectiveness of the immediately prior
Guarantor Payment Blockage Notice. No Guarantor non-payment default that existed
or was continuing on the date of delivery of any Guarantor Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Guarantor
Payment Blockage Notice unless such default shall have been cured or waived for
a period of not less than 90 days.
SECTION 12.04. Demand for Payment. If payment of the Securities is
accelerated because of an Event of Default and a demand for payment is made on a
Guarantor pursuant to Article XI, the Trustee shall promptly notify the Company,
and the Company shall promptly (and in no event more than five Business Days
after receipt of such notice) notify the Representative of the lenders under the
New Credit Facility of the acceleration. If any Debt under the New Credit
Facility is outstanding, such Guarantor may not pay its Obligations under its
Security Guarantee until five Business Days after the holders of such Debt
receive notice of such demand and, thereafter, may pay its Obligations under its
Security Guarantee only if this Article XII otherwise permits payment at that
time.
SECTION 12.05. When Distribution Must Be Paid Over. If a distribution
is made to Securityholders that because of this Article XII should not have been
made to them, the
80
<PAGE>
Securityholders who receive the distribution shall hold it in trust for holders
of Senior Debt of the relevant Guarantor and pay it over to them as their
interests may appear.
SECTION 12.06. Subrogation. After all Senior Debt of a Guarantor is
paid in full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Debt of such Guarantor to receive
distributions applicable to Senior Debt of such Guarantor. A distribution made
under this Article XII to holders of Senior Debt of such Guarantor which
otherwise would have been made to Securityholders is not, as between such
Guarantor and Securityholders, a payment by such Guarantor on Senior Debt of
such Guarantor.
SECTION 12.07. Relative Rights. This Article XII defines the relative
rights of Securityholders and holders of Senior Debt of a Guarantor. Nothing in
this Indenture shall:
(1) impair, as between a Guarantor and Security holders, the
obligation of a Guarantor which is absolute and unconditional, to pay
its Obligations under its Security Guarantee to the extent set forth in
Article XI; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a default by a Guarantor under its
Obligations under its Security Guarantee, subject to the rights of
holders of Senior Debt of such Guarantor to receive distributions
otherwise payable to Securityholders.
SECTION 12.08. Subordination May Not Be Impaired by a Guarantor. No
right of any holder of Senior Debt of a Guarantor to enforce the subordination
of the Obligations under the Security Guarantee of such Guarantor shall be
impaired by any act or failure to act by such Guarantor or by its failure to
comply with this Indenture.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article XII, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt.
SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article XII. A Guarantor, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Debt of a Guarantor may give the notice;
provided, however, that, if an issue of Senior Debt of a Guarantor has a
Representative, only the Representative may give the notice. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Debt of a Guarantor
(or a Representative of such holder) to establish that such notice has been
given by a holder of such Senior Debt or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior
Debt of a Guarantor with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the
81
<PAGE>
Paying Agent may do the same with like rights. The Trustee shall be entitled to
all the rights set forth in this Article XII with respect to any Senior Debt of
a Guarantor which may at any time be held by it, to the same extent as any other
holder of Senior Debt of such Guarantor; and nothing in Article VII shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
XII shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07.
SECTION 12.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt of a
Guarantor, the distribution may be made and the notice given to their
Representative (if any).
SECTION 12.11. Article XII Not to Prevent Events of Default or Limit
Right to Accelerate. The failure of a Guarantor to make a payment on any of its
Obligations under its Security Guarantee by reason of any provision in this
Article XII shall not be construed as preventing the occurrence of a default by
such Guarantor under its Security Guarantee. Nothing in this Article XII shall
have any effect on the right of the Securityholders or the Trustee to make a
demand for payment on a Guarantor pursuant to this Article XII.
SECTION 12.12. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article XII, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 12.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior Debt
of a Guarantor for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt of a
Guarantor and other Debt of a Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XII. In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person as
a holder of Senior Debt of a Guarantor to participate in any payment or
distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Debt of such Guarantor held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article XII, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. Sections 7.01 and 7.02 shall be applicable to all actions or omissions
of actions by the Trustee pursuant to this Article XI.
SECTION 12.13. Trustee To Effectuate Subordination. Each Securityholder
by accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Securityholders and the holders of Senior Debt of each
of the Guarantors as provided in this Article XII and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 12.14. Trustee Not Fiduciary for Holders of Senior Debt of a
Guarantor. The Trustee shall not be deemed to owe any fiduciary or other duty to
the holders of Senior Debt of a Guarantor and shall not be liable to any such
holders if it shall mistakenly pay over or distribute
82
<PAGE>
to Securityholders or the relevant Guarantor or any other Person, money or
assets to which any holders of Senior Debt of such Guarantor shall be entitled
by virtue of this Article XII or otherwise.
SECTION 12.15. Reliance by Holders of Senior Debt of a Guarantor on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Debt of a Guarantor, whether such Senior Debt was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Debt and such holder of Senior Debt shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Debt.
SECTION 12.16. Payments May Be Paid Prior to Dissolution. Nothing
contained in this Article XII or elsewhere in this Indenture shall prevent (i)
any Guarantor, except under the conditions described in Section 12.02 and 12.03,
from making any payment or distribution upon or in respect of its Security
Guarantee at any time or from depositing with the Trustee any moneys for any
such payment or distribution, or (ii) in the absence of actual knowledge by the
Trustee that a given payment or distribution would be prohibited by Section
12.02 or 12.03, the application by the Trustee of any moneys deposited with it
for the purpose of making any such payment or distribution to the Holders
entitled thereto unless at least three Business Days prior to the date upon
which such payment or distribution would otherwise become due and payable, a
Trust Officer of the Trustee shall have received a Guarantor Payment Blockage
Notice provided for in Section 12.03 (provided, that notwithstanding the
foregoing, the Holders receiving any payment or distribution made in
contravention of Section 12.02 and/or 12.03 (and the respective payment or
distribution) shall otherwise be subject to the provisions of Sections 12.02 and
12.03). Each Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of such Guarantor,
although any delay or failure to give any such notice shall have no effect on
the subordination provisions contained herein.
ARTICLE XIII
Miscellaneous
-------------
SECTION 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02. Notices. Any notice or communication shall be in writing
and delivered in person or mailed by first-class mail addressed as follows:
if to the Company:
Jostens, Inc.
5501 Norman Center Drive
Minneapolis, MN 55437
Attention of: General Counsel, with copies to:
83
<PAGE>
David Tayeh
Investcorp International Inc.
280 Park Avenue, 37 West
New York, NY 10017
Gibson, Dunn & Crutcher, LLP
200 Park Avenue
New York, NY 10166
Attention: Joerg H. Esdorn, Esq.
if to the Trustee:
The Bank of New York
101 Barclay Street, 21st Floor West
New York, New York 10286
telecopier no.: (212) 815-5915
Attention of: Corporate Trust Trustee Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be made in
compliance with Section 313(c) of the TIA and mailed to the Securityholder at
the Securityholder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Guarantors, the Trustee, the Registrar and anyone
else shall have the protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, at the request of the Trustee the
Company shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof) stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 13.05 hereof)
84
<PAGE>
stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
To the extent applicable, the Company shall comply with Section
314(c)(3) of the TIA.
SECTION 13.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with or satisfied; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.06. When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee actually knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
85
<PAGE>
SECTION 13.10. No Recourse Against Others. A director, officer,
incorporator, employee, stockholder or Affiliate as such, of the Company or any
Guarantor shall not have any liability for any obligations of the Company or any
Guarantor under the Securities or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release shall be part of the consideration for the issue of the Securities.
SECTION 13.11. Successors. All agreements of the Company and each
Guarantor in this Indenture and the Securities shall bind their successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 13.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
SECTION 13.14. Severability. In case any one or more of the provisions
in this Indenture, in the Securities or in the Guarantees shall be held invalid,
illegal or unenforceable, in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
SECTION 13.15. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any of its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
86
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
JOSTENS, INC.,
by: /s/ Robert C. Buhrmaster
---------------------------
Name: Robert C. Buhrmaster
Title: Chairman of the Board,
President and Chief
Executive Officer
AMERICAN YEARBOOK COMPANY, INC.
by: /s/ Robert C. Buhrmaster
---------------------------
Name: Robert C. Buhrmaster
Title: President
THE BANK OF NEW YORK
by: /s/ Terence Rawlins
---------------------------
Name: Terence Rawlins
Title: Asst. Vice President
87
<PAGE>
Exhibit A
[FORM OF FACE OF INITIAL SECURITY]
[GLOBAL SECURITIES LEGEND]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
[RESTRICTED SECURITIES LEGEND]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR"),
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO JOSTENS, INC.
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
Exhibit A
---------
i
<PAGE>
AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF
JOSTENS, INC. SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO
YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE
IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE TRUSTEE AND JOSTENS, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
JOSTENS, INC.
12 3/4% SENIOR SUBORDINATED NOTE DUE 2010
No. ___ CUSIP No.
$
----------
JOSTENS, INC., a Minnesota corporation (the "Company"), promises to pay
to _______________, or its registered assigns, the principal sum of ___________
in U.S. Dollars on May 1, 2010.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Additional provisions of this Security are set forth on the other side
of this Security.
JOSTENS, INC.,
by ______________________________
Name:
Title:
Exhibit A
---------
ii
<PAGE>
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK
as Trustee, certifies that
this is one of the Securities [Seal]
referred to in the Indenture,
by
-----------------------------
Authorized Signatory
Exhibit A
---------
iii
<PAGE>
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
12 3/4 % Senior Subordinated Note due 2010
1. Interest
--------
JOSTENS, INC., a Minnesota corporation (the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above and shall pay Liquidated Damages, if any, payable pursuant to the relevant
Registration Rights Agreement.
The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on May 1 and November 1 of each year commencing on
November 1, 2000. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
Issue Date with respect to this Security. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) on and
Liquidated Damages, if any, in respect of the Securities to the Persons who are
registered holders of Securities at the close of business on the 15th of April
or the 15th of October immediately preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest by check
payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, THE BANK OF NEW YORK (the "Trustee") will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice to the Holders. The Company or any
domestically organized Wholly Owned Restricted Subsidiary may act as Paying
Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of May
10, 2000 (the "Indenture"), among the Company, the Initial Guarantor and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the TIA. Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders are
referred to the Indenture and the TIA for a statement of those terms.
The Securities are unsecured senior subordinated obligations of the
Company and are limited to $350,000,000 in aggregate principal amount
outstanding, of which $225,000,000
Exhibit A
---------
iv
<PAGE>
in aggregate principal amount will be initially issued on the Closing Date.
Subject to the conditions set forth in the Indenture, the Company may issue up
to an additional $125,000,000 aggregate principal amount of Additional
Securities. This Security is one of the Initial Securities referred to in the
Indenture. The Securities include the Initial Securities, the Additional
Securities and any Exchange Securities and Private Exchange Securities issued in
exchange for the Initial Securities pursuant to the Indenture. The Initial
Securities, the Additional Securities, the Exchange Securities and the Private
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the incurrence of Debt
by the Company and its Restricted Subsidiaries; the payment of dividends and
other payments by the Company and its Restricted Subsidiaries; Investments;
sales of assets of the Company and Restricted Subsidiaries; certain transactions
with Affiliates; the lines of business in which the Company and its Restricted
Subsidiaries may operate; Liens; and consolidations, mergers and transfers of
all or substantially all of the Company's or a Guarantor's assets. In addition,
the Indenture prohibits certain restrictions on distributions from Restricted
Subsidiaries.
5. Optional Redemption
-------------------
Except as set forth in the next two paragraphs, the Securities may not
be redeemed at the Company's option prior to May 1, 2005. Thereafter, the
Securities will be subject to redemption at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the applicable redemption date (subject to the right of Holders on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period beginning on May 1 of
the years indicated below:
Redemption
Period Price
------ --------
2005 106.375%
2006 104.250%
2007 102.125%
2008 and thereafter 100.000%
In addition, at any time and from time to time, prior to May 1, 2003,
the Company may redeem up to 35% of the aggregate principal amount of Securities
issued under the Indenture at a redemption price of 112.75% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the redemption date (subject to the right of Holders on the relevant
record date to receive interest due on the relevant interest payment date), with
the net cash proceeds of an underwritten registered public offering of common
stock of the Company; provided that at least 65% of the aggregate principal
amount of Securities issued under the Indenture remains outstanding immediately
after the occurrence of any such redemption; and provided further, that such
redemption shall occur within 90 days of the date of the closing of such public
offering.
At any time on or prior to May 1, 2005, the Securities may be redeemed
as a whole but not in part at the option of the Company upon the occurrence of a
Change of Control, upon not less than 30 nor more than 60 days' prior notice
(but in no event may any such redemption occur
Exhibit A
---------
v
<PAGE>
more than 120 days after the occurrence of such Change of Control) mailed by
first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the principal amount thereof plus the Applicable Premium as of,
and accrued but unpaid interest and Liquidated Damages, if any, to, the
redemption date, subject to the right of Holders on the relevant record date to
receive interest due on the relevant interest payment date.
6. Notices of Redemption
---------------------
Notices of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at its registered address all in accordance with the
Indenture. If less than all of the Securities are to be redeemed at any time,
selection of Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Securities are listed, or, if the Securities are not so listed, on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided that no Securities of $1,000 or less shall be redeemed in
part; provided further, however, that if a partial redemption is made with the
proceeds of a public offering of common stock, selection of the Securities or
portions thereof for redemption shall be made by the Trustee on a pro rata basis
only or on as nearly a pro rata basis as is practicable (subject to DTC
procedures), unless such method is otherwise prohibited. If any Security is to
be redeemed in part only, the notice of redemption that relates to such Security
shall state the portion of the principal amount thereof to be redeemed. On and
after the redemption date, interest ceases to accrue on Securities or portions
of them called for redemption.
7. Repurchase at the Option of the Holder
--------------------------------------
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions set forth in the Indenture, to require the Company
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of the Securities of such Holder at a purchase price equal to 101% of the
aggregate principal amount of the Securities to be repurchased plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date that is on or
prior to the date of repurchase) as provided in, and subject to the terms of,
the Indenture.
8. Subordination
-------------
The Securities are subordinated to Senior Debt of the Company, as
defined in the Indenture. To the extent provided in the Indenture, Senior Debt
of the Company must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder,
Exhibit A
---------
vi
<PAGE>
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or transfer or exchange any
Securities for a period of 15 days prior to a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for
two years, the Paying Agent shall pay the money back to the Company at its
request, or if then held by the Company or a Wholly Owned Restricted Subsidiary,
shall be discharged from such trust (unless an abandoned property law designates
another Person for payment thereof). After any such payment, Holders entitled to
the money must look only to the Company for payment thereof, and all liability
of the Paying Agent with respect to such money, and all liability of the Company
or such permitted Wholly Owned Restricted Subsidiary as trustee thereof, shall
thereupon cease.
12. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Indenture,
the Security Guarantees, any Registration Rights Agreement and the Securities if
the Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Securities or the Security Guarantees may be amended or
supplemented with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any existing default or
noncompliance with any provision of the Indenture, the Securities or the
Security Guarantees (other than payment of principal, premium, if any,
Liquidated Damages, if any, and interest) may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated Securities
(provided that the uncertificated Securities are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the Code), to
provide for the assumption of the Company's or any Guarantor's obligations to
Holders of Securities in the case of a merger, consolidation or sale of assets,
to release any Security Guarantee in accordance with the provisions of the
Indenture, to provide for additional Guarantors, to make any change that would
provide any additional rights or benefits to the Holders of Securities or that,
as determined by the Board of Directors of the Company in good
Exhibit A
---------
vii
<PAGE>
faith, does not adversely affect the legal rights of any such Holder under the
Indenture, the Securities or the Security Guarantees, to comply with
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA or to provide for the issuance of Additional Securities
in compliance with Article II and Section 4.03 of the Indenture.
14. Defaults and Remedies
---------------------
Under the Indenture, an Event of Default occurs if there is: (i)
default for 30 days in the payment when due of interest on, or Liquidated
Damages with respect to, the Securities (whether or not prohibited by Article X
in the Indenture); (ii) default in payment when due of the principal of or
premium, if any, on the Securities (including the failure to make a payment to
purchase Securities tendered pursuant to a Change of Control Offer or an Asset
Sale Offer) (whether or not prohibited by Article X in the Indenture); (iii)
failure by the Company for 30 days after receipt of notice from the Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Securities to comply with Section 4.03, 4.04, 4.06, 4.08 or 5.01 of the
Indenture; (iv) failure by the Company for 60 days after receipt of notice from
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities specifying such failure to comply with any of its other
agreements in the Indenture or the Securities; (v) the failure by the Company or
any Restricted Subsidiary that is a Significant Subsidiary to pay any Debt
within any applicable grace period after final maturity or acceleration by the
holders thereof because of a default if the total amount of all such Debt unpaid
or accelerated at the time exceeds $25.0 million; (vi) any judgment or decree
for the payment of money in excess of $25.0 million (net of any insurance or
indemnity payments actually received in respect thereof prior to or within 60
days from the entry thereof, or to be received in respect thereof in the event
any appeal thereof shall be unsuccessful) is entered against the Company or any
Significant Subsidiary that is a Restricted Subsidiary and is not discharged,
waived or stayed and either (A) an enforcement proceeding has been commenced by
any creditor upon such judgment or decree or (B) there is a period of 60 days
following the entry of such judgment or decree during which such judgment or
decree is not discharged, waived or the execution thereof stayed; (vii) any
Security Guarantee by a Guarantor that is a Significant Subsidiary shall be held
in any judicial proceeding to be unenforceable or invalid or, except as
permitted by the Indenture, shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Security Guarantee; or (viii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Restricted Subsidiaries that is a Significant Subsidiary.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to it. Subject to certain limitations, Holders of a majority in principal amount
of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal, premium, if any, or interest) if and
so long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interest of the Holders.
Exhibit A
---------
viii
<PAGE>
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders
------------
No past, present or future director, officer, employee, incorporator,
agent or stockholder or Affiliate of the Company, as such, shall have any
liability for any obligations of the Company under the Securities, the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. No past, present or future director, officer, employee,
incorporator, agent or stockholder or Affiliate of any of the Guarantors, as
such, shall have any liability for any obligations of the Guarantors under the
Security Guarantees, the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each holder of Securities and
Security Guarantees by accepting a Security and a Security Guarantee waives and
releases all such liabilities. The waiver and release are part of the
consideration for issuance of the Securities and the Security Guarantees. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the SEC that such a waiver is against public policy.
17. Governing Law
-------------
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the
Exhibit A
---------
ix
<PAGE>
Securities and has directed the Trustee to use CUSIP numbers in notices of
redemption as a convenience to Securityholders. No representation is made as to
the accuracy of such numbers either as printed on the Securities or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
JOSTENS, INC.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
Attention of Secretary
Exhibit A
---------
x
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- ---------------------------------------
(Print or type assignee's name, address and zip code)
- ---------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ___________________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
Date: ________________ Your Signature: _____________________
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
- --------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Exhibit A
---------
xi
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED SECURITIES
Reference is hereby made to that certain Indenture dated May 10, 2000 (the
"Indenture") between Jostens, Inc., as Issuer (the "Company"), the Initial
Guarantor (as defined therein) and The Bank of New York, as trustee (the
"Trustee"). Capitalized terms used but not defined herein shall have the
meanings set forth in the Indenture.
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
* has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated
above);
* has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with any transfer of any of the Securities evidenced by
this certificate occurring prior to the expiration of the periods
referred to in Rule 144(k) under the Securities Act of 1933, as
amended, the undersigned confirms that such Securities are being
transferred in accordance with its terms:
CHECK ONE BOX BELOW:
(1) * to the Company or any of its subsidiaries; or
(2) * pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(3) * inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of
1933, as amended) that purchases for its own account or for
the account of a qualified institutional buyer to whom notice
is given that such transfer is being made in reliance on Rule
144A under the Securities Act of 1933, as amended, in each
case pursuant to and in compliance with Rule 144A thereunder;
or
(4) * outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act of 1933,
as amended, in compliance with Rule 904 thereunder; or
(5) * inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act of 1933, as amended) that has furnished to
the Trustee a signed letter containing certain
Exhibit A
---------
xii
<PAGE>
representations and agreements (the form of which letter is
attached to the Indenture as Exhibit D and which may be
obtained from the Trustee); or
(6) * pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933, as
amended; or
(7) * in accordance with another exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
that if box (4), (5) or (6) is checked, the Trustee may require, prior
to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Company has
reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as amended,
such as the exemption provided by Rule 144 thereunder.
------------------------
Signature
Signature Guarantee:________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended ("Rule 144A"), and is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
Exhibit A
---------
xiii
<PAGE>
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal Amount in Principal Amount this Global Security authorized signatory
of this Global of this Global following such of Trustee or
Security Security decrease or increase Securities Custodian
</TABLE>
Exhibit A
---------
xiv
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
* 4.06 Asset Sale * 4.08 Change of Control
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$_____.
Date: ____________________Your Signature: _________________________
(Sign exactly as your name appears
on the other side of the Security)
------------------
Tax I.D. number
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
Exhibit A
---------
xv
<PAGE>
Exhibit B
[FORM OF FACE OF EXCHANGE OR PERMANENT REGULATION S SECURITY]
[Global Securities Legend]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. 1
JOSTENS, INC.
12 3/4% SENIOR SUBORDINATED NOTE DUE 2010
No. __..........................................CUSIP No. _________
$
JOSTENS, INC., a Minnesota corporation (the "Company"), promises to pay
to _____________, or its registered assigns, the principal sum of $__________ in
U.S. Dollars on May 1, 2010.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
- ----------
1 This paragraph should only be added if the Security is issued in global form
Exhibit B
---------
i
<PAGE>
Additional provisions of this Security are set forth on the other side
of this Security.
JOSTENS, INC.,
by ____________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK, as Trustee,
certifies that this is [Seal]
one of the Securities
referred to in the
Indenture,
by
-------------------------
Authorized Signatory
Exhibit B
---------
ii
<PAGE>
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
12 3/4 % Senior Subordinated Note due 2010
1. Interest
--------
JOSTENS, INC., a Minnesota corporation (the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above and shall pay Liquidated Damages, if any, payable pursuant to the relevant
Registration Rights Agreement.
The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on May 1 and November 1 of each year commencing on
November 1, 2000. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
Issue Date with respect to this Security. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) on and
Liquidated Damages, if any, in respect of the Securities to the Persons who are
registered holders of Securities at the close of business on the 15th of April
and the 15th of October immediately preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest by check
payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, THE BANK OF NEW YORK (the "Trustee") will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice to the Holders. The Company or any
domestically organized Wholly Owned Restricted Subsidiary may act as Paying
Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of May
10, 2000 (the "Indenture"), among the Company, the Initial Guarantor and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the TIA. Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders are
referred to the Indenture and the TIA for a statement of those terms.
Exhibit B
---------
iii
<PAGE>
The Securities are unsecured senior subordinated obligations of the
Company and are limited to $350,000,000 in aggregate principal amount
outstanding, of which $225,000,000 in aggregate principal amount will be
initially issued on the Closing Date. Subject to the conditions set forth in the
Indenture, the Company may issue up to an additional $125,000,000 aggregate
principal amount of Additional Securities. This Security is one of the Initial
Securities referred to in the Indenture. The Securities include the Initial
Securities, the Additional Securities and any Exchange Securities and Private
Exchange Securities issued in exchange for the Initial Securities pursuant to
the Indenture. The Initial Securities, the Additional Securities, the Exchange
Securities and the Private Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
incurrence of Debt by the Company and its Restricted Subsidiaries; the payment
of dividends and other payments by the Company and its Restricted Subsidiaries;
Investments; sales of assets of the Company and Restricted Subsidiaries; certain
transactions with Affiliates; the lines of business in which the Company and its
Restricted Subsidiaries may operate; Liens; and consolidations, mergers and
transfers of all or substantially all of the Company's or a Guarantor's assets.
In addition, the Indenture prohibits certain restrictions on distributions from
Restricted Subsidiaries.
5. Optional Redemption
-------------------
Except as set forth in the next two paragraphs, the Securities may not
be redeemed at the Company's option prior to May 1, 2005. Thereafter, the
Securities will be subject to redemption at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the applicable redemption date (subject to the right of Holders on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period beginning on May 1 of
the years indicated below:
Redemption
Period Price
------ ---------
2005 106.375%
2006 104.250%
2007 102.125%
2008 and thereafter 100.000%
In addition, at any time and from time to time, prior to May 1, 2003,
the Company may redeem up to 35% of the aggregate principal amount of Securities
issued under the Indenture at a redemption price of 112.75% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the redemption date (subject to the right of Holders on the relevant
record date to receive interest due on the relevant interest payment date), with
the net cash proceeds of an underwritten registered public offering of common
stock of the Company; provided that at least 65% of the aggregate principal
amount of Securities issued under the Indenture remains outstanding immediately
after the occurrence of any such redemption; and provided further, that such
redemption shall occur within 90 days of the date of the closing of such public
offering.
Exhibit B
---------
iv
<PAGE>
At any time on or prior to May 1, 2005, the Securities may be redeemed
as a whole but not in part at the option of the Company upon the occurrence of a
Change of Control, upon not less than 30 nor more than 60 days' prior notice
(but in no event may any such redemption occur more than 120 days after the
occurrence of such Change of Control) mailed by first-class mail to each
Holder's registered address, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium as of, and accrued but
unpaid interest and Liquidated Damages, if any, to, the redemption date, subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date.
6. Notices of Redemption
---------------------
Notices of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at its registered address all in accordance with the
Indenture. If less than all of the Securities are to be redeemed at any time,
selection of Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Securities are listed, or, if the Securities are not so listed, on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided that no Securities of $1,000 or less shall be redeemed in
part; provided further, however, that if a partial redemption is made with the
proceeds of a public offering of common stock, selection of the Securities or
portions thereof for redemption shall be made by the Trustee on a pro rata basis
only or on as nearly a pro rata basis as is practicable (subject to DTC
procedures), unless such method is otherwise prohibited. If any Security is to
be redeemed in part only, the notice of redemption that relates to such Security
shall state the portion of the principal amount thereof to be redeemed. On and
after the redemption date, interest ceases to accrue on Securities or portions
of them called for redemption.
7. Repurchase at the Option of the Holder
--------------------------------------
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions set forth in the Indenture, to require the Company
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of the Securities of such Holder at a purchase price equal to 101% of the
aggregate principal amount of the Securities to be repurchased plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date that is on or
prior to the date of repurchase) as provided in, and subject to the terms of,
the Indenture.
8. Subordination
-------------
The Securities are subordinated to Senior Debt of the Company, as
defined in the Indenture. To the extent provided in the Indenture, Senior Debt
of the Company must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
Exhibit B
---------
v
<PAGE>
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed or 15 days before an interest payment
date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for
two years, the Paying Agent shall pay the money back to the Company at its
request, or if then held by the Company or a Wholly Owned Restricted Subsidiary,
shall be discharged from such trust (unless an abandoned property law designates
another Person for payment thereof). After any such payment, Holders entitled to
the money must look only to the Company for payment thereof, and all liability
of the Paying Agent with respect to such money, and all liability of the Company
or such permitted Wholly Owned Restricted Subsidiary as trustee thereof, shall
thereupon cease.
12. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Indenture,
the Security Guarantees, any Registration Rights Agreement and the Securities if
the Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Securities or the Security Guarantees may be amended or
supplemented with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any existing default or
noncompliance with any provision of the Indenture, the Securities or the
Security Guarantees (other than payment of principal, premium, if any,
Liquidated Damages, if any, and interest) may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated Securities
(provided that the uncertificated Securities are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the
Exhibit B
---------
vi
<PAGE>
Code), to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Securities in the case of a merger, consolidation or
sale of assets, to release any Security Guarantee in accordance with the
provisions of the Indenture, to provide for additional Guarantors, to make any
change that would provide any additional rights or benefits to the Holders of
Securities or that, as determined by the Board of Directors of the Company in
good faith, does not adversely affect the legal rights of any such Holder under
the Indenture, the Securities or the Security Guarantees, to comply with
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA or to provide for the issuance of Additional Securities
in compliance with Article II and Section 4.03 of the Indenture.
14. Defaults and Remedies
---------------------
Under the Indenture, an Event of Default occurs if there is: (i)
default for 30 days in the payment when due of interest on, or Liquidated
Damages with respect to, the Securities (whether or not prohibited by Article X
in the Indenture); (ii) default in payment when due of the principal of or
premium, if any, on the Securities (including the failure to make a payment to
purchase Securities tendered pursuant to a Change of Control Offer or an Asset
Sale Offer) (whether or not prohibited by Article X in the Indenture); (iii)
failure by the Company for 30 days after receipt of notice from the Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Securities to comply with Section 4.03, 4.04, 4.06, 4.08 or 5.01 of the
Indenture; (iv) failure by the Company for 60 days after receipt of notice from
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities specifying such failure to comply with any of its other
agreements in the Indenture or the Securities; (v) the failure by the Company or
any Restricted Subsidiary that is a Significant Subsidiary to pay any Debt
within any applicable grace period after final maturity or acceleration by the
holders thereof because of a default if the total amount of all such Debt unpaid
or accelerated at the time exceeds $25.0 million; (vi) any judgment or decree
for the payment of money in excess of $25.0 million (net of any insurance or
indemnity payments actually received in respect thereof prior to or within 60
days from the entry thereof, or to be received in respect thereof in the event
any appeal thereof shall be unsuccessful) is entered against the Company or any
Significant Subsidiary that is a Restricted Subsidiary and is not discharged,
waived or stayed and either (A) an enforcement proceeding has been commenced by
any creditor upon such judgment or decree or (B) there is a period of 60 days
following the entry of such judgment or decree during which such judgment or
decree is not discharged, waived or the execution thereof stayed; (vii) any
Security Guarantee by a Guarantor that is a Significant Subsidiary shall be held
in any judicial proceeding to be unenforceable or invalid or, except as
permitted by the Indenture, shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Security Guarantee; or (viii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Restricted Subsidiaries that is a Significant Subsidiary.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to it. Subject to certain limitations, Holders of a majority in principal amount
of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal, premium, if any, or interest) if and
so long as a
Exhibit B
---------
vii
<PAGE>
committee of its Trust Officers in good faith determines that withholding notice
is in the interest of the Holders.
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders
------------
No past, present or future director, officer, employee, incorporator,
agent or stockholder or Affiliate of the Company, as such, shall have any
liability for any obligations of the Company under the Securities, the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. No past, present or future director, officer, employee,
incorporator, agent or stockholder or Affiliate of any of the Guarantors, as
such, shall have any liability for any obligations of the Guarantors under the
Security Guarantees, the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each holder of Securities and
Security Guarantees by accepting a Security and a Security Guarantee waives and
releases all such liabilities. The waiver and release are part of the
consideration for issuance of the Securities and the Security Guarantees. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the SEC that such a waiver is against public policy.
17. Governing Law
-------------
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
Exhibit B
---------
viii
<PAGE>
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
JOSTENS, INC.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
Attention of Secretary
Exhibit B
---------
ix
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- ---------------------------------------
(Print or type assignee's name, address and zip code)
- ---------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ___________________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
Date: ________________ Your Signature: _____________________
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
- --------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Exhibit B
---------
x
<PAGE>
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal Amount in Principal Amount this Global Security authorized signatory
of this Global of this Global following such of Trustee or
Security Security decrease or increase Securities Custodian
</TABLE>
Exhibit B
---------
xi
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
* 4.06 Asset Sale * 4.08 Change of Control
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$ _____.
Date: __________________ Your Signature: __________________
(Sign exactly as your name appears
on the other side of the Security)
------------------
Tax I.D. number
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
Exhibit B
---------
xii
<PAGE>
Exhibit C
[FORM OF FACE OF PRIVATE EXCHANGE SECURITY]
[GLOBAL SECURITIES LEGEND]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. 2
[RESTRICTED SECURITIES LEGEND]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR"),
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO JOSTENS, INC.
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON
- ----------
2 This paragraph should only be added if the security is issued in global form
Exhibit C
---------
i
<PAGE>
TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE),
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF JOSTENS, INC. SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED
TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND JOSTENS, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
JOSTENS, INC.
12 3/4% SENIOR SUBORDINATED NOTE DUE 2010
No. ___ CUSIP No.
$_________
JOSTENS, INC., a Minnesota corporation (the "Company"), promises to pay
to _______________, or its registered assigns, the principal sum of ___________
in U.S. Dollars on May 1, 2010.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Additional provisions of this Security are set forth on the other side
of this Security.
JOSTENS, INC.,
by _______________________________
Name:
Title:
Exhibit C
---------
ii
<PAGE>
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK
as Trustee, certifies that
this is one of the Securities [Seal]
referred to in the Indenture,
by
-------------------------
Authorized Signatory
Exhibit C
---------
iii
<PAGE>
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
12 3/4 % Senior Subordinated Note due 2010
1. Interest
--------
JOSTENS, INC., a Minnesota corporation (the "Company"), promises to pay
interest on the principal amount of this Security at the rate per annum shown
above and shall pay Liquidated Damages, if any, payable pursuant to the relevant
Registration Rights Agreement.
The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on May 1 and November 1 of each year commencing on
November 1, 2000. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
Issue Date with respect to this Security. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months. The Company shall pay
interest on overdue principal at the rate borne by the Securities, and it shall
pay interest on overdue installments of interest at the same rate to the extent
lawful.
2. Method of Payment
-----------------
The Company will pay interest (except defaulted interest) on and
Liquidated Damages, if any, in respect of the Securities to the Persons who are
registered holders of Securities at the close of business on the 15th of April
or the 15th of October immediately preceding the interest payment date even if
Securities are canceled after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest by check
payable in such money or by wire transfer of federal funds.
3. Paying Agent and Registrar
--------------------------
Initially, THE BANK OF NEW YORK (the "Trustee") will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice to the Holders. The Company or any
domestically organized Wholly Owned Restricted Subsidiary may act as Paying
Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of May
10, 2000 (the "Indenture"), among the Company, the Initial Guarantor and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the TIA. Terms defined in the
Indenture and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Securityholders are
referred to the Indenture and the TIA for a statement of those terms.
Exhibit C
---------
iv
<PAGE>
The Securities are unsecured senior subordinated obligations of the
Company and are limited to $350,000,000 in aggregate principal amount
outstanding, of which $225,000,000 in aggregate principal amount will be
initially issued on the Closing Date. Subject to the conditions set forth in the
Indenture, the Company may issue up to an additional $125,000,000 aggregate
principal amount of Additional Securities. This Security is one of the Initial
Securities referred to in the Indenture. The Securities include the Initial
Securities, the Additional Securities and any Exchange Securities and Private
Exchange Securities issued in exchange for the Initial Securities pursuant to
the Indenture. The Initial Securities, the Additional Securities, the Exchange
Securities and the Private Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
incurrence of Debt by the Company and its Restricted Subsidiaries; the payment
of dividends and other payments by the Company and its Restricted Subsidiaries;
Investments; sales of assets of the Company and Restricted Subsidiaries; certain
transactions with Affiliates; the lines of business in which the Company and its
Restricted Subsidiaries may operate; Liens; and consolidations, mergers and
transfers of all or substantially all of the Company's or a Guarantor's assets.
In addition, the Indenture prohibits certain restrictions on distributions from
Restricted Subsidiaries.
5. Optional Redemption
-------------------
Except as set forth in the next two paragraphs, the Securities may not
be redeemed at the Company's option prior to May 1, 2005. Thereafter, the
Securities will be subject to redemption at any time at the option of the
Company, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the applicable redemption date (subject to the right of Holders on
the relevant record date to receive interest due on the relevant interest
payment date), if redeemed during the twelve-month period beginning on May 1 of
the years indicated below:
Redemption
Period Price
------ ---------
2005 106.375%
2006 104.250%
2007 102.125%
2008 and thereafter 100.000%
In addition, at any time and from time to time, prior to May 1, 2003,
the Company may redeem up to 35% of the aggregate principal amount of Securities
issued under the Indenture at a redemption price of 112.75% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the redemption date (subject to the right of Holders on the relevant
record date to receive interest due on the relevant interest payment date), with
the net cash proceeds of an underwritten registered public offering of common
stock of the Company; provided that at least 65% of the aggregate principal
amount of Securities issued under the Indenture remains outstanding immediately
after the occurrence of any such redemption; and provided further, that such
redemption shall occur within 90 days of the date of the closing of such public
offering.
Exhibit C
---------
v
<PAGE>
At any time on or prior to May 1, 2005, the Securities may be redeemed
as a whole but not in part at the option of the Company upon the occurrence of a
Change of Control, upon not less than 30 nor more than 60 days' prior notice
(but in no event may any such redemption occur more than 120 days after the
occurrence of such Change of Control) mailed by first-class mail to each
Holder's registered address, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium as of, and accrued but
unpaid interest and Liquidated Damages, if any, to, the redemption date, subject
to the right of Holders on the relevant record date to receive interest due on
the relevant interest payment date.
6. Notices of Redemption
---------------------
Notices of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Securities to be redeemed at its registered address all in accordance with the
Indenture. If less than all of the Securities are to be redeemed at any time,
selection of Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Securities are listed, or, if the Securities are not so listed, on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided that no Securities of $1,000 or less shall be redeemed in
part; provided further, however, that if a partial redemption is made with the
proceeds of a public offering of common stock, selection of the Securities or
portions thereof for redemption shall be made by the Trustee on a pro rata basis
only or on as nearly a pro rata basis as is practicable (subject to DTC
procedures), unless such method is otherwise prohibited. If any Security is to
be redeemed in part only, the notice of redemption that relates to such Security
shall state the portion of the principal amount thereof to be redeemed. On and
after the redemption date, interest ceases to accrue on Securities or portions
of them called for redemption.
7. Repurchase at the Option of the Holder
--------------------------------------
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions set forth in the Indenture, to require the Company
to repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of the Securities of such Holder at a purchase price equal to 101% of the
aggregate principal amount of the Securities to be repurchased plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date that is on or
prior to the date of repurchase) as provided in, and subject to the terms of,
the Indenture.
8. Subordination
-------------
The Securities are subordinated to Senior Debt of the Company, as
defined in the Indenture. To the extent provided in the Indenture, Senior Debt
of the Company must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such purpose.
Exhibit C
---------
vi
<PAGE>
9. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed or 15 days before an interest payment
date.
10. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed for
two years, the Paying Agent shall pay the money back to the Company at its
request, or if then held by the Company or a Wholly Owned Restricted Subsidiary,
shall be discharged from such trust (unless an abandoned property law designates
another Person for payment thereof). After any such payment, Holders entitled to
the money must look only to the Company for payment thereof, and all liability
of the Paying Agent with respect to such money, and all liability of the Company
or such permitted Wholly Owned Restricted Subsidiary as trustee thereof, shall
thereupon cease.
12. Discharge and Defeasance
------------------------
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Indenture,
the Security Guarantees, any Registration Rights Agreement and the Securities if
the Company deposits with the Trustee money or U.S. Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, the Securities or the Security Guarantees may be amended or
supplemented with the written consent of the Holders of at least a majority in
principal amount outstanding of the Securities and (ii) any existing default or
noncompliance with any provision of the Indenture, the Securities or the
Security Guarantees (other than payment of principal, premium, if any,
Liquidated Damages, if any, and interest) may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Securities in addition to or in place of certificated Securities
(provided that the uncertificated Securities are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the
Exhibit C
---------
vii
<PAGE>
Code), to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of Securities in the case of a merger, consolidation or
sale of assets, to release any Security Guarantee in accordance with the
provisions of the Indenture, to provide for additional Guarantors, to make any
change that would provide any additional rights or benefits to the Holders of
Securities or that, as determined by the Board of Directors of the Company in
good faith, does not adversely affect the legal rights of any such Holder under
the Indenture, the Securities or the Security Guarantees, to comply with
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the TIA or to provide for the issuance of Additional Securities
in compliance with Article II and Section 4.03 of the Indenture.
14. Defaults and Remedies
---------------------
Under the Indenture, an Event of Default occurs if there is: (i)
default for 30 days in the payment when due of interest on, or Liquidated
Damages with respect to, the Securities (whether or not prohibited by Article X
in the Indenture); (ii) default in payment when due of the principal of or
premium, if any, on the Securities (including the failure to make a payment to
purchase Securities tendered pursuant to a Change of Control Offer or an Asset
Sale Offer) (whether or not prohibited by Article X in the Indenture); (iii)
failure by the Company for 30 days after receipt of notice from the Trustee or
the Holders of at least 25% in principal amount of the then outstanding
Securities to comply with Section 4.03, 4.04, 4.06, 4.08 or 5.01 of the
Indenture; (iv) failure by the Company for 60 days after receipt of notice from
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Securities specifying such failure to comply with any of its other
agreements in the Indenture or the Securities; (v) the failure by the Company or
any Restricted Subsidiary that is a Significant Subsidiary to pay any Debt
within any applicable grace period after final maturity or acceleration by the
holders thereof because of a default if the total amount of all such Debt unpaid
or accelerated at the time exceeds $25.0 million; (vi) any judgment or decree
for the payment of money in excess of $25.0 million (net of any insurance or
indemnity payments actually received in respect thereof prior to or within 60
days from the entry thereof, or to be received in respect thereof in the event
any appeal thereof shall be unsuccessful) is entered against the Company or any
Significant Subsidiary that is a Restricted Subsidiary and is not discharged,
waived or stayed and either (A) an enforcement proceeding has been commenced by
any creditor upon such judgment or decree or (B) there is a period of 60 days
following the entry of such judgment or decree during which such judgment or
decree is not discharged, waived or the execution thereof stayed; (vii) any
Security Guarantee by a Guarantor that is a Significant Subsidiary shall be held
in any judicial proceeding to be unenforceable or invalid or, except as
permitted by the Indenture, shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Security Guarantee; or (viii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Restricted Subsidiaries that is a Significant Subsidiary.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security reasonably satisfactory
to it. Subject to certain limitations, Holders of a majority in principal amount
of the Securities may direct the Trustee in its exercise of any trust or power.
The Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal, premium, if any, or interest) if and
so long as a
Exhibit C
---------
viii
<PAGE>
committee of its Trust Officers in good faith determines that withholding notice
is in the interest of the Holders.
15. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders
------------
No past, present or future director, officer, employee, incorporator,
agent or stockholder or Affiliate of the Company, as such, shall have any
liability for any obligations of the Company under the Securities, the Indenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. No past, present or future director, officer, employee,
incorporator, agent or stockholder or Affiliate of any of the Guarantors, as
such, shall have any liability for any obligations of the Guarantors under the
Security Guarantees, the Indenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each holder of Securities and
Security Guarantees by accepting a Security and a Security Guarantee waives and
releases all such liabilities. The waiver and release are part of the
consideration for issuance of the Securities and the Security Guarantees. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the SEC that such a waiver is against public policy.
17. Governing Law
-------------
THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
18. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
Exhibit C
---------
ix
<PAGE>
20. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Securityholder upon written request and
without charge to the Securityholder a copy of the Indenture which has in it the
text of this Security in larger type. Requests may be made to:
JOSTENS, INC.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
Attention of Secretary
Exhibit C
---------
x
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
- --------------------------------------
(Print or type assignee's name, address and zip code)
- --------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint ___________________ agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
Date: ________________ Your Signature: _____________________
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
- ------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
Exhibit C
---------
xi
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED SECURITIES
Reference is hereby made to that certain Indenture dated May 10, 2000 (the
"Indenture") between Jostens, Inc., as Issuer (the "Company"), the Initial
Guarantor (as defined therein) and The Bank of New York, as trustee (the
"Trustee"). Capitalized terms used but not defined herein shall have the
meanings set forth in the Indenture.
This certificate relates to $_________ principal amount of Securities held in
(check applicable space) ____ book-entry or _____ definitive form by the
undersigned.
The undersigned (check one box below):
* has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated
above);
* has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities. In connection with any transfer
of any of the Securities evidenced by this certificate occurring prior
to the expiration of the periods referred to in Rule 144(k) under the
Securities Act of 1933, as amended, the undersigned confirms that such
Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW:
(1) * to the Company or any of its subsidiaries; or
(2) * pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(3) * inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of
1933, as amended) that purchases for its own account or for
the account of a qualified institutional buyer to whom notice
is given that such transfer is being made in reliance on Rule
144A under the Securities Act of 1933, as amended, in each
case pursuant to and in compliance with Rule 144A thereunder;
or
(4) * outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act of 1933,
as amended, in compliance with Rule 904 thereunder; or
(5) * inside the United States to an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act of 1933, as amended) that has furnished to
the Trustee a signed letter containing certain
Exhibit C
---------
xii
<PAGE>
representations and agreements (the form of which letter is
attached to the Indenture as Exhibit D and which may be
obtained from the Trustee); or
(6) * pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933, as
amended; or
(7) * in accordance with another exemption from the registration
requirements of the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4), (5) or
(6) is checked, the Trustee may require, prior to registering any such transfer
of the Securities, such legal opinions, certifications and other information as
the Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as amended, such as the
exemption provided by Rule 144 thereunder.
------------------------
Signature
Signature Guarantee:________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended ("Rule 144A"), and is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
Exhibit C
---------
xiii
<PAGE>
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Amount of decrease Amount of increase Principal amount of Signature of
Exchange in Principal Amount in Principal Amount this Global Security authorized signatory
of this Global of this Global following such of Trustee or
Security Security decrease or increase Securities Custodian
</TABLE>
Exhibit C
---------
xiv
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.08 of the Indenture, check the box:
* 4.06 Asset Sale * 4.08 Change of Control
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$ _____.
Date: ____________________ Your Signature: __________________
(Sign exactly as your name appears
on the other side of the Security)
------------------
Tax I.D. number
Signature Guarantee:_______________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
Exhibit C
---------
xv
<PAGE>
Exhibit D
[FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFER TO INSTITUTIONAL ACCREDITED INVESTORS]
Jostens, Inc.
The Bank of New York
101 Barclay Street, 21st Floor West
New York, NY 10286
Attention: Corporate Trust Trustee Administration
Dear Ladies and Gentlemen:
This certificate is delivered to request a transfer of $______
principal amount of the 12 3/4% Senior Subordinated Notes due 2010 (the
"Securities") of Jostens, Inc. (the "Company").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")), and we are acquiring the Securities not with a view to, or
for offer or sale in connection with, any distribution in violation of the
Securities Act. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risk of our investment in
the Securities and invest in or purchase securities similar to the Securities in
the normal course of our business. We and any accounts for which we are acting
are each able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the later of the date which is two years after
(X) the later of (A) the date of original issue or (B) the date on which this
Security was acquired from an affiliate of the Company or (Y) the date that is
three months after the last date on which the Company or any affiliate of the
Company was the owner of such Securities (or any predecessor thereto) only (a)
to Jostens, Inc. or any subsidiary thereof, (b) inside the United States to a
Qualified Institutional Buyer in compliance with Rule 144A under the Securities
Act, (c) inside the United States to an Accredited Investor that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. Broker-Dealer) to
the Trustee a signed letter containing certain representations and agreements
relating to the restrictions on transfer of this security (the form of which
letter can be obtained from the Trustee for this
Exhibit D
---------
i
<PAGE>
Security), (d) outside the United States in an offshore transactions in
compliance with Rule 904 under the Securities Act (if available), (e) pursuant
to the exemption from registration provided by Rule 144 under the Securities Act
(if available), (f) in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel if
Jostens, Inc. so requests), or (g) pursuant to an effective registration
statement under the Securities Act, subject in each of the foregoing cases to
any requirement of law that the disposition of our property or the property of
such investor account or accounts be at all times within our or their control
and in compliance with any applicable state securities laws. In connection with
any transfer of this security prior to the later of the date which is two years
after (X) the later of (A) the date of original issue or (B) the date on which
this Security was acquired from an affiliate of the Company or (Y) the date that
is three months after the last date on which the Company or any affiliate of the
Company was the owner of such Securities (or any predecessor thereto), pursuant
to clause (c), (d) or (f) above if the holder must, prior to such transfer,
furnish to the Trustee and Jostens, Inc. such certifications, legal opinions or
other information as either of them may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. As used herein,
the terms "offshore transaction, " "United States" and "U.S. person" have the
meaning given to them by Regulation S under the Securities Act.
TRANSFEREE:____________________________
BY_____________________________________
Exhibit D
---------
ii
<PAGE>
Exhibit E
[FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS PURSUANT TO RULE 144A]
Jostens, Inc.
The Bank of New York
101 Barclay Street, 21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Jostens, Inc. (the "Company")
12 3/4% Senior Subordinated Notes due 2010 (the "Securities").
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount at maturity of the Securities, we hereby certify that such transfer is
being effected pursuant to and in accordance with Rule 144A ("Rule 144A") under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, we hereby further certify that the Securities are being
transferred to a person that we reasonably believe is purchasing the Securities
for its own account, or for one or more accounts with respect to which such
person exercises sole investment discretion, and such person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A in
a transaction meeting the requirements of Rule 144A and such Securities are
being transferred in compliance with any applicable blue sky securities laws of
any state of the United States.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
------------------------------------
[Name of Transferor]
By:
---------------------------------
Authorized Signature
Exhibit E
---------
i
<PAGE>
Exhibit F
[FORM OF CERTIFICATE TO BE DELIVERED
IN CONNECTION WITH TRANSFERS
PURSUANT TO REGULATION S]
Jostens, Inc.
The Bank of New York
101 Barclay Street, 21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Jostens, Inc. (the "Company")
12 3/4% Senior Subordinated Notes due 2010 (the "Securities").
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in
the United States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
The Company and you are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Exhibit F
---------
i
<PAGE>
Very truly yours,
------------------------------------
[Name of Transferor]
by
---------------------------------
Authorized Signatory
Exhibit F
---------
ii
<PAGE>
Exhibit G
[FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S]
Jostens, Inc.
The Bank of New York
101 Barclay Street, 21st Floor West
New York, NY 10286
Attention: Corporate Trust Trustee Administration
Re: Jostens, Inc. (the "Company")
12 3/4 % Senior Subordinated Notes due 2010 (the "Securities")
Dear Ladies and Gentlemen:
This letter relates to U.S. $_______________ principal amount of
Securities represented by a Security (the "Legended Security") which bears a
legend outlining restrictions upon transfer of such Legended Security. Pursuant
to Section 2.01 of the Indenture dated as of May 10, 2000 (the "Indenture")
relating to the Securities, we hereby certify that we are (or we will hold such
securities on behalf of) a person outside the United States to whom the
Securities could be transferred in accordance with Rule 904 of Regulation S
promulgated under the U.S. Securities Act of 1933. Accordingly, you are hereby
requested to exchange the legended certificate for an unlegended certificate
representing an identical principal amount at maturity of Securities, all in the
manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
--------------------------------
[Name of Holder]
By:
-----------------------------
Authorized Signature
Exhibit G
---------
i
<PAGE>
EXHIBIT 4.2
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of May 10, 2000
Among
JOSTENS, INC.
and
THE GUARANTOR NAMED HEREIN
as Issuers,
and
DEUTSCHE BANK SECURITIES INC.,
UBS WARBURG LLC
and
GOLDMAN, SACHS & CO.
as Initial Purchasers
12 3/4% Senior Subordinated Notes due 2010
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is dated as of
May 10, 2000, among JOSTENS, INC., a Minnesota corporation (the "Company"),
AMERICAN YEARBOOK COMPANY, INC., a Kansas corporation (collectively with any
entity that in the future executes a supplemental indenture pursuant to which
such entity agrees to guarantee the Notes (as hereinafter defined), the
"Guarantors" and, together with the Company, the "Issuers"), and DEUTSCHE BANK
SECURITIES INC., UBS WARBURG LLC and GOLDMAN, SACHS & CO., as initial purchasers
(the "Initial Purchasers").
This Agreement is entered into in connection with the Purchase
Agreement by and among the Issuers and the Initial Purchasers, dated as of May
10, 2000 (the "Purchase Agreement"), which provides for, among other things, the
sale by the Company to the Initial Purchasers of 225,000 units consisting in the
aggregate of $225,000,000 aggregate principal amount of the Company's 12 3/4%
Senior Subordinated Notes due 2010 (the "Notes"), guaranteed by the Guarantors
(the "Guarantees") and Warrants to purchase 425,060 shares of the Company's
Class E Common Stock. The Notes and the Guarantees are collectively referenced
to herein as the "Securities". In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Issuers have agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial
Purchasers and any subsequent holder or holders of the Securities. The execution
and delivery of this Agreement is a condition to the Initial Purchasers'
obligation to purchase the Securities under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following
meanings:
Advice: See the last paragraph of Section 5 hereof.
Agreement: See the introductory paragraphs hereto.
Applicable Period: See Section 2(b) hereof.
Business Day: Any day that is not a Saturday, Sunday or a day on which
banking institutions in New York are authorized or required by law to be closed.
Closing Date: The Closing Date as defined in the Purchase Agreement.
Company: See the introductory paragraphs hereto.
<PAGE>
-2-
Effectiveness Date: The 180th day after the Issue Date; provided,
however, that with respect to any Shelf Registration, the Effectiveness Date
shall be the 135th day after the delivery of a Shelf Notice as required pursuant
to Section 2(c) hereof; provided further, however, that if the Effectiveness
Date would otherwise fall on a day that is not a Business Day, then the
Effectiveness Date shall be the next succeeding Business Day.
Effectiveness Period: See Section 3 hereof.
Event Date: See Section 4 hereof.
Exchange Act: The Securities Exchange Act of 1934, and the rules and
regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a) hereof.
Exchange Offer: See Section 2(a) hereof.
Exchange Offer Registration Statement: See Section 2(a) hereof.
Exchanging Dealer: See Section 2(b) hereof.
Filing Date: (A) With respect to an Exchange Offer Registration
Statement, the 120th day after the Issue Date; and (B) with respect to a Shelf
Registration Statement, the 90th day after the delivery of a Shelf Notice as
required pursuant to Section 2(c) hereof; provided further, however, that if the
Effectiveness Date would otherwise fall on a day that is not a Business Day,
then the Effectiveness Date shall be the next succeeding Business Day.
Guarantees: See the introductory paragraphs hereto.
Guarantors: See the introductory paragraphs hereto.
Holder: Any holder of a Registrable Note or Registrable Notes and any
Initial Purchaser holding any Notes, Exchange Notes or Private Exchange Notes
during the Market-Making Period.
Indemnified Person: See Section 7(c) hereof.
Indemnifying Persons: See Section 7(c) hereof.
Indenture: The Indenture, dated as of May 10, 2000, by and among the
Issuers and The Bank of New York, as Trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with
the terms thereof.
Information: See Section 5(o) hereof.
<PAGE>
-3-
Initial Purchasers: See the introductory paragraphs hereto.
Inspectors: See Section 5(o) hereof.
Issue Date: May 10, 2000, the date of original issuance of the Notes.
Issuers: See the introductory paragraphs hereto.
Liquidated Damages: See Section 4 hereof.
Market-Making Period: See Section 3(a) hereof.
NASD: See Section 5(s) hereof.
Notes: See the introductory paragraphs hereto.
Participant: See Section 7(a) hereof.
Person: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
Private Exchange: See Section 2(b) hereof.
Private Exchange Notes: See Section 2(b) hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
under the Securities Act and any term sheet filed pursuant to Rule 434 under the
Securities Act), as amended or supplemented by any prospectus supplement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: See the introductory paragraphs hereof.
Records: See Section 5(o) hereof.
Registrable Notes: Each Note (and the related Guarantees) upon its
original issuance and at all times subsequent thereto, each Exchange Note (and
the related Guarantees) as to which Section 2(c)(iii)(B) hereof is applicable
upon original issuance and at all times subsequent thereto and each Private
Exchange Note (and the related Guarantees) upon original issuance thereof and at
all times subsequent thereto, until, in each case, the earliest to
<PAGE>
-4-
occur of (i) a Registration Statement (other than, with respect to any Exchange
Note as to which Section 2(c)(iii)(B) hereof is applicable, the Exchange Offer
Registration Statement) covering such Note, Exchange Note or Private Exchange
Note has been declared effective by the SEC and such Note, Exchange Note or such
Private Exchange Note (and the related Guarantees), as the case may be, has been
disposed of in accordance with such effective Registration Statement, (ii) such
Note has been exchanged pursuant to the Exchange Offer for an Exchange Note or
Exchange Notes (and the related Guarantees) that may be resold without
restriction under state and federal securities laws, (iii) such Note, Exchange
Note or Private Exchange Note (and the related Guarantees), as the case may be,
ceases to be outstanding for purposes of the Indenture, (iv) such Note, Exchange
Note or Private Exchange Note (and the related Guarantees), as the case may be,
in the reasonable opinion of the Company, may be resold without restriction
pursuant to Rule 144(k) (as amended or replaced) under the Securities Act or (v)
following the exchange by an Exchanging Dealer in the Exchange Offer of a Note
for an Exchange Note, the date on which such Exchange Note is sold to a
purchaser who receives from such Exchanging Dealer on or prior to the date of
such sale a copy of the Prospectus contained in the Exchange Offer Registration
Statement; provided, however, that each Note, Exchange Note and Private Exchange
Note shall be considered a Registrable Note from the time that any Initial
Purchaser shall give notice to the Company pursuant to Section 2(c)(iii)(D)(y)
hereof until the end of the Market-Making Period.
Registration Default: See Section 4(a) hereof.
Registration Statement: Any registration statement of the Issuers that
covers any of the Notes, the Exchange Notes or the Private Exchange Notes (and
the related Guarantees) filed with the SEC under the Securities Act, including
the Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
Restricted Holder: See Section 2(c) hereof.
Rule 144: Rule 144 under the Securities Act.
Rule 144A: Rule 144A under the Securities Act.
Rule 405: Rule 405 under the Securities Act.
Rule 415: Rule 415 under the Securities Act.
Rule 424: Rule 424 under the Securities Act.
SEC: The U.S. Securities and Exchange Commission.
<PAGE>
-5-
Securities: See the introductory paragraphs hereto.
Securities Act: The Securities Act of 1933, and the rules and
regulations of the SEC promulgated thereunder.
Shelf Notice: See Section 2(c) hereof.
Shelf Registration: See Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture and the trustee (if any) under
any indenture governing the Exchange Notes and Private Exchange Notes (and the
related Guarantees).
Underwritten registration or underwritten offering: A registration in
which securities of one or more of the Issuers are sold to an underwriter for
reoffering to the public.
Except as otherwise specifically provided, all references in this
Agreement to acts, laws, statutes, rules, regulations, releases, forms,
no-action letters and other regulatory requirements (collectively, "Regulatory
Requirements") shall be deemed to refer also to any amendments thereto and all
subsequent Regulatory Requirements adopted as a replacement thereto having
substantially the same effect therewith; provided that Rule 144 shall not be
deemed to amend or replace Rule 144A.
2. Exchange Offer
(a) Unless (1) the Exchange Offer would violate applicable law or any
applicable interpretation of the staff of the SEC or (2) each Holder of
Registrable Notes shall have delivered notice to the Company prior to the Filing
Date that it is a Restricted Holder, the Issuers shall file with the SEC, no
later than the Filing Date, a Registration Statement (the "Exchange Offer
Registration Statement") on an appropriate registration form with respect to a
registered offer (the "Exchange Offer") to exchange any and all of the
Registrable Notes for a like aggregate principal amount of debt securities of
the Company, guaranteed by the Guarantors, that are identical in all material
respects to the Securities, except that (i) the Exchange Notes shall contain no
restrictive legend thereon (the "Exchange Notes") and (ii) interest thereon
shall accrue from the last date on which interest was paid on the Notes or, if
no such interest has been paid, from the Issue Date, and which are entitled to
the benefits of the Indenture or a trust indenture which is identical in all
material respects to the Indenture (other than such changes to the Indenture or
any such identical trust indenture as are necessary to comply with the TIA) and
which, in either case, has been qualified under the TIA. The Exchange Offer
shall comply with all applicable tender offer rules and regulations under the
Exchange Act and other applicable laws. Subject to clauses (a)(1) and (2) above,
the Issuers
<PAGE>
-6-
shall use their reasonable best efforts to (x) cause the Exchange Offer
Registration Statement to be declared effective under the Securities Act on or
before the Effectiveness Date; (y) keep the Exchange Offer open for at least 20
Business Days (or longer if required by applicable law) after the date that
notice of the Exchange Offer is mailed to Holders; and (z) consummate the
Exchange Offer on or prior to the 30th day following the date on which the
Exchange Offer Registration Statement was declared effective by the SEC and in
no event later than the 210th day following the Issue Date.
Each Holder (including, without limitation, each Exchanging Dealer) who
participates in the Exchange Offer will be required to represent to the Issuers
in writing (which may be contained in the applicable letter of transmittal)
that: (i) any Exchange Notes acquired in exchange for Registrable Notes tendered
is being acquired in the ordinary course of business of the Person receiving
such Exchange Notes, whether or not such recipient is such Holder itself; (ii)
neither such Holder nor, to the actual knowledge of such Holder, any other
Person receiving Exchange Notes from such Holder is engaging in or intends to
engage in a distribution of the Exchange Notes; (iii) at the time of the
consummation of the Exchange Offer neither such Holder nor, to the actual
knowledge of such Holder, any other Person receiving Exchange Notes from such
Holder has an arrangement or understanding with any Person to participate in the
distribution of the Exchange Notes in violation of the provisions of the
Securities Act; (iv) neither the Holder nor, to the actual knowledge of such
Holder, any other Person is an "affiliate" (as defined in Rule 405) of the
Company or, if it is an affiliate of the Company, it will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable and will provide information to be included in the Shelf
Registration Statement in accordance with Section 5 hereof in order to have
their Notes included in the Shelf Registration Statement and benefit from the
provisions regarding Liquidated Damages in Section 4 hereof; and (v) if such
Holder is an Exchanging Dealer, such Holder has acquired the Registrable Notes
as a result of market-making activities or other trading activities and that it
will comply with the applicable provisions of the Securities Act (including, but
not limited to, the prospectus delivery requirements thereunder).
Upon consummation of the Exchange Offer in accordance with this Section
2, the provisions of this Agreement shall continue to apply, mutatis mutandis,
solely with respect to Registrable Notes that are Private Exchange Notes,
Exchange Notes as to which Section 2(c)(iii)(B) is applicable and Exchange Notes
held by Exchanging Dealers, and the Issuers shall have no further obligation to
register Registrable Notes (other than Private Exchange Notes and Exchange Notes
as to which clause 2(c)(iii)(B) hereof applies) pursuant to Section 3 hereof.
No securities other than the Exchange Notes shall be included in the
Exchange Offer Registration Statement.
<PAGE>
-7-
(b) The Issuers shall include within the Prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution,"
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the staff of the SEC with
respect to the potential "underwriter" status of any broker-dealer that is the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of Exchange
Notes received by such broker-dealer in the Exchange Offer (an "Exchanging
Dealer"), whether such positions or policies have been publicly disseminated by
the staff of the SEC or such positions or policies represent the prevailing
views of the staff of the SEC. Such "Plan of Distribution" section shall also
expressly permit, to the extent permitted by applicable policies and regulations
of the SEC, the use of the Prospectus by all Persons subject to the prospectus
delivery requirements of the Securities Act, including, to the extent permitted
by applicable policies and regulations of the SEC, all Exchanging Dealers, and
include a statement describing the means by which Exchanging Dealers may resell
the Exchange Notes in compliance with the Securities Act.
Subject to Section 3(d), the Issuers shall use their reasonable best
efforts to keep the Exchange Offer Registration Statement effective and to amend
and supplement the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all Persons subject to the prospectus
delivery requirements of the Securities Act for such period of time as is
necessary to comply with applicable law in connection with any resale of the
Exchange Notes; provided, however, that such period shall not be required to
exceed 90 days or such longer period if extended pursuant to the last paragraph
of Section 5 hereof (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial Purchasers
hold any Notes acquired by them that have the status of an unsold allotment in
the initial distribution, the Issuers upon the request of the Initial Purchasers
shall simultaneously with the delivery of the Exchange Notes issue and deliver
to the Initial Purchasers, in exchange (the "Private Exchange") for such Notes
held by any such Holder, a like principal amount of notes (the "Private Exchange
Notes") of the Issuers, guaranteed by the Guarantors, that are identical in all
material respects to the Exchange Notes except for the placement of a
restrictive legend on such Private Exchange Notes. The Private Exchange Notes
shall be issued pursuant to the same indenture as the Exchange Notes and bear
the same CUSIP number as the Exchange Notes.
In connection with the Exchange Offer, the Issuers shall:
(1) mail, or cause to be mailed, to each Holder of record
entitled to participate in the Exchange Offer a copy of the Prospectus
forming part of the Exchange Offer Registration Statement, together
with an appropriate letter of transmittal and related documents;
<PAGE>
-8-
(2) use their reasonable best efforts to keep the Exchange
Offer open for not less than 20 Business Days after the date that
notice of the Exchange Offer is mailed to Holders (or longer if
required by applicable law);
(3) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of New
York;
(4) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last Business Day
on which the Exchange Offer remains open; and
(5) otherwise comply in all material respects with all
applicable laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer and the
Private Exchange, if any, the Issuers shall:
(1) accept for exchange all Registrable Notes validly tendered
and not validly withdrawn pursuant to the Exchange Offer and the
Private Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable
Notes so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to
each Holder of Securities, Exchange Notes or Private Exchange Notes, as
the case may be, equal in principal amount to the Securities of such
Holder so accepted for exchange; provided that, in the case of any
Securities held in global form by a depositary, authentication and
delivery to such depositary of one or more replacement Securities in
global form in an equivalent principal amount thereto for the account
of such Holders in accordance with the Indenture shall satisfy such
authentication and delivery requirement.
The Exchange Offer and the Private Exchange shall not be subject to any
conditions, other than that (i) the Exchange Offer or Private Exchange, as the
case may be, does not violate applicable law or any applicable interpretation of
the staff of the SEC; (ii) no action or proceeding shall have been instituted or
threatened in any court or by any governmental agency which might materially
impair the ability of the Issuers to proceed with the Exchange Offer or the
Private Exchange, and no material adverse development shall have occurred in any
existing action or proceeding with respect to the Issuers; (iii) all
governmental approvals shall have been obtained, which approvals the Issuers
deem necessary for the consummation of the Exchange Offer or Private Exchange;
(iv) each Holder of Registrable Notes shall not have delivered notice to the
Company prior to the Filing Date with respect to
<PAGE>
-9-
the Exchange Offer Registration Statement that it is a Restricted Holder and (v)
the conditions precedent to the Issuers' obligations under this Agreement shall
have been fulfilled.
The Exchange Notes and the Private Exchange Notes shall be issued under
(i) the Indenture or (ii) an indenture identical in all material respects to the
Indenture and which, in either case, has been qualified under the TIA or is
exempt from such qualification and shall provide that the Exchange Notes shall
not be subject to the transfer restrictions set forth in the Indenture. The
Indenture or such indenture shall provide that the Exchange Notes, the Private
Exchange Notes and the Securities shall vote and consent together on all matters
as one class and that none of the Exchange Notes, the Private Exchange Notes or
the Securities will have the right to vote or consent as a separate class on any
matter.
(c) If (i) the Issuers are not required to file the Exchange Offer
Registration Statement or not permitted to consummate the Exchange Offer, (ii)
any Notes validly tendered pursuant to the Exchange Offer are not exchanged for
Exchange Notes within 30 days after the Effectiveness Date of the Exchange Offer
Registration Statement, or (iii) any Holder (a "Restricted Holder") of
Registrable Notes notifies the Company prior to the 20th day following
consummation of the Exchange Offer that: (A) it is prohibited by law or SEC
policy from participating in the Exchange Offer, (B) it may not resell the
Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales, (C) it
is an Initial Purchasers and that such Notes are not eligible to be exchanged
for Exchange Notes or (D) it is (x) a broker-dealer and owns Notes acquired
directly from the Company or (y) an affiliate of the Issuer, then in the case of
each of clauses (i), (ii) and (iii) of this sentence, the Issuers shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") and shall file a Shelf Registration pursuant to Section 3 hereof.
Deutsche Bank Securities Inc., an Initial Purchaser, hereby gives notice,
effective June 9, 2000, to the Company pursuant to clause (iii)(D)(y) above that
it is an affiliate of the Issuer.
3. Shelf Registration
If at any time a Shelf Notice is delivered as contemplated by Section
2(c) hereof, then:
(a) Shelf Registration. The Issuers shall as promptly as practicable
file with the SEC a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 covering all of the Registrable Notes (the
"Shelf Registration"). If the Issuers shall not have yet filed an Exchange Offer
Registration Statement, the Issuers shall use their reasonable best efforts to
file with the SEC the Shelf Registration on or prior to the Filing Date. The
Shelf Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Notes for resale by Holders in the manner or
manners designated by them (including, without limitation, one or more
underwritten offerings). The
<PAGE>
-10-
Issuers shall not permit any securities other than the Registrable Notes and the
Guarantees to be included in the Shelf Registration.
Subject to Section 3(d), the Issuers shall use their best efforts to
cause the Shelf Registration to be declared effective under the Securities Act
on or prior to the Effectiveness Date and to keep the Shelf Registration
continuously effective under the Securities Act until the date that is two years
from the Issue Date or such shorter period ending when all Registrable Notes
covered by the Shelf Registration (i) have been sold in the manner set forth and
as contemplated in the Shelf Registration or (ii) have been distributed to the
public pursuant to Rule 144 or are saleable pursuant to Rule 144(k) under the
Securities Act (the "Effectiveness Period"); provided, however, that upon notice
from any Initial Purchaser pursuant to Section 2(c)(iii)(D)(y) hereof, the
Effectiveness Period shall be extended for a period not beyond the second
anniversary of the date on which the Shelf Registration Statement became
effective (as extended by any Blackout Period) solely for the purpose of
facilitating resales of Registrable Notes by any Initial Purchaser until such
time as each Initial Purchaser shall have notified the Company that neither such
Initial Purchaser nor any of its affiliates is required by applicable law or SEC
policy to deliver a prospectus in connection with any resales of Notes, Exchange
Notes or Private Exchange Notes (such extended period, the "Market-Making
Period").
(b) Withdrawal of Stop Orders. If the Shelf Registration ceases to be
effective for any reason at any time during the Effectiveness Period (other than
because of the sale of all of the securities registered thereunder), the Issuers
shall use their reasonable best efforts to obtain the prompt withdrawal of any
order suspending the effectiveness thereof.
(c) Supplements and Amendments. Subject to Section 3(d), the Issuers
shall promptly supplement and amend the Shelf Registration if required by the
rules, regulations or instructions applicable to the registration form used for
such Shelf Registration, if required by the Securities Act, or if reasonably
requested by the Holders of a majority in aggregate principal amount of the
Registrable Notes (or their counsel) covered by such Registration Statement with
respect to the information included thereon with respect to one or more of such
Holders, or by any underwriter of such Registrable Notes with respect to the
information included thereon with respect to such underwriter.
(d) Blackout Period. Notwithstanding anything to the contrary in this
Agreement, the Company, upon advising the Initial Purchasers, may suspend the
use of the prospectus included in any Registration Statement in the event that
and for a period of time (the "Blackout Period") not to exceed an aggregate of
sixty days in any twelve-month period if (1) the Board of Directors of the
Company determines that the disclosure of an event at such time would have a
material adverse effect on the business, operations or prospects of the Company
or (2) the disclosure otherwise relates to a material business transaction which
has not been publicly disclosed and the Board of Directors of the Company
determines that any
<PAGE>
-11-
such disclosure would jeopardize the success of such transaction; provided,
that, upon the termination of such Blackout Period, the Company promptly shall
advise the Initial Purchasers that such Blackout Period has been terminated.
4. Liquidated Damages
(a) The Issuers and the Initial Purchasers agree that the Holders will
suffer damages if the Issuers fail to fulfill their obligations under Section 2
or Section 3 hereof and that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, the Issuers agree to pay liquidated
damages ("Liquidated Damages") to each Holder of Notes who provides the
representations and warranties set forth in the second paragraph of Section 2(a)
under the circumstances and to the extent set forth below:
(i) if (A) neither the Exchange Offer Registration Statement
nor the Shelf Registration has been filed on or prior to the applicable
Filing Date or (B) notwithstanding that the Issuers have consummated or
will consummate the Exchange Offer, the Issuers are required to file a
Shelf Registration and such Shelf Registration is not filed on or prior
to the Filing Date applicable thereto, then, commencing on the day
after any such Filing Date, Liquidated Damages shall accrue on the
principal amount of the Securities at a rate of $0.05 per week per
$1,000 principal amount of Notes for the first 90 days immediately
following each such Filing Date, and such Liquidated Damages shall
increase by an additional $0.05 per week per $1,000 principal amount of
Notes at the beginning of each subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement
nor the Shelf Registration is declared effective by the SEC on or prior
to the relevant Effectiveness Date or (B) notwithstanding that the
Issuers have consummated or will consummate the Exchange Offer, the
Issuers are required to file a Shelf Registration and such Shelf
Registration is not declared effective by the SEC on or prior to the
Effectiveness Date in respect of such Shelf Registration, then,
commencing on the day after such Effectiveness Date, Liquidated Damages
shall accrue on the principal amount of the Securities at a rate of
$0.05 per week per $1,000 principal amount of Notes for the first 90
days immediately following the day after such Effectiveness Date, and
such Liquidated Damages shall increase by an additional $0.05 per week
per $1,000 principal amount of Notes at the beginning of each
subsequent 90-day period; or
(iii) if (A) the Issuers have not exchanged Exchange Notes for
all Securities validly tendered in accordance with the terms of the
Exchange Offer on or prior to the 210th day after the Issue Date or (B)
if applicable, a Shelf Registration has been declared effective and
such Shelf Registration ceases to be effective at any time during the
Effectiveness Period (other than during any Market-Making Period),
except in the case of a Blackout Period relating to such Shelf
Registration, then Liquidated
<PAGE>
-12-
Damages shall accrue on the principal amount of the Securities at a
rate of $0.05 per week per $1,000 principal amount of Notes for the
first 90 days commencing on (x) the 210th day after the Issue Date, in
the case of (A) above, or (y) the day such Shelf Registration ceases to
be effective in the case of (B) above, and such Liquidated Damages
shall increase by an additional $0.05 per week per $1,000 principal
amount of Notes at the beginning of each such subsequent 90-day period;
provided, however, that (1) the Liquidated Damages on the Notes may not accrue
under more than one of the foregoing clauses (i)-(iii) (each such event, a
"Registration Default") at any one time and may not exceed at any one time in
the aggregate $0.20 per week per $1,000 principal amount of Notes, (2) a Holder
of Notes or Exchange Notes who is not entitled to the benefits of the Shelf
Registration Statement shall not be entitled to Liquidated Damages with respect
to a Registration Default that pertains to the Shelf Registration Statement, and
(3) a Holder of Notes constituting an unsold allotment from the original sale of
the Notes or who otherwise is not entitled to participate in the Exchange Offer
shall not be entitled to Liquidated Damages by reason of a Registration Default
that pertains to the Exchange Offer; provided, further, that if a Registration
Statement ceases to be effective in the case of clause (iii) above on account of
a Blackout Period, Liquidated Damages will cease to accrue during such Blackout
Period; provided, further, however, that (1) upon the filing of the applicable
Exchange Offer Registration Statement or the Shelf Registration as required
hereunder (in the case of clause (i) above of this Section 4(a)), (2) upon the
effectiveness of the Exchange Offer Registration Statement or the Shelf
Registration Statement as required hereunder (in the case of clause (ii) of this
Section 4), or (3) upon the exchange of the applicable Exchange Notes for all
Securities tendered (in the case of clause (iii)(A) of this Section 4), or upon
the effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii)(B) of this Section 4), Liquidated Damages
on the Notes in respect of which such events relate as a result of such clause
(or the relevant subclause thereof), as the case may be, shall cease to accrue.
A confidential submission to the SEC shall qualify as a filing for purposes of
the filing deadlines above.
(b) The Issuers shall notify the Trustee within two Business Days after
each and every date on which an event occurs in respect of which Liquidated
Damages is required to be paid (an "Event Date"). Any amounts of Liquidated
Damages due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be
payable in cash semiannually on each May 1 and November 1 (to the holders of
record on the April 15 and October 15 immediately preceding such dates),
commencing with the first such date occurring after any such Liquidated Damages
commences to accrue. The amount of Liquidated Damages will be determined by
multiplying the applicable Liquidated Damages rate by the principal amount of
the Registrable Notes, multiplied by a fraction, the numerator of which is the
number of days such Liquidated Damages rate was applicable during such period,
and the denominator of which is seven.
<PAGE>
-13-
(c) The parties hereto agree that the Liquidated Damages provided for
in this Section 4 constitute the sole damages that will be suffered by Holders
of Registrable Notes by reason of the occurrence of any of the events described
in Section 4(a)(i) - (iii) hereof.
5. Registration Procedures
In connection with the filing of any Registration Statement pursuant to
Section 2 or 3 hereof, the Issuers shall effect such registrations to permit the
sale of the securities covered thereby in accordance with the intended method or
methods of disposition thereof, and pursuant thereto and in connection with any
Registration Statement filed by the Issuers hereunder each of the Issuers shall:
(a) Prepare and file with the SEC prior to the Filing Date a
Registration Statement or Registration Statements as prescribed by
Section 2 or 3 hereof, and use its reasonable best efforts to cause
each such Registration Statement to become effective and remain
effective as provided herein; provided, however, that if (1) such
filing is pursuant to Section 3 hereof, or (2) a Prospectus contained
in the Exchange Offer Registration Statement filed pursuant to Section
2 hereof is required to be delivered under the Securities Act by any
Exchanging Dealer who seeks to sell Exchange Notes during the
Applicable Period relating thereto from whom any Issuer has received
written notice that it will be an Exchanging Dealer in the Exchange
Offer, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Issuers shall furnish to and
afford the Holders of the Registrable Notes included in such
Registration Statement (with respect to a Registration Statement filed
pursuant to Section 3 hereof) or each such Exchanging Dealer (with
respect to any such Registration Statement), as the case may be, their
counsel and the managing underwriters, if any, a reasonable opportunity
to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits
thereto) proposed to be filed (in each case at least five business days
prior to such filing). The Issuers shall not file any Registration
Statement or Prospectus or any amendments or supplements thereto if the
Holders of a majority in aggregate principal amount of the Registrable
Notes included in such Registration Statement, their counsel, or the
managing underwriters, if any, shall reasonably object on a timely
basis.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration Statement or
Exchange Offer Registration Statement, as the case may be, as may be
necessary to keep such Shelf Registration Statement or Exchange Offer
Registration Statement continuously effective for the Effectiveness
Period, the Market-Making Period or the Applicable Period,
respectively; cause the related Prospectus to be supplemented by any
Prospectus supplement required by applicable law, and as so
supplemented to be filed pursuant to
<PAGE>
-14-
Rule 424; and comply with the provisions of the Securities Act and the
Exchange Act applicable to each of them with respect to the disposition
of all securities covered by such Registration Statement as so amended
or in such Prospectus as so supplemented and with respect to the
subsequent resale of any securities being sold by an Exchanging Dealer
covered by any such Prospectus; provided that none of the foregoing
shall be required during any Blackout Period. Other than during any
Blackout Period, the Issuers shall be deemed not to have used their
reasonable best efforts to keep a Registration Statement effective
during the Effectiveness Period or the Applicable Period, as the case
may be, relating thereto if any Issuer voluntarily takes any action
that would result in selling Holders of the Registrable Notes covered
thereby or Exchanging Dealers seeking to sell Exchange Notes not being
able to sell such Registrable Notes or such Exchange Notes during that
period unless such action is required by applicable law or permitted by
this Agreement.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Exchanging Dealer who
seeks to sell Exchange Notes during the Applicable Period relating
thereto from whom any Issuer has received written notice that it will
be an Exchanging Dealer in the Exchange Offer, notify the selling
Holders of Registrable Notes (with respect to a Registration Statement
filed pursuant to Section 3 hereof), or each such Exchanging Dealer
(with respect to any such Registration Statement), as the case may be,
their counsel and the managing underwriters, if any, promptly (but in
any event within one business day), and confirm such notice in writing,
(i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to a Registration Statement
or any post-effective amendment, when the same has become effective
under the Securities Act (including in such notice a written statement
that any Holder may, upon request, obtain, at the sole expense of the
Issuers, one conformed copy of such Registration Statement or
post-effective amendment including financial statements and schedules,
documents incorporated or deemed to be incorporated by reference and
exhibits), (ii) of the issuance by the SEC of any stop order suspending
the effectiveness of a Registration Statement or of any order
preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) if at any time
when a prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of Exchange
Notes by Exchanging Dealers the representations and warranties of the
Issuers contained in any agreement (including any underwriting
agreement) contemplated by Section 5(n) hereof cease to be true and
correct, (iv) of the receipt by any Issuer of any notification with
respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable
Notes or the Exchange Notes to be sold by any Exchanging Dealer for
offer or sale in any jurisdiction, or the initiation or threatening of
any proceeding for
<PAGE>
-15-
such purpose, (v) of the happening of any event, the existence of any
condition or any information becoming known that makes any statement
made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any
changes in or amendments or supplements to such Registration Statement,
Prospectus or documents so that, in the case of the Registration
Statement, it will 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 that in
the case of the Prospectus, it will 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, in light of
the circumstances under which they were made, not misleading, and (vi)
of the Issuers' determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Use its reasonable best efforts to prevent the issuance of
any order suspending the effectiveness of a Registration Statement or
of any order preventing or suspending the use of a Prospectus or
suspending the qualification (or exemption from qualification) of any
of the Registrable Notes or the Exchange Notes to be sold by any
Exchanging Dealer, for sale in any jurisdiction, and, if any such order
is issued, to use its reasonable best efforts to obtain the withdrawal
of any such order at the earliest practicable moment.
(e) Subject to Section 3(d), if a Shelf Registration is filed
pursuant to Section 3 and if requested during the Effectiveness Period
by the managing underwriter or underwriters (if any), the Holders of a
majority in aggregate principal amount of the Registrable Notes being
sold in connection with an underwritten offering or any Exchanging
Dealer, (i) as promptly as practicable incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriter or underwriters (if any), such Holders, any Exchanging
Dealer or counsel for any of them reasonably request to be included
therein, (ii) make all required filings of such prospectus supplement
or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in
such prospectus supplement or post-effective amendment, and (iii)
supplement or make amendments to such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Exchanging Dealer who
seeks to sell Exchange Notes during the Applicable Period, furnish to
each selling Holder of Registrable Notes (with respect to a
Registration Statement filed pursuant to Section 3 hereof) and to each
such Exchanging Dealer who so requests (with respect to any such
Registration Statement) and to their respective
<PAGE>
-16-
counsel and each managing underwriter, if any, at the sole expense of
the Issuers, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all
documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Exchanging Dealer who
seeks to sell Exchange Notes during the Applicable Period, deliver to
each selling Holder of Registrable Notes (with respect to a
Registration Statement filed pursuant to Section 3 hereof), or each
such Exchanging Dealer (with respect to any such Registration
Statement), as the case may be, their respective counsel, and the
underwriters, if any, at the sole expense of the Issuers, as many
copies of the Prospectus or Prospectuses (including each form of
preliminary prospectus) and each amendment or supplement thereto and
any documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this Section
5, the Issuers hereby consent to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders of
Registrable Notes or each such Exchanging Dealer, as the case may be,
and the underwriters or agents, if any, and dealers, if any, in
connection with the offering and sale of the Registrable Notes covered
by, or the sale by Exchanging Dealers of the Exchange Notes pursuant
to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or
Exchange Notes or any delivery of a Prospectus contained in the
Exchange Offer Registration Statement by any Exchanging Dealer who
seeks to sell Exchange Notes during the Applicable Period, use its
reasonable best efforts to register or qualify, and to cooperate with
the selling Holders of Registrable Notes or each such Exchanging
Dealer, as the case may be, the managing underwriter or underwriters,
if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of such Registrable Notes for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Exchanging Dealer, or the managing
underwriter or underwriters reasonably request in writing; provided,
however, that where Exchange Notes held by Exchanging Dealers or
Registrable Notes are offered other than through an underwritten
offering, the Issuers agree to cause their counsel to perform Blue Sky
investigations and file registrations and qualifications required to be
filed pursuant to this Section 5(h), keep each such registration or
qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and do any and
all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Notes held by
Exchanging Dealers or the Registrable
<PAGE>
-17-
Notes covered by the applicable Registration Statement; provided,
however, that no Issuer shall be required to (A) qualify generally to
do business in any jurisdiction where it is not then so qualified, (B)
take any action that would subject it to general service of process in
any such jurisdiction where it is not then so subject, or (C) subject
itself to taxation in excess of a nominal dollar amount in any such
jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3
hereof, cooperate with the selling Holders of Registrable Notes and the
managing underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold, which certificates shall not bear any restrictive legends
and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such denominations
(subject to applicable requirements contained in the Indenture) and
registered in such names as the managing underwriter or underwriters,
if any, or Holders may request.
(j) Use their reasonable best efforts to cause the Registrable
Notes covered by the Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Notes, except as may be required solely as a consequence of the nature
of such selling Holder's business, in which case the Issuers will
cooperate in all respects with the filing of such Registration
Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Exchanging Dealer who
seeks to sell Exchange Notes during the Applicable Period, upon the
occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi)
hereof, as promptly as practicable (except, in the case of a Blackout
Period) prepare and (subject to Section 5(a) hereof) file with the SEC,
at the sole expense of the Issuers, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Notes being
sold thereunder (with respect to a Registration Statement filed
pursuant to Section 3 hereof) or to the purchasers of the Exchange
Notes to whom such Prospectus will be delivered by an Exchanging Dealer
(with respect to any such Registration Statement), any such Prospectus
will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
<PAGE>
-18-
(l) Use its reasonable best efforts to cause the Registrable
Notes covered by a Registration Statement or the Exchange Notes, as the
case may be, to be rated with the appropriate rating agencies, if so
requested by the Holders of a majority in aggregate principal amount of
Registrable Notes covered by such Registration Statement or the
Exchange Notes, as the case may be, or the managing underwriter or
underwriters, if any.
(m) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee
with certificates for the Registrable Notes in a form eligible for
deposit with The Depository Trust Company and (ii) provide a CUSIP
number for the Registrable Notes.
(n) In connection with any underwritten offering of
Registrable Notes pursuant to a Shelf Registration, enter into an
underwriting agreement as is customary in underwritten offerings of
debt securities similar to the Securities, and take all such other
actions as are reasonably requested by the managing underwriter or
underwriters in order to expedite or facilitate the registration or the
disposition of such Registrable Notes and, in such connection, (i) make
such representations and warranties to, and covenants with, the
underwriters with respect to the business of the Issuers (including any
acquired business, properties or entity, if applicable), and the
Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings
of debt securities similar to the Securities, and confirm the same in
writing if and when requested; (ii) obtain the written opinions of
counsel to the Issuers, and written updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to the underwriters covering the matters
customarily covered in opinions reasonably requested in underwritten
offerings; (iii) obtain "cold comfort" letters and updates thereof in
form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent certified public
accountants of the Issuers (and, if necessary, any other independent
certified public accountants of the Issuers, or of any business
acquired by the Issuers, for which financial statements and financial
data are, or are required to be, included or incorporated by reference
in the Registration Statement), addressed to each of the underwriters,
such letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings of debt securities similar to the Securities;
and (iv) if an underwriting agreement is entered into, the same shall
contain indemnification provisions and procedures no less favorable to
the sellers and underwriters, if any, than those set forth in Section 7
hereof (or such other provisions and procedures reasonably acceptable
to Holders of a majority in aggregate principal amount of Registrable
Notes covered by such Registration Statement and the managing
underwriter or underwriters or agents, if any). The above shall be done
at
<PAGE>
-19-
each closing under such underwriting agreement, or as and to the extent
required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in the Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Exchanging Dealer who
seeks to sell Exchange Notes during the Applicable Period, make
available for inspection by any Initial Purchaser, any selling Holder
of such Registrable Notes being sold (with respect to a Registration
Statement filed pursuant to Section 3 hereof), or each such Exchanging
Dealer, as the case may be, any underwriter participating in any such
disposition of Registrable Notes, if any, and any attorney, accountant
or other agent retained by any such selling Holder or each such
Exchanging Dealer (with respect to any such Registration Statement), as
the case may be, or underwriter (any such Initial Purchasers, Holders,
Exchanging Dealers, underwriters, attorneys, accountants or agents,
collectively, the "Inspectors"), upon written request, at the offices
where normally kept, during reasonable business hours, all pertinent
financial and other records, pertinent corporate documents and
instruments of the Issuers and subsidiaries of the Issuers
(collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities,
and cause the officers, directors and employees of the Issuers and any
of their respective subsidiaries to supply all information
("Information") reasonably requested by any such Inspector in
connection with such due diligence responsibilities. Each Inspector
shall agree in writing that it will keep the Records and Information
confidential and that it will not disclose any of the Records that any
Issuer determines, in good faith, to be confidential and notifies the
Inspectors in writing are confidential unless (i) the disclosure of
such Records or Information is necessary to avoid or correct a
misstatement or omission in such Registration Statement or Prospectus,
(ii) the release of such Records or Information is ordered pursuant to
a subpoena or other order from a court of competent jurisdiction, or
(iii) the information in such Records or Information has been made
generally available to the public other than by an Inspector or an
"affiliate" (as defined in Rule 405) thereof; provided, however, that
prior notice shall be provided as soon as practicable to any Issuer of
the potential disclosure of any information by such Inspector pursuant
to clauses (i) or (ii) of this sentence to permit the Issuers to obtain
a protective order (or waive the provisions of this paragraph (o)) and
that such Inspector shall take such actions as are reasonably necessary
to protect the confidentiality of such information (if practicable) to
the extent such action is otherwise not inconsistent with, an
impairment of or in derogation of the rights and interests of the
Holder or any Inspector.
(p) Provide an indenture trustee for the Registrable Notes or
the Exchange Notes, as the case may be, and cause the Indenture or the
trust indenture provided for
<PAGE>
-20-
in Section 2(a) hereof, as the case may be, to be qualified under the
TIA not later than the effective date of the first Registration
Statement relating to the Registrable Notes; and in connection
therewith, cooperate with the trustee under any such indenture and the
Holders of the Registrable Notes, to effect such changes (if any) to
such indenture as may be required for such indenture to be so qualified
in accordance with the terms of the TIA; and execute, and use their
best efforts to cause such trustee to execute, all documents as may be
required to effect such changes, and all other forms and documents
required to be filed with the SEC to enable such indenture to be so
qualified in a timely manner.
(q) Comply with all applicable rules and regulations of the
SEC and make generally available to its securityholders with regard to
any applicable Registration Statement, a consolidated earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any fiscal
quarter (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Notes are sold to underwriters in a firm commitment
or best efforts underwritten offering and (ii) if not sold to
underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company, after the effective date of a
Registration Statement, which statements shall cover said 12-month
periods.
(r) Upon consummation of the Exchange Offer or a Private
Exchange, obtain an opinion of counsel to the Issuers, in a form
customary for underwritten transactions, addressed to the Trustee for
the benefit of all Holders of Registrable Notes participating in the
Exchange Offer or the Private Exchange, as the case may be, that the
Exchange Notes or Private Exchange Notes, as the case may be, the
related Guarantee and the related indenture constitute legal, valid and
binding obligations of the Issuers, enforceable against the Issuers in
accordance with their respective terms, subject to customary exceptions
and qualifications. If the Exchange Offer or a Private Exchange is to
be consummated, upon delivery of the Registrable Notes by Holders to
the Company (or to such other Person as directed by the Issuers), in
exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be, the Issuers shall mark, or cause to be marked, on such
Registrable Notes that such Registrable Notes are being cancelled in
exchange for the Exchange Notes or the Private Exchange Notes, as the
case may be; in no event shall such Registrable Notes be marked as paid
or otherwise satisfied.
(s) Cooperate with each seller of Registrable Notes covered by
any Registration Statement and each underwriter, if any, participating
in the disposition of such Registrable Notes and their respective
counsel in connection with any filings
<PAGE>
-21-
required to be made with the National Association of Securities
Dealers, Inc. (the "NASD").
(t) Use its reasonable best efforts to take all other steps
necessary to effect the registration of the Exchange Notes and/or
Registrable Notes covered by a Registration Statement contemplated
hereby.
The Issuers may require each seller of Registrable Notes as to which
any registration is being effected to furnish to the Issuers such information
regarding such seller and the distribution of such Registrable Notes as the
Issuers may, from time to time, reasonably request. The Issuers may exclude from
such registration the Registrable Notes of any seller so long as such seller
fails to furnish such information within a reasonable time after receiving such
request. Each seller as to which any Shelf Registration is being effected agrees
to furnish promptly to the Issuers all information required to be disclosed in
order to make the information previously furnished to the Issuers by such seller
not materially misleading.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the securities covered thereby and that
such holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not required by the Securities Act or any
similar federal statute then in force, the deletion of the reference to such
Holder in any amendment or supplement to the Registration Statement filed or
prepared subsequent to the time that such reference ceases to be required.
Each Holder of Registrable Notes and each Exchanging Dealer agrees by
its acquisition of such Registrable Notes or Exchange Notes to be sold by such
Exchanging Dealer, as the case may be, that, upon actual receipt of any notice
from the Company of the happening of any event of the kind described in Section
5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith
discontinue disposition of such Registrable Notes covered by such Registration
Statement or Prospectus or Exchange Notes to be sold by such Holder or
Exchanging Dealer, as the case may be, until such Holder's or Exchanging
Dealer's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(k) hereof, or until it is advised in writing (the
"Advice") by the Issuers that the use of the applicable Prospectus may be
resumed, and has received copies of any amendments or supplements thereto. In
the event that the Issuers shall give any such notice, each of the Applicable
Period, the Market-Making Period and the Effectiveness Period shall be extended
by the number of days during such periods from and including the date of the
giving of such notice to and
<PAGE>
-22-
including the date when each seller of Registrable Notes covered by such
Registration Statement or Exchange Notes to be sold by such Exchanging Dealer,
as the case may be, shall have received (x) the copies of the supplemented or
amended Prospectus contemplated by Section 5(k) hereof or (y) the Advice.
6. Registration Expenses
All fees and expenses incident to the performance of or compliance with
this Agreement by the Issuers (other than any underwriting discounts or
commissions) shall be borne by the Issuers, whether or not the Exchange Offer
Registration Statement or any Shelf Registration is filed or becomes effective
or the Exchange Offer is consummated, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees with
respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) reasonable fees and expenses of compliance with
state securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Notes or Exchange Notes and determination of the eligibility of the
Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes are located, in the
case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the
case of Registrable Notes or Exchange Notes to be sold by an Exchanging Dealer
during the Applicable Period)), (ii) printing expenses, including, without
limitation, expenses of printing certificates for Registrable Notes or Exchange
Notes in a form eligible for deposit with The Depository Trust Company and of
printing prospectuses if the printing of prospectuses is requested by the
managing underwriter or underwriters, if any, by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any Registration
Statement or in respect of Registrable Notes or Exchange Notes to be sold by any
Exchanging Dealer during the Applicable Period, as the case may be, (iii)
messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Issuers and, in case of a Shelf Registration, reasonable fees
and disbursements of one special counsel for all of the sellers of Registrable
Notes (exclusive of any counsel retained pursuant to Section 7 hereof), (v) fees
and disbursements of all independent certified public accountants referred to in
Section 5(n)(iii) hereof (including, without limitation, the expenses of any
"cold comfort" letters required by or incident to such performance), (vi)
Securities Act liability insurance, if the Issuers desire such insurance, (vii)
fees and expenses of all other Persons retained by the Issuers, (viii) internal
expenses of the Issuers (including, without limitation, all salaries and
expenses of officers and employees of the Issuers performing legal or accounting
duties), (ix) the expense of any annual audit, (x) any fees and expenses
incurred in connection with the listing of the securities to be registered on
any securities exchange, and the obtaining of a rating of the securities, in
each case, if applicable, and (xi) the expenses relating to printing, word
processing and distributing all Registration Statements, underwriting
agreements, indentures and any other documents necessary in order to comply with
this Agreement.
<PAGE>
-23-
7. Indemnification and Contribution. (a) Each of the Issuers agree,
jointly and severally, to indemnify and hold harmless each Holder of Registrable
Notes and each Exchanging Dealer selling Exchange Notes during the Applicable
Period, and each Person, if any, who controls such Person or its affiliates
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
(each, a "Participant") against any losses, claims, damages or liabilities to
which any Participant or such controlling person may become subject under the
Act, the Exchange Act or otherwise, insofar as any such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
any Issuer contained in any application or any other document or any
amendment or supplement thereto executed by any Issuer based upon
written information furnished by or on behalf of any Issuer filed in
any jurisdiction in order to qualify the Notes under the securities or
"Blue Sky" laws thereof or filed with the SEC or any securities
association or securities exchange (each, an "Application");
(ii) any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement (or any amendment
thereto) or Prospectus (as amended or supplemented if any of the
Issuers shall have furnished any amendments or supplements thereto) or
any preliminary prospectus; or
(iii) the omission or alleged omission to state, in any
Registration Statement (or any amendment thereto) or Prospectus (as
amended or supplemented if any of the Issuers shall have furnished any
amendments or supplements thereto) or any preliminary prospectus or any
Application or any other document or any amendment or supplement
thereto, a material fact required to be stated therein or necessary to
make the statements therein not misleading;
and will reimburse, as incurred, the Participant and each such controlling
person for any legal or other expenses incurred by the Participant or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, (i) the Issuers will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any Registration Statement (or
any amendment thereto) or Prospectus (as amended or supplemented if any of the
Issuers shall have furnished any amendments or supplements thereto) or any
preliminary prospectus or Application or any amendment or supplement thereto in
reliance upon and in conformity with information relating to any Participant
furnished to the Issuers by such Participant specifically for use therein, and
(ii) the Issuers shall not be liable to any Participant under the indemnity
agreement in this subsection (a) with respect to the preliminary prospectus to
the extent that any such loss, claim, damage, liability or expense of such
Participant results from the fact that such Participant sold Notes to
<PAGE>
-24-
a person as to whom it shall be established that there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the Prospectus (or
the Prospectus as then amended or supplemented if the Issuers shall have
furnished such Participant with such amendment or supplement thereto on a timely
basis), in any case where such delivery is required by applicable law and the
loss, claim, damage, liability or expense of such Participant results from an
untrue statement or omission of a material fact contained in the preliminary
prospectus which was corrected in the Prospectus (or in the Prospectus as then
amended or supplemented if the Issuers shall have furnished such Participant
with such amendment or supplement thereto on a timely basis). The indemnity
provided for in this Section 7 will be in addition to any liability that the
Issuers may otherwise have to the indemnified parties. The Issuers shall not be
liable under this Section 7 for any settlement of any claim or action effected
without its prior written consent, which shall not be unreasonably withheld.
(b) Each Participant, severally and not jointly, agrees to indemnify
and hold harmless the Issuers, their directors, their officers and each person,
if any, who controls the Issuers within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Issuers or any such director, officer or controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement or
Prospectus, any amendment or supplement thereto, or any preliminary prospectus,
or (ii) the omission or the alleged omission to state therein a material fact
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning such Participant, furnished to
the Issuers by the Participant, specifically for use therein; and subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses incurred by the Issuers or any such
director, officer or controlling person in connection with investigating or
defending against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action in respect thereof. The indemnity
provided for in this Section 7 will be in addition to any liability that the
Participants may otherwise have to the indemnified parties. The Participants
shall not be liable under this Section 7 for any settlement of any claim or
action effected without their consent, which shall not be unreasonably withheld.
The Issuers shall not, without the prior written consent of such Participant,
effect any settlement or compromise of any pending or threatened proceeding in
respect of which any Participant is or could have been a party, or indemnity
could have been sought hereunder by any Participant, unless such settlement (A)
includes an unconditional written release of the Participants, in form and
substance reasonably satisfactory to the Participants, from all liability on
claims that are the subject matter of such proceeding and (B) does not include
any statement as to an admission of fault, culpability or failure to act by or
on behalf of any Participant.
<PAGE>
-25-
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action for which such indemnified party is
entitled to indemnification under this Section 7, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party of the commencement thereof in
writing; but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have been advised by counsel that there may be one or more legal defenses
available to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after receipt by the indemnifying party of notice of the institution of
such action, then, in each such case, the indemnifying party shall not have the
right to direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right to select
separate counsel to defend such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof and approval by such indemnified
party of counsel appointed to defend such action, the indemnifying party will
not be liable to such indemnified party under this Section 7 for any legal or
other expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by Participants who sold a majority in
interest of the Registrable Notes and Exchange Notes sold by all such
Participants in the case of paragraph (a) of this Section 7 or the Issuers in
the case of paragraph (b) of this Section 7, representing the indemnified
parties under such paragraph (a) or paragraph (b), as the case may be, who are
parties to such action or actions) or (ii) the indemnifying party has authorized
in writing the employment of counsel for the indemnified party at the expense of
the indemnifying party. All fees and expenses reimbursed pursuant to this
paragraph (c) shall be reimbursed as they
<PAGE>
-26-
are incurred. After such notice from the indemnifying party to such indemnified
party, the indemnifying party will not be liable for the costs and expenses of
any settlement of such action effected by such indemnified party without the
prior written consent of the indemnifying party (which consent shall not be
unreasonably withheld), unless such indemnified party waived in writing its
rights under this Section 7, in which case the indemnified party may effect such
a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 7 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Notes or (ii) if the allocation provided by the foregoing clause
(i) is not permitted by applicable law, not only such relative benefits but also
the relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received by
the Issuers on the one hand and such Participant on the other shall be deemed to
be in the same proportion as the total proceeds from the offering (before
deducting expenses) of the Notes received by the Issuers bear to the total net
profit received by such Participant in connection with the sale of the Notes.
The relative fault of the parties shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuers on the one hand, or the Participants on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in the
circumstances. The parties agree that it would not be equitable if the amount of
such contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (d).
Notwithstanding any other provision of this paragraph (d), no Participant shall
be obligated to make contributions hereunder that in the aggregate exceed the
total net profit received by such Participant in connection with the sale of the
Notes, less the aggregate amount of any damages that such Participant has
otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
no person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this paragraph (d),
each person, if any, who controls a Participant within the meaning of Section 15
of the Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Participants, and each
<PAGE>
-27-
director of any Issuer, each officer of any Issuer and each person, if any, who
controls any Issuer within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, shall have the same rights to contribution as the Issuers.
8. Rules 144 and 144A
Each of the Issuers covenants and agrees that it will file the reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and regulations adopted by the SEC thereunder in a timely manner in
accordance with the requirements of the Securities Act and the Exchange Act and,
if at any time such Issuer is not required to file such reports, such Issuer
will, upon the request of any Holder or beneficial owner of Registrable Notes,
make available such information necessary to permit sales pursuant to Rule 144A.
Each of the Issuers further covenants and agrees, for so long as any Registrable
Notes remain outstanding that it will take such further action as any Holder of
Registrable Notes may reasonably request, all to the extent required from time
to time to enable such holder to sell Registrable Notes without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144(k) under the Securities Act and Rule 144A.
9. Underwritten Registrations
If any of the Registrable Notes covered by any Shelf Registration are
to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of a majority in aggregate principal amount of such Registrable
Notes included in such offering and shall be reasonably acceptable to the
Issuers.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Miscellaneous
(a) No Inconsistent Agreements. The Issuers have not, as of the date
hereof, and the Issuers shall not, after the date of this Agreement, enter into
any agreement with respect to any of its securities that is inconsistent with
the rights granted to the Holders of Registrable Notes in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuers' other issued and outstanding
securities under any such agreements. The Issuers will not enter into any
agreement with
<PAGE>
-28-
respect to any of their securities which will grant to any Person piggy-back
registration rights with respect to any Registration Statement.
(b) Adjustments Affecting Registrable Notes. The Issuers shall not,
directly or indirectly, take any action with respect to the Registrable Notes as
a class that would adversely affect the ability of the Holders of Registrable
Notes to include such Registrable Notes in a registration undertaken pursuant to
this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of (I) the Company, and (II)(A) the Holders of not less than a majority
in aggregate principal amount of the then outstanding Registrable Notes and (B)
in circumstances that would adversely affect the Exchanging Dealers, the
Exchanging Dealers holding not less than a majority in aggregate principal
amount of the Exchange Notes held by all Exchanging Dealers; provided, however,
that Section 7 and this Section 10(c) may not be amended, modified or
supplemented without the prior written consent of each Holder and each
Exchanging Dealer (including any person who was a Holder or Exchanging Dealer of
Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or
supplement. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold pursuant
to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders of Registrable Notes may
be given by Holders of at least a majority in aggregate principal amount of the
Registrable Notes being sold pursuant to such Registration Statement.
(d) Notices. All notices and other communications (including, without
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
(i) if to a Holder of the Registrable Notes or any Exchanging
Dealer, at the most current address of such Holder or Exchanging
Dealer, as the case may be, set forth on the records of the registrar
under the Indenture.
(ii) if to the Issuers, at the address as follows:
c/o Jostens, Inc.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
Attention: General Counsel
<PAGE>
-29-
with a copy to:
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166
Attention: Joerg H. Esdorn, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; one Business Day after
being timely delivered to a next-day air courier; and when receipt is
acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto,
the Holders and the Exchanging Dealers; provided, however, that nothing herein
shall be deemed to permit any assignment, transfer or other disposition of
Registrable Notes in violation of the terms of the Purchase Agreement or the
Indenture.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION OF ANY OTHER
LAW.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative
<PAGE>
-30-
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Securities Held by the Issuers or Their Respective Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Notes is required hereunder, Registrable Notes held by the Issuers
or their respective affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
(k) Third-Party Beneficiaries. Holders of Registrable Notes and
Exchanging Dealers are intended third-party beneficiaries of this Agreement, and
this Agreement may be enforced by such Persons.
(l) Entire Agreement. This Agreement, together with the Purchase
Agreement and the Indenture, is intended by the parties as a final and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein and any and all prior oral or
written agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Holders on the one hand
and the Issuers on the other, or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in
interest with respect to the subject matter hereof and thereof are merged herein
and replaced hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
JOSTENS, INC.
By: /s/ Robert C. Buhrmaster
------------------------------
Name: Robert C. Buhrmaster
Title: Chairman of the Board,
President and Chief
Executive Officer
AMERICAN YEARBOOK COMPANY, INC.,
as Guarantor
By: /s/ Robert C. Buhrmaster
------------------------------
Name: Robert C. Buhrmaster
Title: President
<PAGE>
-31-
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
DEUTSCHE BANK SECURITIES INC.
By: /s/ Matthew Headington
----------------------------------
Name: Matthew Headington
Title: Vice President
UBS WARBURG LLC
By: /s/ Robert Parsons
----------------------------------
Name: Robert Parsons
Title: Managing Director
Leveraged Finance
By: /s/ P. Whitridge Williams
----------------------------------
Name: P. Whitridge Williams
Title: Director
Leveraged Finance
GOLDMAN, SACHS & CO.
/s/ GOLDMAN, SACHS & CO.
- ----------------------------------
<PAGE>
EXHIBIT 4.3
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RIGHTS OF THE
14% SENIOR REDEEMABLE PAYMENT-IN-KIND PREFERRED STOCK,
AND QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant to Section 302A.401 of
the Minnesota Business Corporation Act
Jostens, Inc. (the "Issuer"), a corporation organized and existing
under the Minnesota Business Corporation Act, as amended (the "MBCA"), does
hereby certify that, pursuant to authority conferred upon the Board of Directors
of the Issuer by its Amended and Restated Articles of Incorporation (hereinafter
referred to as the "Articles of Incorporation"), and pursuant to the provisions
of the MBCA the Board of Directors, on May 10, 2000 duly approved and adopted
the following resolution (the "Resolution"):
RESOLVED, that, pursuant to the authority vested in the Board of
Directors by the Articles of Incorporation, the Board of Directors does hereby
create, authorize and provide for the issuance of a series of 14% Senior
Redeemable Payment-In-Kind Preferred Stock, par value $0.01 per share, with a
stated value of $1,000.00 per share, consisting of 307,500 shares, in each case
having the designations, preferences, relative, participating, optional and
other special rights and the qualifications, limitations and restrictions
thereof that are set forth in the Articles of Incorporation and in this
Resolution as follows:
This Certificate of Designation shall be deemed effective on May 10,
2000.
I. Senior Redeemable Preferred Stock
------------------------------------
(a) Designation. There is hereby created out of the authorized and
unissued shares of Preferred Stock of the Issuer a series of Preferred Stock
designated as the "14% Senior Redeemable Payment-In-Kind Preferred Stock." The
number of shares constituting such series shall be 307,500 and are referred to
herein as the "Redeemable Preferred Stock." 60,000 shares of Redeemable
Preferred Stock shall be initially issued with an additional 247,500 shares
reserved for issuance in accordance with paragraph (c)(i) and (c)(vi) of this
Article I. The liquidation preference of the Redeemable Preferred Stock shall be
$1,000.00 per share.
(b) Liquidation Preference. Except as permitted by this Certificate of
Designation, the Redeemable Preferred Stock shall, with respect to dividends and
distributions upon liquidation, winding-up and dissolution of the Issuer, rank
senior to all classes of Common Stock of the Issuer and to each other class of
Capital Stock of the Issuer or series of Preferred Stock of the Issuer hereafter
created (any such Stock other than Senior Stock and Parity Stock, collectively,
referred to as "Junior Stock"). The Issuer may not issue any class or series of
Capital Stock that ranks (x) on a parity with the Redeemable Preferred Stock as
to dividends and distributions upon liquidation, winding-up and dissolution
(collectively, referred to as "Parity Stock") other than in accordance with
paragraph (f)(ii)(A) of Article I hereof or (y) senior to the Redeemable
Preferred Stock as to dividends and distributions upon liquidation, winding-up
and
<PAGE>
dissolution of the Issuer (collectively referred to as "Senior Stock") other
than in accordance with paragraph (f)(ii)(B) of Article I.
(c) Dividends. (i) The Holders of the outstanding shares of Redeemable
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors, out of funds legally available therefor, dividends (the
"Regular Dividends") for each Dividend Period on each outstanding share of
Redeemable Preferred Stock, at a rate per annum equal to 14% of the liquidation
preference per share of the Redeemable Preferred Stock, payable quarterly;
provided that so long as an Redeemable Preferred Triggering Event shall have
occurred and be continuing, additional dividends ("Additional Dividends") will
accumulate on the Redeemable Preferred Stock at a rate per annum of 1% of the
liquidation preference per share of the Redeemable Preferred Stock, payable
quarterly. All Regular Dividends, Additional Dividends and Special Dividends
shall be cumulative, whether or not earned or declared, on a daily basis from
the Issue Date of the respective shares of the Redeemable Preferred Stock and
all Regular Dividends (and, if payable, all Additional Dividends and Special
Dividends) shall be payable quarterly in arrears on each Regular Dividend
Payment Date, commencing on the first Regular Dividend Payment Date after the
Issue Date. Regular Dividends (and Additional Dividends and Special Dividends,
if any) may be paid, at the Issuer's option, either in cash or by the issuance
of additional shares of Redeemable Preferred Stock (including fractional shares)
having an aggregate liquidation preference equal to the amount of such Regular
Dividends (and Additional Dividends and Special Dividends, if any) (but not less
than $1.00). Each Regular Dividend or Additional Dividend, to the extent paid in
cash, shall be payable out of funds legally available therefor, to the Holders
of record as they appear on the stock books of the Issuer on the Regular
Dividend Record Date immediately preceding the related Regular Dividend Payment
Date.
(ii) All Regular Dividends, Additional Dividends and Special
Dividends paid in cash with respect to shares of the Redeemable
Preferred Stock pursuant to paragraphs (c)(i) and (vi) of this Article
I shall be paid pro rata to the Holders thereof entitled thereto and
holders of Parity Stock, if any, entitled thereto.
(iii) Regular Dividends and Additional Dividends in connection
with any optional redemption pursuant to paragraph (e) of this Article
I may be declared and paid at any time, without reference to any
Regular Dividend Payment Date, to Holders of record on such date, not
more forty five (45) days prior to the payment thereof, as may be fixed
by the Board of Directors of the Issuer.
(iv) So long as any share of the Redeemable Preferred Stock is
outstanding, the Issuer shall not declare, pay or set apart for payment
any dividend on any Junior Stock or Parity Stock or make any payment on
account of, or set apart for payment money for a sinking or other
similar fund for, the purchase, redemption or other retirement of, any
Junior Stock or Parity Stock or any warrants, rights, calls or options
exercisable for or convertible into any Junior Stock or Parity Stock
whether in cash, obligations or shares of the Issuer or other property,
and shall not permit any corporation or other entity directly or
indirectly controlled by the Issuer to purchase or redeem any Junior
Stock or Parity Stock or any such warrants, rights, calls or options
unless full cumulative dividends determined in accordance herewith on
the Redeemable Preferred Stock have been paid (or are deemed paid) in
full in cash or in additional shares.
-2-
<PAGE>
(v) Regular Dividends payable on the Redeemable Preferred
Stock for any period less than a year shall be computed on the basis of
a 360-day year of twelve 30-day months and the actual number of days
elapsed in the period for which payable. The amount of Additional
Dividends will be determined consistent with the preceding sentence and
by multiplying the applicable Additional Dividends by a fraction, the
numerator of which is the number of days (not to exceed 90) such rate
was applicable during any Dividend Period and the denominator of which
is 360.
(vi) Additional dividends shall become due and payable with
respect to the Redeemable Preferred Stock as set forth in the
Registration Rights Agreement (the "Special Dividends").
(vii) To the extent payable in cash, all Regular Dividends,
Additional Dividends, if any, and Special Dividends, if any, on the
Redeemable Preferred Stock may be made by check mailed to the Holders
of the Redeemable Preferred Stock at their respective addresses set
forth in the stock books of the Company; provided that all payments of
Regular Dividends, Additional Dividends, if any and Special Dividends
if any, with respect to any Redeemable Preferred Stock the Holders of
which have given wire transfer instructions to the Issuer will be
required to be made by wire transfer of immediately available funds to
the accounts specified by the Holders thereof. The Issuer will be
deemed to have made the aforementioned payments upon mailing of such
check or initiating such wire transfer.
(viii) In the event that dividends with respect to the
Redeemable Preferred Stock are paid in additional shares of Redeemable
Preferred Stock, and U.S. federal withholding tax or backup withholding
is due with respect to such dividends, the Issuer or the withholding
agent, as the case may be, may retain all or a portion of these
additional shares of Redeemable Preferred Stock (A) in the case of
withholding tax obligations, until such time as (x) the Holder of such
shares has provided to the Issuer or withholding agent cash in an
amount equal to the withholding tax due or (y) the Holder authorizes
the Issuer or withholding agent to reduce such additional shares of
Redeemable Preferred Stock to cash sufficient to satisfy the requisite
withholding tax on such additional Redeemable Preferred Stock, or (B)
in the case of backup withholding obligations, until such time as the
Holder of such shares has provided the information or certification
required for the Issuer or withholding agent to meet its backup
withholding obligations.
(d) Liquidation Preference. (i) In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the Issuer,
the Holders of shares of Redeemable Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the Issuer available for distribution
to its shareholders an amount in cash equal to the liquidation preference for
each share outstanding, plus, without duplication, an amount in cash equal to
accumulated and unpaid Regular Dividends, Additional Dividends and Special
Dividends, if any, thereon to the date fixed for liquidation, dissolution or
winding up (including an amount equal to a prorated Regular Dividend (together
with any applicable Additional Dividends and Special Dividends) for the period
from the last Regular Dividend Payment Date to the date fixed for liquidation,
dissolution or winding up) before any distribution is made on Junior Stock,
including, without limitation, Common Stock of the Issuer. Except as provided in
the preceding sentence, Holders of Redeemable Preferred Stock shall not be
entitled to any distribution in the
-3-
<PAGE>
event of any liquidation, dissolution or winding up of the affairs of the
Issuer. If the assets of the Issuer are not sufficient to pay in full the
liquidation payments payable to the Holders of outstanding shares of the
Redeemable Preferred Stock and all Parity Stock, then the holders of all such
shares of Redeemable Preferred Stock and Parity Stock shall share equally and
ratably in such distribution of assets in proportion to the full liquidation
preference to which each is entitled until such preferences are paid in full,
and then in proportion to their respective amounts of accumulated but unpaid
dividends.
(ii) For the purposes of this paragraph (d) of this Article I,
neither the sale, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all
of the property or assets of the Issuer nor the consolidation or merger
of the Issuer with or into one or more entities or a statutory share
exchange of any Capital Stock of the Issuer shall be deemed to be a
liquidation, dissolution or winding up of the affairs of the Issuer.
(e) Redemption. (i) Except as described in the following paragraphs,
the Redeemable Preferred Stock will not be redeemable at the Issuer's option
prior to 2005, provided, however, that 35% of the Redeemable Preferred Stock
will be redeemable at the Issuer's option, at any time or in part from time to
time, on or prior to May 1, 2005, at a redemption price equal to 114% of the
liquidation preference thereof, plus an amount in cash equal to all accumulated
and unpaid Regular Dividends (together with any applicable Additional Dividends
and Special Dividends) thereon, if any, to the redemption date (including an
amount in cash equal to a prorated Regular Dividend (together with any
applicable Additional Dividends and Special Dividends) for the period from the
Regular Dividend Payment Date immediately prior to the redemption date to the
redemption date), with the net cash proceeds received by the Issuer of an
underwritten, registered public offering of Common Stock of the Issuer, provided
that such redemption shall occur within 60 days of the closing of such
underwritten, registered public offering.
(ii) On or after May 1, 2005, the Redeemable Preferred Stock
will be redeemable, at the Issuer's option, in whole at any time or in
part from time to time, at the following redemption prices (expressed
as a percentage of liquidation preference) if redeemed during the
twelve-month period commencing on May 1 of the applicable year set
forth below plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends (including, but not limited to, an
amount in cash equal to a prorated Regular Dividend (together with any
applicable Additional Dividends and Special Dividends) for the period
from the immediately preceding Regular Dividend Payment Date to the
redemption date):
Year Percentage
---- ----------
2005 107.000 %
2006 104.667 %
2007 102.333 %
2008 and thereafter 100.000 %
-4-
<PAGE>
(iii) At any time and from time to time on or prior to the
first date on which the Redeemable Preferred Stock may be redeemed as
described in paragraph (e)(ii) above (the "First Call Date"), the
Redeemable Preferred Stock may be redeemed as a whole but not in part
at the option of the Issuer upon the occurrence of a Change of Control,
at a redemption price equal to 100% of the liquidation preference
thereof, plus an amount in cash equal to all accumulated and unpaid
dividends thereon through the redemption date (including, but not
limited to, an amount in cash equal to a prorated Regular Dividend
(together with any applicable Additional Dividends and Special
Dividends) for the period from the immediately preceding Regular
Dividend Payment Date to the redemption date) plus the Applicable
Premium. Any redemption pursuant to this paragraph (e)(iii) shall occur
no more than 120 days after the occurrence of the Change of Control.
(iv) On May 1, 2011, the Issuer will be required to redeem
(subject to the legal availability of funds therefor) all outstanding
shares of Redeemable Preferred Stock at a redemption price equal to
100% of the liquidation preference thereof, plus an amount in cash
equal to all accumulated and unpaid dividends thereon (including, but
not limited to, an amount in cash equal to a prorated Regular Dividend
(together with any applicable Additional Dividends and Special
Dividends) for the period from the immediately preceding Regular
Dividend Payment Date to the redemption date). The Issuer will not be
required to make sinking fund payments with respect to the Redeemable
Preferred Stock.
(v) (A) At least thirty (30) days and not more than sixty (60)
days prior to the date fixed for any redemption of the Redeemable
Preferred Stock, written notice (the "Redeemable Redemption Notice")
shall be given by first class mail, postage prepaid, to each Holder of
record on the record date fixed for such redemption of the Redeemable
Preferred Stock at such Holder's address as it appears on the stock
books of the Issuer, provided that no failure to give such notice nor
any deficiency therein shall affect the validity of the procedure for
the redemption of any shares of Redeemable Preferred Stock to be
redeemed except as to the Holder or Holders to whom the Issuer has
failed to give said notice or except as to the Holder or Holders whose
notice was defective. The Redeemable Redemption Notice shall state:
(1) whether the redemption is pursuant to paragraph
(e)(i), (e)(ii), (e)(iii) or (e)(iv) of this Article I;
(2) the redemption price;
(3) whether all or less than all the outstanding
shares of the Redeemable Preferred Stock are to be redeemed
and the total number of shares of the Redeemable Preferred
Stock being redeemed;
(4) the date fixed for redemption (the "Redeemable
Redemption Date");
(5) that the Holder is to surrender to the Issuer, at
the place or places where certificates for shares of
Redeemable Preferred Stock are to be surrendered for
redemption, in the manner and at the price designated, the
certificate or
-5-
<PAGE>
certificates representing the shares of Redeemable Preferred
Stock to be redeemed; and
(6) that dividends on the shares of the Redeemable
Preferred Stock to be redeemed shall cease to accrue on such
Redeemable Redemption Date unless the Issuer defaults in the
payment of the redemption price.
(B) Each Holder of Redeemable Preferred Stock shall surrender
the certificate or certificates representing such shares of Redeemable
Preferred Stock to the Issuer (duly endorsed or assigned for transfer)
in the manner and at the place designated in the Redeemable Redemption
Notice, and on the Redeemable Redemption Date. The full redemption
price for such shares shall be payable in cash to the Person whose name
appears on such certificate or certificates as the owner thereof, and
each surrendered certificate shall be canceled and retired. In the
event that less than all of the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.
(C) Unless the Issuer fails to make payment in full of the
applicable redemption price upon the surrender of the related
certificates, dividends on the Redeemable Preferred Stock called for
redemption shall cease to accumulate on the Redeemable Redemption Date.
The Holders of such redeemed shares shall cease to have any further
rights with respect thereto from and after the Redeemable Redemption
Date, other than the right to receive the redemption price, without
interest, provided, however, that if a notice of redemption shall have
been given as provided in paragraph (v)(A) above and the funds
necessary for redemption (including an amount in cash in respect of all
dividends that will accumulate to the Redeemable Redemption Date) shall
have been irrevocably deposited in trust for the equal and ratable
benefit for the Holders of the shares to be redeemed, then, at the
close of business on the day on which such funds are segregated and set
aside, the Holders of the shares to be redeemed shall cease to be
shareholders of the Issuer and shall be entitled only to receive the
redemption price.
(f) Voting Rights. (i) The Holders of Redeemable Preferred Stock,
except as otherwise required under Minnesota law or as set forth in paragraphs
(ii), (iii) and (iv) below, shall not be entitled or permitted to vote on any
matter required or permitted to be voted upon by the shareholders of the Issuer.
(ii) (A) So long as any shares of the Redeemable Preferred
Stock are outstanding, the Issuer shall not authorize or issue any
class of Parity Stock without the affirmative vote of Holders of at
least a majority of the then outstanding shares of Redeemable Preferred
Stock, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting; provided, however, that no
such vote or consent shall be necessary in connection with the
authorization and issuance of additional shares of (i) Parity Stock if,
after giving effect to such issuance, the Consolidated Coverage Ratio
for the Issuer's most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding
the date on which such Parity Stock is issued, is greater than 1.50 to
1.00; or (ii) Parity Stock with a liquidation preference of $30 million
or less in the aggregate (plus such amount of
-6-
<PAGE>
additional Parity Stock as may be issuable in payment of dividends
thereon pursuant to the terms of such Parity Stock).
(B) So long as any shares of the Redeemable Preferred
Stock are outstanding, the Issuer shall not authorize or issue
any class of Senior Stock without the affirmative vote of
Holders of at least a majority of the outstanding shares of
Redeemable Preferred Stock, given in person or by proxy,
either in writing or by resolution adopted at an annual or
special meeting.
(C) So long as any shares of the Redeemable Preferred
Stock are outstanding, the Issuer shall not amend this Article
I of this Certificate of Designation so as to affect adversely
the specified rights, preferences, privileges or voting rights
of Holders of shares of Redeemable Preferred Stock without the
affirmative vote of Holders of at least a majority of the
issued and outstanding shares of Redeemable Preferred Stock,
given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting.
(iii) (A) If (1) the Issuer fails to redeem the Redeemable
Preferred Stock on or before May 1, 2011 or fails to discharge any
redemption obligation with respect to the Redeemable Preferred Stock or
(2) the Issuer fails to make a Change of Control Offer if such an offer
is required by the provisions set forth under paragraph (h)(i) of
Article I hereof, fails to comply with paragraph (h)(vii) of this
Article I or fails to purchase shares of Redeemable Preferred Stock
from Holders who elect to have such shares purchased pursuant to the
Change of Control Offer or (3) a breach or violation of any of the
provisions described under paragraph (l) of Article I hereof occurs and
the beach or violation continues for a period of 60 days or more after
the Issuer receives notice thereof specifying the default from the
Holders of at least 25% of the shares of Redeemable Preferred Stock
then outstanding or (4) the Issuer fails to pay at the final stated
maturity (giving effect to any extensions thereof) the principal amount
of any Debt of the Issuer or any Restricted Subsidiary of the Issuer,
or the final stated maturity of any such Debt is accelerated, if the
aggregate principal amount of such Debt, together with the aggregate
principal amount of any other such Debt in default for failure to pay
principal at the final stated maturity (giving effect to any extensions
thereof) or which has been accelerated, aggregates $30.0 million or
more at any time, in each case, after a 30-day period during which such
default shall not have been cured or such acceleration rescinded or (5)
the Issuer (x) shall fail to amend its Articles of Incorporation to
increase the number of shares of authorized Redeemable Preferred Stock
in an amount sufficient to allow it to pay dividends on the Redeemable
Preferred Stock in additional shares of Redeemable Preferred Stock and
(y) shall fail to pay such dividends, when due, in cash or additional
shares of Redeemable Preferred Stock, as the case may be, for at least
two quarterly periods (whether or not consecutive), which failure has
not been cured, then (x) Additional Dividends will accumulate on the
Redeemable Preferred Stock at a rate per annum of 1% of the liquidation
preference per share of Redeemable Preferred Stock, payable as
specified in paragraph (c) above and (y) the number of directors
constituting the board of directors of the Issuer will be adjusted to
permit the Holders of a majority of the then outstanding shares of
Redeemable Preferred Stock, voting together and as a class, to elect
two directors to the Board of Directors of the Issuer. Each such event
described in clauses (1) through (5) above is referred to herein as a
"Redeemable Preferred Triggering Event."
-7-
<PAGE>
(B) The right of the Holders of Redeemable Preferred
Stock to Additional Dividends and, voting together as a
separate class, to elect members of the Board of Directors as
set forth in subparagraph (f)(iii)(A) above shall continue
until such time as (x) in the event such right arises due to a
failure to pay a dividend, all accumulated dividends that are
in arrears on the Redeemable Preferred Stock are paid in full
in cash or in additional shares of Redeemable Preferred Stock;
and (y) in all other cases, the failure, breach or default
giving rise to such Redeemable Preferred Triggering Event is
remedied, cured or waived by the Holders of at least a
majority of the shares of Redeemable Preferred Stock then
outstanding, at which time (1) Additional Dividends shall
cease to accrue, (2) the special right of the Holders of
Redeemable Preferred Stock so to vote as a class for the
election of directors shall cease and (3) the term of office
of the directors elected by the Holders of the Redeemable
Preferred Stock shall terminate and the directors elected by
the Holders of Common Stock or Capital Stock (other than the
Redeemable Preferred Stock) shall constitute the entire Board
of Directors. At any time after voting power to elect
directors shall have become vested and be continuing in the
Holders of Redeemable Preferred Stock pursuant to paragraph
(f)(iii) hereof, or if vacancies shall exist in the offices of
directors elected by the Holders of Redeemable Preferred
Stock, a proper officer of the Issuer may, and upon the
written request of the Holders of record of at least
twenty-five percent (25%) of the shares of Redeemable
Preferred Stock then outstanding addressed to the secretary of
the Issuer, shall, call a special meeting of the Holders of
the Redeemable Preferred Stock for the purpose of electing
directors which such Holders are entitled to elect. If such
meeting shall not be called by a proper officer of the Issuer
within thirty (30) days after personal service of said written
request upon the secretary of the Issuer or within thirty (30)
days after mailing the same within the United States by
certified mail, addressed to the Secretary of the Issuer, then
the Holders of record of at least twenty-five percent (25%) of
the outstanding shares of Redeemable Preferred Stock may
designate in writing one of their number to call such meeting
at the expense of the Issuer, and such meeting may be called
by the Person so designated upon the notice required for the
annual meetings of shareholders of the Issuer and shall be
held at the place for holding the annual meetings of
shareholders, if any specified in the bylaws of the Issuer.
Any Holder of Redeemable Preferred Stock so designated shall
have, and the Issuer shall provide, access to the lists of
shareholders to be called pursuant to the provisions hereof.
(C) At any meeting held for the purpose of electing
directors at which the Holders of Redeemable Preferred Stock
shall have the right, voting together as a separate class, to
elect directors as aforesaid, the presence in person or by
proxy of the Holders of at least a majority of the outstanding
shares of Redeemable Preferred Stock entitled to vote thereat
shall be required to constitute a quorum of the Holders of
such Redeemable Preferred Stock.
(D) Any vacancy occurring in the office of a director
elected by the Holders of Redeemable Preferred Stock may be
filled by the remaining
-8-
<PAGE>
director elected by the Holders of Redeemable Preferred Stock
unless and until such vacancy shall be filled by the Holders
of Redeemable Preferred Stock.
(iv) In any case in which the Holders of Redeemable Preferred
Stock shall be entitled to vote pursuant to this paragraph (f) or
pursuant to Minnesota law, each Holder of Redeemable Preferred Stock
entitled to vote with respect to such matter shall be entitled to one
vote for each share of Redeemable Preferred Stock held.
(g) Mergers and Consolidations. The Issuer may not consolidate or merge
with or into (whether or not the Issuer is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
Person unless:
(1) the Issuer is the surviving corporation or the Person
formed by or surviving any such consolidation or merger (if other than
the Issuer) or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state
thereof or the District of Columbia;
(2) the Redeemable Preferred Stock shall have been converted
into or exchanged for and shall become shares of the surviving entity
having in respect of such surviving entity substantially the same
rights and privileges that the Redeemable Preferred Stock had
immediately prior to such transaction with respect to the Issuer and
shall not be subordinated to any Preferred Stock of the surviving
entity unless the Holders of a majority of the outstanding Redeemable
Preferred Stock consent thereto as required by paragraph (f)(ii)(B) of
this Article I;
(3) immediately before and immediately after giving effect to
such transaction (including giving effect to any Debt being incurred in
connection with the transaction) no Redeemable Preferred Triggering
Event exists; and
(4) except in the case of a merger of the Issuer with or into
a Wholly Owned Restricted Subsidiary of the Issuer, the Issuer or the
Person formed by or surviving any such consolidation or merger (if
other than the Issuer), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made will, at
the time of such transaction and after giving pro forma effect thereto
as if such transaction had occurred at the beginning of the applicable
four-quarter period, either (a) be permitted to incur at least $1.00 of
additional Debt pursuant to the Coverage Ratio Exception or (b) have a
Consolidated Coverage Ratio at least equal to the Consolidated Coverage
Ratio of the Issuer for such four-quarter reference period.
Notwithstanding the foregoing clauses (3) and (4):
(a) any Restricted Subsidiary may consolidate with, merge into or
transfer all or part of its properties and assets to the Issuer; and
(b) the Issuer may merge with an Affiliate incorporated solely for the
purpose of reincorporating the Issuer in another jurisdiction.
-9-
<PAGE>
For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of related transactions) of all
or substantially all of the properties and assets of one or more Restricted
Subsidiaries of the Issuer, the Capital Stock of which constitutes all or
substantially all of the assets and properties of the Issuer (determined on a
consolidated basis for the Issuer and its Subsidiaries), shall be deemed to be
the transfer of all or substantially all of the properties and assets of the
Issuer.
This covenant shall not apply to the merger of Saturn Acquisition
Corporation with and into the Issuer on the Closing Date.
(h) Change of Control. (i) Upon the occurrence of a Change of Control,
unless all Redeemable Preferred Stock has been called for redemption pursuant to
paragraph (e) of this Article I, each Holder of Redeemable Preferred Stock will
have the right to require the Issuer to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Redeemable Preferred
Stock pursuant to an offer (the "Redeemable Preferred Change of Control Offer")
at an offer price in cash (the "Redeemable Preferred Change of Control Payment")
equal to 101% of the aggregate liquidation preference thereof plus an amount in
cash equal to all accumulated and unpaid Regular Dividends, Additional Dividends
and Special Dividends, if any, for the period from the immediately preceding
Regular Dividend Payment Date to the Redeemable Preferred Change of Control
Payment Date.
(ii) The Issuer shall not be required to make an Redeemable
Preferred Change of Control Offer upon a Change of Control if a third
party makes and consummates and Redeemable Preferred Change of Control
Offer in accordance with the provisions of this paragraph (h); provided
that if such third-party Redeemable Preferred Change of Control Offer
is made, but not consummated, the obligations of the Issuer to make a
Redeemable Preferred Change of Control Offer hereunder shall be
reinstated with the same effect as if such third-party Redeemable
Preferred Change of Control Offer had not been made.
(iii) In the event that the Issuer shall be required to
commence a Redeemable Preferred Change of Control Offer, the Issuer
shall follow the procedures specified in this Section (iii). Within 30
days after a Change of Control (unless (a) the Issuer is not required
to make such offer pursuant to paragraph (ii) of this Section or (b)
all shares of Redeemable Preferred Stock have been called for
redemption pursuant to paragraph (e) of this Article I), the Issuer
shall (x) commence a Redeemable Preferred Change of Control Offer,
which shall remain open for a period of at least 20 Business Days
following its commencement (the "Offer Period") and (y) send, by first
class mail, a notice to its Agent and each of the Holders of Redeemable
Preferred Stock which shall contain all instructions and materials
necessary to enable such Holders to tender their shares of Redeemable
Preferred Stock pursuant to such Redeemable Preferred Change of Control
Offer. The notice, which shall govern the terms of the Redeemable
Preferred Change of Control Offer, shall describe the transaction and
transactions that constitute the Change of Control and shall state:
(1) that the Redeemable Preferred Change of Control
Offer is being made pursuant to this paragraph (h);
-10-
<PAGE>
(2) that the Issuer is required to offer to purchase
all of the outstanding shares of Redeemable Preferred Stock at
a purchase price equal to the Redeemable Preferred Change of
Control Payment, and that on the date specified in such notice
(the "Redeemable Preferred Change of Control Payment Date"),
which date shall be no earlier than 30 days and no later than
60 days from the date such notice is mailed, the Issuer shall
repurchase all shares of Redeemable Preferred Stock validly
tendered and not withdrawn pursuant to this Section (h);
(3) that any outstanding shares of Redeemable
Preferred Stock not tendered or accepted for payment shall
continue to accumulate dividends;
(4) that, unless the Issuer defaults in making such
payment, shares of Redeemable Preferred Stock accepted for
payment pursuant to the Redeemable Preferred Change of Control
Offer shall cease to accrue dividends after the Redeemable
Preferred Change of Control Payment Date;
(5) that Holders of outstanding Redeemable Preferred
Stock electing to have such shares purchased pursuant to a
Redeemable Preferred Change of Control Offer may elect to have
all or any portion of such shares purchased;
(6) that Holders of outstanding Redeemable Preferred
Stock electing to have such shares purchased pursuant to a
Redeemable Preferred Change of Control Offer shall be required
to surrender the Redeemable Preferred Stock with such
customary documents of surrender and transfer as the Issuer
may reasonably request, duly completed, or transfer by
book-entry transfer, to the Issuer, or its agent at the
address specified in the notice prior to the Redeemable
Preferred Change of Control Payment Date;
(7) that Holders will be entitled to withdraw their
election if the Issuer receives, not later than the expiration
of the Offer Period, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the aggregate
liquidation preference of the Redeemable Preferred Stock the
Holder delivered for purchase and a statement that such Holder
is withdrawing its election to have such Redeemable Preferred
Stock purchased; and
(8) that Holders whose Redeemable Preferred Stock is
being purchased only in part will be issued new certificates
representing the number of shares of Redeemable Preferred
Stock equal to the unpurchased portion of the certificates
surrendered.
(iv) On the Redeemable Preferred Change of Control Payment
Date, the Issuer shall:
(1) accept for payment, the outstanding Redeemable
Preferred Stock or portions thereof validly tendered pursuant
to the Redeemable Preferred Change of Control Offer and not
theretofore withdrawn; and
-11-
<PAGE>
(2) deliver or cause to be delivered to the Transfer
Agent the shares of Redeemable Preferred Stock so accepted
together with an Officer's Certificate stating the aggregate
liquidation preference of such Redeemable Preferred Stock or
portions thereof being purchased by the Issuer.
The Issuer or the Transfer Agent, as the case may be, shall promptly
mail or deliver to each tendering Holder an amount equal to the Redeemable
Preferred Change of Control Payment with respect to the Redeemable Preferred
Stock tendered by such Holder and accepted by the Issuer for purchase. The
Issuer shall promptly issue new certificates representing shares of Redeemable
Preferred Stock and mail (or cause to be transferred by book entry) to each
Holder a new certificate representing shares of Redeemable Preferred Stock equal
in liquidation preference to any unpurchased portion of the Redeemable Preferred
Stock so surrendered, if any.
Any Redeemable Preferred Stock not so accepted shall be promptly mailed
or delivered by the Issuer to the Holder thereof. All Redeemable Preferred Stock
or portions thereof purchased pursuant to the Redeemable Preferred Change of
Control Offer will be cancelled by the Issuer or the Transfer Agent, as the case
may be. The Issuer shall publicly announce the results of the Redeemable
Preferred Change of Control Offer on or as soon as practicable after the
Redeemable Preferred Change of Control Payment Date.
(v) On or after the Redeemable Preferred Change of Control
Payment Date, and unless the Issuer fails to pay the redemption price
payable in respect of shares of the Redeemable Preferred Stock tendered
by the Holder and payable in connection with a Redeemable Preferred
Change of Control Offer, dividends shall cease to accrue on the
Redeemable Preferred Stock or the portions of Redeemable Preferred
Stock repurchased and all rights of Holders of such tendered shares
shall terminate, except for the right to receive payment therefor.
(vi) The Issuer shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Redeemable
Preferred Stock as a result of a Change of Control. To the extent that
the provisions of any applicable securities laws or regulations
conflict with the provisions of this paragraph (h), the Issuer will
comply with such securities laws and regulations and will not be deemed
to have breached its obligations under this paragraph (h) by virtue
thereof.
(vii) Prior to the mailing of the notice referred to in this
paragraph (h), but in any event within 90 days following the date on
which a Change of Control occurs, the Issuer covenants that, if the
purchase of the Redeemable Preferred Stock would violate or constitute
a default or be prohibited under any instrument governing any Debt or
Senior Stock outstanding at the time, then the Issuer will, either (i)
repay in full all Debt or redeem any Senior Stock under any such
instrument or (ii) obtain the requisite consents under the New Credit
Facility, the Indenture or any such other instrument, as the case may
be, to permit the redemption of the Redeemable Preferred Stock as
provided above. The Issuer will first comply with the covenant in the
preceding sentence before it will be required to redeem Redeemable
Preferred Stock pursuant to the provisions described above.
-12-
<PAGE>
(i) Conversion or Exchange. The Holders of shares of Redeemable
Preferred Stock shall not have any rights hereunder to convert such shares into
or exchange such shares for shares of any other class or classes or of any other
series of any class or classes of Capital Stock of the Issuer.
(j) Reissuance of Redeemable Preferred Stock. Shares of Redeemable
Preferred Stock that have been issued and reacquired in any manner, including
shares purchased or redeemed or exchanged, shall (upon compliance with any
applicable provisions of the laws of Minnesota) have the status of authorized
and unissued shares of Preferred Stock undesignated as to series and may be
redesignated and reissued as part of any series of Preferred Stock, provided
that the issuance of such shares of Preferred Stock is not prohibited by the
terms hereof.
(k) Business Day. If any payment, redemption, repurchase or exchange
shall be required by the terms hereof to be made on a day that is not a Business
Day, such payment, redemption, repurchase or exchange shall be made on the
immediately succeeding Business Day and no interest or dividends shall accrue on
the intervening period.
(l) Certain Additional Provisions. (i) Limitation on Debt. The Issuer
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable, contingently or otherwise, with respect to (collectively,
"incur") any Debt (including Acquired Debt) or issue any Disqualified Stock and
the Issuer will not permit any of its Restricted Subsidiaries to issue any
shares of Preferred Stock; provided, however, that if no Redeemable Preferred
Triggering Event shall have occurred and be continuing at the time of or as a
consequence of the incurrence or issuance of any such Debt or shares of
Disqualified Stock or Permitted Subsidiary Preferred Stock, the Issuer and its
Restricted Subsidiaries may incur Debt (including Acquired Debt) or issue shares
of Disqualified Stock, and Restricted Subsidiaries may issue Permitted
Subsidiary Preferred Stock, if, in any such case, the Consolidated Coverage
Ratio for the Issuer's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Debt is incurred or such Disqualified Stock or Permitted
Subsidiary Preferred Stock is issued, would have been at least 2.00 to 1.00,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Debt had been incurred or the
Disqualified Stock or Permitted Subsidiary Preferred Stock had been issued, as
the case may be, at the beginning of such four-quarter period (the "Coverage
Ratio Exception"). For purposes of the foregoing, Preferred Stock of a Person
that becomes a Restricted Subsidiary after the Closing Date shall be considered
"issued" on the date such Person becomes a Restricted Subsidiary.
The provisions of the first paragraph of this covenant will not apply
to the incurrence of any of the following items of Debt (collectively,
"Permitted Debt"):
(1) the incurrence by the Issuer or any of its Restricted
Subsidiaries of term and revolving Debt and letters of credit (with
letters of credit being deemed to have a principal amount equal to the
undrawn face amount thereof) under Credit Facilities (including
Guarantees of such Debt by the Issuer or any of its Subsidiaries);
provided that the aggregate principal amount of such Debt outstanding
pursuant to this clause (1) without duplication, does not exceed an
amount equal to the sum of (a) $500.0 million
-13-
<PAGE>
and (b) the greater of $170.0 million and the Borrowing Base at the
time such Debt is incurred;
(2) the incurrence by the Issuer and its Restricted
Subsidiaries of Existing Debt;
(3) the incurrence by the Issuer of Debt represented by the
Notes issued on the Closing Date and by the Guarantors of Debt
represented by the Note Guarantees relating to such Notes;
(4) the incurrence by the Issuer or any of its Restricted
Subsidiaries of (a) Acquired Debt or (b) Debt (including Capital Lease
Obligations) for the purpose of financing or refinancing all or any
part of the lease, purchase price or cost of construction or
improvement of any property (real or personal) or other assets that are
used or useful in the business of the Issuer or such Restricted
Subsidiary (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets and whether such Debt is
owed to the seller or Person carrying out such construction or
improvement or to any third party), in an aggregate principal amount at
the date of such incurrence (including all Permitted Refinancing Debt
incurred to refund, refinance or replace any other Debt incurred
pursuant to this clause (4)) not to exceed an amount equal $50.0
million; provided that such Debt exists at the date of such purchase or
transaction, or is created within 180 days thereafter;
(5) the incurrence by the Issuer or any of its Restricted
Subsidiaries of Permitted Refinancing Debt in exchange for, or the net
proceeds of which are used to refund, refinance or replace Debt (other
than intercompany Debt) incurred pursuant to the Coverage Ratio
Exception, or pursuant to clauses (2), (3) or (4) of this paragraph;
(6) the incurrence by the Issuer or any of its Restricted
Subsidiaries of intercompany Debt or Preferred Stock owed or issued to
and held by the Issuer and any of its Restricted Subsidiaries including
any Debt arising in connection with a Qualified Receivables
Transaction, provided, however, that (A) any subsequent issuance or
transfer of Equity Interests or other action that results in any such
Debt or Preferred Stock being held by a Person other than the Issuer or
a Restricted Subsidiary and (B) any sale or other transfer of any such
Debt or Preferred Stock to a Person that is not either the Issuer or a
Restricted Subsidiary shall be deemed, in each case, to constitute an
incurrence of such Debt or issuance of such Preferred Stock by the
Issuer or such Restricted Subsidiary, as the case may be, that was not
permitted by this clause (6);
(7) the incurrence by the Issuer or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred (a) for the
purpose of fixing or hedging interest rate risk with respect to any
floating rate Debt that is permitted by the terms of this Certificate
of Designation to be outstanding in a notional amount not exceeding the
amount of such Debt or (b) for the purpose of fixing or hedging
currency exchange rate risk or commodity price risk incurred in the
ordinary course of business, and in each case, not for speculative
purposes;
-14-
<PAGE>
(8) the guarantee by the Issuer or any Restricted Subsidiary
of Debt of the Issuer or a Restricted Subsidiary of the Issuer that was
permitted to be incurred by another provision of this covenant;
(9) the incurrence by Foreign Subsidiaries of Debt for working
capital purposes (including acquisitions), and by the Issuer or any of
its Restricted Subsidiaries of Guarantees of Debt of Foreign
Subsidiaries or foreign joint ventures, provided that the aggregate
principal amount of such Debt and of the Debt so Guaranteed at any time
outstanding does not exceed $30.0 million;
(10) the incurrence by the Issuer or any of its Restricted
Subsidiaries of additional Debt (which may comprise Debt under the New
Credit Facility) in an aggregate principal amount (or accreted value,
as applicable) at any time outstanding, pursuant to this clause (10)
not to exceed an amount equal to $70.0 million; and
(11) the issuance by any Joint Venture Subsidiary of any
Permitted Joint Venture Subsidiary Preferred Stock, provided that all
Investments made by the Company or any Restricted Subsidiary in such
Joint Venture Subsidiary (giving effect to Investments made prior to
the issuance of such Preferred Stock) are then permissible under
paragraph (l)(ii) of this Article I.
Notwithstanding any other provision in this covenant, the maximum
amount of Debt that the Issuer or any Restricted Subsidiary may incur pursuant
to this covenant shall not be deemed to be exceeded as a result of fluctuations
in the exchange rates of currencies. For purposes of determining compliance with
this covenant:
(1) the outstanding principal amount of any particular Debt
shall be counted only once and any obligation arising under any
guarantee, Lien, letter of credit or similar instrument supporting such
Debt shall be disregarded;
(2) in the event that an item of Debt meets the criteria of
more than one of the categories of Permitted Debt described in clauses
(1) through (10) above or is entitled to be incurred pursuant to the
first paragraph of this covenant, the Issuer shall, in its sole
discretion, classify such item of Debt in any manner that complies with
this covenant and such item of Debt will be treated as having been
incurred pursuant to only one of such clauses or pursuant to the first
paragraph hereof; provided that all outstanding Debt under the New
Credit Facility immediately following the Recapitalization shall be
deemed to have been incurred pursuant to clause (1) of the definition
of Permitted Debt; and
(3) accrual of interest and the accretion of accreted value
will not be deemed to be an incurrence of Debt.
(ii) Limitation on Restricted Payments. The Issuer will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other distribution
(including any payment by the Issuer or any Restricted Subsidiary in
connection with any
-15-
<PAGE>
merger or consolidation involving the Issuer or any of its Restricted
Subsidiaries) on account of any Junior Equity Interests of the Issuer
or Equity Interests of any Restricted Subsidiary other than: (A)
dividends or distributions payable in Junior Equity Interests of the
Issuer (other than Disqualified Stock) and (B) dividends payable to the
Issuer or any Restricted Subsidiary;
(2) purchase, redeem, or otherwise acquire or retire for value
(including any acquisition or retirement by the Issuer or any
Restricted Subsidiary in connection with any merger or consolidation)
any Junior Equity Interests of the Issuer or any Equity Interests of
any Restricted Subsidiary of the Issuer held by persons other than the
Issuer or any Restricted Subsidiary; or
(3) make any Restricted Investment
(all such payments and other actions set forth in clauses (1) through (3) above
being collectively referred to as "Restricted Payments"); unless, at the time of
and after giving effect to such Restricted Payment:
(a) no Redeemable Preferred Triggering Event shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Issuer would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Debt pursuant to the Coverage Ratio
Exception; and
(c) such Restricted Payment, together with (without duplication) the
aggregate amount of all other such Restricted Payments made by the Issuer and
its Restricted Subsidiaries after the Closing Date is less than the sum (without
duplication)(the "Restricted Payments Basket") of:
(i) 50% of the Consolidated Net Income of the Issuer for the
period (taken as one accounting period) from the beginning of the
fiscal quarter during which the Closing Date occurs to the end of the
Issuer's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is
negative 100% of such negative amount); plus
(ii) 100% of the aggregate net cash proceeds, and the fair
market value of any property other than cash, received by the Issuer
from the issue or sale (other than to a Subsidiary) of, or from capital
contributions with respect to, Junior Equity Interests of the Issuer
(other than Disqualified Stock and all warrants, options or other
rights to acquire Disqualified Stock (but excluding any debt security
that is convertible into, or exchangeable for, Disqualified Stock or
any warrants, options or other rights to acquire Disqualified Stock)),
in either case after the Closing Date; plus
(iii) the amount by which the aggregate principal amount (or
accreted value, if less) of Debt or Disqualified Stock of the Issuer or
any Restricted Subsidiary is reduced on the Issuer's consolidated
balance sheet upon the conversion or exchange after the Closing Date of
-16-
<PAGE>
any Debt convertible into or exchangeable for Junior Equity Interests
(other than Disqualified Stock, or any warrants, options or other
rights to acquire Disqualified Stock) of the Issuer, together with the
net cash proceeds received by the Issuer at the time of such
conversion; plus
(iv) 100% of the aggregate net cash proceeds received by the
Issuer or a Restricted Subsidiary of the Issuer since the Closing Date
(to the extent not included in Consolidated Net Income of the Issuer)
from (A) Restricted Investments, whether through interest payments,
principal payments, dividends or other distributions and payments, or
the sale or other disposition (other than to the Issuer or a Restricted
Subsidiary) thereof made by the Issuer and its Restricted Subsidiaries
(less the cost of such sale or disposition, if any) and (B) a cash
dividend from, or the sale (other than to the Issuer or a Restricted
Subsidiary) of the stock of, an Unrestricted Subsidiary; plus
(v) upon the redesignation as a Restricted Subsidiary of any
Subsidiary that was designated an Unrestricted Subsidiary after the
Closing Date, the fair market value of the Restricted Investments of
the Issuer and its Restricted Subsidiaries (other than such Subsidiary)
in such Subsidiary.
The foregoing provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration such payment
would have complied with the provisions of this Certificate of
Designation;
(2) the redemption, repurchase, retirement, defeasance or
other acquisition of any Junior Equity Interests of the Issuer or
Equity Interests of any Restricted Subsidiary in exchange for, or out
of the net cash proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary of the Issuer) of, Junior Equity
Interests (other than any Disqualified Stock or warrants, options or
other rights to acquire Disqualified Stock) or a capital contribution
to the Issuer, provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall not increase the Restricted
Payments Basket;
(3) the redemption, repurchase, retirement, defeasance or
other acquisition of Junior Equity Interests of the Issuer upon a
Change of Control to the extent required by the agreement or
certificate of designation governing such Junior Equity Interests, but
only if the Issuer shall have previously complied with paragraph (h) of
Article I and purchased all Redeemable Preferred Stock validly tendered
pursuant to the offer required by such covenant prior to purchasing or
repaying such Junior Equity Interests;
(4) the payment of any dividend by a Restricted Subsidiary of
the Issuer to the Holders of its common Equity Interests on a pro rata
basis;
(5) to the extent constituting Restricted Payments, the
Specified Affiliate Payments; and
-17-
<PAGE>
(6) Restricted Payments in an aggregate amount not to exceed
$20.0 million.
In determining the aggregate amount of Restricted Payments made after
the Closing Date in accordance with clause (c) of the second preceding
paragraph, amounts expended pursuant to clauses (1) (without duplication) and
(4) (but not amounts under any other clauses of the immediately preceding
paragraph) shall be included in such calculation; provided that any amounts
expended pursuant to such clause (4) relating to dividends paid to the Issuer or
one of its Restricted Subsidiaries shall not be included in such calculation.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Issuer or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment or any property other than cash
that increases the Restricted Payments Basket shall be determined in good faith
by the Board of Directors of the Issuer.
In making the computations required by this covenant:
(1) the Issuer or the relevant Restricted Subsidiary shall use
audited financial statements for the portions of the relevant period
for which audited financial statements are available on the date of
determination and unaudited financial statements and other current
financial data based on the books and records of the Issuer for the
remaining portion of such period; and
(2) the Issuer or the relevant Restricted Subsidiary will be
permitted to rely in good faith on the financial statements and other
financial data derived from the books and records of the Issuer and the
Restricted Subsidiary that are available on the date of determination.
If the Issuer makes a Restricted Payment that, at the time of the
making of such Restricted Payment, would in the good faith determination of the
Issuer or any Restricted Subsidiary be permitted under the requirements of this
Certificate of Designation, such Restricted Payment will be deemed to have been
made in compliance with this Certificate of Designation notwithstanding any
subsequent adjustments made in good faith to the Issuer's or any Restricted
Subsidiary's financial statements, affecting Consolidated Net Income of the
Issuer for any period. For the avoidance of doubt, it is expressly agreed that
no payment or other transaction permitted by clauses (1), (4), (6), (7) and (8)
of paragraph (l)(iii) of Article I and no payment contemplated or otherwise
arising pursuant to the Recapitalization, shall be considered a Restricted
Payment for purposes of, or otherwise restricted by, this Certificate of
Designation.
(iii) Limitation on Affiliate Transactions. The Issuer will
not, and will not permit any of its Restricted Subsidiaries to, make
any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from,
or enter into or make or amend any contract, agreement, understanding,
loan, advance, guarantee or other transaction with, or for the benefit
of, any Affiliate of the Issuer (each of the foregoing, an "Affiliate
Transaction"), unless:
-18-
<PAGE>
(a) such Affiliate Transaction is on terms that,
taken as a whole, are no less favorable to the Issuer or the
relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Issuer or such
Restricted Subsidiary with an unrelated Person; and
(b) the Issuer delivers to the Trustee:
(i) with respect to any Affiliate
Transaction entered into after the Closing Date
involving aggregate consideration in excess of $4.0
million, a resolution of the Board of Directors set
forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with clause (a)
above and that such Affiliate Transaction has been
approved by a majority of the members of the Board of
Directors; and
(ii) with respect to any Affiliate
Transaction involving aggregate consideration in
excess of $10.0 million, an opinion as to the
fairness to the Issuer or such Restricted Subsidiary
of such Affiliate Transaction from a financial point
of view issued by an investment banking, appraisal or
accounting firm of national standing.
Notwithstanding the foregoing, the following will not be deemed to be
Affiliate Transactions:
(1) any employment agreements, non-competition agreements,
stock purchase or option agreements, collective bargaining agreements,
employee benefit plans or arrangements (including vacation plans,
health and life insurance plans, deferred compensation plans, stock
loan programs, long-term incentive plans, directors' and officers'
indemnification agreements and retirement, savings or similar plans),
related trust agreements or any similar arrangements, in each case in
respect of employees, officers or directors and entered into in the
ordinary course of business, any payments or other transactions
contemplated by any of the foregoing and any other payments of
compensation to employees, officers, directors or consultants in the
ordinary course of business or in connection with the Issuer's
transition to new ownership;
(2) transactions between or among (a) the Issuer and/or its
Restricted Subsidiaries or (b) the Issuer and/or one or more of its
Restricted Subsidiaries and any joint venture; provided no Affiliate of
the Issuer (other than a Restricted Subsidiary) owns Capital Stock of
any such joint venture;
(3) Permitted Investments and Restricted Payments that are
permitted by paragraph (l)(ii) of this Article I;
(4) loans or advances to employees (or guarantees of
third-party loans to employees) in the ordinary course of business or
pursuant to a stock loan program;
(5) transactions among the Issuer and/or one or more of its
Subsidiaries effected as part of a Qualified Receivables Transaction;
-19-
<PAGE>
(6) payments to Investcorp and its Affiliates (whether or not
such Persons are Affiliates of the Issuer) for (A) any financial
advisory, financing, underwriting or placement services or in respect
of other investment banking activities and related expenses, including
in connection with acquisitions or divestitures, which payments are
approved by the Board of Directors of the Issuer in good faith and (B)
annual management, consulting and advisory fees and related expenses;
(7) any other agreement as in effect on the Closing Date
(including the Recapitalization Agreement) or any amendment thereto (so
long as any such amendment is not disadvantageous to the Holders in any
material respect) or any transaction pursuant thereto (including the
payment of all fees and expenses related to the Recapitalization);
(8) transactions with customers, clients, suppliers, or
purchasers or sellers of goods or services, in each case in the
ordinary course of business and otherwise in compliance with the terms
of this Certificate of Designation which are fair to the Issuer or its
Restricted Subsidiaries, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party,
in each case in the reasonable determination of the Board of Directors
of the Issuer or the senior management thereof;
(9) Debt permitted by paragraph (10) of the second paragraph
of paragraph (l)(i) of Article I on terms that, taken as a whole, are
no less favorable to the Issuer or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction
with an unrelated Person, or, if there is no comparable transaction,
have been negotiated in good faith by the parties thereto and, if any
member of management is then a member of the Board of Directors of the
Issuer or the relevant Restricted Subsidiary, also approved by such
member;
(10) any transaction on arm's length terms with non-affiliates
that become Affiliates as a result of such transaction; and
(11) the issuance of Common Stock of the Issuer.
(iv) Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The Issuer will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to:
(1) (a) pay dividends or make any other distributions to the
Issuer or any of its Restricted Subsidiaries (i) on its Capital Stock
or (ii) with respect to any other interest or participation in, or
measured by, its profits, or (b) pay any Debt owed to the Issuer or any
of its Restricted Subsidiaries;
(2) make loans or advances to the Issuer or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the Issuer or
any of its Restricted Subsidiaries.
-20-
<PAGE>
However, the preceding restrictions will not apply to
encumbrances or restrictions existing under or by reason of:
(a) contracts in effect on the Issue Date as in
effect on the Issue Date, including the New Credit Facility
and other Existing Debt and the related documentation;
(b) this Certificate of Designation, the Redeemable
Preferred Stock, the Indenture, the Notes, the Note Guarantees
and any other agreement entered into after the Issue Date,
provided that the encumbrances or restrictions in such
agreements are not materially more restrictive than those
contained in the foregoing agreements or instruments;
(c) any agreement or other instrument of a Person
acquired by the Issuer or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (but not created
in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so
acquired;
(d) purchase money obligations (including Capital
Lease Obligations) for property acquired in the ordinary
course of business that impose restrictions of the nature
described in clause (3) above on the property so acquired;
(e) Debt or other contractual requirements in
connection with a Qualified Receivables Transaction that, in
the good faith determination of the Board of Directors or
senior management of the Issuer, are necessary or advisable to
effect such Qualified Receivables Transaction;
(f) in the case of clause (3) above, any encumbrance
or restriction (i) that restricts in a customary manner the
subletting, assignment, or transfer of any property or asset
that is subject to a lease, license or similar contract or
(ii) contained in security agreements or mortgages securing
Debt to the extent such encumbrance or restriction restricts
the transfer of the property subject to such security
agreements or mortgages;
(g) in the clause (3) above, any Lien on property or
assets of the Issuer or any Restricted Subsidiary not
otherwise prohibited by this Certificate of Designation or the
Indenture;
(h) any restriction under an agreement (including an
option or right) to sell property or assets of, or Equity
Interests in, the Issuer or any Restricted Subsidiary pending
the closing of such sale, which sale is permitted under the
Indenture;
(i) restrictions on cash or other deposits or net
worth imposed by leases or other agreements entered into in
the ordinary course of business;
(j) customary provisions in joint venture agreements
and other similar agreements (in each case relating solely to
the respective joint venture or similar entity or the Equity
Interests therein) entered into in the ordinary course of
business;
-21-
<PAGE>
(k) any encumbrances or restrictions created with
respect to Debt or Preferred Stock permitted to be incurred or
issued subsequent to the Issue Date pursuant to paragraph
(l)(i) of Article I hereof;
(l) any encumbrances or restrictions required by any
governmental, local or regulatory authority having
jurisdiction over the Issuer or any of its Restricted
Subsidiaries or any of their businesses in connection with any
development grant made or other assistance provided to the
Issuer or any of its Restricted Subsidiaries by such
governmental authority; or
(m) any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations
referred to in clauses (a) through (l) above, provided that
such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or
refinancings, taken as a whole, are, in the good faith
judgment of the Issuer, not materially more restrictive with
respect to such encumbrances or restrictions than those
contained in the contracts, instruments or obligations prior
to such amendment, modification, restatement, renewal,
increase, supplement, refunding, replacement or refinancing.
(m) Limitations on Designations of Unrestricted Subsidiaries. The Board
of Directors may designate (a "Designation") any Restricted Subsidiary
(including any newly acquired or newly formed Subsidiary of the Issuer) to be an
Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or
owns or holds any Lien on any property of, the Issuer or any Restricted
Subsidiary, so long as such Designation would not cause a Redeemable Preferred
Triggering Event; provided that:
(1) any then existing Guarantee by the Issuer or any
Restricted Subsidiary of any Debt of the Subsidiary being so designated
shall be deemed an "incurrence" of such Debt at the time of such
Designation; and
(2) either (a) the Subsidiary to be so designated has total
assets of $1.0 million or less or (b) if such Subsidiary has assets
greater than $1.0 million, the "incurrence" of Debt referred to in
clause (1) of this provision would be permitted under paragraph (l)(i)
of this Article I.
For purposes of making the determination of whether such Designation
would cause a Redeemable Preferred Triggering Event, the portion of the fair
market value of the net assets of any Subsidiary of the Issuer at the time that
such Subsidiary is designated an Unrestricted Subsidiary that is represented by
the interest of the Issuer and its Restricted Subsidiaries (excluding Permitted
Investments) in such Subsidiary, in each case as determined in good faith by the
Board of Directors of the Issuer shall be deemed to be a Restricted Payment.
Such Designation will only be permitted if such Restricted Payment would be
permitted at such time.
The Board of Directors may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation"); provided that:
-22-
<PAGE>
(1) no Redeemable Preferred Triggering Event shall have
occurred and be continuing at the time of or after giving effect to
such Revocation; and
(2) all Liens and Debt of such Unrestricted Subsidiary
outstanding immediately after such Revocation would, if incurred at
such time, have been permitted to be incurred (and shall be deemed to
have been incurred) for all purposes of this Certificate of
Designation.
(n) SEC Reports. Notwithstanding that the Issuer may not be required to
remain subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, to the extent permitted by the Exchange Act, the Issuer will file
with the Commission, and provide, within 15 days after the Issuer is required to
file the same with the Commission, the Holders with the annual reports and the
information, documents and other reports that are specified in Sections 13 and
15(d) of the Exchange Act. In the event the Issuer is not permitted to file such
reports, documents and information with the Commission, the Issuer will provide
substantially similar information to the Holders, as if the Issuer were subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act.
(o) Conduct of Business. The Issuer will not, and will not permit any
Restricted Subsidiary to, engage in any business other than Permitted
Businesses, except to the extent as is not material to the Issuer and its
Restricted Subsidiaries taken as a whole.
II. Legal Defeasance and Covenant Defeasance.
---------------------------------------------
(a) Legal Defeasance and Covenant Defeasance. (i) The Issuer may, at
the option of the Board of Directors evidenced by a resolution set forth in an
Officer's Certificate, at any time, elect to have either paragraph (a)(ii) or
(a)(iii) of this Article II be applied to all outstanding Redeemable Preferred
Stock upon compliance with the conditions set forth in this Article II.
(ii) Upon the Issuer's exercise under paragraph (a)(i) of this
Article II of the option applicable to this paragraph (a)(ii) of
Article II, the Issuer shall, subject to the satisfaction of the
conditions set forth in paragraph (b) of this Article II, be deemed to
have been discharged from its obligations with respect to all
outstanding Redeemable Preferred Stock, as applicable, on the date the
conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Issuer
shall be deemed to have paid and discharged all the obligations
represented by the outstanding Redeemable Preferred Stock, which
Redeemable Preferred Stock shall thereafter be deemed to be
"outstanding" only for the purposes of paragraph (c) of this Article II
and the other sections of this Certificate of Designation referred to
in (1) and (2) below, and to have satisfied all its other obligations
under such Redeemable Preferred Stock and this Certificate of
Designation, except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (1) the rights of
Holders of outstanding Redeemable Preferred Stock to receive solely
from the trust fund described in this Article II, as more fully set
forth in such Article, payments in respect of the liquidation
preference of, accumulated and unpaid dividends on, and Special
Dividends, if any, on such Redeemable Preferred Stock when such
payments are due and payable and (2) this Article II. Subject to
compliance with this Article II, the Issuer may exercise its option
under this
-23-
<PAGE>
paragraph (a)(ii) of Article II notwithstanding the prior exercise of
its option under paragraph (a)(iii) of this Article II.
(iii) Upon the Issuer's exercise under paragraph (a)(i) of
this Article II of the option applicable to this paragraph (a)(iii),
the Issuer shall, subject to the satisfaction of the conditions set
forth in paragraph (b) of this Article II, be released from its
obligations under Article I, paragraphs (f)(ii), (g)(4), (h), (l), (m),
(n) and (o) with respect to the outstanding Redeemable Preferred Stock
on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Redeemable Preferred
Stock shall thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such Articles and
paragraphs, but shall continue to be deemed "outstanding" for all other
purposes hereunder (it being understood that such Redeemable Preferred
Stock shall not be deemed outstanding for accounting purposes). For
this purpose, Covenant Defeasance means that, with respect of any term,
condition or limitation set forth in any such Article or paragraph,
whether directly or indirectly, by reason of any reference elsewhere
herein to any such Article or paragraph or by reason of any reference
in any such Article or paragraph or any other provision herein or in
any other document, such omission to comply shall not constitute a
Redeemable Preferred Triggering Event under Article I, paragraph (f),
In addition, paragraph (f)(iii)(A)(4) shall cease to be applicable on
and after the date such conditions are satisfied. But except as
specified above, the remainder of this Certificate of Designation and
such Redeemable Preferred Stock shall be unaffected thereby.
(b) Conditions to Legal or Covenant Defeasance. The following shall be
the conditions to the application of either paragraph (a)(ii) or (a)(iii) hereof
to the outstanding Redeemable Preferred Stock:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Issuer must irrevocably deposit with a commercial bank
or trust company having a combined capital and surplus of at least
$250,000,000 appointed by the Issuer to act for the benefit of the
Holders (the "Agent") in trust, cash in United States dollars,
Government Notes, or a combination thereof, in such amounts as will be
sufficient (without reinvestment), in the opinion of a nationally
recognized firm of independent public accountants to pay the aggregate
liquidation preference of, accumulated and unpaid dividends on, and
Special Interest, if any, on the outstanding Redeemable Preferred Stock
on the stated date for payment thereof or on the Redeemable Preferred
Redemption Date;
(ii) in the case of an election under paragraph (a)(ii) of
this Article II, the Issuer shall have delivered to its Agent an
Opinion of Counsel in the United States reasonably acceptable to the
Agent confirming that (A) the Issuer has received from, or there has
been published by, the United States Internal Revenue Service a ruling
or (B) since the date hereof, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon, such Opinion of Counsel shall confirm that, the Holders will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
-24-
<PAGE>
(iii) in the case of an election under paragraph (a)(iii) of
this Article II, the Issuer shall have delivered to its Agent an
Opinion of Counsel in the United States, subject to customary
assumptions and exclusions, reasonably acceptable to the Agent
confirming that the Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(iv) no Redeemable Preferred Triggering Event (or event which,
but for the giving of notice or the passage of time, or both, would
result in a Redeemable Preferred Triggering Event) shall have occurred
and be continuing on the date of such deposit (other than a Redeemable
Preferred Triggering Event resulting from the incurrence of Debt) all
or a portion of the proceeds of which will be used to defease the
Redeemable Preferred Stock pursuant to this Article II concurrently
with such incurrence;
(v) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Certificate of
Designation) to which the Issuer or any of its Subsidiaries is a party
or by which the Issuer or any of its Subsidiaries is bound;
(vi) the Issuer shall have delivered to the Agent an Opinion
of Counsel, subject to customary assumptions and exclusions, to the
effect that after the after the 91st day following the deposit pursuant
to paragraph (b)(i) of this Article II, the trust funds will not be
part of any "estate" formed by the bankruptcy or reorganization of the
Issuer or subject to the "automatic stay" under the Bankruptcy Code, or
in the case of a Covenant Defeasance, will be subject to a first
priority Lien in favor of the Agent for the benefit of the Holders;
(vii) the Issuer shall have delivered to the Agent an
Officer's Certificate stating that the deposit was not made by the
Issuer with the intent of preferring the Holders over an other
creditors of the Issuer or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Issuer;
(viii) the Issuer shall have delivered to the Agent an
Officer's Certificate and an Opinion of Counsel, subject to customary
assumptions and exclusions, each stating that all conditions precedent
provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with; and
(ix) the Issuer shall have delivered to the Agent an Opinion
of Counsel from Minnesota counsel, subject to customary assumptions,
confirming that (1) the deposit of funds by the Issuer into the trust
in accordance with Article II and (2) the rights of Holders to receive
subsequent distributions from the trust fund described in this Article
II when due and payable (x) at the time of the deposit and at the time
of payment will not constitute an illegal redemption of the Redeemable
Preferred Stock under the MBCA, and (y) are not and will not be
otherwise in violation of the MBCA, as amended.
(c) Deposited Money and Government Securities Held in Trust;
Miscellaneous Provisions. Subject to paragraph (d) of this Article II, all money
and Government Notes
-25-
<PAGE>
(including the proceeds thereof) deposited with the Agent pursuant to paragraph
(b) of this Article II in respect of the outstanding Redeemable Preferred Stock
shall be held in trust and applied by the Agent, in accordance with the
provision of such Redeemable Preferred Stock and this Certificate of
Designation, to the payment, either directly or through any paying agent
(including the Issuer acting as paying agent) as the Agent may determine, to the
Holders of such Redeemable Preferred Stock of all sums due and to become due
thereon in respect of the liquidation preference of and accumulated and unpaid
dividends on the Redeemable Preferred Stock, but such money need not be
segregated from other funds except to the extent required by law.
(d) Repayment to Issuer. Any money deposited with the Agent or any
paying agent, or then held by the Issuer, in trust for the payment of the
aggregate liquidation preference of, accumulated and unpaid dividends on and
Special Dividends, if any, and remaining unclaimed for two years after such
amounts have become due and payable shall be paid to the Issuer on its request
or (if then held by the Issuer) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof, and all liability of the Agent with
respect to such trust money, and all liability of any paying agent (including
the Issuer as paying agent) thereof, shall thereupon cease; provided, however,
that the Agent or paying agent, before being required to make any such
repayment, may at the expense of the Issuer, cause to be published once, in the
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Issuer.
(e) Reinstatement. If the Agent is unable to apply any United States
dollars or Government Notes in accordance with this Article II by reason of any
order, or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the Issuer's obligations under
this Certificate of Designation and Redeemable Preferred Stock shall be revived
and reinstated as though no deposit had occurred pursuant to this Article II
until such time as the Agent is permitted to apply all such money in accordance
with this Article II, provided, however, that if the Issuer makes any payment on
account of the Redeemable Preferred Stock following the reinstatement of its
obligations, the Issuer shall be subrogated to the rights of the Holders of such
Redeemable Preferred Stock to receive such payment from the money held by the
Agent or any paying agent.
III. Registration Rights.
-------------------------
So long as any shares of Redeemable Preferred Stock constitute
"Transfer Restricted Securities," as defined in the Registration Rights
Agreement, each Holder of Transfer Restricted Securities shall be entitled to
the rights granted by the Issuer thereunder, and shall be bound by the
restrictions contained therein, on the certificates representing the Transfer
Restricted Securities and in any offering memorandum for additional shares of
Redeemable Preferred Stock
IV. Miscellaneous.
------------------
(a) Remedies. The sole remedy to Holders of Redeemable Preferred Stock
in the event of the Issuer's failure to comply with any of the provisions hereof
and the sole consequence
-26-
<PAGE>
of any such failure will be the voting rights and Additional Dividends described
in paragraph (f) of Article I.
(b) Preemptive Rights. No shares of Redeemable Preferred Stock shall
have any rights of preemption whatsoever as to any securities of the Issuer, or
any warrants, rights or options issued or granted with respect thereto,
regardless of how such securities or such warrants, rights or options may be
designated, issued or granted.
(c) Waiver. The Holders of at least a majority of the outstanding
shares of Redeemable Preferred Stock, voting as one class, may also amend and
waive compliance with any provision of this Certificate of Designation.
(d) Certificate as to Conditions Precedent. Upon any request or
application by the Issuer to the Agent to take or refrain from taking any action
under this Certificate of Designation, at the request of the Agent, the Issuer
shall furnish to the Agent:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Agent (which shall include the statements set forth
in paragraph (e) below) stating that in the opinion of the signers, all
conditions precedent, if any, provided for in this Certificate of
Designation relating to the proposed action have been complied with;
and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Agent (which shall include the statements set forth
in paragraph (e) below) stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
(e) Statements Required in Certificate. Each certificate or opinion
with respect to compliance with a covenant or condition provided for in this
Certificate of Designation shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
(f) Notice. Any notice or communication given pursuant to this
Certificate of Designation shall be in writing and delivered in person or mailed
by first-class mail addressed as follows:
-27-
<PAGE>
if to the Issuer, to:
Jostens, Inc.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
Attn: General Counsel
Phone: (612) 830-3309
Fax: (612) 830-3380
with copies to:
Investcorp International Inc.
280 Park Avenue
37th Floor West
New York, New York 10017
Attn: Charles J. Philippin
Phone: (212) 599-4100
Fax: (212) 983-7073
Gibson, Dunn & Crutcher LLP
200 Park Avenue, 48th Floor
New York, New York 10166
Attn: Joerg H. Esdorn
Phone: (212) 351-4000
Fax: (212) 351-4035
The Issuer may designate additional or different addresses for
subsequent notices or communications. Any notice or communication mailed to a
Holder of Redeemable Preferred Stock shall be mailed to the Holder at the
Holder's address as it appears in the stock register of the Issuer and shall be
sufficiently given if so mailed within the time prescribed. Failure to mail a
notice or communication to a Holder or any defect in such notice shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
(g) Rules of Construction. For the purposes of this Certificate of
Designation (i) words in the singular shall be held to include the plural and
vice versa and words of one gender shall be held to include the other gender as
the context requires, (ii) the word "including" and words of similar import
shall mean "including, without limitation," (iii) a word has the meaning
assigned to it, (iv) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP, and (v) "or" is not exclusive.
V. Transfer Restrictions.
-------------------------
(a) The certificates evidencing the Redeemable Preferred Stock shall,
unless otherwise agreed to by the Issuer and the Holders of any such
certificates, bear a legend substantially to the following effect:
-28-
<PAGE>
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD,
OR OTHERWISE TRANSFERRED OTHER THAN IN ACCORDANCE WITH REGULATIONS
PROMULGATED UNDER THAT ACT, OR IF SO REGISTERED UNDER THAT ACT, OR IF
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
THESE SECURITIES ARE SUBJECT TO MANDATORY REDEMPTION BY THE
CORPORATION. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH
STOCKHOLDER WHO SO REQUESTS THE POWERS, DESIGNATION, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS
OF STOCK OR SERIES OF STOCK OF THE CORPORATION AUTHORIZED TO BE ISSUED,
SO FAR AS THEY HAVE BEEN DETERMINED, AND THE AUTHORITY OF THE BOARD OF
DIRECTORS TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF
SUBSEQUENT CLASSES OR SERIES.
(b) The Issuer shall be entitled to, and the Transfer Agent shall
refuse to register any attempted transfer of shares of Redeemable Preferred
Stock not in compliance with paragraph (a) hereof. As a condition to any
registration of transfer, the Issuer and the Transfer Agent may require an
opinion of counsel or other evidence satisfactory to it that the legend in
paragraph (a) is being complied with.
(c) The legend provided in paragraph (a) hereof may be removed if the
Redeemable Preferred Stock has been registered pursuant to an effective
registration statement under the Securities Act.
-29-
<PAGE>
VI. Certain Definitions.
------------------------
As used in this Certificate of Designation, the following terms shall
have the following meanings (with terms defined in the singular having
comparable meanings when used in the plural and vice versa), unless the context
otherwise requires:
"Acquired Debt" means, with respect to any specified Person:
(1) Debt of any other Person existing at the time such other Person is
merged with or into or became a Restricted Subsidiary of such specified Person,
including Debt incurred in connection with, or in contemplation of, such other
Person's merging with or into or becoming a Restricted Subsidiary of such
specified Person; and
(2) Debt secured by a Lien encumbering any asset acquired by such
specified Person.
"Additional Dividends" has the meaning ascribed to it in paragraph (c)
of Article I hereof.
"Additional Notes" shall mean up to $125,000,000 in aggregate principal
amount of Notes initially issued subsequent to the Closing Date pursuant to
Article II of the Indenture and in compliance with Section 4.03 of the
Indenture.
"Affiliate" of any specified Person means:
(1) any other Person, directly or indirectly, controlling or controlled
by or under direct or indirect common control with such specified Person;
(2) any other Person that owns, directly or indirectly, 5% or more of
such specified Person's Voting Stock; or
(3) any Person who is a director or officer (a) of such Person, (b) of
any Subsidiary of such Person or (c) of any Person described in clause (1) or
(2) above.
For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by agreement or otherwise.
"Affiliate Transaction" has the meaning ascribed to it in paragraph
(l)(iii) of Article I hereof.
"Agent" has the meaning ascribed to it in paragraph (b)(i) of Article
II hereof.
"Applicable Premium" means, with respect to a share of Redeemable
Preferred Stock the greater of (i) 1.0% of the liquidation preference of such
share and (ii) the excess of (A) the
-30-
<PAGE>
present value at such time of (1) the redemption price of such share at the
First Call Date (such redemption price being set forth in the table located in
paragraph (e) of Article I hereof) plus (2) all Regular Dividends which would
have accrued pursuant to the terms of the Redeemable Preferred Stock through the
First Call Date, each computed using a discount rate equal to the Treasury Rate
plus 50 basis points, over (B) the liquidation preference of such share, if
greater.
"Articles of Incorporation" has the meaning ascribed to it in the
preamble to this Certificate of Designation.
"Average Life" means, as of the date of determination, with respect to
any Debt or Preferred Stock, the quotient obtained by dividing (i) the sum of
the product of the numbers of years (rounded upwards to the nearest month) from
the date of determination to the dates of each successive scheduled principal
payment of such Debt or redemption or similar payment with respect to Preferred
Stock multiplied by the amount of such payment by (ii) the sum of all such
payments.
"Bankruptcy Law" means, Title 11, United States Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person, or (except if used in the definition of "Change of
Control") any authorized committee of the Board of Directors of such Person.
"Borrowing Base" means, as of any date, an amount equal to the sum of:
(1) 85% of the aggregate book value of all accounts receivable
of the Issuer and its Restricted Subsidiaries; and
(2) 60% of the aggregate book value of all inventory owned by
the Issuer and its Restricted Subsidiaries, all calculated on a
consolidated basis and in accordance with GAAP.
To the extent that information is not available as to the amount of
accounts receivable or inventory as of a specific date, the Issuer shall use the
most recent available information for purposes of calculating the Borrowing
Base.
"Bridge Commitment Letter" means the bridge commitment letter dated
December 24, 1999 among Investcorp Investment Equity Limited, DB Capital
Investors, L.P, Bankers Trust Corporation, UBS AG, Stamford Branch and Goldman
Sachs Credit Partners, L.P.
"Business Day" means any day except a Saturday, a Sunday, or any day on
which banking institutions in New York are authorized or required by law to
close.
"Calculation Date" means the date of the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio.
-31-
<PAGE>
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(3) in the case of an association or other business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of stock.
"Cash Equivalents" means:
(1) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality thereof;
(2) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any commercial bank or trust company having
capital and surplus in excess of $300 million;
(3) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (1)
and (2) above entered into with any financial institution meeting the
qualifications specified in clause (2) above;
(4) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's
Ratings Services, a division of the McGraw-Hill Companies, Inc. ("S&P")
and in each case maturing within one year after the date of
acquisition;
(5) readily marketable direct obligations issued by any state
of the United States of America or any political subdivision thereof
having one of the two highest rating categories obtainable from either
Moody's or S&P;
(6) Debt with a rating of "A" or higher from S&P or "A2" or
higher from Moody's; and
(7) investment funds investing at least 95% of their assets in
securities of the types described in clauses (1)-(4) above.
"Certificate of Designation" means this Certificate of Designation
creating the Redeemable Preferred Stock.
"Change of Control" means the occurrence of any of the following
events:
-32-
<PAGE>
(1) prior to the first public offering after the Closing Date
of Voting Stock of the Issuer, the Initial Control Group ceases to be
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of more than 50% of the total
voting power of the Voting Stock of the Issuer, whether as a result of
the issuance of securities of the Issuer, any merger, consolidation,
liquidation or dissolution of the Issuer, any direct or indirect
transfer of securities by the Initial Control Group or otherwise (for
purposes of this clause (1) and clause (2) below, the Initial Control
Group shall be deemed to beneficially own any Voting Stock of an entity
(the "specified entity") held by any other entity (the "parent entity")
so long as the Initial Control Group beneficially owns (as so defined),
directly or indirectly, in the aggregate a majority of the voting power
of the Voting Stock of the parent entity);
(2) following the first public offering after the Closing Date
of Voting Stock of the Issuer (a) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more
members of the Initial Control Group, is or becomes the beneficial
owner (as defined in clause (1) above), directly or indirectly, of more
than 40% of the total voting power of the Voting Stock of the Issuer
and (b) the Initial Control Group "beneficially owns" (as defined in
clause (1) above), directly or indirectly, in the aggregate a lesser
percentage of the total voting power of the Voting Stock of the Issuer
than such other person and does not have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Issuer (for purposes of this
clause (2), such other person shall be deemed to beneficially own any
Voting Stock of a specified entity held by a parent entity, if such
other person "beneficially owns" (as defined in clause (1) above),
directly or indirectly, in the aggregate more than 40% of the voting
power of the Voting Stock of such parent entity and the Initial Control
Group "beneficially owns" (as defined in clause (1) above), directly or
indirectly, in the aggregate a lesser percentage of the voting power of
the Voting Stock of such parent entity and does not have the right or
ability by voting power, contract or otherwise to elect or designate
for election a majority of the Board of Directors of such parent
entity); or
(3) at any time after the first public offering of Common
Stock of the Issuer, any person other than the Initial Control Group
and the then incumbent Board of Directors, (a) (i) nominates one or
more individuals for election to the Board of Directors of the Issuer,
and (ii) solicits proxies, authorizations or consents in connection
therewith and (b) such number of nominees elected to serve on the Board
of Directors in such election and all previous elections after the
Closing Date represents a majority of the Board of Directors of the
Issuer, following such election.
"Closing Date" means the date on which the first shares of Redeemable
Preferred Stock are issued hereunder.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the Securities and Exchange Commission.
"Commodity Hedging Agreements" means any futures contract or other
similar agreement or arrangement designed to protect the Issuer or any
Restricted Subsidiary against fluctuations in commodities prices.
-33-
<PAGE>
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period:
(1) plus without duplication to the extent deducted in
computing such Consolidated Net Income:
(a) Consolidated Interest Expense and the
amortization of debt issuance costs, commissions, fees and
expenses of such Person and its Restricted Subsidiaries for
such period;
(b) provision for taxes based on income or profits
(including franchise taxes) of such Person and its Restricted
Subsidiaries for such period;
(c) depreciation and amortization expense, including
amortization of inventory write-up under APB 16, amortization
of intangibles (including goodwill and the non-cash costs of
Interest Rate Agreements, Commodity Hedging Agreements or
Currency Agreements, license agreements and non-competition
agreements), amortization of management fees, non-cash
amortization of Capital Lease Obligations, and organization
costs;
(d) expenses and charges related to any equity
offering or incurrence of Debt permitted to be incurred by
this Certificate of Designation (including any such expenses
or charges relating to the Recapitalization);
(e) the amount of any restructuring or other type of
special charge or reserve;
(f) unrealized gains and losses from hedging, foreign
currency or commodities translations and transactions;
(g) expenses consisting of internal software
development costs that are expensed during the period but
could have been capitalized in accordance with GAAP;
(h) any write-downs, write-offs, and other non-cash
charges, items and expenses;
(i) the amount of any expense relating to any
minority interest of Restricted Subsidiaries; and
(j) costs of surety bonds in connection with
financing activities, and
(2) minus any cash payment for which a reserve or charge of
the kind described in clauses (e), (h) or (i) of subclause (1) above
was taken previously during such period.
-34-
<PAGE>
"Consolidated Coverage Ratio" means with respect to any Person, the
ratio of the Consolidated Cash Flow of such Person and its Restricted
Subsidiaries for the four full fiscal quarters ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Coverage
Ratio (the "Calculation Date") for which financial statements are available to
the Consolidated Interest Expense of such Person and its Restricted Subsidiaries
for such period. In the event that the Issuer or any of its Restricted
Subsidiaries incurs, assumes, Guarantees or redeems any Debt (other than working
capital borrowings) or issues or redeems Preferred Stock subsequent to the
commencement of the period for which the Consolidated Coverage Ratio is being
calculated but prior to Calculation Date, then the Consolidated Coverage Ratio
shall be calculated giving pro forma effect to such incurrence, assumption,
Guarantee or redemption of Debt, or such issuance or redemption of Preferred
Stock, as if the same had occurred at the beginning of the applicable
four-quarter reference period.
For purposes of making the computation referred to above, Investments,
acquisitions, dispositions, mergers and consolidations that have been made by
the Issuer or any of its Restricted Subsidiaries during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date, and discontinued operations determined in accordance with GAAP
on or prior to the Calculation Date, shall be given effect on a pro forma basis
assuming that all such Investments, acquisitions, dispositions, mergers and
consolidations or discontinued operations (and the reduction or increase of any
associated Consolidated Interest Expense, and the change in Consolidated Cash
Flow, resulting therefrom, including because of Pro Forma Cost Savings) had
occurred on the first day of the four-quarter reference period. If since the
beginning of such period any Person (that subsequently became a Restricted
Subsidiary or was merged with or into the Issuer or any Restricted Subsidiary
since the beginning of such period) shall have made any Investment, acquisition,
disposition, merger or consolidation or determined a discontinued operation,
that would have required adjustment pursuant to this definition, then the
Consolidated Coverage Ratio shall be calculated giving pro forma effect thereto
for such period as if such Investment, acquisition, disposition, merger or
consolidation or discontinued operations had occurred at the beginning of the
applicable four-quarter period.
For purposes of this definition, whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a financial or accounting officer of the Issuer. If any Debt to which pro
forma effect is given bears interest at a floating rate, the interest expense on
such Debt shall be calculated as if the rate in effect on the Calculation Date
had been the applicable interest rate for the entire period (taking into account
any Interest Rate Agreement in effect on the Calculation Date). Interest on a
Capital Lease Obligation shall be deemed to accrue at an interest rate
reasonably determined by a responsible financial or accounting officer of the
Issuer to be the rate of interest implicit in such Capital Lease Obligation in
accordance with GAAP. Interest on Debt that may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a eurocurrency
interbank offered rate, or other rate, shall be deemed to have been based upon
the rate actually chosen, or, if none, then based upon such optional rate chosen
as the Issuer may designate.
"Consolidated Interest Expense" means, with respect to any Person for
any period, the sum, without duplication, of:
-35-
<PAGE>
(1) the consolidated net interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued
(including amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings or any
Qualified Receivables Transaction, and net payments (if any) pursuant
to Hedging Obligations relating to Interest Rate Agreements or Currency
Agreements with respect to Debt, excluding, however (a) amortization of
debt issuance costs, commissions, fees and expenses and (b) customary
commitment, administrative and transaction fees and charges);
(2) dividends paid in respect of any Disqualified Stock of the
Issuer (or solely for purposes of paragraph (f)(ii)(A) of Article I,
dividends paid in respect of any Preferred Stock of the Issuer, other
than Junior Equity Interests) or any Restricted Subsidiary, or cash
dividends paid in respect of any Preferred Stock of a Restricted
Subsidiary of the Issuer held by Persons other than the Issuer or a
Subsidiary; and
(3) commissions, discounts and other fees and charges incurred
in connection with a Qualified Receivables Transaction of the Issuer or
any Restricted Subsidiary,
in each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted
Subsidiary of such Person and the net losses of any such Person shall
only be included to the extent funded with cash or property from the
Issuer or any Restricted Subsidiary;
(2) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, prohibited by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders unless such restriction with respect to the payment of
dividends has been permanently waived;
(3) except for purposes of calculating the Consolidated
Coverage Ratio, the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition shall be excluded;
(4) the cumulative effect of a change in accounting principles
shall be excluded (effected either through cumulative effect adjustment
or a retroactive application, in each case, in accordance with GAAP);
-36-
<PAGE>
(5) to the extent deducted in determining Net Income, the
fees, expenses and other costs incurred in connection with the
Recapitalization, including payments to management contemplated by the
Recapitalization Agreement, or in connection with the Issuer's
transition to new ownership, in each case, to the extent that such fee,
expense, cost or payment was disclosed in the Offering Memorandum,
shall be excluded; and
(6) with respect to periods prior to the Closing Date,
Consolidated Net Income shall include (without duplication) all
adjustments relating to reductions in costs related to employee
terminations, elimination of certain unprofitable businesses, excess
rebates related to the JDS program, closing the Mexico manufacturing
facility, excess labor costs associated with the recognition segment
and other items in each case of the type reflected in the calculation
of Adjusted EBITDA set forth in the Offering Memorandum in footnote 5
to "Summary Consolidated Historical and Unaudited Pro Forma Financial
Data". To the extent that all employee terminations referred to above
have not been completed before the Closing Date, such costs shall be
added back to Consolidated Net Income in periods after the Closing
Date; provided, however, that if Consolidated Net Income is being
calculated after September 30, 2000, the expected cost savings of such
employee terminations with respect to employees that have not been
terminated prior to the date of such calculation shall not be added
back to Consolidated Net Income.
"Coverage Ratio Exception" has the meaning ascribed to it in paragraph
(l)(i) of Article I.
"Credit Facilities" means, with respect to the Issuer and its
Restricted Subsidiaries, one or more unsubordinated debt facilities (including
the New Credit Facility) or commercial paper facilities with banks, insurance
companies or other institutional lenders providing for unsubordinated revolving
credit loans, unsubordinated term loans, unsubordinated notes, factoring or
other receivables financing (including through the sale of receivables to such
lenders or to special purpose entities formed to borrow from or issue securities
to such lenders against such receivables) or unsubordinated letters of credit or
other unsubordinated credit facilities, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part from
time to time.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement to which the Issuer or any
Restricted Subsidiary is a party or of which it is a beneficiary.
"Debt" means, with respect to any Person (without duplication):
(1) any indebtedness of such Person, whether or not
contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and
unpaid of the purchase price of any property, which purchase price is
due more than six months after the date of placing such property in
final service or taking final delivery thereof, or representing any
Hedging Obligations, except any such balance that constitutes an
accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit and Hedging
-37-
<PAGE>
Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP;
(2) all indebtedness under clause (1) of other Persons secured
by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) provided that the amount of indebtedness of
such Person shall be the lesser of:
(a) the fair market value of such asset at such date
of determination; and
(b) the amount of such indebtedness of such other
Persons, and
(3) to the extent not otherwise included, the Guarantee by
such Person of any Debt under clause (1) of any other Person;
provided, however, that Debt shall not include:
(a) obligations and liabilities in respect of
synthetic lease facilities that are accounted for as operating
leases in accordance with GAAP (including Guarantees of loans
then outstanding by the lenders under any such facility to the
lessor thereunder);
(b) obligations of the Issuer or any of its
Restricted Subsidiaries arising from agreements of the Issuer
or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each
case, incurred or assumed in connection with the disposition
of any business, assets or a Subsidiary, other than guarantees
of Debt incurred by any Person acquiring all or any portion of
such business, assets or a Subsidiary for the purpose of
financing such acquisition; provided, however, that:
(i) such obligations are not reflected on
the balance sheet of the Issuer or any Restricted
Subsidiary (contingent obligations referred to in a
footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to
be reflected on such balance sheet for purposes of
this clause (i)); and
(ii) the maximum assumable liability in
respect of all such obligations shall at no time
exceed the gross proceeds including noncash proceeds
(the fair market value of such noncash proceeds being
measured at the time received and without giving
effect to any subsequent changes in value) actually
received by the Issuer and its Restricted
Subsidiaries in connection with such disposition,
(c) (i) obligations under (or constituting
reimbursement obligations with respect to) letters of credit,
performance bonds, surety bonds, appeal bonds, completion
guarantees or similar instruments issued in connection with
the ordinary course of a Permitted Business, including letters
of credit in respect of workers' compensation claims, security
or lease deposits and self-insurance; provided, however, that
upon the drawing of such letters of credit or other
instrument, such obligations are reimbursed within 30 days
following such drawing, and (ii) obligations arising from the
honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case
of daylight overdrafts) drawn against
-38-
<PAGE>
insufficient funds in the ordinary course of business;
provided, however, that such obligations are extinguished
within three Business Days of incurrence;
(d) purchase price holdbacks in connection with
purchasing assets in the ordinary course of business of the
Issuer and its Restricted Subsidiaries; or
(e) leases of precious metals used in the ordinary
course of business of the Issuer and its Restricted
Subsidiaries, whether or not accounted for as operating leases
under GAAP; or
(f) customer deposits in the ordinary course of
business.
Except as otherwise expressly provided in this definition, the amount
of any Debt outstanding as of any date shall be:
(i) the accreted value thereof, in the case of any Debt issued
at a discount to par value; and
(ii) the principal amount thereof in the case of any other
Debt.
"Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is:
(1) required to be redeemed or is redeemable at the option of
the holder of such class or series of Capital Stock at any time on or
prior to the date on which the Redeemable Preferred Stock is subject to
mandatory redemption as described in this Certificate of Designation;
or
(2) convertible into or exchangeable at the option of the
holder thereof for Capital Stock referred to in clause (1) above or
Debt having a scheduled maturity on or prior to the date on which the
Redeemable Preferred Stock is subject to mandatory redemption as
described in this Certificate of Designation;
Notwithstanding the preceding sentence, (A) if such Capital Stock is
issued to any plan for the benefit of employees or by any such plan to such
employees, in each case in the ordinary course of business of the Issuer or its
Subsidiaries, such Capital Stock shall not constitute Disqualified Stock solely
because it may be required to be repurchased by the Issuer in order to satisfy
applicable statutory or regulatory obligations, (B) any Capital Stock that would
constitute Disqualified Stock solely because the Holders of the Capital Stock
have the right to require the Issuer to repurchase such Capital Stock upon the
occurrence of a Change of Control or an "Asset Sale" will not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Issuer
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section (l)(ii) of Article I
and (C) the Redeemable Preferred Stock shall not constitute Disqualified Stock
under this Certificate of Designation.
For purposes hereof, the amount of any Disqualified Stock shall be
equal to the greater of its liquidation preference and its maximum fixed
repurchase price, but excluding accrued dividends, if any. The "maximum fixed
repurchase price" of any Disqualified Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were purchased on any date as
of which the
-39-
<PAGE>
Consolidated Coverage Ratio shall be required to be determined pursuant to this
Certificate of Designation, and if such price is based upon, or measured by, the
fair market value of such Disqualified Stock, such fair market value shall be
determined reasonably and in good faith by the Board of Directors of the issuer
of such Disqualified Stock..
"Dividend Period" means the Initial Dividend Period and, thereafter,
each quarterly dividend period.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Existing Debt" means Debt of the Issuer and its Restricted
Subsidiaries (other than Debt under the New Credit Facility) in existence on the
Closing Date, until such amounts are repaid.
"First Call Date" has the meaning ascribed to it in paragraph (e)(iii)
of Article I hereof.
"Foreign Subsidiary" means any Subsidiary of the Issuer formed under
the laws of any jurisdiction other than the United States or any political
subdivision thereof substantially all of the assets of which are located outside
the United States or that conducts substantially all of its business outside of
the United States.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, including those set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession. All ratios and computations based on GAAP
contained in this Certificate of Designation shall be computed in conformity
with GAAP as in effect as of the Closing Date.
"Government Notes" means direct obligations (or certificates
representing an ownership interest in such obligations) of, the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including letters of credit and reimbursement
agreements in respect thereof), of all or any part of any Debt.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under Interest Rate Agreements, Currency Agreements
or Commodity Hedging Agreements.
"Holder" means a holder of shares of Redeemable Preferred Stock, as the
context requires, as reflected in the stock books of the Issuer.
-40-
<PAGE>
"Incur" has the meaning ascribed to it in paragraph (l)(i) of Article I
hereof.
"Indenture" means (i) the Indenture dated as of May 10, 2000, by, and
among the Issuer and The Bank of New York, as Trustee or (ii) any loan agreement
or indenture evidencing bridge loans made or bridge notes issued pursuant to the
Bridge Commitment Letter.
"Initial Control Group" means Investcorp S.A., D.B. Capital Investors,
L.P., their respective Affiliates, any Person acting in the capacity of an
underwriter or initial purchaser in connection with a public or private offering
of the Issuer's Capital Stock, or any Permitted Transferee of any of the
foregoing Persons.
"Initial Dividend Period" means in respect of any share of Redeemable
Preferred Stock, the dividend period commencing on the Issue Date and ending on
the first Regular Dividend Payment Date to occur thereafter.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, repurchase agreement, futures contract or other
financial agreement or arrangement designed to protect the Issuer or any
Restricted Subsidiary against fluctuations in interest rates.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (but excluding Guarantees of Debt not otherwise prohibited to be
incurred under this Certificate of Designation (to the extent that such
Guarantees of Debt do not then require cash payments by the Issuer and in the
event that cash payments are then required, such payments shall constitute an
Investment only 90 days subsequent to such payment)), advances or capital
contributions (excluding commission, travel, payroll, entertainment, relocation
and similar advances to officers and employees and profit sharing plan
contributions made in the ordinary course of business), and purchases or other
acquisitions for consideration of Debt, Equity Interests or other securities. If
the Issuer or any Restricted Subsidiary of the Issuer sells or otherwise
disposes of any Equity Interests of any direct or indirect Subsidiary of the
Issuer such that, after giving effect to any such sale or disposition, such
Person is no longer a Subsidiary of the Issuer, the Issuer shall be deemed to
have made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Subsidiary not sold or
disposed of in an amount determined as provided in the second to last paragraph
of (l)(ii) of Article I hereof.
"Issue Date" means, in respect of any shares of Redeemable Preferred
Stock, the date on which such shares of Redeemable Preferred Stock are issued.
"Issuer" means Jostens, Inc.
"Joint Venture Subsidiary" means any Restricted Subsidiary that is a
joint venture between or among (i) the Company or any Restricted Subsidiary of
the Company, and (ii) one or more other Persons.
"Junior Equity Interests" means Junior Stock or warrants, options or
other rights to acquire Junior Stock (but excluding any debt security that is
convertible into, or exchangeable for, Junior Stock).
-41-
<PAGE>
"Junior Stock" has the meaning ascribed to it in paragraph (b) of
Article I.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement or any lease
in the nature thereof); provided that in no event shall an operating lease be
deemed to constitute a Lien.
"MBCA" means the Minnesota Business Corporation Act, as amended.
"Net Income" means, with respect to any Person and any period, the net
income (or loss) of such Person (but not any Subsidiaries) for such period,
determined in accordance with GAAP and before any reduction in respect of
Preferred Stock dividends of such Person (but not any Subsidiaries) excluding,
however:
(1) any extraordinary or non-recurring gains or losses or charges
(including non-cash charges resulting from any write-up, write-down or write-off
of amounts in connection with the Recapitalization) and gains or losses or
charges from the sale of assets outside the ordinary course of business,
together with any related provision for taxes on such gain or loss or charges;
and
(2) deferred financing costs written off in connection with the early
extinguishment of Debt; provided, however, that Net Income shall be deemed to
include any increases during such period to shareholder's equity of such Person
attributable to tax benefits from net operating losses and the exercise of stock
options that are not otherwise included in Net Income for such period.
"New Credit Facility" means the Credit Agreement expected to be dated
as of May 10, 2000 among the Issuer, the Subsidiaries of the Issuer party
thereto and the financial institutions named therein, and any related notes,
collateral documents, letters of credit and Guarantees, including any
appendices, exhibits or schedules to any of the foregoing (as the same may be in
effect from time to time), in each case, as such agreements may be amended,
modified, supplemented or restated from time to time, or refunded, refinanced,
restructured, replaced, renewed, repaid or extended from time to time (whether
with the original agents and lenders or other agents or lenders or otherwise,
and whether provided under the original credit agreement or other credit
agreements or otherwise).
"Note Guarantee" means the unconditional Guarantee by certain
Subsidiaries of the Issuer's Obligations under the Notes.
"Notes" means (i) the $225,000,000 aggregate principal amount of Senior
Subordinated Notes due 2010 to be issued by the Issuer pursuant to the Indenture
on the Closing Date together with any Additional Notes that may be issued at any
time after the Closing Date or (ii) if no such Senior Subordinated Notes are
issued on the Closing Date, $225,000,000 aggregate principal amount of bridge
loans made or bridge notes issued in lieu of the issuance of such Senior
Subordinated Notes pursuant to the Bridge Commitment Letter.
-42-
<PAGE>
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages, Guarantees and other liabilities
payable under the documentation governing any Debt, in each case, whether now or
hereafter existing, renewed or restructured, whether or not from time to time
decreased or extinguished and later increased, created or incurred, whether or
not arising on or after the commencement of a proceeding under Title 11, U.S.
Code or any similar federal or state law for the relief of debtors (including
post-petition interest) and whether or not allowed or allowable as a claim in
any such proceeding.
"Offering Memorandum" means the final offering memorandum dated May 5,
2000 in respect of the Notes.
"Offer Period" has the meaning ascribed to it in paragraph (h)(iii) of
Article I hereof.
"Officers" means any of the following: Chairman, President, Chief
Executive Officer, Treasurer, Chief Financial Officer, Executive Vice President,
Senior Vice President, Vice President, Assistant Vice President, Secretary,
Assistant Secretary or any other officer reasonably acceptable to the Trustee
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Agent. The counsel may be an employee of or counsel
to the Issuer or the Agent.
"Parity Stock" has the meaning ascribed to it in paragraph (b) of
Article I hereof.
"Permitted Businesses" means the businesses conducted by the Issuer and
its Subsidiaries as of the date of this Certificate of Designation and any other
business reasonably related, complementary or incidental to any of those
businesses including the provision of goods or services related to educational
institutions.
"Permitted Debt" has the meaning ascribed to it in paragraph (l)(i) of
Article I.
"Permitted Investments" means:
(1) any Investment in the Issuer or in a Restricted Subsidiary
(including in any Equity Interests of a Restricted Subsidiary), other
than an Investment in a Joint Venture Subsidiary that has then
outstanding any Permitted Joint Venture Subsidiary Preferred Stock;
(2) any Investment in (a) cash, Cash Equivalents or Investment
Grade Securities or (b) to the extent determined by the Issuer in good
faith to be necessary for local currency working capital requirements
of a Foreign Subsidiary, other cash equivalents, provided in the case
of clause (b), the Investment is made by the Foreign Subsidiary having
such operations;
(3) any Investment by the Issuer or any Restricted Subsidiary
of the Issuer in a Person, other than a Joint Venture Subsidiary that
has then outstanding or is issuing any Permitted Joint Venture
Subsidiary Preferred Stock, if as a result of such Investment (A) such
Person becomes a Restricted Subsidiary or (B) such Person, in one
transaction or a series of
-43-
<PAGE>
substantially concurrent related transactions, is merged, consolidated
or amalgamated with or into, or transfers or conveys substantially all
of its assets to, or is liquidated into, the Issuer or a Restricted
Subsidiary;
(4) any securities received or other Investments made as a
result of the receipt of non-cash consideration from a disposition of
assets under an Asset Sale (as such term is defined in the Offering
Memorandum) made pursuant to and in compliance with the Indenture, or
in connection with any other disposition of assets;
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Issuer;
(6) any Investments relating to a Receivables Subsidiary;
(7) loans or advances to employees (or guarantees of
third-party loans to employees) in the ordinary course of business or
pursuant to a stock loan program;
(8) stock, obligations or securities received in satisfaction
of judgments, foreclosure of liens or settlement of debts (whether
pursuant to a plan of reorganization or similar arrangement);
(9) receivables owing to the Issuer or any Restricted
Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms
(including such concessionary terms as the Issuer or such Restricted
Subsidiary deems reasonable);
(10) any Investment existing on the Closing Date or made
pursuant to legally binding written commitments in existence on the
Closing Date which Investment is disclosed in the Offering Memorandum;
(11) Investments in Interest Rate Agreements, Currency
Agreements and Commodity Hedging Agreements not otherwise prohibited
under this Certificate of Designation;
(12) any Investment in a Permitted Business having an
aggregate fair market value, taken together with all other Investments
made pursuant to this clause (12) that are at that time outstanding,
not to exceed 12.5% of Total Assets at the time of such Investment
(with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value);
and
(13) additional Investments having an aggregate fair market
value, taken together with all other Investments made pursuant to this
clause (13) that are at that time outstanding, not to exceed 2.5% of
Total Assets at the time of such Investment (with the fair market value
of each Investment being measured at the time made and without giving
effect to subsequent changes in value).
"Permitted Joint Venture Subsidiary Preferred Stock" means any
Preferred Stock of a Joint Venture Subsidiary issued upon formation of such
Joint Venture Subsidiary to a joint
-44-
<PAGE>
venture partner (other than a financial institution or other Person in the
business of investing in or underwriting securities).
"Permitted Refinancing Debt" means any Debt of the Issuer or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which are
used to extend, refinance, renew, replace, defease or refund other Debt of the
Issuer or any of its Restricted Subsidiaries incurred in compliance with this
Certificate of Designation; provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Debt does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest on, the Debt so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable premium and fees and expenses incurred in connection therewith);
(2) in the case of term Debt, principal payments required under such
Permitted Refinancing Debt have a Stated Maturity no earlier than the earlier of
(A) the Stated Maturity of those under the Debt being refinanced and (B) the
maturity date of the Notes, and such Permitted Refinancing Debt has a Weighted
Average Life to Maturity equal to or greater than the lesser of the Weighted
Average Life to Maturity of the Debt being extended, refinanced, renewed,
replaced, defeased or refunded and the Weighted Average Life to Maturity of the
Notes; and
(3) such Debt is incurred either by the Restricted Subsidiary who is
the obligor on the Debt being extended, refinanced, renewed, replaced, defeased
or refunded or by the Issuer.
The Issuer may incur Permitted Refinancing Debt not more than six
months prior to the application of the proceeds thereof to repay the Debt to be
refinanced; provided that upon the incurrence of such Permitted Refinancing
Debt, the Issuer shall provide written notice thereof to the Trustee,
specifically identifying the Debt to be refinanced with Permitted Refinancing
Debt.
"Permitted Subsidiary Preferred Stock" means, any Preferred Stock of a
Restricted Subsidiary outstanding at the time such Person becomes a Restricted
Subsidiary and not issued in anticipation thereof.
"Permitted Transferee" means, with respect to any Person:
(1) any other Person, directly or indirectly, controlling or controlled
by or under direct or indirect common control with such specified Person; and
(2) any investment fund or investment entity that is a subsidiary of
such Person or a Permitted Transferee of such Person.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" means, with respect to any Person, any Capital Stock
of such Person (however designated) that is preferred as to the payment of
dividends or distributions, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person,
-45-
<PAGE>
over shares of Capital Stock of any other class of such Person. With respect to
the Issuer, "Preferred Stock" includes the Redeemable Preferred Stock.
"Pro Forma Cost Savings" means, with respect to any period ended on any
Calculation Date, the reductions in costs with respect to the applicable
four-quarter reference period that (1) are directly attributable to any
Investments, acquisitions, dispositions, mergers, consolidations or discontinued
operations and calculated on a basis that is consistent with Article 11 of
Regulation S-X under the Securities Act as in effect on the Closing Date or (2)
have begun to be implemented prior to the Calculation Date by, or have been
identified and approved in good faith by the Board of Directors of, the Issuer,
any Restricted Subsidiary or the business that was the subject of any such
Investments, acquisitions, dispositions, mergers, consolidations or discontinued
operations pursuant to a formalized plan, in the case of each of clause (1) and
(2), based on a supportable, good faith estimate of the Chief Financial Officer
or other senior financial officer of the Issuer and determined on a pro forma
basis as if all such reductions in costs had been effected as of the beginning
of such period, decreased by any incremental expenses (other than capitalized
expenses) incurred or to be incurred during the four-quarter reference period in
order to achieve such reduction in costs.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Issuer, any Restricted Subsidiary
or any Receivables Subsidiary pursuant to which the Issuer, any Restricted
Subsidiary or any Receivables Subsidiary may sell, convey or otherwise transfer
to, or grant a security interest in for the benefit of, (a) a Receivables
Subsidiary (in the case of a transfer or encumbrancing by the Issuer or a
Restricted Subsidiary) and (b) any other Person, accounts and other receivables
(whether now existing or arising in the future) of the Issuer or a Restricted
Subsidiary which arose in the ordinary course of business of the Issuer or a
Restricted Subsidiary, and any assets related thereto, including all collateral
securing such receivables, all contracts and all guarantees or other obligations
in respect of such receivables, proceeds of such receivables and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization or factoring
transactions involving receivables.
"Recapitalization" means the recapitalization of the Issuer pursuant to
which Saturn Acquisition Corporation was merged with and into the Issuer and the
financing transactions related thereto.
"Recapitalization Agreement" means the Agreement and Plan of Merger
dated as of December 27, 1999 by and between the Issuer and Saturn Acquisition
Corporation, as amended through the Closing Date.
"Receivables Subsidiary" means a Wholly Owned Subsidiary of the Issuer
which engages in no activities other than in connection with the financing of
receivables and related assets which is designated by the Board of Directors of
the Issuer as a Receivables Subsidiary (a) no portion of any Debt or any other
obligations (contingent or otherwise) of which, directly or indirectly,
contingently or otherwise, (1) is guaranteed by the Issuer or a Restricted
Subsidiary of the Issuer (excluding Standard Securitization Undertakings), (2)
is recourse to or obligates the Issuer or a Restricted Subsidiary of the Issuer
in any way other than pursuant to Standard Securitization Undertakings, or (3)
subjects any asset of the Issuer or a Restricted Subsidiary of
-46-
<PAGE>
the Issuer to the satisfaction thereof, other than Standard Securitization
Undertakings, (b) with which neither the Issuer nor a Restricted Subsidiary of
the Issuer has any material contract, agreement, arrangement or understanding
other than those customarily entered into in connection with the Qualified
Receivables Transactions, and (c) with which neither the Issuer nor a Restricted
Subsidiary of the Issuer has any obligation, directly or indirectly,
contingently or otherwise, to maintain or preserve such Subsidiary's financial
condition or cause such Subsidiary to achieve certain levels of operating
results.
"Redeemable Preferred Change of Control Offer" has the meaning ascribed
to it in paragraph (h)(i) of Article I.
"Redeemable Preferred Change of Control Payment" has the meaning
ascribed to it in paragraph (h)(i) of Article I.
"Redeemable Preferred Change of Control Payment Date" has the meaning
ascribed to it in paragraph (h)(iii)(2) of Article I.
"Redeemable Preferred Stock" has the meaning ascribed to it in
paragraph (a) of Article I.
"Redeemable Preferred Triggering Event" has the meaning ascribed to it
in paragraph (f)(iii) of Article I.
"Redeemable Redemption Date" has the meaning ascribed to it in
paragraph (e)(v)(A)(4) of Article I.
"Redeemable Redemption Notice" has the meaning ascribed to it in
paragraph (e)(v) of Article I.
"Registration Rights Agreement" means the Preferred Stock Registration
Rights Agreement dated as of the Closing Date between the Issuer and DB Capital
Investors, L.P.
"Regular Dividend Payment Date" means February 1, May 1, August 1 and
November 1 of each year, commencing August 1, 2000.
"Regular Dividend Record Date" means January 15, April 15, July 15 and
October 15 of each year.
"Regular Dividends" has the meaning ascribed to it in paragraph (c)(i)
of Article I.
"Resolution" has the meaning ascribed to it in the preamble to this
Certificate of Designation.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning ascribed to it in paragraph
(l)(ii) of Article I.
-47-
<PAGE>
"Restricted Payments Basket" has the meaning ascribed to it in
paragraph (l)(ii) of Article I hereof.
"Restricted Subsidiary" of a person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Revocation" has the meaning ascribed to it in paragraph (m) of Article
I hereof.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Senior Officer" means the Chief Executive Officer or the Chief
Financial Officer of the Issuer.
"Senior Stock" has the meaning ascribed to it in paragraph (b) of
Article I hereof.
"Special Dividends" has the meaning ascribed to it in paragraph (c)(vi)
of Article I hereof.
"Specified Affiliate Payments" means:
(1) the direct or indirect repurchase, redemption or other acquisition
or retirement for value of any Equity Interests of the Issuer or any Restricted
Subsidiary of the Issuer, held by any future, present or former employee,
director, officer or consultant of the Issuer (or any of its Restricted
Subsidiaries) pursuant to any management equity subscription agreement, stock
option agreement or plan, stock ownership plan, put agreement, stockholder
agreement or similar agreement that may be in effect from time to time; provided
that the aggregate price paid for all such repurchased, redeemed, acquired or
retired Equity Interests shall not exceed $5.0 million in any calendar year
(with unused amounts in any calendar year being carried over to succeeding
calendar years subject to a maximum amount of repurchases, redemptions or other
acquisitions or retirements pursuant to this clause (1) (without giving effect
to the immediately following proviso) of $10.0 million in any calendar year) and
no Redeemable Preferred Triggering Event resulting from a payment default shall
have occurred and been continuing; provided further that such amount in any
calendar year may be increased by an amount not to exceed:
(a) the cash proceeds received by the Issuer (including by way
of capital contribution) since the Closing Date from the sale of Junior
Equity Interests of the Issuer to employees, directors, officers or
consultants of, the Issuer or its Subsidiaries that occurs in such
calendar year (it being understood that such cash proceeds shall be
excluded from clause (c)(ii) of the first paragraph under Article I,
paragraph (l)(ii) hereof; plus
(b) the cash proceeds from key man life insurance policies
received by the Issuer and its Restricted Subsidiaries in such calendar
year (including proceeds from the sale of such policies to the person
insured thereby); provided further that cancellation of Debt owing to
the Issuer from employees, directors, officers or consultants of the
Issuer or any of its Subsidiaries in connection with a repurchase of
Junior Equity Interests of the
-48-
<PAGE>
Issuer will not be deemed to constitute a Restricted Payment for
purposes of this Certificate of Designation;
(2) repurchases of Equity Interests deemed to occur upon exercise of
stock options or warrants as a result of the payment of all or a portion of the
exercise price of such options or warrants with Equity Interests; and
(3) payments by the Issuer to shareholders or members of management of
the Issuer and its Subsidiaries in connection with the Recapitalization that are
reflected as adjustments to the pro forma financial statements included in the
Offering Memorandum.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Issuer or a Restricted
Subsidiary which are reasonably customary in a receivables securitization
transaction.
"Stated Maturity" means, (i) with respect to any class or series of
Debt (including any Debt security), any installment of interest on or principal
of, or any other amount payable in respect of, any such class or series of Debt,
the date on which such interest, principal or other amount is scheduled to be
paid in the documentation governing such Debt, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest,
principal or other amount prior to the date scheduled for the payment thereof,
and (ii) with respect to any other security, the date specified in such security
when the principal amount, liquidation amount or other similar amount thereof is
due and payable in accordance with the terms of such security, including,
pursuant to any mandatory redemption provision.
"Subsidiary" means, with respect to any Person:
(1) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other Subsidiaries
of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof). Unless otherwise specified,
"Subsidiary" refers to a Subsidiary of the Issuer.
"Total Assets" means, at any time, the total consolidated assets of the
Issuer and its Restricted Subsidiaries at such time, determined in accordance
with GAAP. For the purposes of clause (4) of the second paragraph of (l)(i) of
Article I of this Certificate of Designation, Total Assets shall be determined
giving pro forma effect to the lease, acquisition, construction or improvement
of the assets being leased, acquired, constructed or improved with the proceeds
of the relevant Debt.
"Transfer Agent" means any transfer agent with respect to the
Redeemable Preferred Stock appointed by the Issuer, after the Closing Date at
its option.
-49-
<PAGE>
"Transfer Restricted Securities" has the meaning ascribed to it in
Article III hereof.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H. 15(519)
which has become publicly available at least two Business Days prior to the
redemption date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data)) most nearly equal to the
period from the redemption date to the First Call Date, provided, however, that
if the period from the redemption date to the First Call Date is not equal to
the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the redemption date to the First Call Date
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Issuer that is designated an Unrestricted
Subsidiary by the Board of Directors of the Issuer in the manner provided in
paragraph (m) of Article I hereof, and
(2) any Subsidiary of an Unrestricted Subsidiary;
but only to the extent permissible under this Certificate of Designation, as
described above under paragraph (m) of Article I hereof.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any Debt at
any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect thereof,
by (b) the number of years (calculated to the nearest one-twelfth) that will
elapse between such date and the making of such payment, by
(2) the then outstanding principal amount of such Debt.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person.
-50-
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Certificate of Designation
to be signed by its Treasurer, this 10th day of May, 2000.
JOSTENS, INC., a Minnesota Corporation
By /s/ Lee U. McGrath
-------------------------------------
Name: Lee U. McGrath
Title: Vice President and Treasurer
<PAGE>
EXHIBIT 4.4
================================================================================
WARRANT AGREEMENT
Between
JOSTENS, INC.
and
THE BANK OF NEW YORK,
as
Warrant Agent
----------------
Dated as of May 10, 2000
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Appointment of Warrant Agent.....................................4
SECTION 2. Warrant Certificates.............................................4
SECTION 3. Execution of Warrant Certificates................................5
SECTION 4. Registration and Countersignature................................5
SECTION 5. Transfer and Exchange of Warrants................................5
SECTION 6. Registration of Transfers and Exchanges..........................6
(a) Transfer and Exchange of Warrants...........................6
(b) Restrictions on Transfer of a Definitive Warrant for
a Beneficial Interest in a Global Warrant.................7
(c) Transfer or Exchange of Global Warrants.....................8
(d) Transfer or Exchange of a Beneficial Interest in a
Global Warrant for a Definitive Warrant...................8
(e) Restrictions on Transfer or Exchange of Global Warrants....10
(f) Authentication of Definitive Warrants in Absence of
Depositary...............................................10
(g) Cancellation or Adjustment of a Global Warrant.............10
(h) Legends....................................................10
(i) Obligations with Respect to Transfers and Exchanges
of Definitive and Global Warrants........................11
(j) Payment of Taxes...........................................11
SECTION 7. Terms of Warrants; Exercise of Warrants.........................11
SECTION 8. Payment of Taxes................................................14
SECTION 9. Mutilated or Missing Warrant Certificates.......................15
SECTION 10. Reservation of Warrant Shares...................................15
SECTION 11. Obtaining Stock Exchange Listings...............................16
SECTION 12. Adjustment of Number of Warrant Shares Issuable.................16
(a) Adjustment for Change in Capital Stock.....................16
i
<PAGE>
(b) Adjustment for Certain Sales of Common Stock Below
Current Market Value.....................................17
(c) Adjustment upon Certain Distributions......................19
(d) Notice of Adjustment.......................................21
(e) Reorganization of Company; Fundamental Transaction.........21
(f) Other Events...............................................22
(g) Company Determination Final................................22
(h) Warrant Agent's Adjustment Disclaimer......................22
(i) Specificity of Adjustment..................................22
(j) Voluntary Adjustment.......................................23
(k) Multiple Adjustments.......................................23
(l) When De Minimis Adjustment May Be Deferred.................23
(m) Tag-Along Transfers........................................23
(n) Amendments of the Articles of Incorporation................24
SECTION 13. Fractional Interests............................................24
SECTION 14. Notice of Certain Distributions; Certain Rights.................24
SECTION 15. Notices to the Company and Warrant Agent........................24
SECTION 16. Supplements and Amendments......................................25
SECTION 17. Concerning the Warrant Agent....................................26
SECTION 18. Change of Warrant Agent.........................................29
SECTION 19. Identity of Transfer Agent......................................29
SECTION 20. SEC Reports and Other Information...............................29
SECTION 21. Successors......................................................30
SECTION 22 Termination.....................................................30
SECTION 23. Governing Law...................................................30
SECTION 24. Benefits of This Agreement......................................30
SECTION 25. Counterparts....................................................30
Exhibit A Class E Common Stock Purchase Warrant of Jostens, Inc.
Exhibit B(1) Private Placement Legend
Exhibit B(2) Unit Legend
ii
<PAGE>
Exhibit B(3) Global Warrant Legend
Exhibit C Certificate to be Delivered upon Exchange or Registration of
Transfer of Warrants
Exhibit D Form of Transferee Letter of Representation in Connection
with Transfers to Institutional Accredited Investors
Exhibit E Form of Transferee Letter of Representation in Connection with
Transfers Pursuant to Regulation S
iii
<PAGE>
WARRANT AGREEMENT (the "Agreement"), dated as of May 10, 2000, between
JOSTENS, INC., a Minnesota corporation (together with any successors and
assigns, the "Company"), and THE BANK OF NEW YORK, as warrant agent (with any
successor warrant agent, the "Warrant Agent").
A. Pursuant to a purchase agreement (the "Purchase Agreement") dated
May 5, 2000 between the Company and Deutsche Bank Securities Inc., UBS Warburg
LLC and Goldman, Sachs & Co. (the "Initial Purchasers"), the Company has agreed
to sell to the Initial Purchasers 225,000 units (the "Units"), each consisting
of (i) $1,000 principal amount of 12 3/4% Senior Subordinated Notes due 2010
(the "Notes") of the Company and (ii) one warrant (collectively, the
"Warrants"), each Warrant initially entitling the holder thereof to purchase
1.889155 shares of Class E Common Stock (as defined herein) of the Company.
B. The Notes and the Warrants comprising the Units shall not be
separately transferable until the Separability Date (as defined herein).
C. The holders of the Warrants are entitled to the benefits of a
Registration Rights Agreement dated as of May 10, 2000 by and between the
Company and the Initial Purchasers (the "Warrant Registration Rights
Agreement").
D. The Company desires the Warrant Agent as warrant agent to assist the
Company in connection with the issuance, exchange, cancellation, replacement and
exercise of the Warrants, and in this Agreement wishes to set forth, among other
things, the terms and conditions on which the Warrants may be issued, exchanged,
canceled, replaced and exercised.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein, the Company and the Warrant Agent hereby agree as follows:
Defined terms used in this Agreement shall, unless the context
otherwise requires, have the meanings specified below. Certain additional terms
are set forth elsewhere in this Agreement. Any reference to any section of
applicable law shall be deemed to include successor provisions thereto.
"Affiliate" has the meaning given to it in the Indenture.
"Business Day" means any day that is not a Saturday, Sunday or a day on
which banking institutions in New York are authorized or required by law to be
closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated
and whether voting or non-voting) of such Person's capital stock, whether
outstanding on the Issue Date or issued
<PAGE>
-2-
after the Issue Date, and any and all rights (other than any evidence of
indebtedness), warrants or options exchangeable for or convertible into such
capital stock.
"class" means, when referring to any Capital Stock, any class or series
of such Capital Stock.
"Class A Common Stock" means the Class A Common Stock of the Company,
par value $0.33-1/3 per share.
"Class E Common Stock" means the Class E Common Stock of the Company,
par value $0.01 per share. Each issued and outstanding share of Class E Common
Stock is convertible at the option of the holder thereof into one share of Class
A Common Stock at any time commencing 30 days after the original date of
issuance of such share of Class E Common Stock.
"Common Stock" means all shares of Capital Stock of the Company,
whether or not denominated as "common stock," which are entitled to share
ratably in the ordinary dividends of the Company or share ratably in the
proceeds of any liquidation of the Company after the payment of all preferential
claims, and shall include, without limitation, the Class A Common Stock, Class B
Common Stock, Class C Common Stock, Class D Common Stock or Class E Common Stock
of the Company authorized on the Issue Date.
"Convertible Security" shall mean any securities convertible or
exercisable or exchangeable into Common Stock of the Company of the same class
as Warrant Shares, whether outstanding on the Issue Date or thereafter issued.
"DB Capital Warrants" means the warrants issued on the Issue Date to DB
Capital Investors, L.P. to purchase shares of Class E Common Stock.
"Distribution Compliance Period" means the period from the Issue Date
through the first anniversary of the Issue Date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer Registration Statement" means the registration
statement to be filed by the Company under the Securities Act with respect to
the exchange of the Notes for Exchange Notes (as defined in the Note
Registration Rights Agreement).
"Guarantor" means American Yearbook Company, Inc.
"Indenture" means the indenture dated as of May 10, 2000, among the
Company, the Guarantor and The Bank of New York, as trustee, relating to the
Notes.
<PAGE>
-3-
"Independent Financial Expert" means a nationally recognized
independent investment banking firm, appraisal or accounting firm.
"Initial Public Equity Offering" means a primary public offering
(whether or not underwritten) of Common Stock pursuant to an effective
registration statement under the Securities Act, but excluding any offering
pursuant to Form S-8 (or any successor form) under the Securities Act or any
other publicly registered offering pursuant to the Securities Act pertaining to
an issuance of shares of Common Stock or securities exercisable therefor under
any benefit plan, employee compensation plan, or employee or director stock
purchase plan.
"Issue Date" means May 10, 2000, the date of the Indenture.
"Note Registration Rights Agreement" means the Registration Rights
Agreement dated as of May 10, 2000 among the Company, the Guarantor and the
Initial Purchasers relating to the registration of the Notes.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Separability Date" means the earliest of: (1) the date which is 210
days after the Issue Date; (2) the date on which an Event of Default has
occurred or the time immediately prior to the occurrence of a Change of Control
(each as such term is defined in the Indenture); (3) the date on which a
registration statement filed pursuant to the Note Registration Rights Agreement
has become effective; (4) the date immediately preceding an Initial Public
Equity Offering; (5) the date on which a "Transfer Notice" is given by a holder
of Class D Common Stock in respect of a proposed "Tag-Along Transfer," as
contemplated by article IV of the amended and restated articles of incorporation
of the Company; and (6) such earlier date that Deutsche Bank Securities Inc., in
its sole discretion, notifies the Company is the Separability Date.
"Time of Determination" means (i) in the case of any distribution of
securities or other property to existing shareholders to which Section 12(b) or
12(c) applies, the time and date of the determination of shareholders entitled
to receive such securities or property or (ii) in the case of any other issuance
and sale to which Section 12(b) or 12(c) applies, the time and date of such
issuance or sale.
"Warrant Shares" means the shares of Class E Common Stock or other
securities issuable upon exercise of Warrants from time to time.
<PAGE>
-4-
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. Warrant Certificates. (a) The certificates representing the
Warrants ("Warrant Certificates") will initially be issued either in global form
(the "Global Warrants") or in registered form as definitive Warrant Certificates
(the "Definitive Warrants"), in either case substantially in the form of Exhibit
A attached hereto. Any Global Warrants to be delivered pursuant to this
Agreement shall bear the legend set forth in Exhibit B(3) attached hereto. The
Global Warrants shall represent such of the outstanding Warrants as shall be
specified therein, and each Global Warrant shall provide that it shall represent
the aggregate amount of outstanding Warrants from time to time endorsed thereon
and that the aggregate amount of outstanding Warrants represented thereby may
from time to time be reduced or increased, as appropriate. Any endorsement of a
Global Warrant to reflect the amount of any increase or decrease in the amount
of outstanding Warrants represented thereby shall be made by the Warrant Agent
and the Depositary in accordance with instructions given by the holder thereof.
The Depository Trust Company ("DTC") shall act as the "Depositary" with respect
to the Global Warrants until a successor shall be appointed by the Company and
the Warrant Agent. Upon written request, a holder of Warrants may receive from
the Warrant Agent or the Depositary Definitive Warrants as set forth in Section
6 hereof.
(b) Warrants sold in offshore transactions in reliance on Regulation S
will initially be represented by one or more temporary legended Global Warrants
in definitive, fully registered form (each a "Legended Regulation S Global
Warrant") and shall bear a legend substantially to the effect set forth in
Exhibit B(1). The Company may execute, and the Warrant Agent shall countersign
and deliver, Legended Regulation S Global Warrant Certificates, which are
printed, lithographed, typewritten or otherwise produced, substantially of the
tenor of the definitive Warrant Certificates in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Warrant Certificates may determine, as
evidenced by their execution of such Warrant Certificates. The Legended
Regulation S Global Warrants will be exchangeable for one or more unlegended
permanent Global Warrants on or after the first anniversary of the Issue Date.
Subject to the provisions of Section 5 hereof, such exchange shall be without
charge to the holder. Upon surrender for cancellation of any one or more
Legended Regulation S Global Warrant Certificates, the Company shall execute,
and the Warrant Agent shall countersign and deliver in exchange therefor, one or
more unlegended permanent global Warrant Certificates representing in the
aggregate a like number of Warrants. Until so exchanged, the holder of a
Legended Regulation S Global Warrant Certificate shall in all respects be
entitled to the same benefits under this Agreement as a holder of an unlegended
permanent global Warrant Certificate.
<PAGE>
-5-
SECTION 3. Execution of Warrant Certificates. Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board,
President, Chief Executive Officer, a Vice President, Treasurer, an Assistant
Treasurer or Chief Financial Officer and by its Secretary or an Assistant
Secretary under its corporate seal. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of any such present or
future officer and may be imprinted or otherwise reproduced on the Warrant
Certificates.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
Warrant Certificates shall be dated the date of countersignature by the
Warrant Agent.
SECTION 4. Registration and Countersignature. The Warrants shall be
numbered and shall be registered on the books of the Company maintained at the
principal office of the Warrant Agent in the Borough of Manhattan, City of New
York (the "Warrant Register") as they are issued.
Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board, the
President, Chief Executive Officer, a Vice President, the Treasurer, an
Assistant Treasurer, Chief Financial Officer, Secretary or an Assistant
Secretary of the Company, initially countersign and deliver Warrants entitling
the holders thereof to purchase not more than the number of Warrant Shares
referred to above in the first recital hereof and shall thereafter countersign
and deliver Warrants as otherwise provided in this Agreement.
The Company and the Warrant Agent may deem and treat the registered
holders (the "Holders" or "Warrantholders") of the Warrant Certificates as the
absolute owners thereof (notwithstanding any notation of ownership or other
writing thereon made by anyone) for all purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary.
SECTION 5. Transfer and Exchange of Warrants. The Warrant Agent shall
from time to time, subject to the limitations of Section 6, register the
transfer of any outstanding Warrants upon the records to be maintained by it for
that purpose, upon surrender
<PAGE>
-6-
thereof duly endorsed or accompanied (if so required by it) by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent,
duly executed by the registered Holder or Holders thereof or by the duly
appointed legal representative thereof or by a duly authorized attorney. Subject
to the terms of this Agreement, each Warrant Certificate may be exchanged for
another certificate or certificates entitling the Holder thereof to purchase a
like aggregate number of Warrant Shares as the certificate or certificates
surrendered then entitle each Holder to purchase. Any Holder desiring to
exchange a Warrant Certificate or Certificates shall make such request in
writing delivered to the Warrant Agent, and shall surrender, duly endorsed or
accompanied (if so required by the Warrant Agent) by a written instrument or
instruments of transfer in form satisfactory to the Warrant Agent, the Warrant
Certificate or Certificates to be so exchanged.
Upon registration of transfer, the Company shall execute and the
Warrant Agent shall countersign and deliver by certified mail a new Warrant
Certificate or Certificates to the persons entitled thereto. The Warrant
Certificates may be exchanged at the option of the Holder thereof, when
surrendered at the office or agency of the Company maintained for such purpose,
which initially will be the corporate trust office of the Warrant Agent in New
York, New York for another Warrant Certificate, or other Warrant Certificates of
different denominations, of like tenor and representing in the aggregate the
right to purchase a like number of Warrant Shares.
No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that is
imposed in connection with any such exchange or registration of transfer.
SECTION 6. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Warrants. When Warrants are presented to
the Warrant Agent with a request:
(i) to register the transfer of the Warrants; or
(ii) to exchange such Definitive Warrants for an equal
number of Warrants of other authorized denominations,
the Warrant Agent shall register the transfer or make the exchange as requested
if (and may refuse to register any transfer or exchange unless) the requirements
under this Agreement as set forth in this Section 6 for such transactions are
met; provided, however, that the Warrants presented or surrendered for
registration of transfer or exchange:
<PAGE>
-7-
(x) shall be duly endorsed or accompanied by a written instruction
of transfer in form satisfactory to the Company and the
Warrant Agent, duly executed by the holder thereof or by his
or her attorney, duly authorized in writing; and
(y) in the case of Warrants the offer and sale of which have not
been registered under the Securities Act, such Warrants shall
be accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable,
it being understood, however, that the Warrant Agent need not
determine which clause (A) through (D) below is applicable:
(A) if such Warrant is being delivered to the Warrant
Agent by a holder for registration in the name of
such holder, without transfer, a certification from
such holder to that effect (in substantially the form
of Exhibit C); or
(B) if such Warrant is being transferred to a qualified
institutional buyer (as defined in Rule 144A under
the Securities Act ("Rule 144A")) (a "QIB") in
accordance with Rule 144A or pursuant to an exemption
from registration in accordance with Rule 144 or
Regulation S under the Securities Act, a
certification to that effect (in substantially the
form of Exhibit C); or
(C) if such Warrant is being transferred to an
institutional accredited investor within the meaning
of subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of
Rule 501 under the Securities Act (an "Institutional
Accredited Investor"), delivery of a Certificate of
Transfer (in substantially the form of Exhibit D) and
an opinion of counsel and/or other information
reasonably acceptable to the Company to the effect
that such transfer is in compliance with the
Securities Act; or
(D) if such Warrant is being transferred in reliance on
another exemption from the registration requirements
of the Securities Act, a certification to that effect
from the transferee or transferor (in substantially
the form of Exhibit C), and an opinion of counsel
from the transferee or transferor reasonably
acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act. If
such transfer is made specifically pursuant to
Regulation S, delivery by the transferor must also
deliver a Certificate for Regulation S Transfers in
substantially the form of Exhibit E.
(b) Restrictions on Transfer of a Definitive Warrant for a Beneficial
Interest in a Global Warrant. A Definitive Warrant may not be transferred by a
holder for a beneficial interest in a Global Warrant except upon satisfaction of
the requirements set forth below.
<PAGE>
-8-
Upon receipt by the Warrant Agent of a Definitive Warrant, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Warrant Agent, together with:
(i) certification from such holder (in substantially the form of
Exhibit C) that such Definitive Warrant is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act; and
(ii) written instructions directing the Warrant Agent to make, or
to direct the Depositary to make, an endorsement on the Global
Warrant to reflect an increase in the aggregate amount of the
Warrants represented by the Global Warrant,
then the Warrant Agent shall cancel such Definitive Warrant and cause, or direct
the Depositary to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Warrant Agent, the number of
Warrant Shares represented by the Global Warrant to be increased accordingly. If
no Global Warrant is then outstanding, the Company shall issue and the Warrant
Agent shall upon written instructions from the Company authenticate a new Global
Warrant in the appropriate amount.
(c) Transfer or Exchange of Global Warrants. The transfer or exchange
of Global Warrants or beneficial interests therein shall be effected through the
Depositary, in accordance with this Section 6, the Private Placement Legend set
forth in Exhibit B(1), this Agreement (including the restrictions on transfer
set forth herein) and the procedures of the Depositary therefor.
(d) Transfer or Exchange of a Beneficial Interest in a Global Warrant
for a Definitive Warrant.
(i) Any Person having a beneficial interest in a Global Warrant
may transfer or exchange such beneficial interest for a
Definitive Warrant upon receipt by the Warrant Agent of
written instructions or such other form of instructions as is
customary for the Depositary from the Depositary or its
nominee on behalf of any Person having a beneficial interest
in a Global Warrant, including a written order containing
registration instructions and the following additional
information and documents:
(A) if such beneficial interest is being transferred to
the Person designated by the Depositary as being the
beneficial owner, a certification from such Person to
that effect (in substantially the form of Exhibit C);
or
<PAGE>
-9-
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities
Act, a certification from the transferor to that
effect (in substantially the form of Exhibit C); or
(C) if such beneficial interest is being transferred to
an Institutional Accredited Investor, delivery of a
Certificate of Transfer to that effect (in
substantially the form of Exhibit D) and an opinion
of counsel and/or other information reasonably
acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(D) if such beneficial interest is being transferred in
reliance on another exemption from the registration
requirements of the Securities Act, a certification
to that effect from the transferee or transferor to
that effect (in substantially in the form of Exhibit
C) and an opinion of counsel and/or other information
reasonably acceptable to the Company to the effect
that such transfer is in compliance with the
Securities Act (if such transfer is made specifically
pursuant to Regulation S, the transferor must also
deliver a Certificate for Regulation S Transfers in
substantially the form of Exhibit E),
then the Warrant Agent will cause, in accordance with the
standing instructions and procedures existing between the
Depositary and the Warrant Agent, the aggregate amount of the
Global Warrant to be reduced and, following such reduction,
the Company will execute and, upon receipt of an
countersignature order in the form of an officers' certificate
(a certificate signed by two officers of the Company, one of
whom must be the principal executive officer, principal
financial officer or principal accounting officer) (an
"Officers' Certificate"), the Warrant Agent will countersign
and deliver to the transferee a Definitive Warrant.
(ii) Definitive Warrants issued in exchange for a beneficial
interest in a Global Warrant pursuant to this Section 6 shall
be registered in such names and in such authorized
denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall
instruct the Warrant Agent in writing. The Warrant Agent shall
deliver such Definitive Warrants to the Persons in whose names
such Warrants are so registered and adjust the Global Warrant
pursuant to paragraph (h) of this Section 6.
<PAGE>
-10-
(e) Restrictions on Transfer or Exchange of Global Warrants.
Notwithstanding any other provisions of this Agreement (other than the
provisions set forth in subsection (f) of this Section 6), a Global Warrant may
not be transferred or exchanged as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Countersignature of Definitive Warrants in Absence of Depositary.
If at any time:
(i) the Depositary for the Global Warrants notifies the
Company that the Depositary is unwilling or unable to
continue as Depositary for the Global Warrants and a
successor Depositary for the Global Warrant is not
appointed by the Company within 90 days after
delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the
Warrant Agent in writing that it elects to cause the
issuance of Definitive Warrants for all Global
Warrants under this Agreement,
then the Company will execute, and the Warrant Agent will, upon receipt of an
Officers' Certificate requesting the countersignature and delivery of Definitive
Warrants, countersign and deliver Definitive Warrants, in an aggregate number
equal to the aggregate number of Warrants represented by the Global Warrant, in
exchange for such Global Warrant.
(g) Cancellation or Adjustment of a Global Warrant. At such time as all
beneficial interests in a Global Warrant have either been exchanged for
Definitive Warrants, redeemed, repurchased or canceled, such Global Warrant
shall be returned to the Company or, upon written order to the Warrant Agent in
the form of an Officers' Certificate from the Company, retained and canceled by
the Warrant Agent. At any time prior to such cancellation, if any beneficial
interest in a Global Warrant is exchanged for Definitive Warrants, redeemed,
repurchased or canceled, the number of Warrants represented by such Global
Warrant shall be reduced and an endorsement shall be made on such Global Warrant
by the Warrant Agent to reflect such reduction.
(h) Legends.
(i) Private Placement Legend. Except as permitted by the
following sentence, each Warrant Certificate
evidencing the Warrants (and all Warrants issued in
exchange therefor or substitution thereof and, if the
Company deems appropriate, Warrant Shares issuable
upon exercise of the Warrants) shall bear a legend
substantially to the effect set forth in Exhibit
B(1). Upon any sale or transfer of a Warrant or
Warrant Share
<PAGE>
-11-
pursuant to Rule 144 under the Securities Act in
accordance with this Section 6 or under an effective
registration statement under the Securities Act, the
Warrant Agent shall permit the holder of a Warrant to
exchange such Warrant for a Definitive Warrant and
the Company shall permit the holder of a Warrant
Share to exchange such Warrant Share for a share of
Common Stock, in each case, that does not bear the
legend set forth in Exhibit B(1).
(ii) Unit Legend. Each Warrant issued prior to the
Separability Date shall bear a legend substantially
to the effect set forth in Exhibit B(2).
(i) Obligations with Respect to Transfers and Exchanges of Definitive
and Global Warrants.
(i) To permit registrations of transfers and exchanges,
the Company shall execute, at the Warrant Agent's
request, and the Warrant Agent shall authenticate
Definitive and Global Warrants.
(ii) All Definitive and Global Warrants issued upon any
registration, transfer or exchange of Definitive and
Global Warrants shall be the valid obligations of the
Company, entitled to the same benefits under this
Agreement as the Definitive and Global Warrants
surrendered upon the registration of transfer or
exchange.
(iii) Prior to due presentment for registration of transfer
of any Warrant, the Warrant Agent and the Company may
deem and treat the Person in whose name any Warrant
is registered as the absolute owner of such Warrant,
and neither the Warrant Agent nor the Company shall
be affected by notice to the contrary.
(j) Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the initial issuance of the Warrant Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for the Warrant Shares in
a name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates or any certificates for
the Warrant Shares unless or until the Person or Persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
SECTION 7. Terms of Warrants; Exercise of Warrants. Subject to the
terms of this Agreement, each Warrantholder shall have the right, which may be
exercised
<PAGE>
-12-
commencing on or after the Separability Date and until 5:00 p.m., New York City
time, on May 1, 2010 (the "Expiration Date"), to receive from the Company upon
the exercise of each Warrant the number of fully paid and nonassessable Warrant
Shares which the holder may at the time be entitled to receive on exercise of
such Warrants and payment of the Exercise Price (as defined) for such Warrant
Shares. Each Warrant not exercised prior to the Expiration Date shall become
void and all rights thereunder and all rights in respect thereof under this
Agreement shall cease as of such time. No adjustments as to dividends will be
made upon exercise of the Warrants.
The price per share at which Warrant Shares shall be purchasable upon
exercise of Warrants (the "Exercise Price") regardless of the Exercise Rate (as
defined) then in effect, shall be equal to $0.01. A Warrant may be exercised
upon surrender at the office or agency of the Company maintained for such
purpose, which initially will be at the principal office of the Company, of the
Warrant Certificate or Certificates evidencing the Warrants to be exercised with
the form of election to purchase on the reverse thereof (the "Election to
Exercise") duly filled in and signed, which signature shall be guaranteed by a
participant in a recognized Signature Guarantee Medallion Program.
The "Exercise Date" for a Warrant shall be the date when all of the
items referred to in the immediately preceding sentence are received by the
Warrant Agent at or prior to 11:00 a.m., New York City time, on a Business Day
and the exercise of the Warrants will be effective as of such Exercise Date. If
any items referred to in such sentence are received after 11:00 a.m., New York
City time, on a Business Day, the exercise of the Warrants to which such item
relates will be effective on the next succeeding Business Day. Notwithstanding
the foregoing, in the case of an exercise of Warrants on the Expiration Date, if
all of the items referred to in such sentence are received by the Warrant Agent
at or prior to 5:00 p.m., New York City time, on the Expiration Date, the
exercise of the Warrants to which such items relate will be effective on the
Expiration Date.
The Exercise Price may be paid only by the surrender of one or more
Warrant Certificates (and without the payment of the Exercise Price in cash) in
exchange for a number of Warrant Shares equal to the product of (a) the number
of Warrant Shares for which such Warrant is exercisable as of the Exercise Date
(if the Exercise Price were being paid in cash), and (b) the Cashless Exercise
Ratio. The "Cashless Exercise Ratio" shall equal a fraction, the numerator of
which is the excess of the Current Market Value per Warrant Share on the
Exercise Date over the Exercise Price per Warrant Share as of the Exercise Date
and the denominator of which is the Current Market Value per Warrant Share on
the Exercise Date. Upon surrender of a Warrant Certificate representing more
than one Warrant in connection with the holder's option to exercise, the number
of Warrant Shares deliverable upon exercise shall be equal to the product of the
number of Warrant Shares issuable in respect of those Warrants that the holder
specifies are to be exercised pursuant to a Cashless Exercise multiplied by the
Cashless Exercise Ratio. All provisions of this Agreement shall be
<PAGE>
-13-
applicable with respect to a surrender of a Warrant Certificate for less than
the full number of Warrants represented thereby.
"Current Market Value" per share of any class of Common Stock of the
Company at any date shall mean:
(1) if no class of Common Stock is then registered under the
Exchange Act and traded on a national securities exchange or on the
Nasdaq National Market System,
(a) the value of such class of Common Stock,
determined in good faith by the board of directors of the
Company and certified in a board resolution, taking into
account the most recently completed arm's-length transaction
between the Company and a Person other than an Affiliate of
the Company and the closing of which occurs on such date or
shall have occurred within the six-month period preceding such
date, or
(b) if no such transaction shall have occurred on
such date or within such six-month period, the fair market
value of the security as determined by a nationally recognized
Independent Financial Expert; provided that, in the case of
the calculation of Current Market Value for determining the
cash value of fractional shares, any such determination within
six months that is, in the good faith judgment of the board of
directors, a reasonable determination of value may be
utilized, or
(2) (a) if any class of Common Stock is then registered under
the Exchange Act and traded on a national securities exchange
or on the Nasdaq National Market System, the average of the
daily closing sales prices of such class of Common Stock for
the 20 consecutive trading days immediately preceding such
date, or
(b) if such class of Common Stock has been registered
under the Exchange Act and traded on a national securities
exchange or on the Nasdaq National Market System for less than
20 consecutive trading days before such date, then the average
of the daily closing sales prices for all of the trading days
before such date for which closing sales prices are available,
in the case of each of (2)(a) and (2)(b), as certified to the
Warrant Agent by the Chief Executive Officer, the President,
any Executive Vice President or the Chief Financial Officer of
the Company. The closing sales price for each such trading day
shall be the closing sales price, regular way, on such day or,
if no sale takes place on such day, the average of the closing
bid and asked prices on such day. The Current Market Value of
the Class E Common Stock shall be deemed to be equal to the
Current Market Value of the Class A Common Stock.
<PAGE>
-14-
Subject to the provisions of Section 6 hereof, upon such surrender of
Warrants, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Holder and in such name or names as
the Warrantholder may designate a certificate or certificates for the number of
Warrant Shares issuable upon the exercise of such Warrants. Such certificate or
certificates shall be deemed to have been issued and any Person so designated to
be named therein shall be deemed to have become a holder of record of such
Warrant Shares as of the date of the surrender of such Warrants. At the election
of the Company with the consent of the holder of record of the relevant Warrant
Shares, Warrant Shares may initially be issued in global form (the "Global
Shares"). Such Global Shares shall represent such of the outstanding Warrant
Shares as shall be specified therein and each Global Share shall provide that it
represents the aggregate amount of outstanding Warrant Shares from time to time
endorsed thereon and that the aggregate amount of outstanding Warrant Shares
represented thereby may from time to time be reduced or increased, as
appropriate. Any endorsement of a Global Share to reflect any increase or
decrease in the amount of outstanding Warrant Shares represented thereby shall
be made by the registrar for the Warrant Shares and the Depositary (referred to
below) in accordance with instructions given by the holder thereof. DTC shall
(if possible) act as the Depositary with respect to the Global Shares until a
successor shall be appointed by the Company and the registrar for the Warrant
Shares.
The Warrants shall be exercisable only in whole. In the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrants evidenced thereby at any time prior to the date of expiration of the
Warrants, a new certificate evidencing the remaining Warrant or Warrants will be
issued, and the Warrant Agent is irrevocably authorized to countersign and to
deliver the required new Warrant Certificate or Certificates pursuant to this
Agreement, and the Company, whenever required by the Warrant Agent, will
promptly supply the Warrant Agent with Warrant Certificates duly executed on
behalf of the Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled by the Warrant Agent. Such canceled Warrant Certificates shall then be
disposed of by the Warrant Agent in a manner consistent with the Warrant Agent's
customary procedure for such disposal and in a manner reasonably satisfactory to
the Company. The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Holders during
normal business hours at its office. The Company shall supply the Warrant Agent
from time to time with such numbers of copies of this Agreement as the Warrant
Agent may request.
SECTION 8. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes
<PAGE>
-15-
which may be payable in respect of any transfer involved in the issue of any
Warrant Certificates or any certificates for Warrant Shares in a name other than
that of the registered holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such Warrant Certificates unless or until the Person or Persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 9. Mutilated or Missing Warrant Certificates. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may at its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity also satisfactory to them.
SECTION 10. Reservation of Warrant Shares. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Class E Common Stock or its authorized
and issued Class E Common Stock held in its treasury, for the purpose of
enabling it to satisfy its obligation to issue Warrant Shares upon exercise of
Warrants, the maximum number of shares of Class E Common Stock which may then be
deliverable upon the exercise of all outstanding Warrants. The Company will at
all times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Class A Common Stock or its authorized
and issued Class A Common Stock held in its treasury, for the purpose of
enabling it to satisfy its obligation to issue shares of Class A Common Stock
upon conversion of all shares of Class E Common Stock issuable upon exercise of
all Warrants, the maximum number of shares of Class A Common Stock issuable upon
conversion of all shares of Class E Common Stock issuable upon exercise of all
Warrants.
The Company or, if appointed, the transfer agent for the Class A Common
Stock and the Class E Common Stock (the "Transfer Agent") and every subsequent
transfer agent for any shares of the Company's Capital Stock issuable upon the
exercise of any of the rights of purchase aforesaid will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
as shall be required for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent and with every subsequent transfer
agent for any shares of the Company's Capital Stock issuable upon the exercise
of the rights of purchase represented by the Warrants. The Warrant Agent is
hereby irrevocably authorized to requisition from time to time from such
Transfer Agent the stock certificates required to honor outstanding Warrants
upon exercise thereof in accordance with the terms of this Agreement. The
Company will supply such Transfer Agent with duly executed certificates for such
purposes and will provide or otherwise make available any cash which
<PAGE>
-16-
may be payable as provided in Section 13. The Company will furnish such Transfer
Agent a copy of all notices of adjustments and certificates related thereto
transmitted to each holder pursuant to Section 14 hereof.
The Company covenants that all Warrant Shares which may be issued upon
exercise of Warrants made in accordance with the terms of this Agreement will,
upon issuance, be validly authorized and issued, fully paid, nonassessable, free
of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof. The Company covenants that all
shares of Class A Common Stock issuable upon conversion of all shares of Class E
Common Stock issuable upon exercise of all Warrants in accordance with this
Agreement will, upon issuance, be validly authorized and issued, fully paid,
nonassessable, free of preemptive rights and free from all taxes, liens, charges
and security interests with respect to the issuance thereof. The Company will
take no action to increase the par value of the Class E Common Stock to an
amount in excess of the Exercise Price, and the Company will not enter into any
agreements inconsistent with the rights of Holders hereunder. The Company will
use its reasonable best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Agreement.
SECTION 11. Obtaining Stock Exchange Listings. The Company will from
time to time take all action which may be necessary so that the Warrant Shares,
immediately upon their issuance upon the exercise of Warrants, will be listed on
the principal securities exchanges and markets within the United States of
America (including the Nasdaq National Market System), if any, on which the
Class A Common Stock or the Class E Common Stock is then listed. In the event
that, at any time during the period in which the Warrants are exercisable, the
Class E Common Stock is not listed on any principal securities exchanges or
markets within the United States of America, the Company will use its best
efforts to permit the Warrant Shares to be designated Portal securities in
accordance with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in The Portal Market.
SECTION 12. Adjustment of Number of Warrant Shares Issuable. The number
of shares of Class E Common Stock issuable upon the exercise of each Warrant
(the "Exercise Rate") is subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 12. The Exercise Rate shall
initially be 1.889155.
(a) Adjustment for Change in Capital Stock. If, after the Issue Date,
the Company:
(i) pays a dividend or makes a distribution on shares of any
class of its Common Stock payable in shares of its Common Stock or
other Capital Stock of the Company (except to the extent any such
dividend results in the grant, issuance, sale or
<PAGE>
-17-
making of Distribution Rights or Distributions to holders of Warrants
pursuant to Section 12(c));
(ii) subdivides or splits any of its outstanding shares of any
class of Common Stock into a greater number of shares;
(iii) combines any of its outstanding shares of any class of
Common Stock into a smaller number of shares; or
(iv) issues by reclassification of any class of its Common
Stock any shares of any of its Capital Stock;
then the Exercise Rate in effect immediately prior to such action for each
Warrant then outstanding shall be adjusted by multiplying the Exercise Rate in
effect immediately prior to such action by a fraction (A) the numerator of which
shall be the number of shares of all classes of Common Stock outstanding
immediately after such action and (B) the denominator of which shall be the
number of shares of all classes of Common Stock outstanding immediately prior to
such action or the record date applicable to such action, if any (regardless of
whether the Warrants then outstanding are then exercisable). The adjustment
shall become effective immediately after the record date in the case of a
dividend or distribution and immediately after the effective date in the case of
a subdivision, combination or reclassification. In the event that such dividend
or distribution is not so paid or made or such subdivision, combination or
reclassification is not effected, the Exercise Rate shall again be adjusted to
be the Exercise Rate which would then be in effect if such record date or
effective date had not been so fixed.
If after an adjustment a holder of a Warrant upon exercise of such
Warrant may receive shares of two or more classes of Capital Stock of the
Company, the Exercise Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is contemplated by this Section 12 with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Section 12.
(b) Adjustment for Certain Sales of Common Stock Below Current Market
Value. If, after the Issue Date, the Company (i) grants or sells to any
Affiliate of the Company (other than a subsidiary of the Company) or (ii)
grants, sells or offers to grant or sell to all holders of any class of Common
Stock, any shares of any class of Common Stock or any securities convertible
into or exchangeable or exercisable for any class of Common Stock (other than
(1) pursuant to the exercise of the Warrants, (2) pursuant to any security
convertible into, or exchangeable or exercisable for, shares of Common Stock
outstanding as of the Issue Date, (3) upon the conversion, exchange or exercise
of any convertible, exchangeable or exercisable security as to which upon the
issuance thereof an adjustment pursuant to this Section 12 has been made or (4)
upon the conversion, exchange or exercise of
<PAGE>
-18-
convertible, exchangeable or exercisable securities of the Company outstanding
on the Issue Date (to the extent in accordance with the terms of such securities
as in effect on such date), including any DB Capital Warrants) at a price below
the then Current Market Value, the Exercise Rate for each Warrant then
outstanding shall be adjusted in accordance with the formula:
E/1/ = E x (O+N)
-----------------
(O + (N x P/M))
where:
E/1/ = the adjusted Exercise Rate for each Warrant then outstanding;
E = the then current Exercise Rate for each Warrant then
outstanding;
O = the aggregate number of shares of Common Stock of all classes
outstanding immediately prior to the sale of such Common Stock
or issuance of securities convertible, exchangeable or
exercisable for Common Stock;
N = the number of shares of Common Stock of any class so sold or
the maximum stated number of shares of Common Stock of any
class issuable upon the conversion, exchange or exercise of
any such convertible, exchangeable or exercisable securities,
as the case may be;
P = the proceeds per share of Common Stock of the relevant class
received by the Company, which (i) in the case of shares of
Common Stock of any class is the amount received by the
Company in consideration for the sale and issuance of such
shares; and (ii) in the case of securities convertible into or
exchangeable or exercisable for shares of Common Stock of any
class is the amount received by the Company in consideration
for the sale and issuance of such convertible or exchangeable
or exercisable securities, plus the minimum aggregate amount
of additional consideration, other than the surrender of such
convertible or exchangeable securities, payable to the Company
upon exercise, conversion or exchange thereof; and
M = the Current Market Value as of the Time of Determination or at
the time of sale, as the case may be, of a share of Common
Stock of the relevant class.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the rights, warrants
or options to which this paragraph (b) applies or upon consummation of the sale
of Common Stock, as the case
<PAGE>
-19-
may be. To the extent that shares of Common Stock are not delivered after the
expiration of such rights, warrants or options, the Exercise Rate for each
Warrant then outstanding shall be readjusted to the Exercise Rate which would
otherwise be in effect had the adjustment made upon the issuance of such rights,
warrants or options been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. In the event that such rights or
warrants are not so issued, the Exercise Rate for each Warrant then outstanding
shall again be adjusted to be the Exercise Rate which would then be in effect if
such date fixed for determination of shareholders entitled to receive such
rights, warrants or options had not been so fixed.
No adjustment shall be made under this paragraph (b) if the application
of the formula stated above in this paragraph (a) would result in a value of E1
that is lower than the value of E.
No adjustment shall be made under this paragraph (b) for any adjustment
which is the subject of paragraphs (a) and (d) of this Section 12.
Notwithstanding the foregoing, no adjustment in the Exercise Rate will
be required in respect of: (a) the grant of any stock option or other stock
incentive award pursuant to any stock option or stock incentive plan or
arrangement as disclosed in the Offering Memorandum dated May 5, 2000 relating
to the Units, (b) the grant of any stock option or stock incentive award at an
exercise price at least equal to the lesser of $25.25 per share (other than in
the case of Class D Common Stock) or the then Current Market Value, (c) the
grant of any other stock option or stock incentive award to any officer,
director or employee of the Company or any of its Subsidiaries pursuant to any
compensatory plan or arrangement that has been approved by the Company's Board
of Directors, or (d) the exercise of any such option or award.
(c) Adjustment upon Certain Distributions.
(i) If at any time after the Issue Date the Company grants,
issues or sells options, any Convertible Security, or rights to
purchase Capital Stock or other securities (other than Common Stock)
pro rata to the record holders of any class or series of Common Stock
("Distribution Rights") or, without duplication, makes any distribution
(other than a distribution pursuant to a plan of liquidation) (a
"Distribution") on shares of any class of Common Stock (whether in
cash, property, evidences of indebtedness, or otherwise), then the
Exercise Rate shall be adjusted in accordance with the formula:
E/1/ = E x (M/(M-F))
where:
<PAGE>
-20-
E/1/ = the adjusted Exercise Rate;
E = the current Exercise Rate for each Warrant;
M = the Current Market Value per Warrant Share at the Time of
Determination;
F = the fair market value at the Time of Determination of such
portion of the options, Convertible Securities, Capital Stock
or other securities, cash, property or assets distributable
pursuant to such Distribution Rights or Distribution per share
of outstanding Common Stock.
The adjustment shall become effective immediately after the Time of
Determination with respect to the shareholders entitled to receive the options,
Convertible Securities, warrants, cash, property, evidences of indebtedness or
other securities or assets to which this paragraph (c)(i) applies. No adjustment
shall be made under this paragraph (c) if the application of the formula stated
above in this paragraph (c)(i) would result in a value of E1 that is lower than
the value of E. This paragraph (c)(i) does not apply to any securities which
result in an adjustment pursuant to paragraphs (a) or (b) of this Section 12.
(ii) Notwithstanding the provisions of paragraph (c)(i) of this Section
12, an event which would otherwise give rise to an adjustment pursuant to
Section 12(c)(i) shall not give rise to such adjustment if the Company grants,
issues or sells Distribution Rights to the Holders of Warrants or includes the
holders of the Warrants in such Distribution, in each case on a pro rata basis,
assuming for the purpose of this Section 12(c)(ii) that (x) all outstanding
shares of Common Stock are of one class and (y) the Warrants had been exercised.
(iii) Notwithstanding anything to the contrary set forth in this
Section 12(c), if, at any time, the Company makes any distribution pursuant to
any plan of liquidation (a "Liquidating Distribution") on shares of Class A
Common Stock or Class E Common Stock (whether in cash, property, evidences of
indebtedness or otherwise), then, subject to applicable law, the Company shall
make to each Holder of Warrants the aggregate Liquidating Distribution which
such Holder would have acquired if such Holder had held the maximum number of
shares of Class E Common Stock acquirable upon the complete exercise of each
Holder's Warrants (regardless of whether the Warrants are then exercisable)
immediately before the Time of Determination of shareholders entitled to receive
Liquidating Distributions; provided that any Holder of Warrants may elect to
receive Liquidating Distributions on the basis that such Holder held the maximum
number of shares of Class A Common Stock into which the shares of Class E Common
Stock described in this sentence could be converted (without reference to any
required holding period) immediately before the Time of Determination of
shareholders entitled to receive Liquidating Distributions.
<PAGE>
-21-
(d) Notice of Adjustment. Whenever the Exercise Rate is adjusted, the
Company shall promptly mail to holders of Warrants then outstanding at the
addresses appearing on the Warrant Register a notice of the adjustment. The
Company shall file with the Warrant Agent and any other Registrar such notice
and a certificate from the Company's independent public accountants briefly
stating the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence that the adjustment is correct, absent
manifest error. Neither the Warrant Agent nor any such Registrar shall be under
any duty or responsibility with respect to any such certificate except to
exhibit the same during normal business hours to any holder desiring inspection
thereof.
(e) Reorganization of Company; Fundamental Transaction.
(i) If the Company, in a single transaction or through a
series of related transactions, consolidates with or merges with or
into any other person or sells, assigns, transfers, leases, conveys or
otherwise disposes of all or substantially all of its properties and
assets to another person or group of affiliated persons or is a party
to a merger or binding share exchange which reclassifies or changes its
outstanding Common Stock (a "Fundamental Transaction"), as a condition
to consummating any such transaction the person formed by or surviving
any such consolidation or merger if other than the Company or the
person to whom such transfer has been made (the "Surviving Person")
shall enter into a supplemental warrant agreement. The supplemental
warrant agreement shall provide (a) that the holder of a Warrant then
outstanding may exercise the Warrant for the kind and amount of
securities, cash or other assets which such holder would have received
immediately after the Fundamental Transaction if such holder had
exercised the Warrant and, if such Warrant is then exercisable into
shares of a class of Common Stock (such as Class E Common Stock as
constituted on the Issue Date) that is convertible into shares of
another class of Common Stock (such as Class A Common Stock as
constituted on the Issue Date) if such holder had converted such
Warrant Shares into such other class of Common Stock, in each case
immediately before the effective date of the transaction (whether or
not the Warrants were then exercisable), it being understood that the
Warrants will remain exercisable only in accordance with their terms so
that conditions to exercise will remain applicable, such as surrender
of the Warrant Certificate, assuming (to the extent applicable) that
such holder (i) was not a constituent person or an affiliate of a
constituent person to such transaction, (ii) made no election with
respect thereto, and (iii) was treated alike with the plurality of
non-electing holders, and (b) that the Surviving Person shall succeed
to and be substituted to every right and obligation of the Company in
respect of this Agreement and the Warrants. The supplemental warrant
agreement shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this Section 12. The Surviving Person shall mail to holders of Warrants
at the addresses appearing on the Warrant Register a notice briefly
describing the supplemental warrant agreement. If the issuer of
securities deliverable upon exercise of Warrants is an affiliate of the
Surviving Person, that issuer shall join in the supplemental warrant
agreement.
<PAGE>
-22-
(ii) Notwithstanding the foregoing, if the Company enters into
a Fundamental Transaction with another Person (other than a subsidiary
of the Company) and consideration is payable to holders of shares of
Capital Stock (or other securities or property) issuable or deliverable
upon exercise of the Warrants that are exercisable in exchange for such
shares in connection with such Fundamental Transaction which
consideration consists solely of cash (assuming (to the extent
applicable) that each such holder (i) was not a constituent person or
an affiliate of a constituent person to such transaction, (ii) made no
election with respect thereto, and (iii) was treated alike with the
plurality of non-electing holders), then the holders of Warrants shall
be entitled to receive distributions on the date of such event on an
equal basis with holders of such shares (or other securities issuable
upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event, less the aggregate Exercise Price
therefor. Upon receipt of such payment, if any, the rights of a holder
of such Warrant shall terminate and cease and such holder's Warrants
shall expire.
(iii) If this paragraph (e) applies, it shall supersede the
application of paragraph (a) of this Section 12.
(f) Other Events. If any event occurs as to which the provisions of
this Section 12 are not strictly applicable or, if strictly applicable, would
not, in the good faith judgment of the Board of Directors of the Company, fairly
and adequately protect the rights of the Warrantholders in accordance with the
essential intent and principles of such provisions, then such Board of Directors
shall make such adjustments in the application of such provisions, in accordance
with such essential intent and principles, as shall be reasonably necessary, in
the good faith opinion of such Board of Directors, to protect such rights as
aforesaid, but in no event shall any such adjustment have the effect of
decreasing the Exercise Rate or decreasing the number of Warrant Shares issuable
upon exercise of the Warrants.
(g) Company Determination Final. Any determination that the Company or
the board of directors of the Company must make pursuant to this Section 12
shall be conclusive, absent manifest error.
(h) Warrant Agent's Adjustment Disclaimer. The Warrant Agent shall have
no duty to determine when an adjustment under this Section 12 should be made,
how it should be made or what it should be. The Warrant Agent shall have no duty
to determine whether a supplemental warrant agreement under paragraph (e) need
be entered into or whether any provisions of any supplemental warrant agreement
are correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Section 12.
(i) Specificity of Adjustment. Regardless of any adjustment in the
number or kind of shares purchasable upon the exercise of the Warrants, Warrant
Certificates theretofore
<PAGE>
-23-
or thereafter issued may continue to express the same number and kind of Warrant
Shares per Warrant as are stated on the Warrant Certificates initially issuable
pursuant to this Agreement.
(j) Voluntary Adjustment. The Company from time to time may increase
the Exercise Rate by any number and for any period of time; provided that such
period is not less than 20 Business Days. Whenever the Exercise Rate is so
increased, the Company shall mail to holders at the addresses appearing on the
Warrant Register and file with the Warrant Agent a notice of the increase. The
Company shall give the notice at least 15 days before the date the increased
Exercise Rate takes effect. The notice shall state the increased Exercise Rate
and the period it will be in effect. A voluntary increase in the Exercise Rate
shall not change or adjust the Exercise Rate otherwise in effect as determined
by this Section 12.
(k) Multiple Adjustments. After an adjustment to the Exercise Rate for
outstanding Warrants under this Section 12, any subsequent event requiring an
adjustment under this Section 12 shall cause an adjustment to the Exercise Rate
for outstanding Warrants as so adjusted.
(l) When De Minimis Adjustment May Be Deferred. No adjustment in the
Exercise Rate shall be required unless such adjustment would require an increase
or decrease of at least 1% in such rate; provided, however, that any adjustments
which by reason of the foregoing are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
shall be made by the Issuer and shall be rounded to the sixth decimal place. No
adjustment need be made for a change in the par value or no par value of the
Class A Common Stock or Class E Common Stock and no adjustment shall be deferred
beyond the date on which a Warrant is exercised.
(m) Tag-Along Transfers.
(i) If the Company receives any Transfer Notice by a holder of
Class D Common Stock in respect of a proposed Tag-Along Transfer, as
contemplated by Article IV, Section 4 of the Amended and Restated
Articles of Incorporation of the Company (the "Articles"), the Company
shall promptly provide a copy of such notice to each Holder of a
Warrant.
(ii) Notwithstanding anything herein to the contrary, upon a
Tag-Along Transfer of a number of shares of Class D Common Stock equal
to or greater than 80% of the outstanding shares of Class D Common
Stock, then to the extent the Warrants shall not have been exercised or
the holder of the Warrant Shares issued upon such exercise shall not
have given a Tag-Along Notice in each case on or before the Tag-Along
Acceptance Date, such Warrants shall be subject to redemption pursuant
to Article IV, Section 5 of the Articles and the Holders thereof shall
be entitled to receive the Tag-Along Redemption Price (reduced by the
aggregate Exercise Price payable by such Holders), in each case as if
such Warrants had been exercised immediately prior to the Tag-Along
Acceptance Date. Upon receipt of such
<PAGE>
-24-
payment, if any, the rights of a holder of such Warrant shall terminate
and cease and such holder's Warrants shall expire.
(iii) Capitalized terms not otherwise defined in this Section
12(m) have the meanings set forth in the Articles.
(n) Amendments of the Articles of Incorporation. The Company shall not
amend Section 4, Section 5, Section 6(b) or Section 8 of Article IV of its
Articles of Incorporation in a manner that adversely affects the holders of
Warrants, without the prior consent of the holders of a majority of the Warrants
outstanding (excluding Warrants held by the Company or any of its Affiliates).
SECTION 13. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 13,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the Current Market Value per
Warrant Share on the day immediately preceding the date the Warrant is presented
for exercise, multiplied by such fraction.
SECTION 14. Notice of Certain Distributions; Certain Rights. The
Company shall give prompt written notice to the Warrant Agent and shall cause
the Warrant Agent, on behalf of and at the expense of the Company to give to
each Holder written notice of any determination to make a distribution to the
holders of its Common Stock of any cash dividends, assets, debt securities,
preferred stock, or any rights or warrants to purchase debt securities,
preferred stock, assets or other securities (other than Common Stock, or rights,
options, or warrants to purchase Common Stock) of the Company, which notice
shall state the nature and amount of such planned dividend or distribution and
the record date therefor, and shall be received by the Holders at least 20 days
prior to such record date therefor.
Except as expressly provided in this Agreement or in any Warrant
Certificate, the Holders shall have no right to vote, to consent, to exercise
any preemptive rights or to receive notice as shareholders in respect of the
meetings of shareholders or the election of directors of the Company or any
other matter, or any rights whatsoever as shareholders of the Company.
SECTION 15. Notices to the Company and Warrant Agent. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent or
by any Holder to or on the Company shall be sufficiently given or made when
received at the office of the Company expressly designated by the Company as its
office for purposes of this
<PAGE>
-25-
Agreement (until the Warrant Agent is otherwise notified in accordance with this
Section 15 by the Company), as follows:
Jostens Inc. copies to:
5501 Norman Center Drive Gibson, Dunn & Crutcher, LLP
Minneapolis, Minnesota 55437 200 Park Avenue
Attn: General Counsel 47th Floor
New York, NY 10166
Attn: Joerg H. Esdorn
Any notice pursuant to this Agreement to be given by the Company or by
any Holder(s) to the Warrant Agent shall be sufficiently given when received by
the Warrant Agent at the address appearing below (until the Company is otherwise
notified in accordance with this Section by the Warrant Agent).
The Bank of New York
101 Barclay Street, 21W
New York, NY 10286
Attn: Corporate Trust Trustee Administration
Any notice or communication to a holder shall be mailed by first class
mail, postage prepaid, to its address shown on the register kept by Warrant
Agent.
SECTION 16. Supplements and Amendments. (a) The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrants in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not in any way adversely affect the
interests of any holder of Warrants as evidenced by an opinion of counsel, which
may be in-house counsel, delivered to the Warrant Agent.
(b) No other amendment or modifications of any provision of this
Agreement or the Warrant Certificates or consent to any departure by the Company
therefrom, shall in any event be effective without written consent of the
Holders of a majority of the Warrants, excluding Warrants held by the Company or
any of its Affiliates. The consent of each Holder of Warrants affected shall be
required for any amendment pursuant to which the Exercise Price would be
increased or the Exercise Rate would be decreased (other than pursuant to
adjustments provided in this Agreement) or any of the adjustment provisions in
this Agreement would be changed in a manner that would have any such effect.
<PAGE>
-26-
After an amendment or modification under this Section 16 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing such amendment or modification. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment or modification.
In connection with any amendment or modification under this Section 16,
the Company may offer, but shall not be obligated to offer, to any Holder who
consents to such amendment or modification, consideration for such Holder's
consent, so long as such consideration is offered to all Holders.
(c) Executed or true and correct copies of any amendment or
modification effected pursuant to the provisions of this Section 16 shall be
delivered by the Company to each Holder of outstanding Warrants or Warrant
Shares forthwith following the date on which the same shall have been executed
and delivered by the Holder or Holders of the requisite percentage of
outstanding Warrant Shares (but only to the extent the Company has been provided
with the addresses for the Holders).
SECTION 17. Concerning the Warrant Agent. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the Holders, by their acceptance
of Warrants, shall be bound:
(a) The statements contained herein and in the Warrant Certificate
shall be taken as statements of the Company, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as describe
the Warrant Agent or any action taken by it. The Warrant Agent assumes no
responsibility with respect to the distribution of the Warrants except as herein
otherwise provided.
(b) The Warrant Agent shall be protected and shall not be responsible
for and shall incur no liability to the Company or any Holder for any failure of
the Company to comply with the covenants contained in this Agreement or in the
Warrants to be complied with by the Company.
(c) The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself (through
its employees) or by or through its attorneys or agents (which shall not include
its employees) and shall not be responsible for the misconduct of any attorney
or agent appointed with due care.
(d) The Warrant Agent may consult at any time with legal counsel
satisfactory to it (who may be counsel for the Company), and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder in
respect of any action taken, suffered or
<PAGE>
-27-
omitted by it hereunder in good faith and in accordance with the opinion or the
advice of such counsel.
(e) Whenever in the performance of its duties under this Agreement the
Warrant Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless such evidence in respect thereof be
herein specifically prescribed) may be deemed conclusively to be proved and
established by a certificate signed by the Chairman of the Board, the President,
one of the Vice Presidents, the Treasurer or the Secretary of the Company and
delivered to the Warrant Agent; and such certificate shall be full authorization
to the Warrant Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(f) The Company agrees to pay the Warrant Agent such compensation for
all services rendered by the Warrant Agent in the performance of its duties
under this Agreement as may be separately agreed in writing, to reimburse the
Warrant Agent for all expenses, taxes and governmental charges and other charges
of any kind and nature incurred by the Warrant Agent in the performance of its
duties under this Agreement (including, without limitation, reasonable fees and
expenses of counsel), and to indemnify the Warrant Agent and its agents,
employees, directors, officers and affiliates and save it and them harmless
against any and all liabilities, losses and expenses, including, without
limitation, judgments, costs and counsel fees, for anything done or omitted by
the Warrant Agent in the acceptance and performance of its duties under this
Agreement, except as a result of the Warrant Agent's gross negligence or bad
faith, including, without limitation, the costs and expenses of defending
against any claim (whether asserted by the Company, a Holder or any other
Person) of liability in the premises including reasonable attorneys' fees and
expenses. The provisions of this paragraph shall survive the resignation or
removal of the Warrant Agent and the termination of this Agreement.
(g) The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more holders shall furnish the Warrant
Agent with reasonable security and indemnity for any costs and expenses which
may be incurred, but this provision shall not affect the power of the Warrant
Agent to take such action as the Warrant Agent may consider proper, whether with
or without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant Agent
without the possession of any of the Warrants or the production thereof at any
trial or other proceeding relative thereto, and any such action, suit or
proceeding instituted by the Warrant Agent shall be brought in its name as
Warrant Agent, and any recovery of judgment shall be for the ratable benefit of
the holders, as their respective rights or interests may appear.
<PAGE>
-28-
(h) The Warrant Agent and any stockholder, director, officer or
employee ("Related Parties") of the Warrant Agent may buy, sell or deal in any
of the Warrants or other securities of the Company or become pecuniarily
interested in any transactions in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Warrant Agent under this Agreement or such director,
officer or employee. Nothing herein shall preclude the Warrant Agent or any
Related Party from acting in any other capacity for the Company or for any other
legal entity including, without limitation, acting as Transfer Agent or as a
lender to the Company or an affiliate thereof.
(i) The Warrant Agent shall act hereunder solely as agent, and its
duties shall be determined solely by the provisions thereof. The Warrant Agent
shall not be liable for anything which it may do or refrain from doing in
connection with this Agreement except for its own negligence or bad faith. No
implied duties or obligations shall be read into this Agreement against the
Warrant Agent.
(j) The Warrant Agent will be protected and will not incur any
liability or responsibility to the Company or to any holder for any action
taken, suffered or omitted by it in reliance on any notice, resolution, waiver,
consent, order, certificate, or other paper, document or instrument reasonably
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(k) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, Treasurer any Vice President or the
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and shall not be liable for any
action taken or suffered to be taken by it in good faith and without negligence
in accordance with instructions of any such officer or officers.
(l) By countersigning Warrant Certificates or by any other act
hereunder the Warrant Agent shall not be deemed to make any representations as
to validity or authorization of the Warrants or the Warrant Certificates (except
as to its countersignature thereon) or of any securities or other property
delivered upon exercise or tender of any Warrant, or as to the accuracy of the
computation of the Exercise Price or the number or kind or amount of stock or
other securities or other property deliverable upon exercise of any Warrant or
the correctness of the representations of the Company made in any certifications
that the Warrant Agent receives. The Warrant Agent shall not have any duty to
calculate or determine any adjustments with respect either to the Exercise Price
or the kind and amount of shares or other securities or any property receivable
by holders of Warrants upon the exercise or tender of Warrants required from
time to time, and the Warrant Agent shall have no duty or responsibility in
determining the accuracy or correctness of any such calculation.
<PAGE>
-29-
(m) No provision of this Agreement shall require the Warrant Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
SECTION 18. Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company 30
days' notice in writing. The Warrant Agent may be removed by like notice to the
Warrant Agent from the Company. If the Warrant Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any holder (who shall with such notice submit
his Warrant for inspection by the Company), then any holder or the resigning or
removed Warrant Agent may apply to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such court, the
duties of the Warrant Agent shall be carried out by the Company. Any successor
warrant agent, whether appointed by the Company or such a court, shall be a bank
or trust company in good standing, incorporated under the laws of the United
States of America or any State thereof or the District of Columbia and having at
the time of its appointment as warrant agent a combined capital and surplus of
at least $50,000,000. After appointment, the successor warrant agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor warrant agent
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for such purpose. Failure
to file any notice provided for in this Section 18, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Warrant Agent or the appointment of the successor warrant agent, as the
case may be. In the event of such resignation or removal, the Company or the
successor warrant agent shall mail by first class mail, postage prepaid, to each
Holder, written notice of such removal or resignation and the name and address
of such successor warrant agent.
SECTION 19. Identity of Transfer Agent. Forthwith upon the appointment
of any Transfer Agent for the Common Stock, or any other shares of the Company's
Capital Stock issuable upon the exercise of the Warrants, the Company shall file
with the Warrant Agent a statement setting forth the name and address of such
Transfer Agent.
SECTION 20. SEC Reports and Other Information. The Company shall at all
times provide the Warrant Agent and Holders of Warrants with such annual reports
and such information, documents and other reports as are specified in Sections
13 and 15(d) of the
<PAGE>
-30-
Exchange Act of documents and other reports to be so provided at the times
specified for the filing of such information, documents and reports under such
Sections of the Exchange Act. In addition, for so long as any Warrants remain
outstanding, the Company will furnish to the Holders and to prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, and, to beneficial holders of
Warrants, if not obtainable from the SEC, information of the type that would be
filed with the SEC pursuant to the foregoing provisions, upon the request of any
such holder. Delivery of such reports, information and documents to the Warrant
Agent is for informational purposes only and the Warrant Agent's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Warrant Agent is
entitled to rely exclusively on Officers' Certificates).
SECTION 21. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrant Agent or any holder
of Warrants shall bind and inure to the benefit of their respective successors
and assigns hereunder.
SECTION 22. Termination. This Agreement shall terminate on the
Expiration Date. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date if all Warrants have been exercised or redeemed pursuant to
this Agreement or the Company's Articles of Incorporation.
SECTION 23. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and shall be governed by and construed in accordance with the
laws of said State, without regard to the conflict of law rules thereof.
SECTION 24. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.
SECTION 25. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
<PAGE>
-31-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
JOSTENS, INC.
By: /s/ Robert C. Buhrmaster
------------------------------
Name: Robert C. Buhrmaster
Title: Chairman of the Board,
President and Chief
Executive Officer
THE BANK OF NEW YORK, as Warrant Agent
By: /s/ Terence Rawlins
------------------------------------
Name: Terence Rawlins
Title: Asst. Vice President
<PAGE>
Exhibit A
The Warrants represented by this certificate may be required to be
exercised upon the demand of the Company, upon the occurrence of certain events
specified in the amended and restated articles of incorporation of the Company.
The Company will furnish without charge to each holder who so requests a copy of
the amended and restated articles of incorporation of the Company.
This security is subject to mandatory redemption by the Company. Such
redemption can be accomplished without the certificates representing such
security being surrendered and whether or not the Company gives notice of such
redemption. The Company will furnish without charge to each securityholder who
so requests a full statement of the designations, preferences, limitations and
relative rights of each class of stock or series of stock of the Company
authorized to be issued, so far as they have been determined, and the authority
of the board of directors to determine the relative rights and preferences of
subsequent classes or series.
No. [ ]
CLASS E COMMON STOCK PURCHASE WARRANT
OF
JOSTENS, INC.
THIS CERTIFIES THAT [ ], or its registered assigns, is
the registered holder of ______________ Warrants (the "Warrants"). Each Warrant
entitles the holder thereof (the "Holder"), at its option at any time on or
after the Separability Date and subject to the provisions contained herein and
in the Warrant Agreement referred to below, to purchase from Jostens, Inc., a
Minnesota corporation (the "Company"), 1.889155 shares of Class E Common Stock,
par value $0.01 per share, of the Company at an exercise price per share equal
to $0.01 (the "Exercise Price").
This Warrant Certificate shall terminate and become void as of the
close of business on May 1, 2010 (the "Expiration Date") or, if earlier, upon
the exercise hereof as to all the shares of Class E Common Stock subject hereto.
The number of shares issuable upon exercise of the Warrants shall be subject to
adjustment from time to time as set forth in the Warrant Agreement (as defined).
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of May 10, 2000 (the "Warrant Agreement"), between
the Company and The Bank of New York, as Warrant Agent, and is subject to the
terms and provisions
A-1
<PAGE>
contained in the Warrant Agreement, to all of which terms and provisions the
Holder of this Warrant Certificate consents by acceptance hereof. The Warrant
Agreement is hereby incorporated herein by reference and made a part hereof.
Reference is hereby made to the Warrant Agreement for a full statement of the
respective rights, limitations of rights, duties and obligations of the Company
and the Warrantholders. Capitalized terms used but not defined herein shall have
the meanings ascribed thereto in the Warrant Agreement. A copy of the Warrant
Agreement may be obtained for inspection by the Holder hereof upon written
request to the Company at 5501 Norman Center Drive, Minneapolis, Minnesota
55437, Attn: General Counsel.
Subject to the terms of the Warrant Agreement, the Warrants may be
exercised upon surrender at the office or agency of the Company maintained for
such purpose, which initially will be the corporate trust office of the Warrant
Agent in New York, New York, of the certificate or certificates evidencing the
Warrants to be exercised with the form of election to purchase on the reverse
thereof duly filled in and signed, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price for the number of Warrant Shares in
respect of which such Warrants are then exercised. The Exercise Price may be
paid only by the surrender of one or more warrant certificates (and without the
payment of the Exercise Price in cash) in exchange for such number of shares of
Common Stock equal to the product of (a) the number of Warrant Shares for which
such Warrant is exercisable as of the Exercise Date (if the Exercise Price were
being paid in cash), and (b) the Cashless Exercise Ratio. The "Cashless Exercise
Ratio" shall equal a fraction, the numerator of which is the excess of the
Current Market Value per Warrant Share on the Exercise Date over the Exercise
Price per share as of the Exercise Date and the denominator of which is the
Current Market Value per Warrant Share on the Exercise Date. Upon surrender of a
Warrant Certificate representing more than one Warrant in connection with the
holder's option to elect a Cashless Exercise, the number of Warrant Shares
deliverable upon a Cashless Exercise shall be equal to the product of the number
of Warrant Shares issuable in respect of those Warrants that the holder
specifies are to be exercised pursuant to a Cashless Exercise multiplied by the
Cashless Exercise Ratio. All provisions of the Agreement shall be applicable
with respect to a surrender of a Warrant Certificate for less than the full
number of Warrants represented thereby.
The Warrants shall be exercisable only in whole. In the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrants evidenced thereby at any time prior to the date of expiration of the
Warrants, a new certificate evidencing the remaining Warrant or Warrants will be
issued, and the Warrant Agent is irrevocably authorized to countersign and to
deliver the required new Warrant Certificate or Certificates pursuant to the
Warrant Agreement, and the Company, whenever required by the Warrant Agent, will
promptly supply the Warrant Agent with Warrant Certificates duly executed on
behalf of the Company for such purpose.
A-2
<PAGE>
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent as such term is used in the Warrant Agreement.
As provided in the Warrant Agreement, the Exercise Rate is subject to
adjustment upon the happening of certain events.
The Company will pay all documentary stamp taxes attributable to the
initial issuance of Warrant Shares upon the exercise of Warrants; provided,
however, that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
The Company shall not be required to issue fractional Warrant Shares on
the exercise of Warrants. If more than one Warrant shall be presented for
exercise in full at the same time by the same holder, the number of full Warrant
Shares which shall be issuable upon the exercise thereof shall be computed on
the basis of the aggregate number of Warrant Shares purchasable on exercise of
the Warrants so presented. If any fraction of a Warrant Share would be issuable
on the exercise of any Warrants (or specified portion thereof), the Company
shall pay an amount in cash equal to the Current Market Value per Warrant Share
on the day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
All Warrant Shares issuable by the Company upon the exercise of the
Warrants shall, upon such issue, be duly and validly issued and fully paid and
non-assessable.
The Company and the Warrant Agent may deem and treat Holders of the
Warrant Certificates as the absolute owners thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone) for all purposes,
and neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
A-3
<PAGE>
The Warrants do not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
JOSTENS, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
DATED:
COUNTERSIGNED:
THE BANK OF NEW YORK,
as Warrant Agent
By:
-------------------------------
Authorized Signature
A-4
<PAGE>
FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
JOSTENS, INC.
The undersigned hereby irrevocably elects to exercise ________________
Warrants on the terms and conditions specified in the Warrant Certificate and
the Warrant Agreement, surrenders this Warrant Certificate and all right, title
and interest therein to Jostens, Inc. and directs that the Warrant Shares
deliverable upon the exercise of such Warrants be registered or placed in the
name and at the address specified below and delivered thereto.
Date: ____________, ____
Your Signature.______________________________________________________________
(Sign exactly as your name appears on the face
of this Warrant Certificate)
_____________________________________________________________________________
(Street Address)
_____________________________________________________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
____________________________________________
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
<PAGE>
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
2
<PAGE>
ASSIGNMENT FORM
To assign this Warrant, fill in the form below:
I or we assign and transfer this Warrant to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Warrant on the books
of the Company. The agent may substitute another to act for him.
_____________________________________________________________________________
Date: _____________________
Your Signature: _____________________________________________________________
(Sign exactly as your name appears on the face
of this Warrant Certificate)
Signature Guaranteed by:
____________________________________________
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Registrar, which
requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Registrar in addition to,
or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
<PAGE>
Exhibit B(1)
[Private Placement Legend]
Neither this security nor any security issuable upon the exercise
hereof has been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state or other jurisdiction.
Neither such security nor any interest or participation herein or therein may be
reoffered, sold, assigned, transferred, pledged, encumbered or otherwise
disposed of in the absence of such registration or unless such transaction is
exempt from, or not subject to, such registration. By its acquisition hereby
(but subject to certain rights to require registration of the warrants), the
holder (1) represents that (a) it is a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act), (b) it is an "accredited
investor" (as defined in Rule 501(a)(1), (2), (3), or (7) under the Securities
Act) or (c) it is a foreign purchaser and is acquiring this security outside the
United States within the meaning of Regulation S under the Securities Act; (2)
agrees that it will not prior to two years after the later to occur of (i) the
original issuance of the warrant evidenced hereby or (ii) acquisition thereof
from an affiliate of Jostens, Inc. (or such later date specified in the warrant
agreement referred to below, the "Resale Restriction Termination Date") resell
or otherwise transfer the warrant evidenced hereby, except pursuant to an
effective registration statement under the Securities Act or in a transaction
not requiring registration under the Securities Act (a) to Jostens, Inc. or any
subsidiary thereof, (b) inside the United States to a qualified institutional
buyer in compliance with Rule 144A under the Securities Act, (c) inside the
United States to an accredited investor that, prior to such transfer, furnishes
to The Bank of New York (or any successor, the "Warrant Agent") a signed letter
containing certain representations and agreements relating to the restriction on
transfer of the warrants evidenced hereby (the form of which letter can be
obtained from Jostens, Inc. or the Warrant Agent), (d) outside the United States
in compliance with Regulation S promulgated under the Securities Act, (e)
pursuant to any other available exemption from the registration requirements of
the Securities Act, including the exemption provided by Rule 144 under the
Securities Act (if available), subject in each of the foregoing cases to any
requirement of law that the disposition of the property of such holder be at all
times within such holder's control and to compliance with any applicable state
securities laws; and (3) agrees that it will deliver to each person to whom this
warrant is transferred a notice substantially to the effect of this legend. In
connection with any transfer of the warrant evidenced hereby prior to the
restriction termination date, in the case of certain transfers pursuant to
clause (2)(b), 2(c) or (2)(d), the holder must make certain certifications to
the Warrant Agent to confirm that such transfers are being made pursuant an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. In addition, in the case of any transfer
referred to in clause (2)(e) above, the holder must, prior to such transfer
furnish to the Warrant Agent such certifications, legal opinions or other
information as Jostens, Inc. or the Warrant Agent may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or in a
B-1-1
<PAGE>
transaction not subject to, the registration requirements of the Securities Act.
Hedging transactions involving this security or any security issuable upon
exercise hereof may not be conducted unless in compliance with the Securities
Act.
B-1-2
<PAGE>
Exhibit B(2)
[Unit Legend]
[Any Warrant issued on or after the Issue Date and prior to the
Separability Date shall bear the legend set forth in the following paragraph:]
The Warrants evidenced by this certificate are initially issued as part
of an issuance of units, each of which consists of $1,000 principal amount of
the 12 3/4% Senior Subordinated Notes due 2010 of Jostens, Inc. (the "Notes")
and one warrant (each, a "Warrant" and collectively, the "Warrants"), each
Warrant initially entitling the holder thereof to purchase 1.889155 shares of
Class E Common Stock, $0.01 par value, of Jostens, Inc. (the "Class E Common
Stock"). Prior to the Separability Date, the Warrants evidenced by this
certificate may not be transferred or exchanged separately from, and may be
transferred or exchange only together with, the Notes.
B-2-1
<PAGE>
Exhibit B(3)
[GLOBAL WARRANT LEGEND]
Any Global Warrant countersigned and delivered hereunder shall bear a
legend in substantially the following form:
This security is a Global Warrant within the meaning of the Warrant
Agreement hereinafter referred to and is registered in the name of a
depository or a successor depository. This security is not exchangeable
for securities registered in the name of a person other than the
depository or its nominee except in the limited circumstances described
in the Warrant Agreement, and no transfer of this security (other than
a transfer of this security as a whole by the depository to a nominee
of the depository or by a nominee of the depository to the depository
or another nominee of the depository) may be registered except in the
limited circumstances described in the Warrant Agreement. Unless this
certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the issuer
or its agent for registration of transfer, exchange, or payment, and
any certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), any transfer, pledge
or other use hereof for value or otherwise by or to any person is
wrongful inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
B-3-1
<PAGE>
Exhibit C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF WARRANTS
Re: Warrants to Purchase Class E Common Stock (the "Warrants")
of Jostens, Inc.
This Certificate relates to ________________________ Warrants held by
______________________ (the "Transferor").
The Transferor has requested the Warrant Agent by written order to
exchange or register the transfer of a Warrant or Warrants.
In connection with such request and in respect of each such Warrant,
the Transferor hereby certifies that the Transferor is familiar with the Warrant
Agreement dated as of May 10, 2000, between Jostens, Inc., a Minnesota
corporation, and The Bank of New York, as warrant agent (the "Warrant
Agreement"), relating to the above captioned Warrants and the restrictions on
transfers thereof as provided in Section 1.08 of such Warrant Agreement, and
that the transfer of this Warrant does not require registration under the
Securities Act of 1933, as amended (the "Act"), because*:
[_] Such Warrant is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 6(a)(y)(A) of the Warrant
Agreement).
[_] Such Warrant is being transferred to a qualified institutional
buyer (as defined in Rule 144A under the Act) in reliance on Rule 144A or is
being transferred in accordance with Regulation S under the Act.
[_] Such Warrant is being transferred in accordance with Rule 144 under
the Act.
[_] Such Warrant is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act, other than Rule
144A or Rule 144 or Regulation S under the Act. An opinion of counsel to the
effect that such transfer does not require registration under the Act
accompanies this Certificate.
C-1
<PAGE>
______________________________________
[INSERT NAME OF TRANSFEROR]
By:___________________________________
Date:___________________________
*Check applicable box.
C-2
<PAGE>
Exhibit D
[Form of Transferee Letter of Representation
in Connection with Transfers to Institutional Accredited Investors]
The Bank of New York
[address]
Ladies and Gentlemen:
In connection with our proposed purchase of warrants to purchase Class
E Common Stock, par value $0.01 per share (the "Securities"), of Jostens, Inc.
(the "Company"), we confirm that:
1. We understand that the Securities have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"),
and, unless so registered, may not be offered, sold or otherwise
transferred except as permitted in the following sentence. We agree on
our own behalf and on behalf of any investor account for which we are
purchasing Securities to offer, sell or otherwise transfer such
Securities prior to the date which is two years after the later of the
date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any
predecessor Securities) (the "Resale Restriction Termination Date")
only (a) to the Company, (b) pursuant to a registration statement which
has been declared effective under the Securities Act, (c) for so long
as the Securities are eligible for resale pursuant to Rule 144A under
the Securities Act, to a person we reasonably believe is a qualified
institutional buyer as defined in Rule 144A (a "QIB") that purchases
for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d)
pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of subparagraph
(a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501 under the Securities Act
that is acquiring the Securities for its own account or for the account
of such an institutional "accredited investor", for investment purposes
and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act, or (f) pursuant to
another available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any
requirement of law that the disposition of our property or the property
of such investor account or accounts be at all times within our or
their control and to compliance with any applicable state securities
laws. The foregoing restrictions on resale will not apply subsequent to
the Resale Restriction Termination Date. If any resale or other
transfer of the Securities is proposed to be made pursuant to clause
(e) above prior to the Resale Restriction Termination Date, the
transferor shall deliver a letter from the
D-1
<PAGE>
transferee substantially in the form of this letter to the warrant
agent under the Warrant Agreement pursuant to which the Securities were
issued (the "Warrant Agent") which shall provide, among other things,
that the transferee is an institutional "accredited investor" within
the meaning of subparagraph (a)(1), (a)(2), (a)(3) or (a)(7) of Rule
501 under the Securities Act and that it is acquiring such Securities
for investment purposes and not for distribution in violation of the
Securities Act. The Warrant Agent and the Company reserve the right
prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Securities pursuant to clause (c),
(d), (e) or (f) above to require the delivery of a written opinion of
counsel, certifications, and or other information satisfactory to the
Company and the Warrant Agent.
2. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (a)(2), (a)(3) or (a)(7) of Regulation D under the
Securities Act) purchasing for our own account or for the account of
such an institutional "accredited investor", and we are acquiring the
Securities for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution in violation of the
Securities Act and we have such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we and any accounts for
which we are acting are each able to bear the economic risk of our or
its investment for an indefinite period.
3. We are acquiring the Securities purchased by us for our own
account or for one or more accounts as to each of which we exercise
sole investment discretion.
D-2
<PAGE>
4. You and your counsel are entitled to rely upon this letter
and you are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby.
Very truly yours,
________________________________
(Name of Purchaser)
By:_____________________________
Date:___________________________
Upon transfer the Securities would be registered in the name of the new
beneficial owner as follows:
Name:______________________________
Address:___________________________
Taxpayer ID Number:________________
D-3
<PAGE>
Exhibit E
[Form of Transferee Letter of Representation
in Connection with Transfers Pursuant to Regulation S]
The Bank of New York
[Address]
Ladies and Gentlemen:
In connection with our proposed purchase of warrants (the "Securities")
to purchase Class E Common Stock, par value $0.01 per share, of Jostens, Inc.
(the "Company"), we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we represent that:
(1) The undersigned certifies that it is not a U.S. person and
is not acquiring the Securities for the account or benefit of any U.S.
person.
(2) The undersigned agrees to resell the Securities only in
accordance with the provisions of Regulation S, pursuant to
registration under the Securities Act of 1933 or pursuant to an
available exemption from registration.
(3) The undersigned agrees not to engage in hedging
transactions with regard to the Securities unless in compliance with
the Securities Act.
You and your counsel are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S under the
Securities Act.
Very truly yours,
(Name of Purchaser)
By:
----------------------------------
E-1
<PAGE>
Upon transfer the Securities would be registered in the name of the new
beneficial owner as follows:
Name:___________________________________
Address:________________________________
Taxpayer ID Number:_____________________
E-2
<PAGE>
EXHIBIT 4.5
WARRANT REGISTRATION RIGHTS AGREEMENT
-------------------------------------
THIS WARRANT REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
May 10, 2000, by and between JOSTENS, INC., a Minnesota corporation (the
"Company"), and Deutsche Bank Securities Inc., UBS Warburg LLC and Goldman,
Sachs & Co. (the "Initial Purchasers").
R E C I T A L S
This Agreement is entered into in connection with the Purchase Agreement by
and between the Company and the Initial Purchasers, dated as of May 5, 2000 (the
"Purchase Agreement"), which provides for, among other things, the issuance and
sale by the Company to the Initial Purchasers of 225,000 units consisting in the
aggregate of $225,000,000 principal amount of the Company's 12 3/4% Senior
Subordinated Notes due 2010 (the "Notes") and warrants to purchase 425,060
shares of Class E Common Stock of the Company. In order to induce the Initial
Purchasers to enter into the Purchase Agreement, the Company has agreed to
provide the registration rights set forth in this Agreement for the benefit of
the Initial Purchasers and any subsequent holder or holders of the Warrants and
Warrant Shares. The execution and delivery of this Agreement is a condition to
the Initial Purchasers' obligations under the Purchase Agreement. Capitalized
terms used without definition herein have the meanings given to them in the
Warrant Agreement (as defined below).
A G R E E M E N T
The Parties hereby agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Charter" means the Articles of Incorporation of the Company in effect
immediately following the Effective Time, as such Charter may thereafter
from time to time be amended in accordance with applicable law and such
Charter.
"Commission" means the U.S. Securities and Exchange Commission and any
successor federal agency having similar powers.
<PAGE>
-2-
"Effective Time" shall have the meaning ascribed to that term in the
Merger Agreement.
"Holders," as of any date of determination, means the holders of
record of Registrable Securities as of such date.
"Initial Public Offering" shall have the meaning ascribed to that term
in the Charter as in effect immediately following the Effective Time.
"Merger Agreement" means the merger agreement dated as of December 27,
1999 by and between the Company and Saturn Acquisition Corporation, a
Minnesota corporation.
"Person" means an individual, limited or general partnership, joint
venture, limited liability company, corporation, trust, unincorporated
organization or other entity or a government or any department or agency
thereof.
"Prospectus" means the Prospectus included in any Registration
Statement (including, without limitation, any Prospectus subject to
completion and a Prospectus that includes any information previously
omitted from a Prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act),
as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
"Registrable Securities," as of any date of determination, means (a)
the Warrants, (b) the Warrant Shares, (c) any shares of Capital Stock of
the Company issued upon conversion of any of the foregoing pursuant to the
Charter, (d) any shares of Capital Stock issued on account of any of the
foregoing in connection with any stock split or stock dividend effected
after the Effective Time, (e) equity securities of any other issuer issued
in exchange for any of the foregoing in connection with any merger,
consolidation, reorganization or recapitalization effected after the
closing Effective Time (other than equity securities of another issuer
which are issued pursuant to an effective Registration Statement under the
Securities Act), and (f) if notice has been given under Section 2(c)(i),
during the period that a Shelf Registration is required to be effective
under Section 2(c)(ii), any shares of Capital Stock that is of the same
class or series as any securities referred to in clause (b), (c), (d) or
(e). Notwithstanding the foregoing, any particular Registrable Securities
shall cease to be such when (i) a Registration Statement with respect to
the sale of such securities shall have become effective under the
Securities Act and such securities have been disposed of in accordance with
such Registration Statement or (ii) they shall have ceased to be
outstanding;
<PAGE>
-3-
provided that clause (i) shall not apply during the period that a Shelf
Registration is required to be effective under Section 2(c)(ii).
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with its obligations hereunder including,
without limitation, all Commission and any stock exchange registration,
listing, filing or NASD fees, all fees and expenses of complying with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications),
all messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits or "comfort" letters required by or incident
to such performance and compliance, any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities and the
reasonable fees and expenses of any special experts retained in connection
with the requested registration and the fees and disbursements of one
counsel for the Sellers (which counsel shall be selected by the holders of
a majority in interest of the Registrable Securities included in such
registration), but excluding underwriting discounts and commissions and
fees and disbursements of any additional counsel employed by any Seller.
"Registration Statement" means any Registration Statement of the
Company, including but not limited to a shelf Registration Statement, that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits,
and all material incorporated by reference or deemed to be incorporated by
reference in such Registration Statement.
"Seller" means any Holder whose Registrable Securities are included in
any registration pursuant to Section 2(a) or 2(b) of this Agreement.
"Warrant Agreement" means the Warrant Agreement dated as of May 10,
2000 between the Company and The Bank of New York, as warrant agent,
relating to the Warrants.
"Warrants" means the warrants issued by the Company pursuant to the
Purchase Agreement.
Certain other terms are defined elsewhere in this Agreement.
SECTION 2. Registration Rights.
(a) Demand Right.
(i) Commencing 90 days after the occurrence of the Initial Public
Offering (subject to any lock-up agreement under Section 2(f) that may be
in effect), Holders who beneficially own at least 25% of the total
outstanding Registrable Securities (assuming
<PAGE>
-4-
exercise of all Warrants) referred to in clauses (a)-(e) of the definition
thereof (the "Demanding Holders") shall have the right to require the
Company to register under the Securities Act all or a portion of such
number of Registrable Securities as such Demanding Holders shall designate
for sale in a written request to the Company (the "Demand Registration");
provided, however, that the Company shall have the right to delay the
Demand Registration for an aggregate of up to 60 days if the Board of
Directors of the Company determines in good faith (a "Registration Delay
Determination") that (i) required disclosure of information in any related
Registration Statement, Prospectus or prospectus supplement at such time
would have a material adverse effect on the Company's business, operations
or prospects or (ii) a material business transaction that has not yet been
publicly disclosed would be required to be disclosed in a Registration
Statement, Prospectus or prospectus supplement and such disclosure would
jeopardize the success of such transaction. The Company shall not be
required to effect more than one Demand Registration.
(ii) The Company will not, without the written consent of a majority
in interest of the Demanding Holders, include in any Demand Registration
securities for sale for the account of any Person (including the Company)
other than the Demanding Holders, except that the Company shall include
securities held by other holders of securities of the Company from time to
time having the contractual right to be so included (subject to the
applicable provisions of this Agreement).
(b) Piggyback Registration Rights.
If the Company proposes to file a Registration Statement with respect
to common equity securities of the Company in connection with or after the
Initial Public Offering (excluding any Registration Statement on Form S-8
or S-4 or comparable successor forms or a Registration Statement relating
to a dividend reinvestment plan), then the Company shall give written
notice of such proposed filing to each Holder before the anticipated filing
date of such Registration Statement, and such notice shall offer each
Holder the opportunity to include in such Registration Statement the
Registrable Securities then owned by such Holder, as such Holder may
request in writing within 15 days after receipt of the Company's notice
(which request shall specify the number of Registrable Securities to be
included in such Registration Statement and the intended method of
disposition) (a "Piggyback Registration").
(c) Shelf Registration.
(i) If any Initial Purchaser notifies the Company in writing that such
Initial Purchaser intends to deliver a Prospectus in connection with any
market-making resales of Registrable Securities, the Registration Statement
to be filed pursuant to a Demand Registration or (except in the case of an
underwritten offering) a Piggyback Registration, shall provide for an
offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act covering all of the Registrable Securities (a "Shelf
Registration"). The Shelf
<PAGE>
-5-
Registration shall be on Form S-1 or another appropriate form permitting
registration of such Registrable Securities for resale by such Initial
Purchaser in the manner or manners designated by them.
(ii) Effectiveness Period. The Company shall use its reasonable best
efforts to keep the Shelf Registration continuously effective under the
Securities Act until the date that is two years from the Issue Date or such
shorter period ending when all Registrable Securities covered by the Shelf
Registration have been sold in the manner set forth and as contemplated in
the Shelf Registration (the "Effectiveness Period"); provided, however,
that upon notice from any Initial Purchaser pursuant to Section 2(c)(i)
hereof, the Effectiveness Period shall be extended for a period not beyond
the second anniversary of the date on which the Shelf Registration
Statement became effective (as extended by any Shelf Blackout Period)
solely for the purpose of facilitating resales of Registrable Securities by
any Initial Purchaser until such time as each Initial Purchaser shall have
notified the Company that neither such Initial Purchaser nor any of its
affiliates is required by applicable law or SEC policy to deliver a
prospectus in connection with any resales of Registrable Securities.
(iii) Shelf Blackout Period. Notwithstanding the foregoing, the
Company, upon advising the Holders, may suspend the use of the Prospectus
included in any Shelf Registration in the event that and for a period of
time (the "Shelf Blackout Period") not to exceed an aggregate of 60 days in
any 12-month period if the Board of Directors of the Company has made a
Registration Delay Determination; provided, that, upon the termination of
such Shelf Blackout Period, the Company promptly shall advise the Initial
Purchasers that such Shelf Blackout Period has been terminated.
(d) Registration Procedures. If and whenever the Company is required to
effect the registration of any Registrable Securities under the Securities Act
as provided in Section 2(a) or (b) hereof, the Company will as expeditiously as
practicable:
(i) (A) prepare and file with the Commission a Registration Statement
on the appropriate form which includes such Registrable Securities, and
furnish to each Seller at least 5 business days prior to the filing thereof
a copy of such Registration Statement, and not file any such Registration
Statement to which any Seller shall have reasonably objected on the grounds
that such Registration Statement does not comply in all material respects
with the requirements of the Securities Act or of the rules or regulations
thereunder, (B) promptly respond to all comments received with respect to
such Registration Statement and make and file all necessary amendments
thereto, and (C) thereafter use its reasonable best efforts to cause such
Registration Statement to become effective at the earliest practicable
date;
(ii) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration
Statement accurate and effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities
<PAGE>
-6-
and other securities covered by such Registration Statement until the
earlier of such time as all of such Registrable Securities have been
disposed of by the Sellers thereof set forth in such Registration Statement
or for the longer of (A) nine months or (B) if such registration is a
continuous secondary offering pursuant to Rule 415 under the Securities
Act, two years; and will furnish to each such Seller at least 2 business
days prior to the filing thereof a copy of any amendment or supplement to
such Registration Statement or Prospectus and shall not file any such
amendment or supplement to which any such Seller shall have reasonably
objected on the grounds that such amendment or supplement does not comply
in all material respects with the requirements of the Securities Act or of
the rules or regulations thereunder;
(iii) furnish to each Seller of such Registrable Securities, upon
their request, one signed copy of such Registration Statement and of each
such amendment thereof and supplement thereto (in each case including all
exhibits), such number of copies of the Prospectus included in such
Registration Statement (including each preliminary prospectus and any
summary Prospectus), in conformity with the requirements of the Securities
Act, such documents, if any, incorporated by reference in such Registration
Statement or Prospectus, and such other documents as such Seller may
reasonably request;
(iv) notify each Seller of such Registrable Securities and, if
requested, confirm such notice in writing, as soon as practicable after
notice thereof is received by the Company, (A) when such Registration
Statement or such amendment thereof or supplement thereto has been filed or
becomes effective and when the Prospectus or any amendment thereof or
supplement thereto has been filed, (B) of any request by the Commission for
any amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (C) of the receipt by the Company
of any notification with respect to the suspension of the qualification of
the Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose and (D) of any
stop order issued, or the receipt of notification by the Company that any
such stop order is threatened to be issued, by the Commission, and use its
reasonable best efforts to prevent the entry of such stop order or to
remove it if entered;
(v) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such Registration Statement under such
other securities or blue sky laws of such jurisdictions as each Seller
shall reasonably request, to keep such registration or qualification in
effect for so long as such Registration Statement remains in effect, and do
any and all other acts and things that may be necessary or advisable to
enable such Seller to consummate the disposition in such jurisdictions of
its Registrable Securities covered by such Registration Statement, except
that the Company shall not for any such purpose be required to qualify
generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision (v) be
obligated to be so qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction;
<PAGE>
-7-
(vi) if such Registration Statement relates to an underwritten
offering, obtain and furnish to each Seller a signed counterpart, addressed
to such Seller, of the legal opinions and accountants' comfort letters
which are to be delivered to the underwriters;
(vii) promptly notify each Seller whose Registrable Securities are
covered by such Registration Statement, at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of which,
the Prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing, and the Company shall promptly prepare a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such Prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing;
(viii) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to
its securities holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more than
eighteen months, beginning with the first month of the first fiscal quarter
after the effective date of such Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158 thereunder;
(ix) promptly make available for inspection by any Seller or
underwriter participating in any disposition pursuant to any Registration
Statement, and by any attorney, accountant or other agent or representative
retained by any Seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees
to supply all information reasonably requested by any such Seller or
underwriter in connection with such Registration Statement;
(x) if the Common Stock of the Company is listed on a national
securities exchange or quoted on Nasdaq, use its best efforts to comply
with the requirements of such exchange or Nasdaq to include shares of
Registrable Securities covered by such Registration Statement for listing
on each such securities exchange or for quotation on Nasdaq.
The Company may require each Seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information regarding
such Seller and the distribution of such securities as the Company may from time
to time reasonably request in writing and as shall be required by law or by the
Commission in connection with such registration.
<PAGE>
-8-
(e) Underwriting Agreement. If requested by the underwriters for any
underwritten offering of Registrable Securities on behalf of Sellers pursuant to
a registration covered by Section 2(a) or (b) hereof, the Company will enter
into an underwriting agreement with such underwriters for such offering, such
agreement to contain representations and warranties by the Company and other
terms and provisions not inconsistent with this Section 2 as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, indemnities to the effect and to the extent
provided in Section 2(g) hereof, and the Company will cooperate with such
Sellers to the end that the conditions precedent to the obligations of such
Sellers under such underwriting agreement shall not include conditions that are
not customary in underwriting agreements with respect to secondary distributions
and shall be otherwise satisfactory to such Sellers. Sellers on whose behalf
shares are to be distributed by such underwriters shall be parties to any such
underwriting agreement and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters, shall also be made to and for the benefit of such Sellers. Such
Sellers shall not be required by the Company to make any representations or
warranties to or agreements with the Company or the underwriters other than
reasonable representations, warranties or agreements regarding such Sellers,
such Sellers' Registrable Securities and such Sellers' intended method or
methods of disposition and any other representation required by law.
(f) Lock-Up. If and to the extent requested by the managing underwriter in
connection with the Initial Public Offering, such Holder shall agree in writing
that such Holder will not, without the consent of the managing underwriter and
except for shares included in the Initial Public Offering, if any: (x) effect
any public sale or distribution of any common equity securities of the Company,
or any securities convertible into, or exercisable or exchangeable for, any such
common equity securities for the period requested by the managing underwriter,
not to exceed in any event 180 days following effectiveness of the Registration
Statement relating to the Initial Public Offering, or (y) effect any other
transfer of any of the foregoing during such lock-up period unless the
transferee agrees in writing to be bound by the terms and conditions of this
Section 2(f), in each case, on terms not less favorable than those applicable to
holders of shares of Common Stock generally.
(g) Registration Expenses. The Company agrees to pay, in connection with
each registration of Registrable Securities covered by Section 2(a) or 2(b)
hereof, all Registration Expenses. All other expenses not paid by the Company
which are otherwise not attributable to a particular Seller will be the
responsibility of and paid for by all of the Sellers on a pro rata basis.
(h) Indemnification and Contribution.
(i) The Company agrees, to indemnify and hold harmless each Initial
Purchaser, each Holder of Registrable Securities, and each Person, if any,
who controls such
<PAGE>
-9-
Person or its affiliates within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each, a "Participant") against any
losses, claims, damages or liabilities to which any Participant or such
controlling person may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(a) any untrue statement or alleged untrue statement made by the
Company contained in any application or any other document or any
amendment or supplement thereto executed by the Company based upon
written information furnished by or on behalf of the Company filed in
any jurisdiction in order to qualify the Registrable Securities under
the securities or "Blue Sky" laws thereof or filed with the SEC or any
securities association or securities exchange (each, an
"Application");
(b) any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement (or any
amendment thereto) or Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or
any preliminary prospectus; or
(c) the omission or alleged omission to state, in any
Registration Statement (or any amendment thereto) or Prospectus (as
amended or supplemented if any of the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus or
any Application or any other document or any amendment or supplement
thereto, a material fact required to be stated therein or necessary to
make the statements therein not misleading;
and will reimburse, as incurred, the Participant and each such controlling
person for any legal or other expenses incurred by the Participant or such
controlling person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, (i) the Company will not be
liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in any Registration
Statement (or any amendment thereto) or Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus or Application or any
amendment or supplement thereto in reliance upon and in conformity with
information relating to any Participant furnished to the Company by such
Participant specifically for use therein, and (ii) the Company shall not be
liable to any Participant under the indemnity agreement in this subsection
(a) with respect to the preliminary prospectus to the extent that any such
loss, claim, damage, liability or expense of such Participant results from
the fact that such
<PAGE>
-10-
Participant sold Registrable Securities to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (or the Prospectus as
then amended or supplemented if the Company shall have furnished such
Participant with such amendment or supplement thereto on a timely basis),
in any case where such delivery is required by applicable law and the loss,
claim, damage, liability or expense of such Participant results from an
untrue statement or omission of a material fact contained in the
preliminary prospectus which was corrected in the Prospectus (or in the
Prospectus as then amended or supplemented if the Company shall have
furnished such Participant with such amendment or supplement thereto on a
timely basis). The indemnity provided for in this Section (h) will be in
addition to any liability that the Company may otherwise have to the
indemnified parties. The Company shall not be liable under this Section (h)
for any settlement of any claim or action effected without its prior
written consent, which shall not be unreasonably withheld.
(ii) Each Participant, severally and not jointly, agrees to indemnify
and hold harmless the Company, its directors, its officers and each person,
if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any losses,
claims, damages or liabilities to which the Company or any such director,
officer or controlling person may become subject under the Securities Act,
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus, or (ii) the omission or
the alleged omission to state therein a material fact necessary to make the
statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information concerning such Participant, furnished to the
Company by the Participant, specifically for use therein; and subject to
the limitation set forth immediately preceding this clause, will reimburse,
as incurred, any legal or other expenses incurred by the Company or any
such director, officer or controlling person in connection with
investigating or defending against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action in
respect thereof. The indemnity provided for in this Section (h) will be in
addition to any liability that the Participants may otherwise have to the
indemnified parties. The Participants shall not be liable under this
Section (h) for any settlement of any claim or action effected without
their consent, which shall not be unreasonably withheld. The Company shall
not, without the prior written consent of such Participant, effect any
settlement or compromise of any pending or threatened proceeding in respect
of which any Participant is or could have been a party, or indemnity could
have been sought hereunder by any Participant, unless such settlement (A)
includes an unconditional written release of the Participants, in form and
substance reasonably satisfactory to the Participants, from all liability
on claims that are the subject matter of such
<PAGE>
-11-
proceeding and (B) does not include any statement as to an admission of
fault, culpability or failure to act by or on behalf of any Participant.
(iii) Promptly after receipt by an indemnified party under this
Section (h) of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section (h),
such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section (h), notify the
indemnifying party of the commencement thereof in writing; but the omission
to so notify the indemnifying party (a) will not relieve it from any
liability under paragraph (i) or (ii) above unless and to the extent such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (b) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraphs (i) and (ii) above.
In case any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest,
(ii) the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have been
advised by counsel that there may be one or more legal defenses available
to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of
such indemnified party or parties and such indemnified party or parties
shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable
to such indemnified party under this Section (h) for any legal or other
expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (in addition to local counsel) in any one action or separate but
substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by Participants who
sold a majority in interest of the Registrable Securities sold by all such
Participants in the case of paragraph (i) of this Section (h) or the
Company in the case of paragraph (ii) of this Section (h), representing the
indemnified parties under such paragraph (i) or paragraph (ii), as
<PAGE>
-12-
the case may be, who are parties to such action or actions) or (ii) the
indemnifying party has authorized in writing the employment of counsel for
the indemnified party at the expense of the indemnifying party. All fees
and expenses reimbursed pursuant to this paragraph (c) shall be reimbursed
as they are incurred. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified
party without the prior written consent of the indemnifying party (which
consent shall not be unreasonably withheld), unless such indemnified party
waived in writing its rights under this Section (h), in which case the
indemnified party may effect such a settlement without such consent.
(iv) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section (h) is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect thereof),
each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (a) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Units or (b) if the allocation provided
by the foregoing clause (a) is not permitted by applicable law, not only
such relative benefits but also the relative fault of the indemnifying
party or parties on the one hand and the indemnified party on the other in
connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative benefits received by the Company
on the one hand and such Participant on the other shall be deemed to be in
the same proportion as the total proceeds from the offering (before
deducting expenses) of the Units received by the Company bear to the total
net profit received by such Participant in connection with its resale of
its Registrable Securities. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand, or the Participants on the other, the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or alleged statement or
omission, and any other equitable considerations appropriate in the
circumstances. The parties agree that it would not be equitable if the
amount of such contribution were determined by pro rata or per capita
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of
this paragraph (iv). Notwithstanding any other provision of this paragraph
(iv), no Participant shall be obligated to make contributions hereunder
that in the aggregate exceed the total net profit received by such
Participant in connection with the sale of its Registrable Securities, less
the aggregate amount of any damages that such Participant has otherwise
been required to pay by reason of the untrue or alleged untrue statements
or the omissions or alleged omissions to state a material fact, and no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
<PAGE>
-13-
from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this paragraph (iv), each person, if any, who controls a
Participant within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act shall have the same rights to contribution
as the Participants, and each director of the Company, each officer of the
Company and each person, if any, who controls any Issuer within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company.
(i) Rule 144 Sales.
(i) Compliance. The Company covenants that, to the extent that it is
subject to the reporting requirements of the Exchange Act, it will use its
reasonable best efforts to file the reports required to be filed by it
under the Exchange Act so as to enable any Holder to sell Registrable
Securities without registration pursuant to Rule 144 under the Securities
Act.
(ii) Cooperation with Holders. In connection with any sale, transfer
or other disposition by any Holder of any Registrable Securities pursuant
to Rule 144 under the Securities Act, the Company shall, to the extent
permissible under applicable law, cooperate with such Holder to facilitate
the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any Securities Act
legend, and enable certificates for such Registrable Securities to be
issued at least two business days prior to any sale of such Registrable
Securities for such number of shares and registered in such names as the
Holder may reasonably request upon ten (10) business days prior notice. The
Company's obligation set forth in the previous sentence shall be subject to
the delivery, if reasonably requested by the Company or its transfer agent,
by counsel to such Holder (which counsel shall be reasonably acceptable to
the Company and its transfer agent), in form and substance reasonably
satisfactory to the Company and its transfer agent, of an opinion that such
Securities Act legend need not appear on such certificate.
(j) Selection of Managing Underwriter. With respect to any Registration
Statement covered by Section 2(a) or (b) hereof, the Company shall select the
managing underwriter or underwriters subject to the applicable provisions of the
Common Equity Registration Rights Agreement dated as of May 10, 2000 by and
among the Company and the holders of the Company's equity securities parties
thereto.
(k) Underwriter Cutbacks. Notwithstanding anything in this Agreement to the
contrary and in addition to any other limitations on rights to participate in a
Registration Statement hereunder:
(A) if (x) the Registration Statement relates to an underwritten
offering which includes common equity to be offered and sold for the
account of the Company and (y) the managing underwriter of any such
offering advises the Company in writing (with a copy to the Holders and the
Other Rights Holders) that the total number of common equity
<PAGE>
-14-
which the Company, the Holders, and other Persons whose contractual rights
(now existing or hereafter granted) give them the right to be included in
such registration (the "Other Rights Holders") intend to include in such
offering exceeds the maximum amount of common equity that may be
distributed without adversely affecting the price, timing or distribution
of the common equity being offered, then the amount of common equity to be
included in such Registration Statement and offering for the account of the
Holders and the Other Rights Holders shall be reduced pro rata so that the
aggregate amount of common equity included in such Registration Statement
and offering for the account of the Holders and the Other Rights Holders,
together with the common equity to be sold for the account of the Company,
does not exceed the amount that such managing underwriter determines in
good faith can be sold in such offering without causing such adverse
effect; and
(B) if (x) the Registration Statement relates to an underwritten
offering which does not include common equity to be sold for the account of
the Company and (y) the managing underwriter advises (in writing) the
Holders and the Other Rights Holders who have requested that common equity
be included therein that the total number of common equity which the
Holders and the Other Rights Holders intend to include in such offering
exceeds the maximum amount of common equity that may be distributed without
adversely affecting the price, timing or distribution of the common equity
being offered, then the amount of common equity to be included in such
Registration Statement and offering for the accounts of the Holders and the
Other Rights Holders shall be reduced pro rata so that the aggregate amount
of common equity included in such Registration Statement and offering for
the accounts of Holders and the Other Rights Holders in the aggregate does
not exceed the amount that such managing underwriter determines in good
faith can be sold in such offering without causing such adverse effect.
SECTION 3. Miscellaneous.
(a) Notices. Any notices in connection with this Agreement shall be in
writing and may be given by (i) personal delivery, (ii) fax, (iii) certified
mail, return receipt requested, postage prepaid, or (iv) a nationally recognized
overnight courier as follows: (x) if to any Holder, at the address of record for
such Holder on the records of the Company (or such other address as such Holder
shall furnish the Company in writing to receive notices hereunder); and (y) if
to the Company, to Jostens, Inc., 5501 Norman Center Drive, Minneapolis,
Minnesota 55437, with a copy to Gibson, Dunn & Crutcher LLP, 200 Park Avenue,
New York, New York 10166, Attention: E. Michael Greaney.
Notices shall be deemed to have been given (A) when actually delivered
(including by fax with confirmation of transmission), (B) the next business day
if sent by overnight courier (with proof of delivery), and (C) on the fifth day
after mailing by certified mail.
<PAGE>
-15-
(b) Assignability. This Agreement shall be binding upon the Company and its
successors and upon the successors and all transferees and assignees of the
Holders.
(c) Amendment and Waiver. The rights of the Holders and the obligations the
Company hereunder are subject to amendment upon the written consent of the
Company and a majority in interest of the Holders. Any noncompliance of any
provision of this Agreement by the Company may be waived by written consent of a
majority in interest of the Holders. Any such amendment or waiver shall be
binding upon all Holders.
(d) Governing Law. This Agreement shall be construed both as to validity
and performance in accordance with, and governed by, the laws of the State of
New York without regard to principles of conflict of laws of such jurisdiction
or any other jurisdiction.
(e) Headings; Sections. All headings and captions in this Agreement are for
purposes of reference only and shall not be construed to limit or affect the
substance of this Agreement. All references to Section in this Agreement refer
to Sections of this Agreement, unless the context otherwise expressly provides.
(f) Entire Agreement. This Agreement contains, and is intended as, a
complete statement of all the terms of the arrangements provided for herein, and
supersedes any previous agreements and understandings with respect to such
arrangements.
(g) Specific Performance. The Company acknowledges and agrees that in the
event of any breach of this Agreement by the Company, the Holders would be
irreparably harmed and could not be made whole by monetary damages. Accordingly,
the Company hereby agrees that in addition to any other remedy to which the
Holders may be entitled at law or in equity, the Holders shall be entitled to
compel specific performance of this Agreement in any action instituted in any
court of the United States or any state thereof having subject matter
jurisdiction for such action.
<PAGE>
-16-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
JOSTENS, INC.,
a Minnesota corporation
By: /s/ Robert C. Buhrmaster
------------------------------
Name: Robert C. Buhrmaster
Title: Chairman of the Board,
President and Chief
Executive Officer
<PAGE>
-17-
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
DEUTSCHE BANK SECURITIES INC.
By: /s/ [Signature Illegible]
--------------------------------
Name:
Title:
UBS WARBURG LLC
By: /s/ Robert Parsons
----------------------------------
Name: Robert Parsons
Title: Managing Director
Leveraged Finance
By: /s/ P. Whitridge Williams
----------------------------------
Name: P. Whitridge Williams
Title: Director
Leveraged Finance
GOLDMAN, SACHS & CO.
/s/ GOLDMAN, SACHS & CO.
- -----------------------------------
<PAGE>
EXHIBIT 4.6
Jostens, Inc.
$60,000,000 of
14% Senior Redeemable Payment In-Kind Preferred Stock with
Warrants to Purchase 531,325 Shares of Class E Common Stock
PURCHASE AGREEMENT
------------------
May 10, 2000
DB Capital Investors, L.P.
130 Liberty Street
25th Floor
New York, NY 10006
Ladies and Gentlemen:
The undersigned hereby confirms its agreement with you (the
"Purchaser") as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, Jostens, Inc., a Minnesota corporation (the "Company"), proposes to
issue and sell to the Purchaser 60,000 shares of the 14% Senior Redeemable
Payment In-Kind Preferred Stock of the Company (the "Preferred Stock") with an
aggregate liquidation preference of $60,000,000, together with Warrants (the
"Warrants") to purchase an aggregate of 531,325 shares of the Series E common
stock of the Company, par value $0.01 per share (the "Common Stock"), to be
issued upon exercise of the Warrants (the "Warrant Shares") representing 5% of
the outstanding Common Stock of the Company on a fully diluted basis. The
Preferred Stock and the Warrants are referred to herein collectively as the
"Securities".
The Securities will be offered and sold to the Purchaser without being
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
on exemptions therefrom.
The Securities will be offered in connection with a recapitalization
transaction (such transaction, together with the Merger referred to below, the
"Recapitalization") as a result of which (x) Investcorp Investment Equity
Limited and certain of its affiliates (collectively, "Investcorp") and certain
other institutional equity investors would own up to approximately 94% of the
outstanding common stock of the Company and (y) the Company's existing
shareholders would retain the remaining common stock in the Company. The
undersigned understands that the Recapitalization will be effected by means of a
merger of a newly formed company created by Investcorp and its affiliates
("MergerCo") with and into the Company, with the Company being the surviving
corporation (the "Surviving Corporation") of such merger (the "Merger"),
pursuant to an agreement and plan of merger entered into between MergerCo and
the Company (the "Merger Agreement") dated as of December 27, 1999. Concurrently
with the consummation of the Recapitalization, the Company and its subsidiaries
will refinance
<PAGE>
substantially all of their outstanding debt (the "Refinancing" and, together
with the Recapitalization and the incurrence of the financings described below,
the "Transaction").
In connection with the issuance of senior subordinated notes generating
gross cash proceeds of $240.0 million (the "Senior Subordinated Notes"), the
Company has prepared a preliminary offering memorandum dated April 16, 2000 (the
"Preliminary Memorandum") and will prepare a final offering memorandum to be
dated May 3, 2000 (the "Final Memorandum"; the Preliminary Memorandum and the
Final Memorandum each herein being referred to as the "Memorandum," and if the
Final Memorandum is not prepared, then each reference to the Final Memorandum
herein shall be deemed a reference to the Preliminary Memorandum) setting forth
or including a description of the Company and the Subsidiaries (as defined
below) and any material developments relating to the Company and the
Subsidiaries occurring after the date of the most recent historical financial
statements included therein.
The Company will enter into (i) a registration rights agreement with
respect to the Preferred Stock, whereby the Company will agree to file a shelf
registration statement covering resales of the Preferred Stock (the "Preferred
Stock Registration Rights Agreement"), (ii) a registration rights agreement with
respect to the Warrant Shares and certain other shares of the capital stock of
the Company, whereby the Company will agree to file a registration statement
covering resales of the Warrant Shares (the "Registration Rights Agreement") and
(iii) a Warrant Agreement (the "Warrant Agreement"), prior to, or concurrently
with, the issuance of the Securities. In addition, the Company will file a
Certificate of Designation with respect to the Preferred Stock (the "Certificate
of Designation") with the Secretary of State of the State of Minnesota.
2. Representations and Warranties. The Company represents and warrants
to, and agrees with the Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof
nor the Final Memorandum nor any amendment or supplement thereto as of
the date thereof and, in the case of the Final Memorandum and any
amendment or supplement thereto, at all times subsequent thereto up to
the Closing Date (as defined in Section 3 below) contained or shall
contain any untrue statement of a material fact or omitted or omits to
state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
except that (i) the representations and warranties set forth in this
Section 2(a) do not apply to statements or omissions made in reliance
upon and in conformity with information furnished to the Company in
writing by the Purchaser expressly for use in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement thereto
and (ii) the Memorandum was designed as an offering memorandum for the
Senior Subordinated Notes and not the Securities. The Final Memorandum
conforms in all material respects to the requirements of the Act and
the rules and regulations promulgated thereunder as if it was a
prospectus filed as part of a registration statement on Form S-3
relating to the Senior Subordinated Notes.
(b) After giving effect to the Merger, as of the Closing Date,
the Company will have the authorized and issued capital stock set forth
in the Final Memorandum under the
2
<PAGE>
heading entitled "Capitalization"; the Company will own the percentage
of the issued and outstanding stock (or other equity securities) of
each of the Subsidiaries as listed on Schedule 1 hereto; all of the
outstanding shares of capital stock of the Company and the Subsidiaries
as of the Closing Date will be duly authorized and validly issued, are
fully paid and nonassessable and were not issued in violation of any
preemptive rights; except as set forth in the Final Memorandum and
certain warrants in favor of Investcorp or its affiliates that will be
exercisable for Class B common stock of the Company to the extent an
equal number of shares of Class B common stock of the Company is being
redeemed contemporaneously, there are no outstanding (i) options,
warrants or other rights to purchase from the Company and the
Subsidiaries, (ii) agreements or other obligations of the Company or
any of the Subsidiaries to issue or (iii) other rights to convert any
obligation into, or exchange any securities of, shares of capital stock
of, or other equity securities of, the Company or any of the
Subsidiaries. The entities listed on Schedule 1 hereto (collectively,
the "Subsidiaries") are the only subsidiaries, direct or indirect, of
the Company. Except as disclosed on Schedule 1, the Company does not
own, directly or indirectly, any capital stock or any other equity/or
long-term debt securities or have any equity interests in any firm,
partnership, joint venture, limited liability company or other entity.
(c) The Company and each of the Subsidiaries has been duly
incorporated, is validly existing and is in good standing as a
corporation under the laws of its jurisdiction of incorporation, with
all requisite corporate power and authority to own its properties and
conduct its business as now conducted, and as described in the Final
Memorandum; each of the Company and the Subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the aggregate,
reasonably be expected to affect the business, financial condition or
results of operations of the Company, together with its Subsidiaries,
taken as a whole, excluding in all cases: any events or conditions
generally affecting the industries in which the Company operates or
arising from changes in general business or economic conditions (a
"Material Adverse Effect").
(d) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under each of
the Preferred Stock Registration Rights Agreement, the Registration
Rights Agreement and the Warrant Agreement. Each of such agreements has
been duly and validly authorized, executed and delivered by the Company
and will constitute a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium,
indemnity, contribution or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
3
<PAGE>
(e) The Warrants have been duly authorized by the Company and,
when issued and delivered by the Company in accordance with the terms
of this Agreement and the Warrant Agreement, will constitute valid and
legally binding obligations of the Company, enforceable in accordance
with their terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
(f) The Warrant Shares have been duly and validly authorized
and validly reserved for issuance and when issued and paid for upon
exercise of the Warrants in accordance with the terms of the Warrants
and the Warrant Agreement, will be validly issued, fully paid,
nonassessable and free of preemptive rights.
(g) The Certificate of Designation relating to the Preferred
Stock and any additional Preferred Stock issued as dividends in
accordance with the terms of the Certificate of Designation (such
additional Preferred Stock being referred to herein as the "Dividend
PIK Preferred Stock") have been duly authorized by the Company. Upon
filing of such Certificate of Designation with the Secretary of State
of the State of Minnesota, the Preferred Stock and the Dividend PIK
Preferred Stock will be duly authorized and, when issued and delivered
by the Company against payment therefor in accordance with, in the case
of the Preferred Stock, the provisions of this Agreement and, in the
case of the Dividend PIK Preferred Stock, in accordance with the terms
of the Certificate of Designation, will be validly issued, fully paid
and nonassessable and free of any preemptive rights; the certificates
for the Preferred Stock and the Dividend PIK Preferred Stock will be in
due and proper form; and the holders of such Preferred Stock and
Dividend PIK Preferred Stock will not be subject to personal liability
by reason of being such holders. The Company has reserved for issuance,
and duly authorized the issuance of, the number of shares of Preferred
Stock (60,000 shares), and the maximum number of shares of Dividend PIK
Preferred Stock issuable as dividends pursuant to the terms of the
Certificate of Designation allowed by its certificate of incorporation
(247,500 shares). The certificate of incorporation of the Company, by
virtue of the filing of the Certificate of Designation, will set forth
the rights, preferences and priorities of the Preferred Stock and the
Dividend PIK Preferred Stock.
(h) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly authorized, executed and delivered
by the Company.
(i) No consent, approval, authorization or order of any court
or governmental agency or body or third party is required for the
execution, delivery or performance by the Company or any Subsidiary of
this Agreement, the Preferred Stock Registration Rights Agreement, the
Registration Rights Agreement, the Warrant Agreement, and the
Certificate of Designation, or the consummation by the Company or any
of the Subsidiaries of the transactions contemplated hereby or thereby
that are to be completed
4
<PAGE>
on or before the Closing Date, except such as have been obtained or
disclosed in the Final Memorandum and except for approvals and
authorizations contemplated by the Preferred Stock Registration Rights
Agreement and the Registration Rights Agreement. None of the Company or
any of the Subsidiaries is (i) in violation of its articles of
incorporation or bylaws (or similar organizational document), (ii) in
breach or violation of any statute, judgment, decree, order, rule or
regulation applicable to any of them or any of their respective
properties or assets, or (iii) in breach of or in default under (nor
has any event occurred which, with notice or passage of time or both,
would constitute a default under) or in violation of any of the terms
or provisions of any indenture, mortgage, deed of trust, loan
agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which any of
them is a party or to which any of them or their respective properties
or assets is subject (collectively, "Contracts") except in the case of
clauses (ii) and (iii) above such violations, breaches or defaults that
would not, individually or in the aggregate, have a Material Adverse
Effect.
(j) The execution, delivery and performance by the Company of
this Agreement, the Preferred Stock Registration Rights Agreement, the
Registration Rights Agreement, the Warrant Agreement and the
Certificate of Designation, and the consummation by the Company of the
transactions contemplated hereby and thereby, will not conflict with or
constitute or result in a breach of or a default under (or an event
which with notice or passage of time or both would constitute a default
under) or violation of any of (i) the terms or provisions of any
Contract except such conflicts, breaches, defaults or violations, that
would not, individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or by-laws (or similar
organizational documents) of the Company, or (iii) any statute,
judgment, decree, order, rule or regulation applicable to the Company
or any of its properties or assets except such conflicts, breaches,
defaults or violations that would not, individually or in the
aggregate, have a Material Adverse Effect.
(k) None of the Company, the Subsidiaries nor any agent acting
on any of their behalf has taken or will take any action that might
cause this Agreement or the sale of the Securities to violate
Regulation T, U or X of the Board of Governors of the Federal Reserve
System, in each case as in effect, or as the same may hereafter be in
effect, on the Closing Date.
3. Purchase, Sale and Delivery of the Securities. On the basis of the
representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Purchaser, and the Purchaser agrees to purchase from the
Company 60,000 shares of Preferred Stock and Warrants to purchase an aggregate
of 531,325 Warrant Shares for an aggregate purchase price of $60.0 million. One
or more certificates in definitive form for the shares of Preferred Stock and
the Warrants that the Purchaser has agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as the
Purchaser requests upon notice to the Company at least 48 hours prior to the
Closing Date, shall be delivered by or on behalf of the Company to the
Purchaser, against payment by or on behalf of the Purchaser of the purchase
5
<PAGE>
price therefor by wire transfer to such account or accounts as the Company shall
specify prior to the Closing Date, or by such means as the parties hereto shall
agree prior to the Closing Date. Such delivery of and payment for the Securities
shall be made at the offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue,
New York, New York 10166 at 10:00 A.M., New York time, on May 9, 2000, or at
such other place, time or date as the Purchaser, on the one hand, and the
Company, on the other hand, may agree upon, such time and date of delivery
against payment being herein referred to as "Closing Date." The Company will
make such certificate or certificates for the Securities available for
inspection by the Purchaser at such place as designated by the Purchaser at
least 24 hours prior to the Closing Date.
4. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to the Company as follows:
(a) Purchaser is a limited partnership duly organized, validly
existing and in good standing under the laws of Delaware and has full
power and authority to enter into and consummate the transactions
contemplated by this Agreement.
(b) Purchaser is an "accredited investor" as such term is
defined in Rule 501(a) promulgated under the Act, and is financially
able to hold the Securities for long term investment and to suffer a
complete loss of its investment in the Securities. The Securities are
being purchased by Purchaser for its own account for investment
purposes, and not with a view to any distribution thereof within the
meaning of the Act. Purchaser has had the opportunity to ask questions
of the Company and its officers and employees and to receive to its
satisfaction such information about the business and financial
condition of the Company as it considers necessary or appropriate for
deciding whether to purchase the Securities, and Purchaser is fully
capable of understanding and evaluating the risks associated with the
ownership of the Securities.
(c) Purchaser has conducted its own diligence investigation
with respect to the merits and risks associated with the Merger and
related financings. Notwithstanding that representatives of Investcorp
may have provided information to Purchaser (including, without
limitation, information concerning Jostens, the Merger and related
matters), Purchaser is not relying on and has not relied on any
representation by Investcorp or any affiliate or representative of
Investcorp with respect to any aspect of the Merger, the financings or
the business or prospects of Jostens, other than the representations
and warranties of the Company hereunder and those representations and
warranties of the Company contained in the Merger Agreement.
5. Acknowledgments and Agreements of Purchaser. Purchaser acknowledges
and agrees that:
(a) The Securities will not be registered under the Act or
under the securities laws of any state and must be held by Purchaser
indefinitely unless the resale of the Securities is subsequently
registered under the Act and any applicable state securities law or an
exemption from such registration becomes or is available. In addition
to any legend required by law or any other agreement by which Purchaser
is bound, the Company shall
6
<PAGE>
place a legend in substantially the following form on any certificate
representing the Securities:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED OTHER THAN
IN ACCORDANCE WITH REGULATIONS PROMULGATED UNDER THAT ACT, OR
IF SO REGISTERED UNDER THAT ACT, OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE."
Additionally, the Company shall place a legend in
substantially the following form of any certificate representing the
Securities:
"THESE SECURITIES ARE SUBJECT TO MANDATORY REDEMPTION BY THE
CORPORATION. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO
EACH SHAREHOLDER WHO SO REQUESTS A FULL STATEMENT OF THE
DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF
EACH CLASS OF STOCK OR SERIES OF STOCK OF THE CORPORATION
AUTHORIZED TO BE ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED,
AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE THE
RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT CLASSES OR
SERIES."
"THIS SECURITY IS ALSO SUBJECT TO A SHAREHOLDERS AGREEMENT,
DATED AS OF MAY 10 , 2000, AMONG THE COMPANY, INVESTCORP
INVESTMENT EQUITY LIMITED, THE OTHER HOLDERS OF THE CLASS D
COMMON STOCK OF THE COMPANY AND DB CAPITAL INVESTORS L.P. A
COPY OF SUCH SHAREHOLDERS AGREEMENT MAY BE OBTAINED WITHOUT
CHARGE AND UPON REQUEST ADDRESSED TO THE SECRETARY OF THE
COMPANY AT THE REGISTERED OFFICE OF THE COMPANY"
6. Expenses. The Company agrees to pay, upon the consummation of the
Recapitalization (including the purchase of the Securities pursuant to this
Agreement), all reasonable costs and expenses of the Purchaser and its
affiliates (including the reasonable fees and expenses of White & Case LLP and
other counsel to the Purchaser and the Purchaser's and its affiliates', out of
pocket expenses) arising in connection with the purchase of the Securities, the
Recapitalization and the other transactions contemplated hereby and thereby (and
the Purchaser's due diligence efforts in connection herewith).
7. Conditions of the Purchaser's Obligations. The obligation of the
Purchaser to purchase and pay for the Securities shall, in their reasonable
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) On the Closing Date, the Purchaser shall have received the
opinion, dated as of the Closing Date and addressed to the Purchaser,
of Faegre & Benson LLP, Minnesota
7
<PAGE>
counsel to the Company, or, as to paragraphs (iii), (iv) and (viii) (to
the extent relating to matters under New York state or Federal law or
to the extent relating to the filing of the Certificate of
Designation), paragraph (ix) (to the extent relating to any matters
under New York state or Federal law), and paragraphs (xi), (xiii) and
(xiv), of Gibson, Dunn and Crutcher LLP, New York counsel for the
Company, or, as to paragraphs (ii) (to the extent relating to shares of
capital stock issued prior to the Closing Date, contractual preemptive
or similar rights or the second sentence of paragraph (ii)), (iii) and
(iv) (to the extent relating to execution, issuance and delivery by the
Company), (v) (to the extent relating to contractual preemptive
rights), (vi) (to the extent relating to contractual preemptive
rights), (vii) (to the extent relating to execution and delivery,
(viii) (second sentence), (ix) (to the extent relating to Material
Contracts (as defined herein)), (x) and (xii), by William George,
General Counsel to the Company in form and substance reasonably
satisfactory for counsel to the Purchaser, dated the Closing Date,
substantially to the effect that:
(i) The Company has been duly incorporated, is
validly existing and is in good standing as a corporation
under the laws of its jurisdiction of incorporation, with all
requisite corporate power and authority to own its properties
and conduct its business as now conducted, and as described in
the Final Memorandum.
(ii) All of the outstanding shares of capital stock
of the Company as of the Closing Date are duly authorized and
validly issued, are fully paid and nonassessable and were not
issued in violation of any preemptive or similar rights;
Except as set forth in the Final Memorandum and certain
warrants in favor of Investcorp or its affiliates that will be
exercisable for Class B common stock to the extent an equal
number of shares of Class B common stock is being redeemed
contemporaneously there are no outstanding (i) options,
warrants or other rights to purchase shares of capital stock
of the Company from the Company or the Subsidiaries, (ii)
agreements or other obligations of the Company or any of the
Subsidiaries to issue or (iii) other rights to convert any
obligation into, or exchange any securities of, shares of
capital stock of, or other equity securities of, the Company.
(iii) The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations
under each of the Preferred Stock Registration Rights
Agreement, the Registration Rights Agreement and the Warrant
Agreement. Each of such agreements has been duly and validly
authorized, executed and delivered by the Company and
constitutes a valid and legally binding agreement of the
Company enforceable against the Company in accordance with its
terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, indemnity, contribution or other similar laws
affecting the enforcement of creditors' rights generally and
by general equitable principles (regardless of whether the
issue of enforceability is considered in a proceeding in
equity or at law).
8
<PAGE>
(iv) The Warrants have been duly authorized by the
Company and, when issued and delivered by the Company in
accordance with the terms of this Agreement, will constitute
valid and legally binding obligations of the Company,
enforceable in accordance with their terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium
or other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles
(regardless of whether the issue of enforceability is
considered in a proceeding in equity or at law).
(v) The Warrant Shares have been duly and validly
authorized and validly reserved for issuance, and when issued
and paid for upon exercise of the Warrants in accordance with
the terms of the Warrants and the Warrant Agreement, will be
validly issued, fully paid, nonassessable and free of
preemptive rights.
(vi) The Certificate of Designation relating to the
Preferred Stock and any Dividend PIK Preferred Stock has been
duly authorized by the Company. Upon filing of such
Certificate of Designation with the Secretary of State of the
State of Minnesota, the Preferred Stock and the Dividend PIK
Preferred Stock will be duly authorized and, when issued and
delivered by the Company against payment therefor in
accordance with the provisions of this Agreement and, in the
case of any Dividend PIK Preferred Stock, in accordance with
the terms of the Certificate of Designation, will be validly
issued, fully paid and nonassessable and free of any
preemptive rights; the certificates for the Preferred Stock
and the Dividend PIK Preferred Stock will be in due and proper
form; and the holders of such Preferred Stock and Dividend PIK
Preferred Stock will not be subject to personal liability
under the Minnesota Business Corporation Act by reason of
being such holders. The Company has reserved for issuance, and
duly authorized the issuance of, the number of shares of
Preferred Stock (60,000 shares), and the maximum number of
shares of Dividend PIK Preferred Stock issuable as dividends
pursuant to the terms of the Certificate of Designation
allowed by its certificate of incorporation (247,500 shares).
The articles of incorporation of the Company, by virtue of the
filing of the Certificate of Designation, will set forth the
rights, preferences and priorities of the Preferred Stock and
the Dividend PIK Preferred Stock.
(vii) The Company has all requisite corporate power
and authority to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(viii) No consent, approval, authorization or order
of any United States federal, or New York or Minnesota state
court or governmental agency or body is required for the
execution, delivery or performance by the Company of this
Agreement, the Preferred Stock Registration Rights Agreement,
the Registration Rights Agreement, the Warrant Agreement, and
the Certificate of Designation, or the consummation by the
Company or any of the Subsidiaries of the transactions
9
<PAGE>
contemplated hereby or thereby that are to be completed prior
to or on the date hereof, except such as have been obtained or
disclosed in the Final Memorandum and for approvals and
authorizations contemplated by the Preferred Stock
Registration Rights Agreement or the Registration Rights
Agreement. The Company is not in violation of its articles of
incorporation or bylaws (or similar organizational document),
except such violations as would not, individually or in the
aggregate, have a Material Adverse Effect.
(ix) The execution, delivery and performance by the
Company of this Agreement, the Preferred Stock Registration
Rights Agreement, the Registration Rights Agreement, the
Warrant Agreement and the Certificate of Designation, and the
consummation by the Company of the transactions contemplated
hereby and thereby, and the fulfillment of the terms hereof
and thereof, will not constitute or result in a breach of or a
default under (or an event which with notice or passage of
time or both would constitute a default under) any material
contract filed as an exhibit to the Company's annual report on
Form 10-K for the fiscal year ended 1999 (a "Material
Contract") or violate any of the articles of incorporation or
by-laws of the Company or violate any statute, judgment,
decree, order, rule or regulation of the United States or the
States of Minnesota or New York (of which such counsel is
aware) applicable to the Company or any of their respective
properties or assets except such breaches, defaults or
violations that would not, individually or in the aggregate,
have a Material Adverse Effect.
(x) To the knowledge of such counsel, there is not
pending or threatened any action, suit, proceeding, inquiry,
investigation or legislative mandate to which the Company is a
party or to which the property or assets of the Company are
subject, before or brought by any court, arbitrator or
governmental agency or body which seeks to restrain, enjoin,
prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to be sold hereunder.
(xi) The execution, delivery and performance by the
Company of this Agreement or the sale of the Securities does
not violate Regulation T, U or X of the Board of Governors of
the Federal Reserve System, in each case as in effect on the
date hereof.
(xii) To the knowledge of such counsel, there are no
legal or governmental proceedings involving or affecting the
Company or any Subsidiary or any of their respective
properties or assets which would be required to be described
in a prospectus forming part of a registration statement filed
with the Commission pursuant to the Act that are not described
in the Preliminary Memorandum and the Final Memorandum.
(xiii) Neither the Company nor any of the
Subsidiaries is or immediately after the sale of the
Securities to be sold hereunder and the application of the
proceeds from such sale (as described in the Final Memorandum
under the caption "Use of Proceeds") will be an "investment
company" as such term is
10
<PAGE>
defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(xiv) Assuming accuracy of the representations and
warranties by the Purchaser under, and compliance by the
Purchaser with the provisions of, this Agreement, no
registration under the Act of the Securities is required in
connection with the sale of the Securities to the Purchaser.
In rendering such opinion, such counsel may make such opinion subject
to such assumptions, qualifications and limitations as are customary for
transactions of this type and, without limitation, as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials.
(b) On the Closing Date, the Purchaser shall have received good
standing certificates for each of the Company and each of its Subsidiaries
guaranteeing the Issuer's Senior Subordinated Notes due 2010.
(c) On the Closing Date, the Purchaser shall have received the
following documents duly authorized, executed and delivered by each of the
parties thereto, in form and substance reasonably satisfactory for counsel to
the Purchaser, and containing such terms and conditions that are usual and
customary in transactions similar to those contemplated hereby and thereby,
dated the Closing Date:
(i) the Warrant Agreement;
(ii) the Preferred Stock Registration Rights Agreement;
(iii) the Registration Rights Agreement; and
(iv) the Certificate of Designation.
(d) The representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date; the statements of
the Company's officers made pursuant to any certificate delivered in accordance
with the provisions hereof shall be true and correct on and as of the date made
and on and as of the Closing Date; the Company shall have performed in all
material respects all covenants and agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the Closing Date;
and, except as described in the Final Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), subsequent to the date of the most
recent financial statements in such Final Memorandum, there shall have been no
event or development that, individually or in the aggregate, has had, or would
be reasonably likely to have, a Material Adverse Effect.
(e) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
11
<PAGE>
(f) There shall not have occurred or become known to the Purchaser any
change in the business, financial condition or results of operations of the
Company, together with its Subsidiaries, taken as a whole, from that set forth
in the Final Memorandum that constitutes or would be reasonably expected to
constitute a Material Adverse Effect.
(g) The Purchaser shall have received certificates of the Company,
dated the Closing Date, signed by its Chief Executive Officer and Chief
Financial Officer, to the effect that:
(w) The representations and warranties of the Company
contained in this Agreement are true and correct as of the date hereof
and as of the Closing Date, and the Company has performed all covenants
and agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date;
(x) At the Closing Date, since the date hereof or since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or events have occurred, no information has become
known nor does any condition exist that, individually or in the
aggregate, has had, or could reasonably be expected to have, a Material
Adverse Effect;
(y) The sale of Securities hereunder has not been enjoined
(temporarily or permanently); and
(z) Such other information as the Purchaser may reasonably
request.
(h) The Purchaser shall have received a certificate from the corporate
secretary of the Company, dated the Closing Date, attaching certified copies of
(i) all resolutions of the Board of Directors of the Company authorizing (a) the
transactions contemplated by this Agreement and (b) the entering into of this
Agreement, the Preferred Stock Registration Rights Agreement, the Registration
Rights Agreement and the Warrant Agreement and (ii) the articles of
incorporation and by-laws of the Company and certifying the names and true
signatures of those officers of the Company executing any documents contemplated
by this Agreement.
(i) The Company shall have received, contemporaneously with the Merger,
the gross proceeds from an offering of the Senior Subordinated Notes in an
amount (currently anticipated to be $240.0 million) which, together with the
proceeds of the Credit Facility (as defined herein) and the net proceeds from
the issuance of the Securities and the capital contribution by MergerCo referred
to in paragraph (o) below, are sufficient to fund the Merger, which such Senior
Subordinated Notes shall be on customary terms for securities of their type and
maturity issued by issuers of similar credit quality, such terms to be
reasonably satisfactory to Purchaser in all material respects. Notwithstanding
anything to the contrary set forth herein, the Company shall be permitted to
initially obtain the funds anticipated to be received from the issuance of the
12
<PAGE>
Senior Subordinated Notes out of the proceeds of a bridge financing on
substantially the terms and conditions of the bridge commitment letter (the
"Bridge Commitment Letter") among Investcorp, Bankers Trust Corporation, UBS AG,
Stamford Branch and West Street Fund I, L.L.C., dated as of December 27, 1999
and otherwise on material terms and conditions reasonably satisfactory to
Purchaser.
(j) The Company shall have entered into (x) a revolving credit facility
and (y) one or more term loan facilities (the "Credit Facility") on
substantially the terms and conditions of the commitment letter (the "Credit
Facility Commitment Letter") among Investcorp, The Chase Manhattan Bank, Chase
Securities, Inc., Deutsche Bank AG, Goldman Sachs Credit Partners L.P. and UBS
AG, Stamford Branch, dated as of December 27, 1999 and otherwise on material
terms and conditions reasonably satisfactory to Purchaser.
(k) There not having occurred or become known to Purchaser any material
adverse condition or material adverse change in or affecting, or which is
reasonably expected to affect the business, financial condition or results of
the Company, together with its subsidiaries, taken as a whole, excluding in all
cases any events or conditions generally affecting the industries in which the
Company operates or arising from changes in general business or economic
conditions (a "Material Adverse Effect").
(l) All material governmental (domestic and foreign) and third party
approvals and/or consents in connection with the Merger and the other
transactions contemplated hereby or otherwise referred to herein being obtained
and remaining in effect, and all applicable waiting periods having expired
without any action being taken by any competent authority which restrains,
prevents or imposes materially adverse conditions upon, the consummation of the
transactions contemplated hereby or otherwise referred to herein.
(m) There shall not exist any judgment, order, injunction or other
restraint prohibiting or imposing materially adverse conditions upon the
transactions contemplated hereby or referred to herein.
(n) All purchases of Purchaser shall be in compliance with the Bank
Holding Company Act of 1956, and all other applicable foreign and domestic
banking statutes, and all regulations (including, without limitation, all
regulations of the Federal Reserve Board) promulgated thereunder, in each case
as amended through the closing. Assuming that the investments by the Purchaser
that are contemplated by this Purchase Agreement are consummated on the basis
set forth in this Purchase Agreement, the Purchaser believes that such
investments will be in compliance with the Bank Holding Company Act of 1956, and
all other applicable foreign and domestic banking statutes, and all regulations
(including, without limitation, all regulations of the Federal Reserve Board)
promulgated thereunder, in each case as amended through the closing.
(o) The Company shall have received a common equity contribution in an
amount not less than $208,700,000 from MergerCo.
13
<PAGE>
On or before the Closing Date, the Purchaser and counsel for the
Purchaser shall have received such further documents, certificates, letters and
schedules or instruments relating to the business, corporate, legal and
financial affairs of the Company and the Subsidiaries as they shall have
heretofore reasonably requested from the Company and the Subsidiaries.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Purchaser and counsel for the Purchaser. The Company and the Subsidiaries shall
furnish to the Purchaser such conformed copies of such documents, opinions,
certificates, letters, schedules and instruments in such quantities as the
Purchaser shall reasonably request.
8. Termination. (p) This Agreement may be terminated in the sole
discretion of the Purchaser by notice to the Company given prior to the Closing
Date in the event that the Company shall have failed, refused or been unable to
perform all obligations and satisfy all conditions on their respective part to
be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Closing Date any of the following shall have occurred:
(i) any of the Company or the Subsidiaries shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, earthquakes, hurricane, accident or other
calamity, whether or not covered by insurance, or from any strike,
labor dispute, slow down or work stoppage or any legal or governmental
proceeding, which loss or interference has had or would be reasonably
likely to have a Material Adverse Effect, or there shall have been, in
the sole judgment of the Purchaser, any other event or development
that, individually or in the aggregate, has or could be reasonably
likely to have a Material Adverse Effect (including without limitation
a change in control of the Company or the Subsidiaries), except in each
case as described in the Final Memorandum (exclusive of any amendment
or supplement thereto);
(ii) the sale of the Securities to the Purchaser hereunder
would violate the Bank Holding Company Act of 1956, as amended; and
(iii) a preliminary or permanent injunction or other order
shall have been issued by any court or by any government agency or body
which prohibits the consummation of the Merger or the other
transactions contemplated by the Agreement and is in effect at the
Closing Date.
(q) Termination of this Agreement pursuant to this Section 8 shall be
without liability of any party to any other party.
9. Notices. All communications hereunder shall be in writing and, if
sent to the Purchaser, shall be mailed or delivered to (i) DB Capital Investors,
L.P., 130 Liberty Street, 25th Floor, New York, New York 10006, Attention:
Robert Sharp, with a copy to White & Case LLP, 1155 Avenue of the Americas, New
York, New York 10036, Attention: S. Ward Atterbury, Esq.; if sent to the
Company, shall be mailed or delivered to the Company at 5501 Norman Center
Drive, Minneapolis, Minnesota 55437 Attn: General Counsel.
14
<PAGE>
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier.
10. Successors. This Agreement shall inure to the benefit of and be
binding upon the Purchaser, the Company, the Subsidiaries and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person (including
any purchaser of any Securities from the Purchaser) any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained; this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person.
11. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW THAT WOULD REQUIRE THE
APPLICATION OF ANY OTHER LAW.
12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15
<PAGE>
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company
and the Purchaser.
Very truly yours,
JOSTENS, INC.
By: /s/ Lee U. McGrath
-----------------------------------
Name: Lee U. McGrath
Title: Vice President and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
DB CAPITAL INVESTORS, L.P.
By: DB Capital Partners, L.P.
its General Partner
By: DB Capital Partners, Inc.,
its General Partner
By: /s/ Robert Sharp
-------------------------------
Name: Robert Sharp
Title: Managing Director
16
<PAGE>
SCHEDULE 1
----------
Subsidiaries of the Company
Jurisdiction of
Name Incorporation
- ---- -------------
American Yearbook Company, Inc. Kansas
Jostens Canada, Ltd. Canada
Balfirm Canada, Inc. Canada
Jostens Can Investments B.V. The Netherlands
Jostens International Holding B.V. The Netherlands
C.V. Jostens Global Trading The Netherlands
JC Trading, Inc. Puerto Rice
Conceptos Jostens, S.A. de C.V. Mexico
Reconocimientos E Incentivos, S.A. de C.V. Mexico
JostFer S.A. de C.V. Mexico
Reconocimientos, S.A. Columbia
<PAGE>
EXHIBIT 4.7
================================================================================
WARRANT AGREEMENT
Between
JOSTENS, INC.
and
THE BANK OF NEW YORK
as Warrant Agent
-------------------------
Dated as of May 10, 2000
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Appointment of Warrant Agent.....................................1
SECTION 2. Warrant Certificates.............................................1
SECTION 3. Execution of Warrant Certificates................................1
SECTION 4. Registration and Countersignature................................2
SECTION 5. Transfer and Exchange of Warrants................................2
SECTION 6. Registration of Transfers and Exchanges..........................3
SECTION 7. Separation of Warrants; Terms of Warrants; Exercise of
Warrants.........................................................5
SECTION 8. Payment of Taxes.................................................7
SECTION 9. Mutilated or Missing Warrant Certificates........................7
SECTION 10. Reservation of Warrant Shares....................................7
SECTION 11. Obtaining Stock Exchange Listings................................8
SECTION 12. Adjustment of Number of Warrant Shares Issuable..................8
SECTION 13. Fractional Interests............................................15
SECTION 14. Notice of Certain Distributions; Certain Rights.................15
SECTION 15. Notices to the Company and Warrant Agent........................16
SECTION 16. Supplements and Amendments......................................16
SECTION 17. Concerning the Warrant Agent....................................17
SECTION 18. Change of Warrant Agent.........................................20
i
<PAGE>
SECTION 19. Identity of Transfer Agent......................................20
SECTION 20. Certain Defined Terms...........................................20
SECTION 21. Successors......................................................22
SECTION 22. Termination.....................................................22
SECTION 23. Governing Law...................................................22
SECTION 24. Benefits of This Agreement......................................23
SECTION 25. Counterparts....................................................23
ii
<PAGE>
WARRANT AGREEMENT
-----------------
WARRANT AGREEMENT (the "Agreement"), dated as of May 10, 2000, between
Jostens, Inc., a Minnesota corporation (together with any successors and
assigns, the "Company"), and The Bank of New York, a New York banking
corporation, as Warrant Agent (the "Warrant Agent").
WHEREAS, the Company proposes, among other things, to issue and sell
pursuant to a Purchase Agreement, dated as of May 10, 2000, among the Company
and DB Capital Investors, L.P. ("DB Capital"), (the "Purchase Agreement"), 14%
Senior Redeemable Payment-In-Kind Preferred Stock (the "Preferred Stock"), along
with Class E Common Stock Purchase Warrants (the "Warrants"), for the purchase
of 531,325 shares of its Series E Common Stock, par value $0.01 per share (the
"Class E Common Stock," and the shares of Class E Common Stock issuable upon
exercise of the Warrants, together with any shares of the Class A Common Stock,
par value $0.33-1/3 per share of the Company ("Class A Common Stock") issued
upon conversion of such shares of Class E Common Stock, being referred to herein
as the "Warrant Shares");
WHEREAS, the Company wishes the Warrant Agent to act on behalf of the
Company and the Warrant Agent is willing to act in connection with the issuance,
division, transfer, exchange and exercise of Warrants as provided herein;
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein, the Company and the Warrant Agent hereby agree as follows:
SECTION 1. Appointment of Warrant Agent. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. Warrant Certificates. The Warrants will be certificated and
issued in registered form. Any certificates (the "Warrant Certificates")
evidencing the Warrants to be delivered pursuant to this Agreement shall be
substantially in the form set forth in Exhibit A attached hereto.
SECTION 3. Execution of Warrant Certificates. Warrant Certificates
shall be signed on behalf of the Company by its Chairman of the Board,
President, Chief Executive Officer, Vice President, Treasurer or Chief Financial
Officer and by its Secretary or an Assistant Secretary under its corporate seal.
Each such signature upon the Warrant Certificates may be in the form of a
facsimile signature of the present or any future Chairman of the Board,
President, Chief Executive Officer, Vice President, Treasurer, Chief Financial
Officer, Secretary or Assistant Secretary and may be imprinted or otherwise
reproduced on the Warrant Certificates and for that purpose the Company may
adopt and use the facsimile signature of any person who shall have been Chairman
of the Board, President, Chief Executive Officer, Vice President, Treasurer,
Chief Financial Officer, Secretary or Assistant Secretary, notwithstanding the
fact that at the time the Warrant Certificates shall be countersigned and
delivered or disposed of he shall have ceased to hold such office.
<PAGE>
The Warrant Agent shall, upon written instructions of the Chairman of
the Board, the President, Chief Executive Officer, a Vice President, the
Treasurer, an Assistant Treasurer, Chief Financial Officer, Secretary or an
Assistant Secretary of the Company, initially countersign and deliver Warrants
entitling the holders thereof to purchase not more than the number of Warrant
Shares referred to above in the first recital hereof and shall thereafter
countersign and deliver Warrants as otherwise provided in this Agreement.
In case any officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be such officer before the Warrant
Certificates so signed shall have been countersigned by the Warrant Agent, or
disposed of by the Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such person had not ceased
to be such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Warrant Certificate, shall be a proper officer of the Company to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such officer.
Warrant Certificates shall be dated the date of countersignature by the
Warrant Agent.
SECTION 4. Registration and Countersignature. The Warrants shall be
numbered and shall be registered on the books of the Company maintained at the
principal office of the Warrant Agent in the Borough of Manhattan, City of New
York (the "Warrant Register") as they are issued.
Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall, upon written instructions of the Chairman of the Board, the
President, Chief Executive Officer, a Vice President, the Treasurer, Chief
Financial Officer, Secretary or an Assistant Secretary of the Company, initially
countersign and deliver Warrants entitling the holders thereof to purchase not
more than the number of Warrant Shares referred to above in the first recital
hereof and shall thereafter countersign and deliver Warrants as otherwise
provided in this Agreement.
The Company and the Warrant Agent may deem and treat the registered
holders (the "Holders") of the Warrant Certificates as the absolute owners
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone) for all purposes, and neither the Company nor the Warrant Agent shall
be affected by any notice to the contrary.
SECTION 5. Transfer and Exchange of Warrants. The Warrant Agent shall
from time to time, subject to the limitations of Section 6, register the
transfer of any outstanding Warrants upon the records to be maintained by it for
that purpose, upon surrender thereof duly endorsed or accompanied (if so
required by it) by a written instrument or instruments of transfer in form
reasonably satisfactory to the Warrant Agent, duly executed by the registered
Holder or Holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney. Subject to the terms of this Agreement, each
Warrant Certificate may be exchanged for another certificate or certificates
entitling the Holder thereof to purchase a like aggregate number of Warrant
Shares as the certificate or certificates surrendered then entitle each Holder
to
2
<PAGE>
purchase. Any Holder desiring to exchange a Warrant Certificate or Certificates
shall make such request in writing delivered to the Warrant Agent, and shall
surrender, duly endorsed or accompanied (if so required by the Warrant Agent) by
a written instrument or instruments of transfer in form reasonably satisfactory
to the Warrant Agent, the Warrant Certificate or Certificates to be so
exchanged.
Upon registration of transfer, the Company shall execute and the
Warrant Agent shall countersign and deliver, by certified mail or such other
method of delivery which shall provide proof of delivery, a new Warrant
Certificate or Certificates to the persons entitled thereto. The Warrant
Certificates may be exchanged at the option of the Holder thereof, when
surrendered at the office or agency of the Company maintained for such purpose,
which initially will be the corporate trust office of the Warrant Agent in New
York, New York for another Warrant Certificate, or other Warrant Certificates of
different denominations, of like tenor and representing in the aggregate the
right to purchase a like number of Warrant Shares.
No service charge shall be made for any exchange or registration of
transfer of Warrant Certificates, but the Company may require payment of a sum
sufficient to cover any stamp or other tax or other governmental charge that is
imposed in connection with any such exchange or registration of transfer.
SECTION 6. Registration of Transfers and Exchanges. (a) Transfer and
Exchange. The Warrants shall be transferable upon the surrender of a Warrant
Certificate for registration of transfer and in compliance with the provisions
of this Agreement. When a Warrant is presented to the Warrant Agent with a
request to register a transfer, the Warrant Agent shall register the transfer as
requested if the requirements of Section 8-401(a) of the Uniform Commercial Code
are met. When Warrants are presented to the Warrant Agent with a request to
exchange them for an equal number of Warrants of other denominations, the
Warrant Agent shall make the exchange as requested if the requirements of
Sections 8-401(a)(1) and (2) of the Uniform Commercial Code of the State of New
York are met. To permit registration of transfers and exchanges, the Company
shall execute Warrant Certificates at the Warrant Agent's request. The Company
may require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any transfer, exchange or exercise
pursuant to this Section 6.
Subject to the restrictions set forth in this Section 6, each Holder
may at any time and from time to time freely transfer its Warrant and the
Warrant Shares in whole or in part. No Warrant has been, and the Warrant Shares
at the time of their issuance may not be, registered under the Securities Act,
and, except as provided in any separate agreement providing for registration
rights, nothing herein contained shall be deemed to require the Company to so
register any Warrant or Warrant Shares. The Warrants and the Warrant Shares are
issued or issuable subject to the provisions and conditions contained herein,
and every Holder of a Warrant or Warrant Shares by accepting such Warrant or
Warrant Shares agrees with the Company to such provisions and conditions, and
represents to the Company that such Warrant has been acquired and the Warrant
Shares will be acquired for the account of such Warrantholder for investment and
not with a view to or for sale in connection with any distribution thereof.
3
<PAGE>
Except as otherwise permitted by this Section 6, each Warrant
(including each Warrant issued upon the transfer of any Warrant) and/or all
Warrant Shares, as appropriate, shall be stamped or otherwise imprinted with
legends in substantially the following form:
(i) "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS" and
(ii) "THIS SECURITY IS ALSO SUBJECT TO A SHAREHOLDERS
AGREEMENT, DATED AS OF MAY 10, 2000, AMONG THE COMPANY, INVESTCORP
INVESTMENT EQUITY LIMITED, THE OTHER HOLDERS OF THE CLASS D COMMON
STOCK OF THE COMPANY AND DB CAPITAL INVESTORS L.P. A COPY OF SUCH
SHAREHOLDERS AGREEMENT MAY BE OBTAINED WITHOUT CHARGE AND UPON REQUEST
ADDRESSED TO THE SECRETARY OF THE COMPANY AT THE REGISTERED OFFICE OF
THE COMPANY" and
(iii) "THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY BE
REQUIRED TO BE EXERCISED UPON THE DEMAND OF THE COMPANY, UPON THE
OCCURRENCE OF CERTAIN EVENTS SPECIFIED IN THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF THE COMPANY. THE COMPANY WILL FURNISH
WITHOUT CHARGE TO EACH HOLDER WHO SO REQUESTS A COPY OF THE AMENDED AND
RESTATED ARTICLES OF INCORPORATION OF THE COMPANY" and
(iv) "THIS SECURITY IS SUBJECT TO MANDATORY REDEMPTION BY THE
COMPANY. SUCH REDEMPTION CAN BE ACCOMPLISHED WITHOUT THE CERTIFICATES
REPRESENTING SUCH SECURITIES BEING SURRENDERED AND WHETHER OR NOT THE
COMPANY GIVES NOTICE OF SUCH REDEMPTION. THE COMPANY WILL FURNISH
WITHOUT CHARGE TO EACH SECURITYHOLDER WHO SO REQUESTS A FULL STATEMENT
OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF
EACH CLASS OF STOCK OR SERIES OF STOCK OF THE CORPORATION AUTHORIZED TO
BE ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED, AND THE AUTHORITY OF
THE BOARD OF DIRECTORS TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES
OF SUBSEQUENT CLASSES OR SERIES".
4
<PAGE>
Each Warrant issued upon the transfer of any Warrant shall bear the
restrictive legends set forth above, unless, with respect to the legend in
paragraph (i) above, to the extent that the Holder thereof has delivered to the
Company an opinion of counsel (which may be an opinion of an internal counsel of
the Holder) reasonably satisfactory to the Company to the effect that such
legend is not required in order to ensure compliance with the Securities Act.
(b) Obligations with Respect to Transfers and Exchanges of Warrants.
(i) To permit registrations of transfers and exchanges, the
Company shall execute, at the Warrant Agent's request, and the Warrant
Agent shall countersign Warrants.
(ii) All Warrants issued upon any registration of transfer or
exchange of Warrants shall be the valid obligations of the Company,
entitled to the same benefits under this Agreement as the Warrants
surrendered upon the registration of transfer or exchange.
SECTION 7. Separation of Warrants; Terms of Warrants; Exercise of
Warrants. The Preferred Stock and Warrants will be separately transferable as of
the date hereof.
Subject to the terms of this Agreement, each Warrant holder shall have
the right, which may be exercised commencing on or after the date of issuance
and until 5:00 p.m., New York City time, on May 1, 2011 (the "Expiration Date"),
to receive from the Company upon the exercise of each Warrant the number of
fully paid and nonassessable Warrant Shares which the holder may at the time be
entitled to receive on exercise of such Warrants and payment of the Exercise
Price (as defined) for such Warrant Shares. Each Warrant not exercised prior to
the Expiration Date shall become void and all rights thereunder and all rights
in respect thereof under this Agreement shall cease as of such time. No
adjustments as to dividends will be made upon exercise of the Warrants.
The price per share at which Warrant Shares shall be purchasable upon
exercise of Warrants (the "Exercise Price") regardless of the Exercise Rate (as
defined) then in effect shall be $0.01. A Warrant may be exercised upon
surrender at the office or agency of the Company maintained for such purpose,
which initially will be the corporate trust office of the Warrant Agent in New
York, New York, of the certificate or certificates evidencing the Warrants to be
exercised with the form of election to purchase on the reverse thereof duly
filled in and signed, which signature shall be guaranteed by a participant in a
recognized Signature Guarantee Medallion Program, and upon payment to the
Warrant Agent for the account of the Company of the Exercise Price for the
number of Warrant Shares in respect of which such Warrants are then exercised.
The "Exercise Date" for a Warrant shall be the date when all of the items
referred to in the immediately preceding sentence are received by the Warrant
Agent at or prior to 11:00 a.m., New York City time, on a Business Day and the
exercise of the Warrants will be effective as of such Exercise Date. If any
items referred to in such sentence are received after 11:00 a.m., New York City
time, on a Business Day, the exercise of the Warrants to which such item relates
will be effective on the next succeeding Business Day. Notwithstanding the
foregoing, in the case of an exercise of Warrants on the Expiration Date, if all
of the items referred to in such sentence are received by the Warrant Agent at
or prior to 5:00 p.m., New York City time, on the Expiration Date, the exercise
of the Warrants to which such items relate will be effective on the Expiration
Date. Payment of the aggregate Exercise Price shall be made
5
<PAGE>
(i) in cash or by certified or official bank check to the order of the Company
in New York Clearing House Funds, (ii) by wire transfer to an account specified
by the Company on request of the Holder, such request to be made not less than
two Business Days prior to the proposed exercise of the Warrants or (iii)
without the payment of cash, by reducing the number of shares of Class E Common
Stock obtainable upon the exercise of a Warrant and payment of the Exercise
Price in cash so as to yield a number of shares of Class E Common Stock upon the
exercise of such Warrant equal to the product of (A) the number of shares of
Class E Common Stock issuable as of the Exercise Date upon the exercise of such
Warrant (if payment of the Exercise Price were being made in cash) and (B) a
fraction (the "Cashless Exercise Ratio"), the numerator of which is the excess
of the Current Market Value (as defined below) per share of the Class A Common
Stock of the Company on the Exercise Date over the Exercise Price per share as
of the Exercise Date of such Warrant and the denominator of which is the Current
Market Value per share of the Class A Common Stock of the Company on such
Exercise Date. An exercise of a Warrant in accordance with the immediately
preceding clause (ii) is herein called a "Cashless Exercise." Upon surrender of
a Warrant Certificate representing more than one Warrant in connection with the
Holder's option to elect a Cashless Exercise, the number of shares of Class E
Common Stock deliverable upon a Cashless Exercise shall be equal to the number
of shares of Common Stock issuable upon the exercise of Warrants that the Holder
specifies are to be exercised pursuant to a Cashless Exercise multiplied by the
Cashless Exercise Ratio. All provisions of this Agreement shall be applicable
with respect to a surrender of a Warrant Certificate pursuant to a Cashless
Exercise for less than the full number of Warrants represented thereby.
Subject to the provisions of Section 6 hereof, upon such surrender of
Warrants and payment of the Exercise Price or the election of a Cashless
Exercise, the Company shall issue and cause to be delivered with all reasonable
dispatch to or upon the written order of the Holder and in such name or names as
the Warrantholder may designate a certificate or certificates for the number of
Warrant Shares issuable upon the exercise of such Warrants together with cash as
provided in Section 13.
The Warrants shall be exercisable, at the election of the holders
thereof, either in full or from time to time in part and, in the event that a
certificate evidencing Warrants is exercised in respect of fewer than all of the
Warrant Shares issuable on such exercise at any time prior to the date of
expiration of the Warrants, a new certificate evidencing the remaining Warrant
or Warrants will be issued, and the Warrant Agent is hereby irrevocably
authorized to countersign and to deliver the required new Warrant Certificate or
Certificates pursuant to the provisions of this Section and of Section 3 hereof,
and the Company, whenever required by the Warrant Agent, will promptly supply
the Warrant Agent with Warrant Certificates duly executed on behalf of the
Company for such purpose.
All Warrant Certificates surrendered upon exercise of Warrants shall be
cancelled by the Warrant Agent. Such cancelled Warrant Certificates shall then
be disposed of by the Warrant Agent in a manner consistent with the Warrant
Agent's customary procedure for such disposal and in a manner reasonably
satisfactory to the Company. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the
6
<PAGE>
Company all monies received by the Warrant Agent for the purchase of the Warrant
Shares through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the holders during
normal business hours at its office. The Company shall supply the Warrant Agent
from time to time with such numbers of copies of this Agreement as the Warrant
Agent may request.
SECTION 8. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Warrant Shares in a
name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 9. Mutilated or Missing Warrant Certificates. In case any of
the Warrant Certificates shall be mutilated, lost, stolen or destroyed, the
Company may at its discretion issue and the Warrant Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of and substitution for the Warrant Certificate lost,
stolen or destroyed, a new Warrant Certificate of like tenor and representing an
equivalent number of Warrants, but only upon receipt of evidence satisfactory to
the Company and the Warrant Agent of such loss, theft or destruction of such
Warrant Certificate and indemnity also satisfactory to them.
SECTION 10. Reservation of Warrant Shares. The Company will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued Class E Common Stock or its authorized
and issued Class E Common Stock held in its treasury, for the purpose of
enabling it to satisfy an obligation to issue shares of Class E Common Stock
upon exercise of Warrants, the maximum number of shares of Class E Common Stock
which may then be deliverable upon the exercise of all outstanding Warrants. In
addition, the Company will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Class A
Common Stock or its authorized and issued Class A Common Stock held in its
treasury, for the purpose of enabling it to satisfy an obligation to issue
shares of Class A Common Stock upon the conversion of shares of Class E Common
Stock issuable upon the exercise of Warrants, the maximum number of shares of
Class A Common Stock which may then be deliverable upon the conversion of all
such shares of Class E Common Stock.
The Company or, if appointed, the transfer agent for the Class A Common
Stock and the Class E Common Stock (the "Transfer Agent") and every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of any of the rights of purchase aforesaid will be irrevocably
authorized and directed at all times to reserve such number of authorized shares
as shall be required for such purpose. The Company will keep a copy of this
Agreement on file with the Transfer Agent and with every subsequent transfer
agent
7
<PAGE>
for any shares of the Company's capital stock issuable upon the exercise of the
rights of purchase represented by the Warrants. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such Transfer Agent
the stock certificates required to honor outstanding Warrants upon exercise
thereof in accordance with the terms of this Agreement. The Company will supply
such Transfer Agent with duly executed certificates for such purposes and will
provide or otherwise make available any cash which may be payable as provided in
Section 13. The Company will furnish such Transfer Agent a copy of all notices
of adjustments and certificates related thereto transmitted to each holder
pursuant to Section 14 hereof.
The Company covenants that all shares of Class E Common Stock which may
be issued upon exercise of Warrants made in accordance with the terms of this
Agreement will, upon payment of the Exercise Price therefor (or the election of
a Cashless Exercise, as the case may be) and issue, be validly authorized and
issued, fully paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the issuance
thereof. The Company further covenants that all shares of Class A Common Stock
which may be issued upon the conversion in accordance with the terms thereof of
any shares of Class E Common Stock issuable upon the exercise of Warrants made
in accordance with the terms of this Agreement will be validly authorized and
issued, fully paid, non-assessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the issuance
thereof. The Company will take no action to increase the par value of the Class
E Common Stock to an amount in excess of the Exercise Price, and the Company
will not enter into any agreements inconsistent with the rights of Holders
hereunder. The Company will use its reasonable best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having
jurisdiction thereof as may be necessary to enable the Company to perform its
obligations under this Agreement. The Company shall not take any action
reasonably within its control, including the hiring of a broker to solicit
exercises, which would render unavailable an exemption from registration under
the Securities Act which might otherwise be available with respect to the
issuance of Warrant Shares upon exercise of any Warrants.
SECTION 11. Obtaining Stock Exchange Listings. The Company will from
time to time take all action which may be necessary so that the Warrant Shares
which are shares of Class A Common Stock, immediately upon their issuance upon
the conversion of the shares of Class E Common Stock issuable upon the exercise
of Warrants, will be listed on the principal securities exchanges and markets
within the United States of America (including the NASDAQ National Market
System), if any, on which other shares of Class A Common Stock are then listed.
In the event that, at any time during the period in which the Warrants are
exercisable, the Class A Common Stock is not listed on any principal securities
or exchanges or markets within the United States of America, the Company will
use its reasonable best efforts to permit the Warrant Shares to be designated
PORTAL securities in accordance with the rules and regulations adopted by the
National Association of Securities Dealers, Inc. relating to trading in the
Private Offering, Resales and Trading through Automated Linkages market.
SECTION 12. Adjustment of Number of Warrant Shares Issuable. The number
of shares of Class E Common Stock issuable upon the exercise of each Warrant
(the "Exercise
8
<PAGE>
Rate") is subject to adjustment from time to time upon the occurrence of the
events enumerated in this Section 12. The Exercise Rate shall initially be one
(1.00).
(a) Adjustment for Change in Capital Stock. If, after the
Issue Date, the Company:
(i) pays a dividend or makes a distribution on shares
of any class or series of its Common Stock payable in shares
of its Common Stock of the Company, except to the extent any
such dividend or distribution results in the grant, issuance,
sale or making of Distribution Rights or a Distribution
pursuant to Section 12(c);
(ii) subdivides or splits any of its outstanding
shares of any class or series of Common Stock into a greater
number of shares;
(iii) combines any of its outstanding shares of any
class or series of Common Stock into a smaller number of
shares; or
(iv) issues by reclassification of any class or
series of its Common Stock any shares of any of its Capital
Stock;
then the Exercise Rate in effect immediately prior to such action for each
Warrant then outstanding shall be adjusted by multiplying the Exercise Rate in
effect immediately prior to such action by a fraction (A) the numerator of which
shall be the number of shares of all classes or series of Common Stock
outstanding immediately after such action and (B) the denominator of which shall
be the number of shares of all classes or series of Common Stock outstanding
immediately prior to such action or the record date applicable to such action,
if any (regardless of whether the Warrants then outstanding are then exercisable
and without giving effect to the Cashless Exercise option). The adjustment shall
become effective immediately after the record date in the case of a dividend or
distribution and immediately after the effective date in the case of a
subdivision, combination or reclassification. In the event that such dividend or
distribution is not so paid or made or such subdivision, combination or
reclassification is not effected, the Exercise Rate shall again be adjusted to
be the Exercise Rate which would then be in effect if such record date or
effective date had not been so fixed.
If after an adjustment a holder of a Warrant upon exercise of such
Warrant may receive shares of two or more classes or series of Capital Stock of
the Company, the Exercise Rate shall thereafter be subject to adjustment upon
the occurrence of an action taken with respect to any such class or series of
Capital Stock as is contemplated by this Section 12 with respect to the Common
Stock, on terms comparable to those applicable to Common Stock in this Section
12.
(b) Adjustment for Certain Sales of Common Stock Below Current Market
Value. If, after the Issue Date, the Company (i) grants or sells to any
Affiliate of the Company (other than a Subsidiary) or (ii) grants or sells, or
offers to grant or sell to all holders of any class or series of Common Stock,
shares of any class or series of Common Stock or any securities convertible into
or exchangeable or exercisable for any class or series of Common Stock (other
than (1) pursuant to the exercise of the Warrants, (2) pursuant to any security
convertible into, or
9
<PAGE>
exchangeable or exercisable for, shares of Common Stock outstanding as of the
Issue Date, (3) upon the conversion, exchange or exercise of any convertible,
exchangeable or exercisable security as to which upon the issuance thereof an
adjustment pursuant to this Section 12 has been made or (4) upon the conversion,
exchange or exercise of convertible, exchangeable or exercisable securities of
the Company outstanding on the Issue Date (to the extent in accordance with the
terms of such securities as in effect on such date), including any warrants
issued to purchasers of the Company's 12 3/4% Senior Subordinated Notes due 2010
at a price per share below the then Current Market Value, the Exercise Rate for
each Warrant then outstanding shall be adjusted in accordance with the formula:
E/1/ = E x (O+N)
-----------------
(O + (N x P/M))
where:
E/1/ = the adjusted Exercise Rate for each Warrant then outstanding;
E = the then current Exercise Rate for each Warrant then outstanding;
O = the aggregate number of shares of Common Stock of all
classes outstanding immediately prior to the sale of such
Common Stock or issuance of securities convertible,
exchangeable or exercisable for Common Stock;
N = the number of shares of Common Stock of any class or series
so sold or the maximum stated number of shares of Common Stock
of any class or series issuable upon the conversion, exchange
or exercise of any such convertible, exchangeable or
exercisable securities, as the case may be;
P = the proceeds per share of Common Stock of the relevant class
or series received by the Company, which (i) in the case of
shares of Common Stock of any class or series is the amount
received by the Company in consideration for the sale and
issuance of such shares; and (ii) in the case of securities
convertible into or exchangeable or exercisable for shares of
Common Stock of any class or series is the amount received by
the Company in consideration for the sale and issuance of such
convertible or exchangeable or exercisable securities, plus
the minimum aggregate amount of additional consideration,
other than the surrender of such convertible or exchangeable
securities, payable to the Company upon exercise, conversion
or exchange thereof; and
M = the Current Market Value as of the Time of Determination or
at the time of sale, as the case may be, of a share of Common
Stock of the relevant class or series.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the rights, warrants
or options to which this paragraph (b) applies or upon consummation of the sale
of Common Stock, as the case may be. To the extent that shares of Common Stock
are not delivered after the expiration of such rights, warrants or options, the
Exercise Rate for each Warrant then outstanding shall be readjusted to the
Exercise Rate which would otherwise be in effect had the adjustment made upon
the issuance of such rights, warrants or options been made on the basis of
delivery of only the number of shares of Common Stock actually delivered. In the
event that such rights or warrants are not so issued, the Exercise Rate for each
Warrant then outstanding shall again be adjusted to
10
<PAGE>
be the Exercise Rate which would then be in effect if such date fixed for
determination of shareholders entitled to receive such rights, warrants or
options had not been so fixed.
No adjustment shall be made under this paragraph (b) if the application
of the formula stated above in this paragraph (b) would result in a value of E1
that is lower than the value of E.
No adjustment shall be made under this paragraph (b) for any adjustment
which is the subject of paragraphs (a) and (e) of this Section 12.
Notwithstanding the foregoing, no adjustment in the Exercise Rate shall
be required upon the grant, conversion, exchange or exercise of options to or by
officers, directors or employees of the Company to acquire Common Stock that (i)
are granted or exercised pursuant to any option or option plan as in effect on
the Issue Date or described in the offering memorandum concerning the Units or
(ii) have an exercise price, at the time of issuance thereof, at least equal to
the then Current Market Value of the Common Stock underlying such options.
(c) Adjustment Upon Certain Distributions.
(i) If at any time after the Issue Date, the Company grants,
issues or sells any Capital Stock or other securities (other than
Common Stock), any Convertible Security, or options, warrants or rights
to purchase Capital Stock or other securities (other than Common Stock)
pro rata to the record holders of any class or series of Common Stock
(the "Distribution Rights") or, without duplication, makes any
distribution (other than a distribution pursuant to a plan of
liquidation) (a "Distribution") on shares of any class or series of
Common Stock (whether in cash, property, evidences of indebtedness, or
otherwise), then the Exercise Rate shall be adjusted in accordance with
the formula:
E/1/ = E x (M/(M-F))
where:
E/1/ = the adjusted Exercise Rate;
E = the current Exercise Rate for each Warrant;
M = the Current Market Value per share of Class A Common Stock at the
Time of Determination;
F = the fair market value at the Time of Determination of such
portion of the options, Convertible Securities, warrants,
cash, property or other securities or assets distributable
pursuant to such Distribution Rights or Distribution per share
of outstanding of Common Stock.
11
<PAGE>
The adjustment shall become effective immediately after the
Time of Determination with respect to the shareholders entitled to
receive the options, Convertible Securities, warrants, cash, property,
evidences of indebtedness or other securities or assets to which this
paragraph (c)(i) applies. No adjustment shall be made under this
paragraph (b) if the application of the formula stated above in this
paragraph (c)(i) would result in a value of E1 that is lower than the
value of E. This paragraph (c)(i) does not apply to any securities
which result in an adjustment pursuant to paragraphs (a) or (b) of this
Section 12.
(ii) Notwithstanding the provisions of paragraph (c)(i) of
this Section 12, an event which would otherwise give rise to an
adjustment pursuant to Section 12(c)(i) shall not give rise to such
adjustment if the Company grants, issues or sells Distribution Rights
to the Holders of Warrants or includes the holders of the Warrants in
such Distribution, in each case on a pro rata basis, assuming for the
purpose of this Section 12(c)(ii) that (x) all outstanding shares of
Common Stock are of one class and (y) the Warrants had been exercised
(disregarding for this purpose all provisions with respect to Cashless
Exercise).
(iii) Notwithstanding anything to the contrary set forth in
this Section 12(c), if, at any time, the Company makes any distribution
pursuant to any plan of liquidation (a "Liquidating Distribution") on
shares of Class A Common Stock or Class E Common Stock (whether in
cash, property, evidences of indebtedness or otherwise), then, subject
to applicable law, the Company shall make to each Holder of Warrants
the aggregate Liquidating Distribution which such Holder would have
acquired if such Holder had held the maximum number of shares of Class
E Common Stock acquirable upon the complete exercise of each Holder's
Warrants (regardless of whether the Warrants are then exercisable and
without giving effect to the Cashless Exercise option) immediately
before the Time of Determination of shareholders entitled to receive
Liquidating Distributions; provided, any Holder of Warrants may elect
to receive Liquidating Distributions on the basis that such Holder held
the maximum number of shares of Class A Common Stock into which the
shares of Class E Common Stock described in this sentence could be
converted (without reference to any required holding period)
immediately before the Time of Determination of shareholders entitled
to receive Liquidating Distributions.
(d) Notice of Adjustment. Whenever the Exercise Rate is adjusted, the
Company shall promptly mail to holders of Warrants then outstanding at the
addresses appearing on the Warrant Register a notice of the adjustment. The
Company shall file with the Warrant Agent and any other Registrar such notice
and a certificate from the Company's independent public accountants briefly
stating the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence that the adjustment is correct, absent
manifest error. Neither the Warrant Agent nor any such Registrar shall be under
any duty or responsibility with respect to any such certificate except to
exhibit the same during normal business hours to any holder desiring inspection
thereof.
(e) Reorganization of Company; Fundamental Transaction.
(i) If the Company, in a single transaction or through a
series of related transactions, consolidates with or merges with or
into any other person or sells, assigns, transfers, leases, conveys or
otherwise disposes of all or substantially all of its properties and
assets to another person or group of affiliated persons or is a party
to a merger or binding share exchange
12
<PAGE>
which reclassifies or changes its outstanding Common Stock (a
"Fundamental Transaction"), as a condition to consummating any such
transaction the person formed by or surviving any such consolidation or
merger if other than the Company or the person to whom such transfer
has been made (the "Surviving Person") shall enter into a supplemental
warrant agreement. The supplemental warrant agreement shall provide (a)
that the holder of a Warrant then outstanding may exercise the Warrant
for the kind and amount of securities, cash or other assets which such
holder would have received immediately after the Fundamental
Transaction if such holder had exercised the Warrant and, if such
Warrant is then exercisable into shares of a class or series of Common
Stock (such as Class E Common Stock as constituted on the Issue Date)
that is convertible into shares of another class or series of Common
Stock (such as Class A Common Stock as constituted on the Issue Date)
if such holder had converted such Warrant Shares into such other class
or series of Common Stock, in each case immediately before the
effective date of the transaction (whether or not the Warrants were
then exercisable and without giving effect to the Cashless Exercise
option), it being understood that the Warrants will remain exercisable
only in accordance with their terms so that conditions to exercise will
remain applicable, such as payment of Exercise Price, assuming (to the
extent applicable) that such holder (i) was not a constituent person or
an affiliate of a constituent person to such transaction, (ii) made no
election with respect thereto, and (iii) was treated alike with the
plurality of non-electing holders, and (b) that the Surviving Person
shall succeed to and be substituted to every right and obligation of
the Company in respect of this Agreement and the Warrants. The
supplemental warrant agreement shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 12. The Surviving Person shall mail to
holders of Warrants at the addresses appearing on the Warrant Register
a notice briefly describing the supplemental warrant agreement. If the
issuer of securities deliverable upon exercise of Warrants is an
affiliate of the Surviving Person, that issuer shall join in the
supplemental warrant agreement.
(ii) Notwithstanding the foregoing, if the Company enters into
a Fundamental Transaction with another Person (other than a subsidiary
of the Company) and consideration is payable to holders of shares of
Capital Stock (or other securities or property) issuable or deliverable
upon exercise of the Warrants that are exercisable in exchange for such
shares in connection with such Fundamental Transaction which
consideration consists solely of cash ( assuming (to the extent
applicable) that each such holder (i) was not a constituent person or
an affiliate of a constituent person to such transaction, (ii) made no
election with respect thereto, and (iii) was treated alike with the
plurality of non-electing holders), then the holders of Warrants shall
be entitled to receive distributions on the date of such event on an
equal basis with holders of such shares (or other securities issuable
upon exercise of the Warrants) as if the Warrants had been exercised
immediately prior to such event, less the aggregate Exercise Price
therefor. Upon receipt of such payment, if any, the rights of a holder
of such Warrant shall terminate and cease and such holder's Warrants
shall expire.
(iii) If this paragraph (e) applies, it shall supersede the
application of paragraph (a) of this Section 12.
(f) Other Events. If any event occurs as to which the foregoing
provisions of this Section 12 are not strictly applicable or, if strictly
applicable, would not, in the good faith
13
<PAGE>
judgment of the Board of Directors, fairly and adequately protect the purchase
rights of the Warrants in accordance with the essential intent and principles of
such provisions, then such Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and
principles, as shall be reasonably necessary, in the good faith opinion of such
Board of Directors, to protect such purchase rights as aforesaid, but in no
event shall any such adjustment have the effect of decreasing the Exercise Rate
or decreasing the number of Warrant Shares issuable upon exercise of the
Warrants.
(g) Warrant Agent's Adjustment Disclaimer. The Warrant Agent shall have
no duty to determine when an adjustment under this Section 12 should be made,
how it should be made or what it should be. The Warrant Agent shall have no duty
to determine whether a supplemental warrant agreement under paragraph (e) need
be entered into or whether any provisions of any supplemental warrant agreement
are correct. The Warrant Agent shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon exercise of Warrants. The Warrant Agent shall not be responsible for the
Company's failure to comply with this Section 12.
(h) Adjustment for Tax Purposes. In the event of a taxable distribution
to holders of shares of Common Stock which results in an adjustment to the
number of shares of Common Stock or other consideration for which such a Warrant
may be exercised, the holders of the Warrants may, in certain circumstances, be
deemed to have received a distribution subject to United States federal income
tax as a dividend.
(i) Specificity of Adjustment. Regardless of any adjustment in the
number or kind of shares purchasable upon the exercise of the Warrants, Warrant
Certificates theretofore or thereafter issued may continue to express the same
number and kind of Warrant Shares per Warrant as are stated on the Warrant
Certificates initially issuable pursuant to this Agreement.
(j) Voluntary Adjustment. The Company from time to time may increase
the Exercise Rate by any number and for any period of time provided that such
period is not less than 20 Business Days. Whenever the Exercise Rate is so
increased, the Company shall mail to holders at the addresses appearing on the
Warrant Register and file with the Warrant Agent a notice of the increase. The
Company shall give the notice at least 15 days before the date the increased
Exercise Rate takes effect. The notice shall state the increased Exercise Rate
and the period it will be in effect. A voluntary increase in the Exercise Rate
shall not change or adjust the Exercise Rate otherwise in effect as determined
by this Section 12.
(k) Multiple Adjustments. After an adjustment to the Exercise Rate for
outstanding Warrants under this Section 12, any subsequent event requiring an
adjustment under this Section 12 shall cause an adjustment to the Exercise Rate
for outstanding Warrants as so adjusted.
(l) When De Minimis Adjustment May Be Deferred. No adjustment in the
Exercise Rate need be made unless the adjustment would require an increase of at
least one percent (1%) in the Exercise Rate. Any adjustments that are not made
shall be carried forward and taken into account in any subsequent adjustments.
All calculations under this Section 12 shall be made to the nearest 1/1000th of
a share, as the case may be.
14
<PAGE>
(m) Treasury Shares Disregarded. For purposes of this Section 12, the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company. The Company shall not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company.
(n) Tag-Along Transfers.
(i) If the Company receives any Transfer Notice by a holder of
Class D Common Stock in respect of a proposed Tag-Along Transfer, as
contemplated by Section 4 of the Amended and Restated Articles of
Incorporation of the Company (the "Articles"), the Company shall
promptly provide a copy of such notice to each Holder of a Warrant.
(ii) Notwithstanding anything herein to the contrary, upon a
Tag-Along Transfer of a number of shares of Class D Common Stock equal
to or greater than 80% of the outstanding shares of Class D Common
Stock, then to the extent the Warrants shall not have been exercised or
the holder of the Warrant Shares issued upon such exercise shall not
have given a Tag-Along Notice in each case on or before the Tag-Along
Acceptance Date, such Warrants shall be subject to redemption pursuant
to Section 5 of the Articles and the Holders thereof shall be entitled
to receive the Tag-Along Redemption Price (reduced by the aggregate
Exercise Price payable by such Holders), in each case as if such
Warrants had been exercised immediately prior to the Tag-Along
Acceptance Date. Upon receipt of such payment, if any, the rights of a
holder of such Warrant shall terminate and cease and such holder's
Warrants shall expire.
(iii) Capitalized terms not otherwise defined in this Section
12(n) have the meanings set forth in the Articles.
(iv) Sections 4 and 5 of the Articles shall not be amended
without the consent of a majority-in-interest of the Holders of
Warrants.
SECTION 13. Fractional Interests. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 13,
be issuable on the exercise of any Warrants (or specified portion thereof), the
Company shall pay an amount in cash equal to the Current Market Value per share
of the Class A Common Stock of the Company on the day immediately preceding the
date the Warrant is presented for exercise, multiplied by such fraction.
SECTION 14. Notice of Certain Distributions; Certain Rights. The
Company shall give prompt written notice to the Warrant Agent and shall cause
the Warrant Agent, on behalf of and at the expense of the Company to give to
each Holder written notice of any determination to make a distribution to the
holders of its Common Stock of any cash dividends, assets, debt securities,
preferred stock, or any rights or warrants to purchase debt securities,
preferred stock, assets or other securities (other than Common Stock, or rights,
options, or warrants to purchase Common Stock) of the Company, which notice
shall state the nature and
15
<PAGE>
amount of such planned dividend or distribution and the record date therefor,
and shall be received by the Holders at least 20 days prior to such record date
therefor.
Nothing contained in this Agreement or in any Warrant Certificate shall
be construed as conferring upon the Holders the right to vote or to consent or
to receive notice as shareholders in respect of the meetings of shareholders or
the election of directors of the Company or any other matter, or any rights
whatsoever as shareholders of the Company.
SECTION 15. Notices to the Company and Warrant Agent. Any notice or
demand authorized by this Agreement to be given or made by the Warrant Agent or
by any Holder to or on the Company shall be sufficiently given or made when
received at the office of the Company expressly designated by the Company as its
office for purposes of this Agreement (until the Warrant Agent is otherwise
notified in accordance with this Section 15 by the Company), as follows:
Jostens Inc.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
Attn: General Counsel
with a copy to:
Gibson, Dunn & Crutches LLP
200 Park Avenue
47th Floor
New York, New York 10166
Attention: Joerg H. Esdorn, Esq.
Any notice pursuant to this Agreement to be given by the Company or by
any Holder(s) to the Warrant Agent shall be sufficiently given when received by
the Warrant Agent at the address appearing below (until the Company is otherwise
notified in accordance with this section by the Warrant Agent).
Any notice or communication to a Holder shall be mailed by first class
mail, postage prepaid, to its address shown on the register kept by Warrant
Agent.
SECTION 16. Supplements and Amendments. (a) The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Warrants in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, or to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not in any way adversely affect the
interests of any holder of Warrants as evidenced by an opinion of counsel which
may be in-house counsel delivered to the Warrant Agent.
(b) No other amendment or modifications of any provision of this
Agreement or the Warrant Certificates or consent to any departure by the Company
therefrom, shall in any
16
<PAGE>
event be effective without written consent of the Holders of Warrants
representing at least a majority of all the Warrant Shares issued or issuable
upon exercise of the Warrants (the "Requisite Holders"), provided, however, that
without the consent of each Holder affected thereby, no amendment, modification,
termination or waiver may:
(i) make any change to the definition of "Requisite Holders"; or
(ii) make any change in the foregoing amendment and waiver
provisions.
After an amendment or modification under this Section 16 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing such amendment or modification. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment or modification.
In connection with any amendment or modification under this Section 16,
the Company may offer, but shall not be obligated to offer, to any Holder who
consents to such amendment or modification, consideration for such Holder's
consent, so long as such consideration is offered to all Holders.
(c) The Company will not effect any proposed amendment or modification
of any of the provisions of this Agreement or the Warrant Certificates unless
each Holder (irrespective of the amount of Warrants or Warrant Shares then owned
by it) shall be informed thereof by the Company prior to the effectuation
thereof (but only to the extent the Company has been provided with addresses for
the Holders) and shall be afforded the opportunity of considering the same and
shall be supplied by the Company with sufficient information to enable it to
make an informed decision with respect thereto. Executed or true and correct
copies of any amendment or modification effected pursuant to the provisions of
this Section 16 shall be delivered by the Company to each Holder of outstanding
Warrants or Warrant Shares forthwith following the date on which the same shall
have been executed and delivered by the Holder or Holders of the requisite
percentage of outstanding Warrant Shares (but only to the extent the Company has
been provided with the addresses for the Holders).
SECTION 17. Concerning the Warrant Agent. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the Holders, by their acceptance
of Warrants, shall be bound (it being understood that the Company, to the extent
that it acts as Warrant Agent, shall not be entitled to the benefits or
protections of this Section 17.):
(a) The statements contained herein and in the Warrant
Certificate shall be taken as statements of the Company, and the
Warrant Agent assumes no responsibility for the correctness of any of
the same except such as describe the Warrant Agent or any action taken
by it. The Warrant Agent assumes no responsibility with respect to the
distribution of the Warrants except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for and shall
incur no liability to the Company or any Holder for any failure of the
Company to comply with the covenants contained in this Agreement or in
the Warrants to be complied with by the Company.
17
<PAGE>
(c) The Warrant Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself (through its employees) or by or through its attorneys or
agents (which shall not include its employees) and shall not be
responsible for the misconduct of any attorney or agent appointed with
due care.
(d) The Warrant Agent may consult at any time with legal
counsel satisfactory to it (who may be counsel for the Company), and the
Warrant Agent shall incur no liability or responsibility to the Company
or to any holder in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the
advice of such counsel.
(e) Whenever in the performance of its duties under this
Agreement the Warrant Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
such evidence in respect thereof be herein specifically prescribed) may
be deemed conclusively to be proved and established by a certificate
signed by the Chairman of the Board, the President, one of the Vice
Presidents, the Treasurer or the Secretary of the Company and delivered
to the Warrant Agent; and such certificate shall be full authorization
to the Warrant Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon such
certificate.
(f) The Company agrees to pay the Warrant Agent such
compensation for all services rendered by the Warrant Agent in the
performance of its duties under this Agreement as may be separately
agreed in writing, to reimburse the Warrant Agent for all expenses,
taxes and governmental charges and other charges of any kind and nature
incurred by the Warrant Agent in the performance of its duties under
this Agreement (including, without limitation, reasonable fees and
expenses of counsel), and to indemnify the Warrant Agent and its
agents, employees, directors, officers and affiliates and save it and
them harmless against any and all liabilities, losses and expenses,
including, without limitation, judgments, costs and counsel fees, for
anything done or omitted by the Warrant Agent in the performance of its
duties under this Agreement, except as a result of the Warrant Agent's
negligence or bad faith. The provisions of this paragraph shall survive
the resignation or removal of the Warrant Agent and the termination of
this Agreement.
(g) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other
action likely to involve expense unless the Company or one or more
holders shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with or
without any such security or indemnity. All rights of action under this
Agreement or under any of the Warrants may be enforced by the Warrant
Agent without the possession of any of the Warrants or the production
thereof at any trial or other proceeding relative thereto, and any such
action, suit or proceeding instituted by the Warrant Agent shall be
brought in its name as Warrant Agent, and any recovery of judgment
shall be for the ratable benefit of the holders, as their respective
rights or interests may appear.
18
<PAGE>
(h) The Warrant Agent and any stockholder, director, officer
or employee ("Related Parties") of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or
become pecuniarily interested in any transactions in which the Company
may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement or such director, officer or employee. Nothing
herein shall preclude the Warrant Agent or any Related Party from
acting in any other capacity for the Company or for any other legal
entity including, without limitation, acting as Transfer Agent or as a
lender to the Company or an affiliate thereof.
(i) The Warrant Agent shall act hereunder solely as agent, and
its duties shall be determined solely by the provisions thereof. The
Warrant Agent shall not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own
negligence or bad faith. No implied duties or obligations shall be read
into this Agreement against the Warrant Agent.
(j) The Warrant Agent will not incur any liability or
responsibility to the Company or to any holder for any action taken in
reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, document or instrument reasonably believed
by it to be genuine and to have been signed, sent or presented by the
proper party or parties.
(k) The Warrant Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Warrant Agent) or in
respect of the validity or execution of any Warrant (except its
countersignature thereof); nor shall the Warrant Agent by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Warrant Shares (or other stock) to
be issued pursuant to this Agreement or any Warrant, or as to whether
any Warrant Shares (or other stock) will, when issued, be validly
issued, fully paid and nonassessable, or as to the Exercise Price or
the number or amount of Warrant Shares or other securities or other
property issuable upon exercise of any Warrant.
(l) The Warrant Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, Treasurer any
Vice President or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and
shall not be liable for any action taken or suffered to be taken by it
in good faith and without negligence in accordance with instructions of
any such officer or officers.
(m) By countersigning Warrant Certificates or by any other act
hereunder the Warrant Agent shall not be deemed to make any
representations as to validity or authorization of the Warrants or the
Warrant Certificates (except as to its countersignature thereon) or of
any securities or other property delivered upon exercise or tender of
any Warrant, or as to the accuracy of the computation of the Exercise
Price or the number or kind or amount of stock or other securities or
other property deliverable upon exercise of any Warrant or the
correctness of the representations of the Company made in any
certifications that the Warrant Agent receives.
19
<PAGE>
The Warrant Agent shall not have any duty to calculate or determine any
adjustments with respect either to the Exercise Price or the kind and
amount of shares or other securities or any property receivable by
holders of Warrants upon the exercise or tender of Warrants required
from time to time, and the Warrant Agent shall have no duty or
responsibility in determining the accuracy or correctness of any such
calculation.
SECTION 18. Change of Warrant Agent. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company 30
days' notice in writing. The Warrant Agent may be removed by like notice to the
Warrant Agent from the Company. If the Warrant Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Warrant Agent or by any holder (who shall with such notice submit
his Warrant for inspection by the Company), then the resigning or removed
Warrant Agent or any holder may apply to any court of competent jurisdiction for
the appointment of a successor to the Warrant Agent. Pending appointment of a
successor to the Warrant Agent, either by the Company or by such court, the
duties of the Warrant Agent shall be carried out by the Company. Any successor
warrant agent, whether appointed by the Company or such a court, shall be a bank
or trust company in good standing, incorporated under the laws of the United
States of America or any State thereof or the District of Columbia and having at
the time of its appointment as warrant agent a combined capital and surplus of
at least $250,000,000. After appointment, the successor warrant agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent shall deliver and transfer to the successor warrant agent
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for such purpose. Failure
to file any notice provided for in this Section 18, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Warrant Agent or the appointment of the successor warrant agent, as the
case may be. In the event of such resignation or removal, the Company or the
successor warrant agent shall mail by first class mail, postage prepaid, to each
Holder, written notice of such removal or resignation and the name and address
of such successor warrant agent.
SECTION 19. Identity of Transfer Agent. Forthwith upon the appointment
of any Transfer Agent for the Class A Common Stock or the Class E Common Stock,
or any other shares of the Company's capital stock issuable upon the exercise of
the Warrants, the Company shall file with the Warrant Agent (or if the Company
is the Warrant Agent, deliver to the Warrantholders) a statement setting forth
the name and address of such Transfer Agent.
SECTION 20. Certain Defined Terms. Defined terms used in this Agreement
shall, unless the context otherwise requires, have the meanings specified below.
Certain additional terms are set forth elsewhere in this Agreement. Any
reference to any section of applicable law shall be deemed to include successor
provisions thereto.
"Affiliate" of any specified Person means (i) any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified
20
<PAGE>
person; (ii) any other Person that owns, directly or indirectly, 5% or more of
such specified Person's Voting Stock; or (iii) any Person who is a director or
officer (a) of such person, (b) of any Subsidiary of Such Person or (c) any
Person described in clause (1) or (2) above.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock, whether
outstanding on the Issue Date or issued after the Issue Date, and any and all
rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such capital stock.
"Common Stock" means all shares of Capital Stock of the Company,
whether or not denominated as "common stock" which are entitled to share ratably
in the ordinary dividends of the Company or share ratably in the proceeds of any
liquidation of the Company after the payment of all preferential claims, and
shall include, without limitation, the Class A Common Stock, Class B Common
Stock, Class C Common Stock, Class D Common Stock or Class E Common Stock of the
Company authorized on the Issue Date.
"Convertible Security" shall mean any securities convertible or
exercisable or exchangeable into Common Stock of the Company of the same class
as Warrant Shares, whether outstanding on the Issue Date or thereafter issued.
"Current Market Value" per share of any class or series of Common Stock
of the Company at any date shall mean (i) if no class or series of Common Stock
is then (A) registered under the Exchange Act and (B) traded on a national
securities exchange or on the NASDAQ National Market System, (a) the value of
such class or series of Common Stock, determined in good faith by the board of
directors of the Company and certified in a board resolution, taking into
account the most recently completed arms-length transaction between the Company
and a Person other than an Affiliate of the Company and the closing of which
occurs on such date or shall have occurred within the six-month period preceding
such date, or (b) if no such transaction shall have occurred on such date or
within such six-month period, the fair market value of the security as
determined by a nationally recognized Independent Financial Expert, provided
that, in the case of the calculation of Current Market Value for determining the
cash value of fractional shares, any such determination within six months that
is, in the good faith judgment of the board of directors, a reasonable
determination of value, may be utilized) or (ii) (a) if any class or series of
Common Stock is then (A) registered under the Exchange Act and (B) traded on a
national securities exchange or on the NASDAQ National Market System, the
average of the daily closing sales prices of such class or series of Common
Stock for the 20 consecutive trading days immediately preceding such date, or
(b) if such class or series of Common Stock has been registered under the
Exchange Act and traded on a national securities exchange or on the NASDAQ
National Market System for less than 20 consecutive trading days before such
date, then the average of the daily closing sales prices for all of the trading
days before such date for which closing sales prices are available, in the case
of each of (ii)(a) and (ii)(b), as certified to the Warrant Agent by the chief
executive officer, the president, any executive vice president or the chief
financial officer of the Company. The closing sales price for each such trading
day shall be the closing sales price, regular way, on such day, or if no sale
takes place on such day, the average of the closing bid and asked prices on such
day.
21
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Independent Financial Expert" means a nationally recognized
independent financial expert, investment banking firm or accounting firm.
"Issue Date" means the date of this Agreement.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Subsidiary" means with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more other Subsidiaries of that Person (or a combination
thereof); and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).
"Time of Determination" means, (i) in the case of any distribution of
securities or other property to existing shareholders to which Section 12(b) or
(c) applies, the time and date of the determination of shareholders entitled to
receive such securities or property or (ii) in the case of any other issuance
and sale to which Section 12(b) or (c) applies, the time and date of such
issuance or sale.
"Voting Stock" of any Person means any Capital Stock of such Person
that is at the time entitled to vote in the election of the Board of Directors
of such Person.
SECTION 21. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company, the Warrant Agent or any holder
of Warrants shall bind and inure to the benefit of their respective successors
and assigns hereunder.
SECTION 22. Termination. This Agreement shall terminate on the
Expiration Date. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date if all Warrants have been exercised or redeemed pursuant to
this Agreement or the Articles.
SECTION 23. Governing Law. This Agreement and each Warrant Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and shall be governed by and construed in accordance with the
laws of said State, without regard to the conflict of law rules thereof.
SECTION 24. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent and the registered holders of the Warrant Certificates any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Warrant Agent
and the registered holders of the Warrant Certificates.
22
<PAGE>
SECTION 25. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
23
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
JOSTENS, INC.
By: /s/ Lee U. McGrath
----------------------------
Name: Lee U. McGrath
Title: Managing Director
THE BANK OF NEW YORK
as Warrant Agent
By: /s/ Terence Rawlins
----------------------------
Name: Terence Rawlins
Title: Assistant Vice President
24
<PAGE>
[FORM OF FACE OF WARRANT CERTIFICATE]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH
CERTIFICATES AND OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
THIS SECURITY IS ALSO SUBJECT TO A SHAREHOLDERS AGREEMENT, DATED AS OF MAY 10,
2000, AMONG THE COMPANY, INVESTCORP INVESTMENT EQUITY LIMITED, THE OTHER HOLDERS
OF THE CLASS D COMMON STOCK OF THE COMPANY AND DB CAPITAL INVESTORS L.P. A COPY
OF SUCH SHAREHOLDERS AGREEMENT MAY BE OBTAINED WITHOUT CHARGE AND UPON REQUEST
ADDRESSED TO THE SECRETARY OF THE COMPANY AT THE REGISTERED OFFICE OF THE
COMPANY.
THE WARRANTS REPRESENTED BY THIS CERTIFICATE MAY BE REQUIRED TO BE EXERCISED
UPON THE DEMAND OF THE COMPANY, UPON THE OCCURRENCE OF CERTAIN EVENTS SPECIFIED
IN THE AMENDED AND RESTATED ARTICLES OF INCORPORATION OF THE COMPANY. THE
COMPANY WILL FURNISH WITHOUT CHARGE TO EACH HOLDER WHO SO REQUESTS A COPY OF THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION OF THE COMPANY.
THIS SECURITY IS SUBJECT TO MANDATORY REDEMPTION BY THE COMPANY. SUCH REDEMPTION
CAN BE ACCOMPLISHED WITHOUT THE CERTIFICATES REPRESENTING SUCH SECURITIES BEING
SURRENDERED AND WHETHER OR NOT THE COMPANY GIVES NOTICE OF SUCH REDEMPTION. THE
COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SECURITYHOLDER WHO SO REQUESTS A
FULL STATEMENT OF THE DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS
OF EACH CLASS OF STOCK OR SERIES OF STOCK OF THE CORPORATION AUTHORIZED TO BE
ISSUED, SO FAR AS THEY HAVE BEEN DETERMINED, AND THE AUTHORITY OF THE BOARD OF
DIRECTORS TO DETERMINE THE RELATIVE RIGHTS AND PREFERENCES OF SUBSEQUENT CLASSES
OR SERIES.
25
<PAGE>
No. [ ]
CLASS E COMMON STOCK PURCHASE WARRANT
OF
JOSTENS, INC.
THIS CERTIFIES THAT [ ], or its registered assigns,
is the registered holder of ____________________ Class E Common Stock Purchase
Warrants (the "Warrants"). Each Warrant entitles the holder thereof (the
"Holder"), at its option and subject to the provisions contained herein and in
the Warrant Agreement referred to below, to purchase from Jostens, Inc., a
Minnesota corporation (the "Company"), one (1) share of Class E Common Stock,
par value $0.01 per share, of the Company (the "Common Stock") at the per share
exercise price of $0.01 (the "Exercise Price") or by Cashless Exercise referred
to below. This Warrant Certificate shall terminate and become void as of the
close of business on May 1, 2011 (the "Expiration Date") or upon the exercise
hereof as to all the shares of Class E Common Stock subject hereto. The number
of shares issuable upon exercise of the Warrants shall be subject to adjustment
from time to time as set forth in the Warrant Agreement (as defined).
This Warrant Certificate is issued under and in accordance with a Warrant
Agreement dated as of May 10, 2000 (the "Warrant Agreement"), between the
Company and The Bank of New York, as Warrant Agent, and is subject to the terms
and provisions contained in the Warrant Agreement, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance hereof.
The Warrant Agreement is hereby incorporated herein by reference and made a part
hereof. Reference is hereby made to the Warrant Agreement for a full statement
of the respective rights, limitations of rights, duties and obligations of the
Company and the Warrantholders. Capitalized terms used but not defined herein
shall have the meanings ascribed thereto in the Warrant Agreement. A copy of the
Warrant Agreement may be obtained for inspection by the Holder hereof upon
written request to the Company at 5501 Norman Center Drive, Minneapolis,
Minnesota 55437, Attn: General Counsel.
Subject to the terms of the Warrant Agreement, the Warrants may be exercised
upon surrender at the office or agency of the Company maintained for such
purpose, which initially will be the principal office of the Company of the
certificate or certificates evidencing the Warrants to be exercised with the
form of election to purchase on the reverse thereof duly filled in and signed,
which signature shall be guaranteed by a participant in a recognized Signature
Guarantee Medallion Program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price for the number of Warrant Shares in
respect of which such Warrants are then exercised. Payment of the aggregate
Exercise Price shall be made (i) in cash or by certified or official bank check
to the order of the Company in New York Clearing House Funds, (ii) by wire
transfer to an account specified by the Company on request of the Holder, such
request to be made not less than two Business Days prior to the proposed
exercise of the Warrants or (iii) without the payment of cash, by reducing the
number of shares of Common Stock obtainable upon the exercise of a Warrant and
payment of the Exercise Price in cash so as to yield a number
26
<PAGE>
of shares of Common Stock upon the exercise of such Warrant equal to the product
of (A) the number of shares of Common Stock issuable as of the Exercise Date
upon the exercise of such Warrant (if payment of the Exercise Price were being
made in cash) and (B) the Cashless Exercise Ratio.
The Warrants shall be exercisable, either in full or from time to time in part
and, in the event that a certificate evidencing Warrants is exercised in respect
of fewer than all of the Warrant Shares issuable on such exercise at any time
prior to the date of expiration of the Warrants, a new certificate evidencing
the remaining Warrant or Warrants will be issued, and the Warrant Agent is
irrevocably authorized to countersign and to deliver the required new Warrant
Certificate or Certificates pursuant to the Warrant Agreement, and the Company,
whenever required by the Warrant Agent, will promptly supply the Warrant Agent
with Warrant Certificates duly executed on behalf of the Company for such
purpose.
This Warrant Certificate shall not be valid unless countersigned by the Warrant
Agent as such term is used in the Warrant Agreement.
As provided in the Warrant Agreement, the Exercise Rate is subject to adjustment
upon the happening of certain events.
The Company will pay all documentary stamp taxes attributable to the initial
issuance of Warrant Shares upon the exercise of Warrants; provided, however,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
The Company shall not be required to issue fractional Warrant Shares on the
exercise of Warrants. If more than one Warrant shall be presented for exercise
in full at the same time by the same holder, the number of full Warrant Shares
which shall be issuable upon the exercise thereof shall be computed on the basis
of the aggregate number of Warrant Shares purchasable on exercise of the
Warrants so presented. If any fraction of a Warrant Share would be issuable on
the exercise of any Warrants (or specified portion thereof), the Company shall
pay an amount in cash equal to the Current Market Value per share of the Class A
Common Stock of the Company on the day immediately preceding the date the
Warrant is presented for exercise, multiplied by such fraction.
All shares of Common Stock issuable by the Company upon the exercise of the
Warrants shall, upon such issue, be duly and validly issued and fully paid and
non-assessable.
The Company and the Warrant Agent may deem and treat Holders of the Warrant
Certificates as the absolute owners thereof (notwithstanding any notation of
ownership or other writing thereon made by anyone) for all purposes, and neither
the Company nor the Warrant Agent shall be affected by any notice to the
contrary.
27
<PAGE>
The Warrants do not entitle any Holder hereof to any of the rights of a
stockholder of the Company.
JOSTENS, INC.
By:
------------------------------
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
DATED:
COUNTERSIGNED:
THE BANK OF NEW YORK,
as Warrant Agent
By:
------------------------------
Authorized Signature
28
<PAGE>
FORM OF ELECTION TO PURCHASE WARRANT SHARES
(to be executed only upon exercise of Warrants)
JOSTENS, INC.
The undersigned hereby irrevocably elects to exercise ________________
Warrants to acquire shares of Class E Common Stock, par value $0.01 per share,
of Jostens, Inc., (i) at an exercise price per share of Class E Common Stock of
$0.01 or (ii) through Cashless Exercise and otherwise on the terms and
conditions specified in the Warrant Certificate and the Warrant Agreement,
surrenders this Warrant Certificate and all right, title and interest therein to
Jostens, Inc. and directs that the shares of Class E Common Stock deliverable
upon the exercise of such Warrants be registered or placed in the name and at
the address specified below and delivered thereto.
Check method of exercise:
Exercise at $0.01 per share of Common Stock: ___
Cashless Exercise: _____
Date:_____________________ , ______
_____________________________________________________________/1/
(Signature of Owner)
(Street Address)
_____________________________________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
_____________________________________________________________
- ----------
/1/ The signature must correspond with the name as written upon the face of
the Warrant Certificate in every particular, without alteration or
enlargement or any change whatever, and must be guaranteed by a
national bank or trust company or by a member firm of any national
securities exchange.
29
<PAGE>
Securities and/or check to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
A new Warrant Certificate evidencing any unexercised Warrants evidenced by the
within Warrant Certificate is to be issued to:
Please insert social security or identifying number:
Name:
Street Address:
City, State and Zip Code:
30
<PAGE>
ASSIGNMENT FORM
To assign this Warrant, fill in the form below:
I or we assign and transfer this Warrant to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Warrant on the books
of the Company. The agent may substitute another to act for him.
_____________________________________________________________
Date: __________ Your Signature: _______________________
_____________________________________________________________
The signature must correspond with the name as written upon the face of the
Warrant Certificate in every particular, without alteration or enlargement or
any change whatever, and must be guaranteed by a national bank or trust company
or by a member firm of any national securities exchange.
31
<PAGE>
EXHIBIT 4.8
================================================================================
PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
=============================================
Dated as of May 10, 2000
by and among
JOSTENS, INC.
and
DB CAPITAL INVESTORS, L.P.
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
1. Definitions..............................................................1
2. Shelf Registration.......................................................3
3. Additional Dividends.....................................................4
4. Registration Procedures..................................................6
5. Registration Expenses...................................................12
6. Indemnification.........................................................12
7. Rule 144................................................................15
8. Underwritten Registrations..............................................15
9. Miscellaneous...........................................................16
(a) No Inconsistent Agreements.........................................16
(b) Adjustments Affecting Transfer Restricted Securities...............16
(c) Amendments and Waivers.............................................16
(d) Notices............................................................16
(e) Successors and Assigns.............................................17
(f) Counterparts.......................................................17
(g) Headings...........................................................17
(h) Governing Law......................................................17
(i) Severability.......................................................18
(j) Preferred Stock Held by the Company or Their Affiliates............18
(k) Third Party Beneficiaries..........................................18
<PAGE>
PREFERRED STOCK REGISTRATION RIGHTS AGREEMENT
---------------------------------------------
This Preferred Stock Registration Rights Agreement (the "Agreement") is
dated as of May 10, 2000, by and between Jostens, Inc., a Minnesota corporation
(the "Company") and DB Capital Investors L.P., a Delaware limited partnership
(the "Purchaser") on its own behalf and on behalf of all subsequent holders of
Preferred Stock and Warrants (as defined below).
This Agreement is entered into in connection with the Purchase Agreement,
dated as of May 10, 2000, between the Company and the Purchaser (the "Purchase
Agreement"), which provides for the sale by the Company to the Purchaser of
60,000 shares of the 14.0% Senior Redeemable Payment-in-Kind Preferred Stock
(the "Preferred Stock") with an aggregate liquidation preference of
$60,000,000.00, together with warrants to purchase an aggregate of 531,325
shares of Series E common stock of the Company (the "Warrants" and, together
with the Preferred Stock, the "Securities"). In order to induce the Purchaser to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement for the benefit of the Purchaser
and their direct and indirect transferees. The execution and delivery of this
Agreement is a condition to the obligation of the Purchaser to purchase the
Securities under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following meanings:
Advice: Has the meaning provided in the last paragraph of Section 4
hereof.
Additional Dividends: Has the meaning provided in Section 3(a) hereof.
Agreement: Has the meaning provided in the first introductory
paragraph hereto.
Blackout Period: Has the meaning provided in Section 4(k) hereof.
Certificate of Designation: The Certificate of Designation of the
Powers, Preferences and Rights of 14% Senior Redeemable Payment-in-Kind
Preferred Stock and Qualifications, Limitations and Restrictions Thereof.
Company: Has the meaning provided in the first introductory paragraph
hereto.
Demand Date: The date on which Holders of a majority-in-interest of
the outstanding liquidation preference of the Preferred Stock constituting
Transfer Restricted Securities deliver a Demand Notice.
Demand Notice: A notice signed by either (x) the Purchaser or (y)
Holders of a majority-in-interest of the outstanding liquidation preference
of the Preferred Stock constituting Transfer Restricted Securities,
pursuant to which such Holders request the Company to effect the
registration of Transfer Restricted Securities contemplated hereby.
<PAGE>
Effectiveness Date: The 180th day after the Demand Date.
Effectiveness Period: Has the meaning provided in Section 2(a) hereof.
Event Date: Has the meaning provided in Section 3(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Filing Date: The 120th day after the Demand Date.
Holder: Any holder of Transfer Restricted Securities.
Indemnified Person: Has the meaning provided in Section 6(c) hereof.
Indemnifying Person: Has the meaning provided in Section 6(c) hereof.
Inspectors: Has the meaning provided in Section 4(n) hereof.
Issue Date: The date on which the Preferred Stock was sold to the
Purchaser pursuant to the Purchase Agreement.
NASD: Has the meaning provided in Section 4(p) hereof.
Participant: Has the meaning provided in Section 6(a) hereof.
Persons: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
Preferred Stock: Has the meaning provided in the second introductory
paragraph hereof.
Prospectus: The prospectus included in the Shelf Registration
Statement (including, without limitation, any prospectus subject to
completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act),
as amended or supplemented by any prospectus supplement, and all other
amendments and supplements to the Prospectus, with respect to the terms of
the offering of any portion of the Transfer Restricted Securities covered
by the Shelf Registration Statement including post-effective amendments,
and all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
Purchase Agreement: Has the meaning provided in the second
introductory paragraph hereto.
Purchaser: Has the meaning provided in the first introductory
paragraph hereto.
2
<PAGE>
Records: Has the meaning provided in Section 4(n) hereof.
Rule 415: Rule 415 promulgated under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
Rule 144(k): Rule 144(k) promulgated under the Securities Act, as such
rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC as a replacement thereto
having substantially the same effect as such rule.
SEC: The United States Securities and Exchange Commission.
Securities: Has the meaning provided in the second introductory
paragraph hereof.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations of the SEC promulgated thereunder.
Shelf Registration Statement: shall mean a "shelf" registration
statement of the Company which covers all of the Transfer Restricted
Securities on an appropriate form under Rule 415 under the Securities Act,
or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
Transfer Restricted Securities: Each share of Preferred Stock (no
matter when issued) upon original issuance of such Preferred Stock and at
all times subsequent thereto and all Warrants issued pursuant to the
Purchase Agreement or otherwise issued in respect of the Preferred Stock,
until, in the case of any such Security, the earliest to occur of (i) the
Shelf Registration Statement covering such Security has been declared
effective by the SEC and such Security has been disposed of in accordance
with such effective Shelf Registration Statement, (ii) such Security is or
may be sold in compliance with Rule 144(k) or any successor provision, or
(iii) such Security ceases to be outstanding.
Underwritten registration or underwritten offering: A registration in
which securities of the Company are sold to an underwriter for reoffering
to the public.
Warrants: Has the meaning provided in the second introductory
paragraph hereof.
2. Shelf Registration. (a) Shelf Registration. At any time after the Issue
Date, either (x) the Purchaser or (y) the Holders of a majority-in-interest of
the outstanding liquidation preference of the Preferred Stock constituting
Transfer Restricted Securities may file with the Company a Demand Notice
requesting the Company to file the Shelf Registration Statement and otherwise
effect the registration of Transfer Restricted Securities contemplated hereby.
Upon receiving a Demand Notice, the Company shall file with the SEC no later
than the Filing Date the Shelf Registration Statement for an offering to be made
on a continuous basis pursuant to Rule 415 covering all of the Transfer
Restricted Securities (including shares of Preferred Stock constituting
Additional Dividends issued during the Effectiveness Period as
3
<PAGE>
dividends in respect of outstanding shares of Preferred Stock). The Shelf
Registration Statement shall be on Form S-3 or another appropriate form
permitting registration of such Transfer Restricted Securities for resale by any
Holder in the manner or manners designated by it (including, without limitation,
one or more underwritten offerings). Upon receipt of a Demand Notice, the
Company shall promptly (but in any event within ten (10) days) give written
notice of such receipt to all Holders of Transfer Restricted Securities.
The Company shall use its reasonable best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act by the
Effectiveness Date and to keep the Shelf Registration Statement continuously
effective under the Securities Act until the date which is two years from the
date on which the Shelf Registration Statement first becomes effective (the
"Effectiveness Period"), subject to extension pursuant to the last paragraph of
Section 4 hereof subject to extension pursuant to the last sentence of Section
4(k) hereof, or such shorter period ending when all Holders of shares of
Transfer Restricted Securities have sold all shares of Transfer Restricted
Securities held by them.
No action taken by the Company that results in a Blackout Period shall be
considered to constitute a failure of the Company to use its reasonable best
efforts under this Section 2(a).
(b) Withdrawal of Stop Orders. If the Shelf Registration Statement
ceases to be effective for any reason at any time during the Effectiveness
Period (other than because of the sale of all of the securities registered
thereunder), the Company shall use its reasonable best efforts to obtain
the prompt withdrawal of any order suspending the effectiveness thereof..
No action taken by the Company that results in a Blackout Period shall be
considered to constitute a failure of the Company to use its reasonable
best efforts under this Section 2(b).
(c) Supplements and Amendments. The Company shall promptly supplement
and amend the Shelf Registration Statement other than during a Blackout
Period, if required by the rules, regulations or instructions applicable to
the registration form used for such Shelf Registration Statement, if
required by the Securities Act, or if reasonably requested for such purpose
by the Holders of a majority-in-interest of the outstanding liquidation
preference of the Preferred Stock constituting Transfer Restricted
Securities covered by such Shelf Registration Statement or by any
underwriter of such Transfer Restricted Securities.
3. Additional Dividends. (a) The Company and the Purchaser agree that the
Holders of Transfer Restricted Securities will suffer damages if the Company
fails to fulfill its obligations under Section 2 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Company agrees to pay, as liquidated damages and as the sole and exclusive
remedy therefor, additional dividends on the Preferred Stock constituting
Transfer Restricted Securities ("Additional Dividends") under the circumstances
and to the extent set forth below:
(i) if the Shelf Registration Statement is not filed with the SEC
on or prior to the Filing Date, Additional Dividends shall accrue on
the Preferred Stock constituting Transfer Restricted Securities over
and above the stated dividend rate at a rate of 0.25% per annum for
the first 60 days commencing on the 121st day after the Issue Date,
such
4
<PAGE>
Additional Dividend rate increasing by an additional 0.25% per annum
at the beginning of each subsequent 90-day period;
(ii) if the Shelf Registration Statement is not declared
effective on or prior to the Effectiveness Date, Additional Dividends
shall accrue on the Preferred Stock constituting Transfer Restricted
Securities over and above the stated dividend rate at a rate of 0.25%
per annum for the first 90 days commencing on the 181st day after the
Issue Date, such Additional Dividend rate increasing by an additional
0.25% per annum at the beginning of each subsequent 90-day period; or
(iii) if the Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective
at any time prior to the second anniversary of the date on which the
Shelf Registration Statement (unless all shares of Transfer Restricted
Securities have been sold thereunder), then Additional Dividends shall
accrue on the Preferred Stock constituting Transfer Restricted
Securities over and above the stated interest at a rate of 0.25% per
annum for the first 90 days commencing on the day on which such Shelf
Registration Statement ceases to be effective, such Additional
Dividend rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period;
provided, however, that the Additional Dividends on the Preferred Stock
constituting Transfer Restricted Securities under clauses (i), (ii) and (iii)
above may not exceed in the aggregate 1.00% per annum in the aggregate; and
provided further, that (1) upon the filing of the Shelf Registration Statement
(in the case of clause (i) above), (2) upon the effectiveness of the Shelf
Registration Statement (in the case of (ii) above), or (3) upon the
effectiveness of the Shelf Registration Statement which had ceased to remain
effective (in the case of clause (iii) above), Additional Dividends on the
Transfer Restricted Securities as a result of such clause (or the relevant
subclause thereof), as the case may be, shall cease to accrue. Notwithstanding
anything to the contrary in this paragraph (a), no action taken by the Company
that results in a Blackout Period shall result in any Additional Dividends. The
sole and exclusive remedy of the Holders for the occurrence of any Blackout
Period shall be the extension of the Effectiveness Period for the same number of
days as the Blackout Period.
(b) The Company shall notify the Purchaser and any transfer agent in
respect of the Preferred Stock within three business day after each and
every date on which an event occurs in respect of which Additional
Dividends are required to be paid (an "Event Date"). The Company shall pay
the Additional Dividends due on the Preferred Stock constituting Transfer
Restricted Securities by paying or depositing with the transfer agent
(which shall not be the Company for these purposes) for the Preferred Stock
in trust, for the benefit of the holders thereof, prior to 11:00 A.M. on
the next dividend payment date specified by the Certificate of Designation,
sums of cash and/or additional shares of Preferred Stock sufficient to pay
the Additional Dividends then due. Any Additional Dividends due pursuant to
clauses (a)(i), (a)(ii) or (a)(iii) of this Section 3 will be payable to
the Holders of affected Preferred Stock quarterly on each dividend payment
date specified by the Certificate of Designation to the record holders
entitled to receive the dividend payment to be made on such date,
commencing with the first such date occurring after any such Additional
Dividends commence to accrue. The amount of Additional Dividends will be
determined by multiplying the applicable Additional Dividend rate
5
<PAGE>
by the aggregate liquidation preference of the affected Preferred Stock of
such Holders, multiplied by a fraction, the numerator of which is the
number of days such Additional Dividend rate was applicable during such
period (determined on the basis of a 360-day year comprised of twelve
30-day months and, in the case of a partial month, the actual number of
days elapsed), and the denominator of which is 360.
4. Registration Procedures. In connection with the filing of the Shelf
Registration Statement pursuant to Section 2 hereof, the Company shall effect
such registration(s) to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with the Shelf Registration Statement filed
by the Company hereunder, the Company shall:
(a) Prepare and file with the SEC on or prior to the Filing Date the
Shelf Registration Statement as prescribed by Section 2 hereof, and use its
reasonable best efforts to cause such Shelf Registration Statement to
become effective and remain effective as provided herein; provided,
however, that the Company shall, if requested in writing, furnish to and
afford the Holders of the Transfer Restricted Securities covered by such
Shelf Registration Statement, their counsel and the managing underwriters,
if any, a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference therein
and all exhibits thereto) proposed to be filed (in each case at least five
(5) business days prior to such filing). The Company shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must be afforded an opportunity to
review prior to the filing of such document under the immediately preceding
sentence, if the Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities covered by the Shelf Registration Statement,
their counsel, or the managing underwriters, if any, shall reasonably
object directly to the Company in writing, on the grounds that such
Registration Statement or Prospectus or amendment or supplement thereto
does not comply in all material respects with the requirements of the
Securities Act or the rules and regulations thereunder.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to the Shelf Registration Statement, other than during a
Blackout Period, as may reasonably be necessary to keep such Shelf
Registration Statement continuously effective for the Effectiveness Period,
cause the related Prospectus to be supplemented by any Prospectus
supplement required by applicable law, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) promulgated
under the Securities Act; and comply with the provisions of the Securities
Act and the Exchange Act applicable to it with respect to the disposition
of all securities covered by such Shelf Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Notify the selling Holders of Transfer Restricted Securities,
their counsel and the managing underwriters, if any, promptly (but in any
event within two business days), and, if requested, confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Shelf
Registration Statement or any post-effective amendment, when the same has
become effective under the Securities Act (including in such notice a
written statement that any Holder may, upon request, obtain, at the sole
expense of the Company, one conformed copy of such Shelf
6
<PAGE>
Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be
incorporated by reference and exhibits), (ii) of the issuance by the SEC of
any stop order suspending the effectiveness of the Shelf Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of the Shelf Registration Statement, (iv) of the happening of
any event, the existence of any condition or any information becoming known
that makes any statement made in such Shelf Registration Statement or
related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in or amendments or supplements to such
Shelf Registration Statement, Prospectus or documents so that, in the case
of the Shelf Registration Statement, it will 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 that in the case of the Prospectus, it will 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,
in light of the circumstances under which they were made, not misleading,
and (v) of the determination by the Company that a post-effective amendment
to the Shelf Registration Statement would be appropriate.
(d) Use its reasonable best efforts to prevent the issuance of any
order suspending the effectiveness of the Shelf Registration Statement or
of any order preventing or suspending the use of a Prospectus or suspending
the qualification (or exemption from qualification) of any of the Transfer
Restricted Securities for sale in any jurisdiction, and, if any such order
is issued, to use its reasonable best efforts to obtain the withdrawal of
any such order at the earliest possible moment. No action taken by the
Company that results in a Blackout Period shall be considered to constitute
a failure of the Company to use its reasonable best efforts under this
Section 4(d).
(e) If requested, other than in a Blackout Period, by the managing
underwriter or underwriters (if any), or the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities being sold
in connection with an underwritten offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter or underwriters (if any), such Holders, or counsel for
any of them reasonably request to be included therein, (ii) make all
required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such prospectus
supplement or post-effective amendment, and (iii) supplement or make
amendments to such Shelf Registration Statement.
(f) Furnish to each selling Holder of Transfer Restricted Securities
who so requests and to such Holder's counsel and each managing underwriter,
if any, at the sole expense of the Company, one conformed copy of the Shelf
Registration Statement and each post-effective amendment thereto, including
financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all
exhibits.
7
<PAGE>
(g) Deliver to each selling Holder of Transfer Restricted Securities,
their counsel, and the underwriter, if any, at the sole expense of the
Company, as many copies of the Prospectus or Prospectuses (including each
form of preliminary prospectus) and each amendment or supplement thereto
and any documents incorporated by reference therein as such Persons may
reasonably request; and, subject to the last paragraph of this Section 4,
the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders of Transfer
Restricted Securities and the underwriter, if any, in connection with the
offering and sale of the Transfer Restricted Securities covered by such
Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Transfer Restricted Securities to
use its reasonable best efforts to register or qualify such Transfer
Restricted Securities (and to cooperate with selling Holders of Transfer
Restricted Securities, each managing underwriter or underwriters, if any,
and their respective counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of
such Transfer Restricted Securities) for offer and sale under the
securities or Blue Sky laws of such jurisdictions within the United States
as any selling Holder, or the managing underwriter or underwriters
reasonably request in writing; provided, however, that where Transfer
Restricted Securities are offered other than through an underwritten
offering, the Company agrees to cause their counsel to perform Blue Sky
investigations and file registrations and qualifications required to be
filed pursuant to this Section 4(h); keep each such registration or
qualification (or exemption therefrom) effective during the period the
Shelf Registration Statement is required to be kept effective and do any
and all other acts or things reasonably necessary or advisable to enable
the disposition in such jurisdictions of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided, however, that the
Company shall not be required to (A) qualify generally to do business in
any jurisdiction where it is not then so qualified, (B) take any action
that would subject it to general service of process in any such
jurisdiction where it is not then so subject or (C) subject itself to
taxation in excess of a nominal dollar amount in any such jurisdiction
where it is not then so subject.
(i) Cooperate with the selling Holders of Transfer Restricted
Securities and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold, which certificates shall not
bear any restrictive legends and shall be in a form eligible for deposit
with The Depository Trust Company; and enable such Transfer Restricted
Securities certificates to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, or Holders may
reasonably request.
(j) Use its reasonable best efforts to cause the Transfer Restricted
Securities covered by the Shelf Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may
be necessary to enable the Holders thereof or the underwriter, if any, to
dispose of such Transfer Restricted Securities, except as may be required
solely as a consequence of the nature of a selling Holder's business, in
which case the Company will cooperate in all reasonable respects with the
filing of the Shelf Registration Statement and the granting of such
approvals.
8
<PAGE>
(k) Upon the occurrence of any event contemplated by paragraph
4(c)(iv) or 4(c)(v) hereof, as promptly as practicable prepare and (subject
to Section 4(a) hereof) file with the SEC, at the sole expense of the
Company, a supplement or post-effective amendment to the Shelf Registration
Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, or file any
other required document so that, as thereafter delivered to the purchasers
of the Transfer Restricted Securities being sold thereunder any such
Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided, that this Section 4(k) shall not be deemed
to require the Company to disclose any information that, in the good faith
opinion of the management of the Company, is not yet required to be
disclosed and would not be in the best interests of the Company to disclose
for that period of time (not to exceed 90 days in the aggregate in any 360
day period) that in the good faith opinion of the management of the Company
such information is not required to be disclosed (the "Blackout Period"),
so long as the Company complies with all applicable laws and government
regulations and the last paragraph of this Section 4. The Company shall
promptly advise the Holders of Transfer Restricted Securities of any
commencement of a Blackout Period. Upon termination of any such Blackout
Period, the Company promptly shall advise the Holders of Transfer
Restricted Securities. In the event of any Blackout Period, the
Effectiveness Period shall be extended for a number of days equal to the
duration of the Blackout Period.
(l) Prior to the effective date of the Shelf Registration Statement
relating to the Transfer Restricted Securities, provide a CUSIP number for
the Warrants and the Preferred Stock.
(m) In connection with any underwritten offering initiated by the
Company of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, enter into an underwriting agreement as is
customary in underwritten offerings of securities similar to the Preferred
Stock and take all such other actions as are reasonably requested by the
managing underwriter or underwriters in order to facilitate the
registration or the disposition of such Transfer Restricted Securities and,
in such connection, (i) make such representations and warranties to, and
covenants with, the underwriters with respect to the business of the
Company and its respective subsidiaries and the Shelf Registration
Statement, Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, as are customarily made by
companies to underwriters in underwritten offerings of securities similar
to the Securities, and confirm the same in writing if and when requested;
(ii) obtain the written opinion of counsel to the Company and written
updates thereof in form, scope and substance reasonably satisfactory to the
managing underwriter or underwriters, addressed to the underwriters
covering the matters customarily covered in opinions requested in
underwritten offerings of securities similar to the Securities and such
other matters as may be reasonably requested by the managing underwriter or
underwriters; (iii) obtain "cold comfort" letters and updates thereof in
form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters from the independent certified public
accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of any of the Company or of
any business acquired by any of the Company for which financial statements
and financial data are, or are required to be, included or incorporated by
reference in the Shelf
9
<PAGE>
Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings of securities similar to the Securities and such
other matters as reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures no less
favorable than those set forth in Section 6 hereof (or such other
provisions and procedures acceptable to Holders of a majority in aggregate
of the liquidation preference of Preferred Stock constituting Transfer
Restricted Securities covered by such Shelf Registration Statement and the
managing underwriter or underwriters or agents) with respect to all parties
to be indemnified pursuant to said Section. The above shall be done at each
closing under such underwriting agreement, or as and to the extent required
thereunder.
(n) Make available for inspection by any selling Holder of such
Transfer Restricted Securities being sold, any underwriter participating in
any such disposition of Transfer Restricted Securities, if any, and any
attorney, accountant or other agent retained by any such selling Holder
(any such Holder, underwriter, attorney, accountant or other agent a
"Reviewing Party," and collectively, the "Reviewing Parties"), at the
offices where normally kept, during reasonable business hours, all
financial and other records, pertinent corporate documents and instruments
of the Company and its subsidiaries (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and employees
of the Company and its respective subsidiaries to make available for
inspection all information reasonably requested by any such Reviewing Party
in connection with such Shelf Registration Statement. Records which the
Company determine, in good faith, to be confidential and any Records which
it notifies the Reviewing Parties are confidential shall not be disclosed
by the Reviewing Parties unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such Shelf
Registration Statement, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is, in the opinion of
counsel for any Reviewing Party, necessary in connection with any action,
claim, suit or proceeding, directly or indirectly, involving or potentially
involving such Reviewing Party and arising out of, based upon, relating to,
or involving this Agreement, or any transactions contemplated hereby or
arising hereunder, or (iv) the information in such Records has been made
generally available to the public. Each selling Holder of such Registrable
Securities will be required to agree that information obtained by it as a
result of such inspections shall be deemed confidential and shall not be
used by it as the basis for any market transactions in the securities of
the Company unless and until such information is generally available to the
public. Each selling Holder of such Transfer Restricted Securities will be
required to further agree that it will, upon learning that disclosure of
such Records is sought in a court of competent jurisdiction or is
contemplated pursuant to clause (iii), give such notice as is practicable
to the Company and, to the extent practicable, allow the Company to
undertake appropriate action to prevent disclosure of the Records deemed
confidential at the Company's sole expense.
(o) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the
10
<PAGE>
end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Transfer Restricted Securities
are sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of the Shelf Registration Statement, which
statements shall cover said 12-month periods.
(p) Cooperate with each seller of Transfer Restricted Securities
covered by the Shelf Registration Statement and each underwriter, if any,
participating in the disposition of such Transfer Restricted Securities and
their respective counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc. (the "NASD").
(q) Use its reasonable best efforts to take all other steps necessary
or advisable to effect the registration of the Transfer Restricted
Securities covered by the Shelf Registration Statement contemplated hereby.
The Company may require each seller of Transfer Restricted Securities as to
which the Shelf Registration Statement is being effected to furnish to the
Company such information regarding such seller and the distribution of such
Transfer Restricted Securities as the Company may, from time to time, reasonably
request. The Company may exclude from such Shelf Registration Statement the
Transfer Restricted Securities of any seller who unreasonably fails to furnish
such information within a reasonable time after receiving such request. Each
seller as to which the Shelf Registration Statement is being effected agrees to
furnish promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such seller
not materially misleading.
Each Holder of Transfer Restricted Securities agrees by acquisition of such
Transfer Restricted Securities that, upon actual receipt of any notice from the
Company of the happening of any event of the kind described in Section 4(c)(ii),
4(c)(iii), 4(c)(iv), or 4(c)(v) hereof, such Holder will forthwith discontinue
disposition of such Transfer Restricted Securities covered by such Shelf
Registration Statement or Prospectus to be sold by such Holder or Participating
Broker-Dealer, as the case may be, until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 4(k) hereof, or
until it is advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any amendments
or supplements thereto. In the event the Company shall give any such notice, the
Effectiveness Period shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Transfer Restricted Securities covered by the Shelf
Registration Statement shall have received (x) the copies of the supplemented or
amended Prospectus contemplated by Section 4(k) hereof or (y) the Advice. In the
event the Company does not give any such notice within five business days, each
Holder shall return the Shelf Registration Statement or Prospectus to the
Company or destroy all copies of the Shelf Registration Statement or Prospectus;
and if so requested by the Company, shall certify that all copies of the Shelf
Registration Statement or Prospectus were destroyed.
5. Registration Expenses. (a) All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the
11
<PAGE>
Company whether or not the Shelf Registration Statement is filed or
becomes effective, including, without limitation, (i) all registration and
filing fees (including, without limitation, (A) fees with respect to filings
with the SEC, (B) fees with respect to filings required to be made with the NASD
in connection with an underwritten offering and (C) fees and expenses of
compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of the Company's counsel in
connection with Blue Sky qualifications of the Transfer Restricted Securities
and determination of the eligibility of the Transfer Restricted Securities for
investment under the laws of such jurisdictions where the holders of Transfer
Restricted Securities are located, (ii) printing expenses, including, without
limitation, expenses of printing certificates for Transfer Restricted Securities
in a form eligible for deposit with The Depository Trust Company and of printing
Prospectuses if the printing of Prospectuses is requested by the managing
underwriter or underwriters, if any, by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Securities included in the Shelf
Registration Statement, (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company, (v) fees and disbursements of
all independent certified public accountants referred to in Section 4(m)(iii)
hereof (including, without limitation, the expenses of any special audit and
"cold comfort" letters required by or incident to such performance by or
incident to such performance), (vi) rating agency fees, if any, (vii) Securities
Act liability insurance, if the Company desires such insurance, (viii) fees and
expenses of all other Persons retained by the Company, (ix) internal expenses of
the Company (including, without limitation, all salaries and expenses of
officers and employees of the Company performing legal or accounting duties),
(x) the expense of any annual audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any securities
exchange or any inter-dealer quotation system, if applicable, and (xii) the
expenses relating to printing, word processing and distributing the Shelf
Registration Statement, underwriting agreements, securities sales agreements,
indentures and any other documents necessary in order to comply with this
Agreement. The Company shall not be responsible for any underwriter's discounts,
fees or commissions incurred in connection with the sale of any Transfer
Restricted Securities pursuant to the Shelf Registration Statement, which such
discounts, fees and commissions shall be for the account of the Holders.
(b) The Company shall reimburse the Holders of the Transfer Restricted
Securities being registered in a Shelf Registration Statement for the
reasonable fees and disbursements of not more than one counsel chosen in
writing by the Holders of a majority in aggregate principal amount of the
Transfer Restricted Securities to be included in the Shelf Registration
Statement.
6. Indemnification. (a) The Company agrees to indemnify and hold harmless
each Holder of Transfer Restricted Securities offered pursuant to the Shelf
Registration Statement, the affiliates, directors, officers, agents,
representatives and employees of each such Person or its affiliates, and each
other Person, if any, who controls any such Person or its affiliates within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act (each, a "Participant") from and against any and all losses, claims, damages
and liabilities (including, without limitation, the reasonable legal fees and
other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact
12
<PAGE>
contained in the Shelf Registration Statement pursuant to which the offering of
such Transfer Restricted Securities is registered (or any amendment thereto) or
related Prospectus (or any amendments or supplements thereto) or any related
preliminary prospectus, or caused by, arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that the Company will not be required to indemnify a Participant if (i) such
losses, claims, damages or liabilities are caused by any untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company in writing by or on behalf
of such Participant expressly for use therein or (ii) if such Participant sold
to the person asserting the claim the Transfer Restricted Securities which are
the subject of such claim and such untrue statement or omission or alleged
untrue statement or omission was contained or made in any preliminary prospectus
and corrected in the Prospectus or any amendment or supplement thereto and the
Prospectus does not contain any other untrue statement or omission or alleged
untrue statement or omission of a material fact that was the subject matter of
the related proceeding and such Participant failed to deliver or provide a copy
of the Prospectus (as amended or supplemented) to such Person with or prior to
the confirmation of the sale of such Transfer Restricted Securities sold to such
Person if required by applicable laws, unless such failure to deliver or provide
a copy of the Prospectus (as amended or supplemented) was a result of
noncompliance by the Company with Section 4 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Company, its respective directors, officers, agents,
representatives, employees and each Person who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
to each Participant, but only (i) with reference to information furnished
to the Company in writing by or on behalf of such Participant expressly for
use in the Shelf Registration Statement or Prospectus, any amendment or
supplement thereto, or any preliminary prospectus or (ii) with respect to
any untrue statement or representation made by such Participant in writing
to the Company.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "Indemnified
Person") shall promptly notify the Person against whom such indemnity may
be sought (the "Indemnifying Person") in writing, and the Indemnifying
Person shall have the right to retain counsel reasonably satisfactory to
the Indemnified Person to represent the Indemnified Person and any others
the Indemnifying Person may reasonably designate in such proceeding and
shall pay the reasonable fees and expenses actually incurred by such
counsel related to such proceeding; provided, however, that the failure to
so notify the Indemnifying Person shall not relieve it of any obligation or
liability which it may have hereunder or otherwise (unless and only to the
extent that the Indemnifying Person has been prejudiced in any material
respect by such failure). Subject in all cases to the immediately following
sentence, after notice from the Indemnifying Person to the Indemnified
Person of its election to assume such defense, the Indemnifying Person
shall not be liable to the Indemnified Person for any legal or other
expenses subsequently incurred by the Indemnified Person in connection with
such defense
13
<PAGE>
other than reasonable costs of investigation. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii)
the named parties in any such proceeding (including any impleaded parties)
include both the Indemnifying Person and the Indemnified Person and the
Indemnified Person has been advised in good faith by counsel that
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that, unless there exists a conflict among Indemnified Persons,
the Indemnifying Person shall not, in connection with any one such
proceeding or separate but substantially similar related proceeding in the
same jurisdiction arising out of the same general allegations, be liable
for the reasonable fees and expenses of more than one separate firm (in
addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed promptly as they are incurred.
Any such separate firm for the Participants and such control Persons of
Participants shall be designated in writing by Participants who sold a
majority-in-interest of the aggregate liquidation preference of the
Preferred Stock constituting Transfer Restricted Securities sold by all
such Participants and any such separate firm for the Company, its
directors, their officers and such control Persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its prior
written consent. No Indemnifying Person shall consent to entry of any
judgment or enter into any settlement that does not include an
unconditional written release of such Indemnified Person, in form and
substance reasonably satisfactory to such Indemnified Person, from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in Sections 6(a) and 6(b)
hereof is for any reason unavailable to, or insufficient to hold harmless,
an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraphs, in lieu of indemnifying such Indemnified Person thereunder and
in order to provide for just and equitable contribution, shall contribute
to the amount paid or payable by such Indemnified Person as a result of
such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Person or
Persons on the one hand and the Indemnified Person or Persons on the other
in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or such Participant or such other Indemnified
Person, as the case may be, on the other, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate
in the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purposes) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The
14
<PAGE>
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, in no
event shall a Participant be required to contribute any amount in excess of
the amount by which proceeds received by such Participant from sales of
Transfer Restricted Securities exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. No
party shall be liable for contribution with respect to any action or claim
settled without its consent, which consent may not be unreasonably withheld
or delayed.
(f) The indemnity and contribution agreements contained in this
Section 6 will be in addition to any liability which the Indemnifying
Persons may otherwise have to the Indemnified Persons referred to above.
7. Rule 144. The Company covenants that it will use its reasonable best
efforts to file the reports required to be filed by it under the Exchange Act
and the rules and regulations adopted by the SEC thereunder in a timely manner
in accordance with the requirements of the Exchange Act and, if at any time the
Company is not required to file such reports, it will, upon the request of any
Holder of Transfer Restricted Securities, make publicly available annual reports
and such information, documents and other reports of the type specified in
Sections 13 and 15(d) of the Exchange Act. The Company further covenants for so
long as any Transfer Restricted Securities remain outstanding, to make available
to any Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such Transfer
Restricted Securities from such Holder or beneficial owner the information
required by the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144.
8. Underwritten Registrations. If any of the Transfer Restricted Securities
covered by the Shelf Registration Statement are to be sold in an underwritten
offering, the investment banker or investment bankers and manager or managers
that will manage the offering will be selected by the Holders of a majority in
aggregate principal amount of such Transfer Restricted Securities included in
such offering and reasonably acceptable to the Company.
No Holder of Transfer Restricted Securities may participate in any
underwritten registration hereunder unless such Holder (a) agrees to sell such
Holder's Transfer Restricted Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
15
<PAGE>
9. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not entered, as of the
date hereof, and the Company shall not, after the date of this Agreement,
enter into any agreement with respect to any of its securities that is
inconsistent with the rights granted to the Holders of Transfer Restricted
Securities in this Agreement or otherwise conflicts with the provisions
hereof. The Company has not entered and the Company will not enter into any
agreement with respect to any of its securities which will grant to any
Person piggy-back registration rights with respect to the Shelf
Registration Statement.
(b) Adjustments Affecting Transfer Restricted Securities. The Company
shall not, directly or indirectly, take any action with respect to the
Transfer Restricted Securities as a class that would adversely affect the
ability of the Holders of Transfer Restricted Securities to include such
Transfer Restricted Securities in a registration undertaken pursuant to
this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, otherwise than with the prior
written consent of the Holders of not less than a majority in aggregate
principal amount of the then outstanding Transfer Restricted Securities.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Transfer Restricted Securities whose securities are
being sold pursuant to the Shelf Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of
other Holders of Transfer Restricted Securities may be given by Holders of
at least a majority-in-interest of the outstanding liquidation preference
of the Preferred Stock constituting Transfer Restricted Securities being
sold by such Holders pursuant to the Shelf Registration Statement;
provided, however, that the provisions of this sentence may not be amended,
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Transfer Restricted Securities, at the
most current address of such Holder set forth on the records of the
Company, with a copy in like manner to the Purchaser as follows:
DB Capital Investors, L.P.
c/o DB Capital Partners, Inc.
130 Liberty Street
25th Floor
New York, New York 10006
Attention: Robert Sharp
Managing Director
16
<PAGE>
with a copy to:
White & Case LLP
1155 Avenue of the Americas
New York, NY 10036
Facsimile No: (212) 354-8113
Attention: S. Ward Atterbury, Esq.
2. if to the Purchaser, at the addresses specified in Section
10(d)(1);
3. if to the Company, as follows:
Jostens, Inc.
5501 Norman Center Drive
Minneapolis, Minnesota 55437
Attention: General Counsel
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; one business
day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressee, if sent by facsimile.
(e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties
hereto; provided, however, that this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a Holder unless and
to the extent such successor or assign holds Certificates representing
Transfer Restricted Securities.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or
17
<PAGE>
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and
shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means
to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated
and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(j) Preferred Stock Held by the Company or Their Affiliates. Whenever
the consent or approval of Holders of a specified percentage of Transfer
Restricted Securities is required hereunder, Transfer Restricted Securities
held by the Company or its affiliates (as such term is defined in Rule 405
under the Securities Act) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(k) Third Party Beneficiaries. Holders of Transfer Restricted
Securities are intended third party beneficiaries of this Agreement and
this Agreement may be enforced by such Persons.
18
<PAGE>
IN WITNESS WHEREOF, the parties have executed the Agreement as of the date
first written above.
JOSTENS, INC.
By: /s/ Lee U. McGrath
-------------------------------------
Name: Lee U. McGrath
Title: Vice President and Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written:
DB CAPITAL INVESTORS, L.P.
By: DB Capital Partners, L.P.
its General Partner
By: DB Capital Partners, Inc.
its General Partner
/s/ Robert Sharp
---------------------------
Name: Robert Sharp
Title: Managing Director
19
<PAGE>
EXHIBIT 4.9
Execution Copy
--------------
SHAREHOLDER AGREEMENT
---------------------
THIS SHAREHOLDER AGREEMENT (this "Agreement") is entered into as of May
10, 2000, by and among JOSTENS, INC., a Minnesota corporation (the "Company"),
INVESTCORP INVESTMENT EQUITY LIMITED, a Cayman Islands corporation ("IIEL"), the
other holders of Class D Common Stock ("Class D Stock") of the Company (IIEL and
each such other holder individually a "Class D Shareholder" and collectively the
"Class D Shareholders"), the other shareholders listed on Schedule A attached
hereto (the "Investcorp Shareholders") and DB CAPITAL INVESTORS, L.P., a
Delaware limited partnership ("DB Capital" and, together with the Class D
Shareholders and the Investcorp Shareholders, the "Shareholders").
R E C I T A L S
A. The Company is a party to an Agreement and Plan of Merger dated as
of December 27, 1999 (the "Merger Agreement") by and between the Company and
Saturn Acquisition Corporation, a Minnesota corporation ("MergerCo"), and
amended on March 31, 2000, pursuant to which MergerCo will, subject to the terms
and conditions of the Merger Agreement, be merged with and into the Company (the
"Merger").
B. Pursuant to a Subscription Agreement dated the date hereof, DB
Capital has purchased (i) 590,000 shares of Class A Common Stock, par value
$0.33? per share, of MergerCo (the "Class A Shares"), (ii) 1,346,036 shares of
Class E Common Stock, par value $0.01 per share, of MergerCo (the "Class E
Shares"), all of which shares will by virtue of the Merger be automatically
converted into a like number of the same class of shares of the Company, and
(iii) warrants to purchase 531,325 Class E Shares (the "Warrants"). The Class A
Shares and Class E Shares are collectively referred to herein as the "DB
Shares". The DB Shares, the Warrants and the shares issuable upon exercise of
the Warrants are referred to herein as the "DB Securities."
C. Pursuant to Subscription Agreements dated the date hereof, the Class
D Shareholders have purchased 20,000 shares of Class D Stock and the Investcorp
Shareholders have purchased (i) 5,300,000 shares of Class B Common Stock, par
value $0.01 per share, of MergerCo ("Class B Stock")and (ii) 811,020 shares of
Class C Common Stock, par value $0.01 per share, of MergerCo ("Class C Stock"),
all of which shares will by virtue of the Merger be automatically converted into
a like number of the respective class of shares of the Company
D. In connection with the Merger, the Company and the Shareholders
desire to enter into this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the parties
hereto agree as follows:
<PAGE>
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" means, with respect to any Person, (a) any Person
which, directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person or (b) any Person who is a
director or officer (i) of such Person, (ii) of any subsidiary of such
Person or (iii) of any Person described in clause (a) above. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, (x) to vote 50% or more of the securities
having ordinary voting power for the election of directors of such
Person whether by ownership of securities, contract, proxy or
otherwise, or (y) to direct or cause the direction of the management
and policies of such Person whether by ownership of securities,
contract, proxy or otherwise.
"Articles of Incorporation" means the Articles of
Incorporation of the Company in effect immediately following the
closing of the Merger, as such Articles may thereafter from time to
time be amended in accordance with applicable law and such Articles.
"Board" means the Board of Directors of the Company.
"Common Stock" means the common stock, par value $0.01 per
share, of the Company.
"Initial Public Offering" shall have the meaning ascribed to
that term in Article IV, Section 1 of the Articles of Incorporation.
"New Equity Financing" means the issuance by the Company of
new common equity securities of the Company, or securities convertible
into, or exercisable or exchangeable for, such common equity securities
other than issuances of equity securities (a) pursuant to stock
incentive or compensation plans approved by the Board, (b) upon
exercise of convertible instruments outstanding immediately following
the closing of the Merger, (c) as consideration for business
acquisitions by the Company or a subsidiary of the Company approved by
the Board, (d) in connection with debt or lease financings approved by
the Board or (e) in the Initial Public Offering.
"Permitted Transferee" shall mean (i) a Person acquiring
Shares pursuant to Section 2 hereof or (ii) a Person that is an
Affiliate of either DB Capital or a Permitted Transferee; provided,
however, that no transfer to a Permitted Transferee will be effective
unless and until such Permitted Transferee has agreed in writing to be
bound by this Agreement with respect to the Shares to be so
transferred.
"Person" means an individual, limited or general partnership,
joint venture, limited liability company, corporation, trust,
unincorporated organization or a government or any department or agency
thereof.
Certain other terms are defined elsewhere in this Agreement.
2
<PAGE>
SECTION 2. Right of First Offer on DB Shares.
(a) In the event that DB Capital or any Permitted Transferee holding DB
Shares (the "Initiating Holder") proposes to sell any DB Shares to any Person
other than a Permitted Transferee, such Initiating Holder shall furnish to the
Company and to IIEL a written notice specifying the number of DB Shares proposed
to be sold, the proposed sale price and all other material terms and conditions
of the proposed sale (a "Proposed Sale Notice").
(b) The Company and IIEL shall each then have the irrevocable option,
exercisable by written notice to the Initiating Holder within 45 days after
receipt of a Proposed Sale Notice (the "Option Period"), to purchase all (but
not less than all) of the DB Shares covered by such Notice at the same price and
on the same terms and conditions as contained in such Notice (the "Option"). As
between the Company and IIEL, IIEL will have first priority with respect to the
Option, and the DB Shares covered by such Option may be allocated between IIEL
and the Company in any amounts mutually agreed upon by IIEL and the Company.
(c) In the event that either IIEL or the Company elects to exercise the
Option (either or both, as applicable, an "Electing Offeree"), the closing of
the purchase or purchases pursuant to the exercise of such Option shall occur at
the offices of the Company on the date specified in the notice of exercise,
which date shall not be later than 90 days after receipt by the Company and IIEL
of the Proposed Sale Notice (or such earlier date, if any, mutually agreed upon
by the Initiating Holder and the Electing Offeree). At such closing, (i) the
Initiating Holder shall deliver to the Electing Offeree the stock certificate or
certificates evidencing such DB Shares in valid form for transfer with
appropriate and duly executed assignments, stock powers or endorsements, as the
case may be, bearing any necessary documentary stamps and accompanied by such
certificates of authority, consents to transfer or other instruments or
evidences of good title of the Initiating Holder to such DB Shares, free and
clear of any and all claims, liens, pledges and encumbrances, as may reasonably
be requested by such Electing Offerees, and (ii) each Electing Offeree shall pay
to the Initiating Holder the applicable purchase price by wire transfer of
immediately available funds to such account as the Initiating Holder shall
designate in writing to the Electing Offeree.
(d) If the Option is not exercised within the Option Period or if,
prior to the expiration of the Option Period, each of IIEL and the Company shall
have given the Initiating Holder written notice that it will not exercise the
Option, then the Initiating Holder shall be free, for a period of 180 days
beginning on the earlier of the day after the expiration of the Option Period or
the date on which the Initiating Holder shall have received such notices of
non-election, as applicable, to sell such DB Shares to any other purchaser or
purchasers at prices, terms and conditions no less favorable to the Initiating
Holder than those contained in the Proposed Sale Notice; provided that (i) any
such other purchaser or purchasers shall agree in writing to be bound by all
provisions of this Agreement applicable to the Initiating Holder to the extent
such provisions by their terms continue in effect; and (ii) the total number of
Persons holding DB Shares as a result of sales pursuant to this Section 2(d)
shall not exceed ten (10) Persons without the written consent of the Company
(which shall not be unreasonably withheld).
(e) Except as hereinafter provided, no transfer, assignment or other
disposition of any DB Shares (including without limitation any transfer,
assignment or other disposition by
3
<PAGE>
operation of law) may be made by DB Capital or a Permitted Transferee, other
than a transfer by DB Capital to a Permitted Transferee or by a Permitted
Transferee to another Permitted Transferee; provided that, subject to the prior
written consent of IIEL (which consent shall not be unreasonably withheld), DB
Capital or a Permitted Transferee may pledge or hypothecate DB Shares in a bona
fide credit transaction with an unaffiliated financial institution.
(f) All DB Shares sold pursuant to Section 2(d) shall continue to be
subject to the provisions of this Section 2.
(g) The transfer restrictions imposed on the DB Shares by this Section
2 are in addition to any restrictions applicable to such shares which are
contained in the Articles of Incorporation.
(h) The provisions of this Section 2 shall expire and be of no further
force and effect upon occurrence of an Initial Public Offering.
SECTION 3. Right to Participate in Certain Sales.
(a) In the event that, during the period beginning immediately after
the closing of the Merger and ending upon the Initial Public Offering, one or
more Investcorp Shareholders propose to engage in a sale or series of related
sales of equity interests in the Company which is not a "Tag-Along Transfer"
within the meaning of Article IV of the Articles of Incorporation (a "Section 3
Sale") to a purchaser who is not an Investcorp Shareholder (a "Section 3
Purchaser"), then DB Capital and any Permitted Transferee holding DB Securities
shall be given the right to participate in such Section 3 Sale at the same price
and on the same terms and conditions as the Investcorp Shareholders
participating in such transaction, up to the Pro Rata DB Share Amount (as
defined below) applicable to DB Capital and each such Permitted Transferee. As
used in this Section 3 "Pro Rata DB Share Amount" applicable to a holder of DB
Securities shall mean the number of whole DB Shares and shares issued or
issuable upon exercise of a Warrant ("Warrant Shares") (disregarding any
resulting fractional share) derived by multiplying (x) the total number of DB
Shares and Warrant Shares held by such holder by (y) a fraction, the numerator
of which is the total number of outstanding shares of all classes of common
stock of the Company (other than DB Shares and Warrant Shares) to be included in
the Section 3 Sale and the denominator of which is the total number of
outstanding shares of all classes of common stock of the Company held by the
Investcorp Shareholders participating in such transaction.
(b) The Investcorp Shareholders proposing to engage in a Section 3 Sale
shall notify, or cause to be notified, DB Capital and each Permitted Transferee
holding DB Securities in writing of each Section 3 Sale at least 20 days prior
to the scheduled closing of the Section 3 Sale. Such notice (the "Section 3 Sale
Notice") shall set forth the following: (i) the total number of shares of
Company capital stock, by class, to be included in the Section 3 Sale, (ii) the
applicable Pro Rata DB Share Amount for each holder of DB Securities then having
rights under this Section 3 and the basis on which each of such Amounts has been
calculated, (iii) the consideration per share to be paid by the Section 3
Purchaser, (iv) a summary of other material terms and conditions of the Section
3 Sale and an estimate of anticipated expenses, (v) that the Section 3 Purchaser
has been informed of the participation rights under this Section 3 and has
agreed to purchase DB Securities up to the applicable Pro Rata DB Share Amounts
to the extent
4
<PAGE>
holders of such DB Securities elect to participate and (vi) the name and address
of the person to whom such holders of DB Securities should direct their election
notices as provided in Section 3(c) below.
(c) The participation rights granted pursuant to this Section 3 may be
exercised by holders of such rights by delivery of a written notice (the
"Section 3 Election Notice") within 15 days following receipt of such Notice
(each holder of such participation rights who so elects is referred to herein as
an "Electing Holder"). The Section 3 Election Notice shall state either (A) that
the Electing Holder elects to include in such sale its full Pro Rata DB Share
Amount or (B) if such Electing Holder elects to include in such Sale a lesser
number of shares, such lesser number of shares (the amount so included, the
"Included DB Shares").
The Section 3 Election Notice shall constitute a binding agreement by
the applicable Electing Holder to sell the Included DB Shares in the Section 3
Sale on the terms and conditions specified in the Section 3 Sale Notice. In
addition, by delivering the Section 3 Election Notice such Electing Holder
agrees to the following: (i) prior to the closing of any such Sale, to execute
and deliver (or cause to be executed and delivered) any purchase agreement or
other documentation required by the Section 3 Purchaser to consummate the
Section 3 Sale, which purchase agreement and other documentation shall be on
terms no less favorable in respect of any material term to such Electing Holder
than those executed by the other Company shareholders participating in such
Sale; provided that no Electing Holder shall be required to make any
representation or warranty or undertake any liability in any such purchase
agreement or otherwise in connection with a Section 3 Sale other than
representations and warranties as to its ownership and authority to transfer the
Included DB Shares, free and clear of all liens and encumbrances and in
compliance with all applicable laws; and (B) at the closing of any such Sale
deliver to the Section 3 Purchaser the certificate or certificates representing
the Included DB Shares, duly endorsed for transfer with signatures guaranteed,
against receipt of the purchase price therefor.
If no Section 3 Election Notice is received by the person designated in
the Section 3 Sale Notice to receive such Election within the time period
specified in Section 3(c)(i) above, the other selling shareholders participating
in the Section 3 Sale shall have the right to sell to the Section 3 Purchaser up
to the number of shares designated as proposed for sale in the Section 3 Sale
Notice on terms and conditions no more favorable in any material respect to such
shareholders than those stated in such Notice.
(d) Each holder of Included DB Shares shall be required to bear its pro
rata share, based on the number of total shares included in such Sale by all
Company shareholders, of the expenses of the transaction, including without
limitation legal, accounting and investment banking fees and expenses.
(e) The provisions of this Section 3 shall not apply to any DB
Securities that have previously been the subject of a completed Section 3 Sale
nor shall the holder of any such DB Securities have the right, pursuant to this
Agreement, to participate in any subsequent Section 3 Sale.
5
<PAGE>
(f) The provisions of this Section 3 shall not apply to sales by any
Investcorp Shareholder to any Affiliate of any such Investcorp Shareholder or to
any other Investcorp Shareholder.
(g) Nothing herein shall constitute an obligation on the part of the
Investcorp Shareholders proposing to engage in a Section 3 Sale to consummate
such sale.
SECTION 4. Board Representation.
The Class D Shareholders hereby agree that, from and after the date
hereof until the Initial Public Offering, and provided DB Capital beneficially
owns either (a) at least a majority of the DB Shares or (b) at least $30.0
million in aggregate liquidation preference of the Senior Exchangeable
Payment-In-Kind Preferred Stock of the Company (the "Retention Condition"), the
Class D Shareholders shall vote or cause to be voted the shares of Class D
Common Stock of the Company held by such shareholders in such a manner as to
elect one director to the Board as specified by DB Capital. DB Capital and its
Permitted Transferees, if any, hereby agree that, from and after the date hereof
until the Initial Public Offering, DB Capital and such Permitted Transferees, if
any, shall vote or cause to be voted the Shares held by such shareholders (to
the extent such holders have voting rights) in such a manner as to elect the
remaining directors to the Board as specified by the Class D Shareholders. In
the event that voting equity securities are issued by the Company in a New
Equity Financing, the Company shall take steps as necessary to preserve for the
benefit of DB Capital its rights under this Section 4.
SECTION 5. Right to Participate in Future Financings.
In the event that, prior to the Initial Public Offering, the Company
intends to engage in a New Equity Financing, (i) it shall provide DB Capital,
the Class D Shareholders and the Investcorp Shareholders with written notice of
such intention at least 20 business days prior to the scheduled closing of the
New Equity Financing, describing the type of equity securities to be issued, the
price and the number or amount thereof, and the general terms upon which the
Company proposes to effect such issuance and (ii) if within 10 days after
receipt of such notice DB Capital, any Class D Shareholder or any Investcorp
Shareholder (each, an "Electing Shareholder") notifies the Company of its desire
to participate in such New Equity Financing as hereinafter contemplated, it
shall take steps as are necessary to enable each such Electing Shareholder to
participate, at such Electing Shareholder's option, as a purchaser in such New
Equity Financing such that the Electing Shareholder, through the exercise of
such option, would maintain a percentage interest in the outstanding common
equity securities of the Company equal to the percentage that the total
outstanding common equity securities of the Company held by such Electing
Shareholder at such time (excluding the Warrants and shares issued or issuable
upon the exercise of the Warrants) bears to the total outstanding common equity
securities of the Company on a fully diluted basis (including, without
limitation, shares issued upon the exercise of the Warrants).
SECTION 6. Public Reports and Financial Statements.
As soon as available to the public, the Company will provide to DB
Capital copies of all annual reports, periodic reports and other filings made by
the Company with the Securities and
6
<PAGE>
Exchange Commission. In the event that, after the date hereof, the Company shall
not be required to make filings with the Securities and Exchange Commission, the
Company will deliver to DB Capital as soon as available annual and quarterly
consolidated balance sheets and consolidated statements of income and
shareholders' equity and consolidated statements of cash flows of the Company.
SECTION 7. Legends. All certificates representing DB Shares shall, in
addition to other legends that may be required by the Articles of Incorporation
of the Company or by state or federal securities laws, bear the following
legends:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS, CONDITIONS AND RESTRICTIONS OF A SHAREHOLDER AGREEMENT AMONG JOSTENS,
INC. AND CERTAIN OF ITS SHAREHOLDERS AND MAY BE TRANSFERRED ONLY IN COMPLIANCE
WITH THE CONDITIONS SPECIFIED IN SUCH AGREEMENT. THESE SHARES ARE SUBJECT TO
REPURCHASE RIGHTS PURSUANT TO SUCH SHAREHOLDER AGREEMENT. A COMPLETE AND CORRECT
COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE OFFICES OF JOSTENS,
INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN
REQUEST."
SECTION 8. Miscellaneous.
(a) Notices. All notices, instructions and other communications in
connection with this Agreement shall be in writing and may be given by (i)
personal delivery, (ii) certified mail, return receipt requested, postage
prepaid, or (iii) delivery by a nationally recognized overnight courier, to the
parties at the addresses of each as set forth on the signature pages to this
Agreement or to such other address as any party may specify in a notice to the
other parties. Notices will be deemed to have been given (w) when actually
delivered personally, (x) the next business day if sent by overnight courier
(with proof of delivery) or (y) on the fifth day after mailing by certified
mail.
(b) No Waiver. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this Agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy.
(c) Binding Effect; Assignability. This Agreement shall be binding upon
and, except as otherwise provided herein, shall inure to the benefit of the
respective parties and their permitted successors and assigns, including,
without limitation, Permitted Transferees to the extent specifically provided
for herein. This Agreement shall not be assignable except as otherwise
specifically provided herein.
(d) Amendment and Waiver. This Agreement may not be amended, modified
or supplemented, and no waiver or consent to departures from the provisions
hereof shall bind any party who has not given such waiver or consent, unless
consented to in writing by the holders of at least 80% of the outstanding common
equity securities of the Company. The Agreement may not be amended, modified or
supplemented in a manner which adversely affects the rights of any
7
<PAGE>
holder of common equity securities of the Company but does not equally affect
the rights of all other holders of common equity securities of the Company
without the affected party's consent.
(e) Governing Law; Service of Process. This Agreement shall be
construed both as to validity and performance in accordance with, and governed
by, the laws of the State of New York applicable to agreements to be performed
in New York, without regard to principles of conflict of laws. Each of the
parties hereto irrevocably consents to the jurisdiction and venue of any state
or federal court situated in the City of New York in the State of New York, and
further consents to the service of any and all process in any action or
proceeding arising out of or relating to this Agreement by the mailing of copies
of such process to such party at its address pursuant to Section 6(a) hereof.
(f) Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed an original but all of which together
shall constitute one and the same instrument, and all signatures need not appear
on any one counterpart.
(g) Headings. All headings and captions in this Agreement are for
purposes of reference only and shall not be construed to limit or affect the
substance of this Agreement. All references to Section in this Agreement refer
to Sections of this Agreement, unless the context otherwise expressly provides.
(h) Entire Agreement. This Agreement contains, and is intended as, a
complete statement of all the terms of the arrangements between the parties with
respect to the matters provided for herein and supersedes any previous
agreements and understandings between the parties with respect to those matters.
(i) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the maximum extent possible.
(j) No Dilution. The Company hereby represents and warrants to DB
Capital that in no event will the issuance of Common Stock upon exercise of the
Class B Warrant issued by the Company on the date hereof be dilutive to DB
Capital's ownership percentage of the Company common equity securities.
(k) New Class D Shareholders. The Company will not issue, and the Class
D Shareholders and the Investcorp Shareholders will not transfer, any shares of
Class B Stock, Class C Stock or Class D Stock unless the holder or transferee of
such shares shall have first agreed to become a party to, and to be bound by,
the terms of this Agreement.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
JOSTENS, INC.
a Minnesota corporation
By: /s/ Lee U. McGrath
------------------------------------
Name: Lee U. McGrath
Title: Vice President & Treasurer
Address:
------------------------
------------------------
DB CAPITAL INVESTORS, L.P.,
a Delaware limited partnership
By: DB Capital Partners, L.P.
its General Partner
By: DB Capital Partners, Inc.
its General Partner
By: /s/ Robert Sharp
------------------------------------
Name: Robert Sharp
Title: Managing Director
Address:
------------------------
------------------------
INVESTCORP INVESTMENT EQUITY LIMITED,
a Cayman Islands corporation
By: /s/ Sydney J. Coleman
------------------------------------
Name: Sydney J. Coleman
Title: Director
Address: P.O. Box 1111
Grand Cayman
Cayman Islands, B.W.I.
9
<PAGE>
OTHER CLASS D SHAREHOLDERS
--------------------------
BALLET LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
DENARY LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
GLEAM LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
HIGHLANDS LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
10
<PAGE>
NOBLE LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
OUTRIGGER LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
QUILL LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
RADIAL LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
SHORELINE LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
11
<PAGE>
ZINNIA LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
12
<PAGE>
EXHIBIT 4.10
Execution Copy
--------------
SHAREHOLDER AGREEMENT
THIS SHAREHOLDER AGREEMENT (this "Agreement") is entered into as of May 10,
2000, by and among JOSTENS, INC., a Minnesota corporation (the "Company"),
INVESTCORP INVESTMENT EQUITY LIMITED, a Cayman Islands corporation ("IIEL"), the
other holders of Class D Common Stock ("Class D Stock") of the Company (IIEL and
each such other holder individually a "Class D Shareholder" and collectively the
"Class D Shareholders"), the other shareholders listed on Schedule A attached
hereto (the "Investcorp Shareholders"), FIRST UNION LEVERAGED CAPITAL, LLC, a
North Carolina limited liability company ("First Union" and, together with the
Class D Shareholders and the Investcorp Shareholders, the "Shareholders").
R E C I T A L S
A. The Company is a party to an Agreement and Plan of Merger dated as of
December 27, 1999 and amended on March 31, 2000 (the "Merger Agreement") by and
between the Company and Saturn Acquisition Corporation, a Minnesota corporation
("MergerCo"), pursuant to which MergerCo will, subject to the terms and
conditions of the Merger Agreement, be merged with and into the Company (the
"Merger").
B. Pursuant to a Subscription Agreement dated the date hereof, First Union
has purchased 198,019 shares of Class A Common Stock, par value $0.33? per
share, of MergerCo ("Class A Stock"), which shares will by virtue of the Merger
be automatically converted into a like number of the same class of shares of the
Company (the "First Union Shares").
C. Pursuant to Subscription Agreements dated the date hereof, the Class D
Shareholders have purchased 20,000 shares of Class D Stock and the Investcorp
Shareholders have purchased (i) 5,300,000 shares of Class B Common Stock, par
value $0.01 per share, of MergerCo ("Class B Stock")and (ii) 811,020 shares of
Class C Common Stock, par value $0.01 per share, of MergerCo ("Class C Stock"),
all of which shares will by virtue of the Merger be automatically converted into
a like number of the respective class of shares of the Company
D. In connection with the Merger, the Company and the Shareholders desire
to enter into this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the parties
hereto agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
<PAGE>
"Affiliate" means, with respect to any Person, (a) any Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person or (b) any Person who is a director or
officer (i) of such Person, (ii) of any subsidiary of such Person or (iii)
of any Person described in clause (a) above. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
(x) to vote 50% or more of the securities having ordinary voting power for
the election of directors of such Person whether by ownership of
securities, contract, proxy or otherwise, or (y) to direct or cause the
direction of the management and policies of such Person whether by
ownership of securities, contract, proxy or otherwise.
"Articles of Incorporation" means the Articles of Incorporation of the
Company in effect immediately following the closing of the Merger, as such
Articles may thereafter from time to time be amended in accordance with
applicable law and such Articles.
"Common Stock" means the common stock, par value $0.01 per share, of
the Company.
"Initial Public Offering" shall have the meaning ascribed to that term
in Article IV, Section 1 of the Articles of Incorporation.
"New Equity Financing" means the issuance by the Company of new common
equity securities of the Company, or securities convertible into, or
exercisable or exchangeable for, such common equity securities other than
issuances of equity securities (a) pursuant to stock incentive or
compensation plans approved by the Board, (b) upon exercise of convertible
instruments outstanding immediately following the closing of the Merger,
(c) as consideration for business acquisitions by the Company or a
subsidiary of the Company approved by the Board, (d) in connection with
debt or lease financings approved by the Board or (e) in the Initial Public
Offering.
"Permitted Transferee" shall mean (i) a Person acquiring Shares
pursuant to Section 2 hereof or (ii) a Person that is an Affiliate of
either First Union or a Permitted Transferee; provided, however, that no
transfer to a Permitted Transferee will be effective unless and until such
Permitted Transferee has agreed in writing to be bound by this Agreement
with respect to the Shares to be so transferred.
"Person" means an individual, limited or general partnership, joint
venture, limited liability company, corporation, trust, unincorporated
organization or a government or any department or agency thereof.
Certain other terms are defined elsewhere in this Agreement.
SECTION 2. Right of First Offer on Shares.
(a) In the event that First Union or any Permitted Transferee holding
First Union Shares (the "Initiating Holder") proposes to sell any First
Union Shares to any Person other than a Permitted Transferee, such
Initiating Holder shall furnish to the Company and to IIEL a written notice
specifying the number of First Union Shares proposed to be sold, the
proposed sale price and all other material terms and conditions of the
proposed sale (a "Proposed Sale Notice").
2
<PAGE>
(b) The Company and IIEL shall each then have the irrevocable option,
exercisable by written notice to the Initiating Holder within 60 days after
receipt of a Proposed Sale Notice (the "Option Period"), to purchase all
(but not less than all) of the First Union Shares covered by such Notice at
the same price and on the same terms and conditions as contained in such
Notice (the "Option"). As between the Company and IIEL, IIEL will have
first priority with respect to the Option, and the First Union Shares
covered by such Option may be allocated between IIEL and the Company in any
amounts mutually agreed upon by IIEL and the Company.
(c) In the event that either IIEL or the Company elects to exercise
the Option (either or both, as applicable, an "Electing Offeree"), the
closing of the purchase or purchases pursuant to the exercise of such
Option shall occur at the offices of the Company on the date specified in
the notice of exercise, which date shall not be later than 90 days after
receipt by the Company and IIEL of the Proposed Sale Notice Holder (or such
earlier date, if any, mutually agreed upon by the Initiating Holder and the
Electing Offeree). At such closing, (i) the Initiating Holder shall deliver
to the Electing Offeree the stock certificate or certificates or warrant
certificate or certificates evidencing such First Union Shares in valid
form for transfer with appropriate and duly executed assignments, stock
powers or endorsements, as the case may be, bearing any necessary
documentary stamps and accompanied by such certificates of authority,
consents to transfer or other instruments or evidences of good title of the
Initiating Holder to such First Union Shares, free and clear of any and all
claims, liens, pledges and encumbrances, as may reasonably be requested by
such Electing Offerees, and (ii) each Electing Offeree shall pay to the
Initiating Holder the applicable purchase price by wire transfer of
immediately available funds to such account as the Initiating Holder shall
designate in writing to the Electing Offeree.
(d) If the Option is not exercised within the Option Period or if,
prior to the expiration of the Option Period, each of IIEL and the Company
shall have given the Initiating Holder written notice that it will not
exercise the Option, then the Initiating Holder shall be free, for a period
of 180 days beginning on the earlier of the day after the expiration of the
Option Period or the date on which the Initiating Holder shall have
received such notices of non-election, as applicable, to sell such First
Union Shares to any other purchaser or purchasers at prices, terms and
conditions no less favorable to the Initiating Holder than those contained
in the Proposed Sale Notice; provided that (i) any such other purchaser or
purchasers agree in writing to be bound by all provisions of this Agreement
applicable to the Initiating Holder to the extent such provisions by their
terms continue in effect; and (ii) in no event shall the total number of
Persons holding First Union Shares as a result of sales pursuant to this
Section 2(d) exceed five (5) Persons.
(e) Except as hereinafter provided, no transfer, assignment or other
disposition of any First Union Shares (including without limitation any
transfer, assignment or other disposition by operation of law) may be made
by First Union or a Permitted Transferee, other than a transfer by First
Union to a Permitted Transferee or by a Permitted Transferee to another
Permitted Transferee; provided that, subject to the prior written consent
of IIEL (which consent shall not be unreasonably withheld), First Union or
a Permitted Transferee may pledge First Union Shares in a bona fide credit
transaction with an unaffiliated financial institution.
(f) All First Union Shares sold pursuant to Section 2(d) shall
continue to be subject to the provisions of this Section 2.
3
<PAGE>
(g) The transfer restrictions imposed on the First Union Shares by
this Section 2 are in addition to any restrictions applicable to such
shares which are contained in the Articles of Incorporation.
(h) The provisions of this Section 2 shall expire and be of no further
force and effect upon occurrence of an Initial Public Offering.
SECTION 3. Right to Participate in Certain Sales.
(a) In the event that, during the period beginning immediately after
the closing of the Merger and ending upon the Initial Public Offering, one
or more Investcorp Shareholders propose to engage in a sale or series of
related sales of equity interests in the Company which is not a "Tag-Along
Transfer" within the meaning of Article IV of the Articles of Incorporation
(a "Section 3 Sale") to a purchaser who is not an Investcorp Shareholder (a
"Section 3 Purchaser"), then First Union and any Permitted Transferee
holding First Union Shares shall be given the right to participate in such
Section 3 Sale at the same price and on the same terms and conditions as
the Investcorp Shareholders participating in such transaction, up to the
Pro Rata Share Amount (as defined below) applicable to First Union and each
such Permitted Transferee. As used in this Section 3. "Pro Rata Share
Amount" applicable to a holder of First Union Shares shall mean the number
of whole First Union Shares (disregarding any resulting fractional share)
derived by multiplying (x) the total number of First Union Shares held by
such holder by (y) a fraction, the numerator of which is the total number
of outstanding shares of all classes of common stock of the Company (other
than First Union Shares) to be included in the Section 3 Sale and the
denominator of which is the total number of outstanding shares of all
classes of common stock of the Company held by the Investcorp Shareholders
participating in such transaction.
(b) The Investcorp Shareholders proposing to engage in a Section 3
Sale shall notify, or cause to be notified, First Union and each Permitted
Transferee holding First Union Shares in writing of each Section 3 Sale at
least 20 days prior to the scheduled closing of the Section 3 Sale. Such
notice (the "Section 3 Sale Notice") shall set forth the following: (i) the
total number of shares of Company capital stock, by class, to be included
in the Section 3 Sale, (ii) the applicable Pro Rata Share Amount for each
holder of First Union Shares then having rights under this Section 3 and
the basis on which each of such Amounts has been calculated, (iii) the
consideration per share to be paid by the Section 3 Purchaser, (iv) a
summary of other material terms and conditions of the Section 3 Sale and an
estimate of anticipated expenses, (v) that the Section 3 Purchaser has been
informed of the participation rights under this Section 3 and has agreed to
purchase First Union Shares up to the applicable Pro Rata Share Amounts to
the extent holders of such First Union Shares elect to participate and (vi)
the name and address of the person to whom such holders of First Union
Shares should direct their election notices as provided in Section 3(c)
below.
(c) The participation rights granted pursuant to this Section 3 may be
exercised by holders of such rights by delivery of a written notice (the
"Section 3 Election Notice") within 15 days following receipt of such
Notice (each holder of such participation rights who so elects is referred
to herein as an "Electing Holder"). The Section 3 Election Notice shall
state either (A) that the Electing Holder elects to include in such sale
its full Pro Rata Share Amount or
4
<PAGE>
(B) if such Electing Holder elects to include in such Sale a lesser number
of shares, such lesser number of shares (the amount so included, the
"Included Shares").
The Section 3 Election Notice shall constitute a binding agreement by
the applicable Electing Holder to sell the Included Shares in the Section 3
Sale on the terms and conditions specified in the Section 3 Sale Notice. In
addition, by delivering the Section 3 Election Notice such Electing Holder
agrees to the following: (i) prior to the closing of any such Sale, to
execute and deliver (or cause to be executed and delivered) any purchase
agreement or other documentation required by the Section 3 Purchaser to
consummate the Section 3 Sale, which purchase agreement and other
documentation shall be on terms no less favorable in respect of any
material term to such Electing Holder than those executed by the other
Company shareholders participating in such Sale; provided that no Electing
Holder shall be required to make any representation or warranty or
undertake any liability in any such purchase agreement or otherwise in
connection with a Section 3 Sale other than representations and warranties
as to its ownership and authority to transfer the Included Shares, free and
clear of all liens and encumbrances and in compliance with all applicable
laws; and (B) at the closing of any such Sale deliver to the Section 3
Purchaser the certificate or certificates representing the Included Shares,
duly endorsed for transfer with signatures guaranteed, against receipt of
the purchase price therefor.
If no Section 3 Election Notice is received by the person designated
in the Section 3 Sale Notice to receive such Election within the time
period specified in Section 3(c)(i) above, the other selling shareholders
participating in the Section 3 Sale shall have the right to sell to the
Section 3 Purchaser up to the number of shares designated as proposed for
sale in the Section 3 Sale Notice on terms and conditions no more favorable
in any material respect to such shareholders than those stated in such
Notice.
(d) Each holder of Included Shares shall be required to bear its pro
rata share, based on the number of total shares included in such Sale by
all Company shareholders, of the expenses of the transaction, including
without limitation legal, accounting and investment banking fees and
expenses.
(e) The provisions of this Section 3 shall not apply to any First
Union Shares that have previously been the subject of a completed Section 3
Sale nor shall the holder of any such First Union Shares have the right,
pursuant to this Agreement, to participate in any subsequent Section 3
Sale.
(f) The provisions of this Section 3 shall not apply to sales by any
Investcorp Shareholder to any Affiliate of any such Investcorp Shareholder
or to any other Investcorp Shareholder.
(g) Nothing herein shall constitute an obligation on the part of the
Investcorp Shareholders proposing to engage in a Section 3 Sale to
consummate such sale.
SECTION 4. Right to Participate in Future Financings.
In the event that, prior to the Initial Public Offering, the Company
intends to engage in a New Equity Financing, (i) it shall provide First Union,
the Class D Shareholders and the
5
<PAGE>
Investcorp Shareholders with written notice of such intention at least 20
business days prior to the scheduled closing of the New Equity Financing,
describing the type of equity securities to be issued, the price and the number
or amount thereof, and the general terms upon which the Company proposes to
effect such issuance and (ii) if within 10 days after receipt of such notice
First Union, any Class D Shareholder or any Investcorp Shareholder (each, an
"Electing Shareholder") notifies the Company of its desire to participate in
such New Equity Financing as hereinafter contemplated, it shall take steps as
are necessary to enable each such Electing Shareholder to participate, at such
Electing Shareholder's option, as a purchaser in such New Equity Financing such
that the Electing Shareholder, through the exercise of such option, would
maintain a percentage interest in the outstanding common equity securities of
the Company equal to the percentage that the total outstanding common equity
securities of the Company held by such Electing Shareholder at such time bears
to the total outstanding common equity securities of the Company on a fully
diluted basis.
SECTION 5. Public Reports and Financial Statements.
As soon as available to the public, the Company will provide to First Union
copies of all annual reports, periodic reports and other filings made by the
Company with the Securities and Exchange Commission. In the event that, after
the date hereof, the Company shall not be required to make filings with the
Securities and Exchange Commission, the Company will deliver to First Union as
soon as available annual and quarterly consolidated balance sheets and
consolidated statements of income and shareholders' equity and consolidated
statements of cash flows of the Company.
SECTION 6. Legends. All certificates representing First Union Shares shall,
in addition to other legends that may be required by the Articles of
Incorporation of the Company or by state or federal securities laws, bear the
following legends:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS, CONDITIONS AND RESTRICTIONS OF A SHAREHOLDER AGREEMENT AMONG JOSTENS,
INC. AND CERTAIN OF ITS SHAREHOLDERS AND MAY BE TRANSFERRED ONLY IN COMPLIANCE
WITH THE CONDITIONS SPECIFIED IN SUCH AGREEMENT. THESE SHARES ARE SUBJECT TO
REPURCHASE RIGHTS PURSUANT TO SUCH SHAREHOLDER AGREEMENT. A COMPLETE AND CORRECT
COPY OF SUCH AGREEMENT IS AVAILABLE FOR INSPECTION AT THE OFFICES OF JOSTENS,
INC. AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN
REQUEST."
SECTION 7. Miscellaneous.
(a) Notices. All notices, instructions and other communications in
connection with this Agreement shall be in writing and may be given by (i)
personal delivery, (ii) certified mail, return receipt requested, postage
prepaid, or (iii) delivery by a nationally recognized overnight courier, to
the parties at the addresses of each as set forth on the signature pages to
this Agreement or to such other address as any party may specify in a
notice to the other parties. Notices will be deemed to have been given (w)
when actually delivered personally, (x) the next business day if sent by
overnight courier (with proof of delivery) or (y) on the fifth day after
mailing by certified mail.
6
<PAGE>
(b) No Waiver. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy conferred by this
Agreement shall operate as a waiver thereof or otherwise prejudice such
party's rights, powers and remedies conferred by this Agreement or shall
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.
(c) Binding Effect; Assignability. This Agreement shall be binding
upon and, except as otherwise provided herein, shall inure to the benefit
of the respective parties and their permitted successors and assigns,
including, without limitation, Permitted Transferees to the extent
specifically provided for herein. This Agreement shall not be assignable
except as otherwise specifically provided herein.
(d) Amendment and Waiver. This Agreement may not be amended, modified
or supplemented, and no waiver or consent to departures from the provisions
hereof shall bind any party who has not given such waiver or consent,
unless consented to in writing by the holders of at least 80% of the
outstanding common equity securities of the Company. The Agreement may not
be amended, modified or supplemented in a manner which adversely affects
the rights of any holder of common equity securities of the Company but
does not equally affect the rights of all other holders of common equity
securities of the Company without the affected party's consent.
(e) Governing Law; Service of Process. This Agreement shall be
construed both as to validity and performance in accordance with, and
governed by, the laws of the State of New York applicable to agreements to
be performed in New York, without regard to principles of conflict of laws.
Each of the parties hereto irrevocably consents to the jurisdiction and
venue of any state or federal court situated in the City of New York in the
State of New York, and further consents to the service of any and all
process in any action or proceeding arising out of or relating to this
Agreement by the mailing of copies of such process to such party at its
address pursuant to Section 6(a) hereof.
(f) Counterparts. This Agreement may be executed in two or more
counterparts each of which shall be deemed an original but all of which
together shall constitute one and the same instrument, and all signatures
need not appear on any one counterpart.
(g) Headings. All headings and captions in this Agreement are for
purposes of reference only and shall not be construed to limit or affect
the substance of this Agreement. All references to Section in this
Agreement refer to Sections of this Agreement, unless the context otherwise
expressly provides.
(h) Entire Agreement. This Agreement contains, and is intended as, a
complete statement of all the terms of the arrangements between the parties
with respect to the matters provided for herein and supersedes any previous
agreements and understandings between the parties with respect to those
matters.
(i) Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any
7
<PAGE>
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the maximum extent possible.
(j) No Dilution. The Company hereby represents and warrants to First
Union that in no event will the issuance of Common Stock upon exercise of
the Class B Warrant issued by the Company on the date hereof be dilutive to
First Union's ownership percentage of the Company common equity securities.
(k) New Class D Shareholders. The Company will not issue, and the
Class D Shareholders and the Investcorp Shareholders will not transfer, any
shares of Class B Stock, Class C Stock or Class D Stock unless the holder
or transferee of such shares shall have first agreed to become a party to,
and to be bound by, the terms of this Agreement.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
JOSTENS, INC.
a Minnesota corporation
By: /s/ Lee U. McGrath
-------------------------------------
Name: Lee U. McGrath
Title: Vice President & Treasurer
Address:
----------------------------
----------------------------
----------------------------
FIRST UNION LEVERAGED CAPITAL, LLC
a North Carolina limited liability
company
By: /s/ David Carson
-------------------------------------
Name: David Carson
Title: Senior Vice President
Address:
----------------------------
----------------------------
----------------------------
INVESTCORP INVESTMENT EQUITY LIMITED, a
Cayman Islands corporation
By: /s/ Sydney J. Coleman
-------------------------------------
Name: Sydney J. Coleman
Title: Director
Address: P.O. Box 1111
Grand Cayman
Cayman Islands, B.W.I.
9
<PAGE>
OTHER CLASS D SHAREHOLDERS
--------------------------
BALLET LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
DENARY LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
GLEAM LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
HIGHLANDS LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
10
<PAGE>
NOBLE LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
OUTRIGGER LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
QUILL LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
RADIAL LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
SHORELINE LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
11
<PAGE>
ZINNIA LIMITED, a Cayman Islands
corporation
By: /s/ [Signature Illegible]
------------------------------------
Name: Investcorp Management
Services Limited
Title: Authorized Representative
Address: West Wind Building
P.O. Box 2197
Georgetown, Grand Cayman
Cayman Islands, B.W.I.
12
<PAGE>
EXHIBIT 4.11
Execution Copy
--------------
COMMON EQUITY REGISTRATION RIGHTS AGREEMENT
-------------------------------------------
THIS COMMON EQUITY REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
as of May 10, 2000, by JOSTENS, INC., a Minnesota corporation (the "Company")
for the benefit of the Holders (as defined below).
R E C I T A L S
A. The Company is a party to an Agreement and Plan of Merger dated as of
December 27, 1999 (as amended, the "Merger Agreement") by and between the
Company and Saturn Acquisition Corporation, a Minnesota corporation
("MergerCo"), pursuant to which MergerCo will, subject to the terms and
conditions of the Merger Agreement, be merged with and into the Company (the
"Merger").
B. The Company is willing to grant the registration rights set forth below
to the shareholders of the Company as of the Effective Time (as defined in the
Merger Agreement).
A G R E E M E N T
In consideration of the equity investment in the Company made by the
Initial Holders (as defined below) and for other good and valuable consideration
and intending to be legally bound hereby, the Company hereby agrees as follows:
SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Affiliate" means (a) any Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person
or (b) any Person who is a director or officer (i) of such Person, (ii) of
any subsidiary of such Person or (iii) of any Person described in clause
(a) above. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, (x) to vote 50% or more of the securities
having ordinary voting power for the election of directors of such Person
whether by ownership of securities, contract, proxy or otherwise, or (y) to
direct or cause the direction of the management and policies of such Person
whether by ownership of securities, contract, proxy or otherwise.
"Agreement" is defined in the preamble.
"Charter" means the Articles of Incorporation of the Company in effect
immediately following the Effective Time, as such Charter thereafter from
time to time be amended in accordance with applicable law and such Charter.
"Commission" means the U.S. Securities and Exchange Commission and any
successor federal agency having similar powers.
"Company" is defined in the preamble.
<PAGE>
"DB Investors" as of any date of determination, means all of the
following who are then Holders: DB Capital Investors, L.P. and its
Affiliates and any DB Transferee.
"DB Transferee" means any Person who acquires from a DB Investor more
than 10,000 shares (as adjusted, after the date hereof, to account for
stock dividends, stock splits and similar events of the Company) of the
common stock (including shares issued or issuable upon exercise of
Warrants) of the Company acquired as of the Effective Time by DB Capital
Investors, L.P.
"Effective Time" shall have the meaning ascribed to that term in the
Merger Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
successor law, as amended from time to time, including the various rules
and regulations issued pursuant to that Act or any successor law.
"Holders," as of any date of determination, means the holders of
record of Registrable Securities other than any Persons to whom Registrable
Securities have been transferred who are not Permitted Assignees under
Section 3(b) hereof.
"Initial Holders" means the shareholders set forth on Schedule I
attached hereto.
"Initial Public Offering" shall have the meaning ascribed to that term
in the Charter.
"Investcorp Investors," as of any date of determination, means all of
the following who are then Holders: Investcorp Bank E.C. and its Affiliates
and any other investor with whom Investcorp Bank E.C. or any Affiliate
thereof has an administrative relationship.
"Merger" is defined in Recital A.
"Merger Agreement" is defined in Recital A.
"MergerCo" is defined in Recital A.
"Nonconvertible Preferred Shares" means shares of preferred stock of
the Company which are not convertible into common stock of the Company.
"Person" means an individual, limited or general partnership, joint
venture, limited liability company, corporation, trust, unincorporated
organization or other entity or a government or any department or agency
thereof.
"Registrable Securities," as of any date of determination, means (a)
the shares of Class A Common Stock, Class B Common Stock, Class C Common
Stock, Class D Common Stock and Class E Common Stock of the Company issued
to the Initial Holders in the Merger as set forth on Exhibit A attached
hereto, (b) any additional shares of capital stock of the Company acquired
prior to the Initial Public Offering by an Initial Holder, other than
Nonconvertible Preferred Shares, (c) the Warrants and the shares of Class E
Common Stock issuable upon
2
<PAGE>
exercise of the Warrants, (d) any shares of capital stock of the Company
issued upon conversion of any of the foregoing pursuant to the Charter, (e)
any shares of capital stock issued on account of any of the foregoing in
connection with any stock split or stock dividend effected after the
Effective Time and (f) equity securities of any other issuer issued in
exchange for any of the foregoing in connection with any merger,
consolidation, reorganization or recapitalization effected after the
closing Effective Time (other than equity securities of another issuer
which are issued pursuant to an effective registration statement under the
Securities Act). Notwithstanding the foregoing, any particular Registrable
Securities shall cease to be such when (i) a registration statement with
respect to the sale of such securities shall have become effective under
the Securities Act and such securities have been disposed of in accordance
with such registration statement, or (ii) they shall have ceased to be
outstanding.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with its obligations hereunder including,
without limitation, all Commission and any stock exchange registration,
listing, filing or NASD fees, all fees and expenses of complying with
securities or blue sky laws (including reasonable fees and disbursements of
counsel for the underwriters in connection with blue sky qualifications),
all messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits or "comfort" letters required by or incident
to such performance and compliance, any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities and the
reasonable fees and expenses of any special experts retained in connection
with the requested registration and the fees and disbursements of one
counsel for the Sellers (which counsel shall be selected by the holders of
a majority in interest of the Registrable Securities included in such
registration), but excluding underwriting discounts and commissions and
fees and disbursements of any additional counsel employed by any Seller (as
defined in Section 2(b) hereof) other than in-house counsel of the Company
and outside counsel employed by the Company for purposes of the
registration.
"Securities Act" means the Securities Act of 1933, or any successor
law, as amended from time to time, including the various rules and
regulations issued pursuant to that Act or any successor law.
"Seller" means any Holder whose Registrable Securities are included in
any registration pursuant to Section 2(a) or 2(b) of this Agreement.
"Warrants" means the Class E Stock Purchase Warrants to purchase
531,325 shares of Class E Common Stock of the Company (as such shares may
be adjusted from time to time) being issued by the Company in connection
with the Merger.
Certain other terms are defined elsewhere in this Agreement.
SECTION 2. Registration Rights.
(a) Demand Rights.
(i) Commencing 90 days after the occurrence of the Initial Public
Offering, Holders who are Investcorp Investors shall have the right,
exercisable for up to a total of four (4) effective registration
statements (any one or all of which may be a continuous or delayed
"shelf"
3
<PAGE>
registration pursuant to Rule 415 under the Securities Act), to
require the Company to register under the Securities Act such number
of Registrable Securities as such Holders shall designate for sale in
a written request to the Company (the "Investcorp Demand
Registration") provided, however, that the number of Registrable
Securities designated for sale by the Investcorp Investors in any
Investcorp Demand Registration may not represent less than 2% of the
total number of shares of common stock of the Company then
outstanding.
(ii) Commencing 90 days after the occurrence of the Initial
Public Offering, Holders who are DB Investors beneficially owning at
least one-third of the total common Registrable Securities held by DB
Investors (assuming for this purpose the exercise of the Warrants)
shall have the right, exercisable for up to a total of two (2)
effective registration statements (any one or both of which may be a
continuous or delayed "shelf" registration pursuant to Rule 415 under
the Securities Act), to require the Company to register under the
Securities Act all or a portion of such number of Registrable
Securities as such Holders shall designate for sale in a written
request to the Company (the "DB Demand Registration") provided,
however, that the Company shall have the right to delay any DB Demand
Registration for any two periods not to exceed 90 days in the
aggregate for both such periods in any 12 month period if, in the good
faith determination of the Company, the sale of such Registrable
Securities or the required disclosure of information in any related
registration statement, prospectus or prospectus supplement would
materially interfere with any material financing, acquisition or other
material event or transaction which is then intended or the public
disclosure of which at the time would be materially prejudicial to the
Company; provided, further, that the Company shall not be required to
effect more than one DB Demand Registration in any 12 month period.
(iii) The Company will not, without the written consent of a
majority in interest of the Investcorp Investors, include in any
Investcorp Demand Registration securities for sale for the account of
any Person (including the Company) other than Investcorp Investors,
except that the Company shall include securities held by other Holders
having the contractual right to be so included pursuant to (A) this
Agreement, (B) the Warrant Registration Rights Agreement dated as of
the date hereof among the Company, Deutsche Bank Securities Inc., UBS
Warburg LLC and Goldman, Sachs & Co.(the "Warrant Registration Rights
Agreement") or (C) the Management Shareholder Agreements dated as of
the date hereof entered into with members of senior management of the
Company or any Management Shareholder Agreements with substantially
similar terms (the "Management Shareholder Agreements") (in each case
subject to the applicable provisions of such Agreements).
(iv) The Company will not, without the written consent of a
majority in interest of the DB Investors, include in any DB Demand
Registration securities for sale for the account of any Person
(including the Company) other than DB Investors, except that the
Company shall include securities held by other Holders having the
contractual right to be so included pursuant to (A) this Agreement,
(B) the Warrant Registration Rights Agreement or (C) any Management
Shareholder Agreements (in each case subject to the applicable
provisions of such Agreements).
4
<PAGE>
(b) Piggyback Registration Rights.
If the Company proposes to file a registration statement with respect
to common equity securities of the Company in connection with or following
the Initial Public Offering (including without limitation pursuant to an
Investcorp Demand Registration or DB Demand Registration, but excluding any
registration statement on Form S-8 or S-4 or comparable successor forms or
a registration statement relating to a dividend reinvestment plan), which
is available for use for the sale of Registrable Securities under the
Securities Act, then the Company shall give written notice of such proposed
filing to each Holder at least 10 business days before the anticipated
filing date of such registration statement, and such notice shall offer
each Holder the opportunity to include in such registration statement the
Registrable Securities then owned by such Holder, as such Holder may
request in writing within 5 days after receipt of the Company's notice
(which request shall specify the number of Registrable Securities to be
included in such registration statement and the intended method of
disposition).
(c) Registration Procedures. If and whenever the Company is required
to effect the registration of any Registrable Securities under the
Securities Act as provided in Section 2(a) or (b) hereof, the Company will
as expeditiously as practicable:
(i)(A) prepare and file with the Commission a registration
statement on the appropriate form which includes such Registrable
Securities, and furnish to each Seller at least 5 business days prior
to the filing thereof a copy of such registration statement, and not
file any such registration statement to which any Seller shall have
reasonably objected on the grounds that such registration statement
does not comply in all material respects with the requirements of the
Act or of the rules or regulations thereunder, (B) promptly respond to
all comments received with respect to such registration statement and
make and file all necessary amendments thereto, and (C) thereafter use
its reasonable best efforts to cause such registration statement to
become effective at the earliest practicable date;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement accurate and effective and to comply with the provisions of
the Act with respect to the disposition of all Registrable Securities
and other securities covered by such registration statement until the
earlier of such time as all of such Registrable Securities have been
disposed of by the Sellers thereof set forth in such registration
statement or for the longer of (A) nine months or (B) if such
registration is a continuous secondary offering pursuant to Rule 415
under the Act, two years; and will furnish to each such Seller at
least 2 business days prior to the filing thereof a copy of any
amendment or supplement to such registration statement or prospectus
and shall not file any such amendment or supplement to which any such
Seller shall have reasonably objected on the grounds that such
amendment or supplement does not comply in all material respects with
the requirements of the Act or of the rules or regulations thereunder;
(iii) furnish to each Seller of such Registrable Securities, upon
their request, one signed copy of such registration statement and of
each such amendment thereof and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus
included in such registration statement (including each preliminary
prospectus and any summary
5
<PAGE>
prospectus), in conformity with the requirements of the Act, such
documents, if any, incorporated by reference in such registration
statement or prospectus, and such other documents as such Seller may
reasonably request;
(iv) notify each Seller of such Registrable Securities and, if
requested, confirm such notice in writing, as soon as practicable
after notice thereof is received by the Company, (A) when such
registration statement or such amendment thereof or supplement thereto
has been filed or becomes effective and when the prospectus or any
amendment thereof or supplement thereto has been filed, (B) of any
request by the Commission for any amendments or supplements to the
registration statement or the prospectus or for additional
information, (C) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable
Securities for offering or sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose and (D) of any stop
order issued, or the receipt of notification by the Company that any
such stop order is threatened to be issued, by the Commission, and use
its reasonable best efforts to prevent the entry of such stop order or
to remove it if entered;
(v) use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions as each
Seller shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement
remains in effect, and do any and all other acts and things that may
be necessary or advisable to enable such Seller to consummate the
disposition in such jurisdictions of its Registrable Securities
covered by such registration statement, except that the Company shall
not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would
not but for the requirements of this subdivision (v) be obligated to
be so qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction;
(vi) if such registration statement relates to an underwritten
offering, (A) obtain and furnish to each Seller a signed counterpart,
addressed to such Seller, of the legal opinions and accountants'
comfort letters which are to be delivered to the underwriters and (B)
notify each Seller of such Registrable Securities (and, if requested,
confirm such notice in writing) as soon as practicable after notice
thereof is received by the Company, if at any time in which the
underwriting agreement contemplated by Section 2(d) remains in effect
any representation or warranty of the Company contained therein shall
cease to be true and correct;
(vii) promptly notify each Seller whose Registrable Securities
are covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then
existing, and the Company shall promptly prepare a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances then existing;
6
<PAGE>
(viii) otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make
available to its securities holders, as soon as reasonably
practicable, an earnings statement covering the period of at least
twelve months, but not more than eighteen months, beginning with the
first month of the first fiscal quarter after the effective date of
such registration statement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Act and Rule 158 thereunder;
(ix) promptly make available for inspection by any Seller or
underwriter participating in any disposition pursuant to any
registration statement, and by any attorney, accountant or other agent
or representative retained by any Seller or underwriter, all financial
and other records, pertinent corporate documents and properties of the
Company, as shall be reasonably necessary to enable them to exercise
their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably requested
by any such Seller or underwriter in connection with such registration
statement;
(x) if the Common Stock of the Company is listed on a national
securities exchange or quoted on Nasdaq, use its best efforts to
comply with the requirements of such exchange or Nasdaq to include
shares of Registrable Securities covered by such registration
statement for listing on each such securities exchange or for
quotation on Nasdaq.
The Company may require each Seller of Registrable Securities as to which
any registration is being effected to furnish the Company such information
regarding such Seller and the distribution of such securities as the
Company may from time to time reasonably request in writing and as shall be
required by law or by the Commission in connection with such registration.
(d) Underwriting Agreement. If requested by the underwriters for any
underwritten offering of Registrable Securities on behalf of Sellers
pursuant to a registration covered by Section 2(a) or (b) hereof, the
Company will enter into an underwriting agreement with such underwriters
for such offering, such agreement to contain representations and warranties
by the Company and other terms and provisions not inconsistent with this
Section 2 as are customarily contained in underwriting agreements with
respect to secondary distributions, including, without limitation,
indemnities to the effect and to the extent provided in Section 2(g)
hereof, and the Company will cooperate with such Sellers to the end that
the conditions precedent to the obligations of such Sellers under such
underwriting agreement shall not include conditions that are not customary
in underwriting agreements with respect to secondary distributions and
shall be otherwise satisfactory to such Sellers. Sellers on whose behalf
shares are to be distributed by such underwriters shall be parties to any
such underwriting agreement and the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of
such underwriters, shall also be made to and for the benefit of such
Sellers. Such Sellers shall not be required by the Company to make any
representations or warranties to or agreements with the Company or the
underwriters other than reasonable representations, warranties or
agreements regarding such Sellers, such Sellers' Registrable Securities and
such Sellers' intended method or methods of disposition and any other
representation required by law.
7
<PAGE>
(e) Lock-Up.
(i) If and to the extent requested by the managing underwriter in
connection with the Initial Public Offering, such Holder shall agree
in writing that such Holder will not, without the consent of the
managing underwriter and except for shares included in the Initial
Public Offering, if any: (x) effect any public sale or distribution of
any common equity securities of the Company, or any securities
convertible into, or exercisable or exchangeable for, any such common
equity securities for a period of 180 days following effectiveness of
the registration statement relating to such Offering or (y) effect any
other transfer of any of the foregoing during such 180 day period
unless the transferee agrees in writing to be bound by the terms and
conditions of this Section 2(e).
(ii) If and to the extent requested by the managing underwriter
in connection with any other underwritten offering of common equity
securities of the Company (whether for the account of the Company,
selling shareholders or both) which occurs within two (2) years
following the effectiveness of the Initial Public Offering, such
Holder shall agree in writing that such Holder will not, without the
consent of the managing underwriter: (x) effect any public sale or
distribution of any common equity securities of the Company, or any
securities convertible into, or exercisable or exchangeable for, any
such common equity securities for a period of 90 days following
effectiveness of the registration statement relating to such Offering
or (y) effect any other transfer of any of the foregoing during such
90 day period unless the transferee agrees in writing to be bound by
the terms and conditions of this Section 2(e).
(f) Registration Expenses. The Company agrees to pay, in connection
with each registration of Registrable Securities covered by Section 2(a) or
2(b) hereof, all Registration Expenses. All other expenses not paid by the
Company which are otherwise not attributable to a particular Seller will be
the responsibility of and paid for by all of the Sellers on a pro rata
basis.
(g) Indemnification and Contribution.
(i) Indemnification by Company. The Company agrees to indemnify,
to the full extent permitted by law, each Seller, and any of their
officers, directors, employees and partners, and each Person who
controls such Seller within the meaning of Section 15 of the
Securities Act and Section 20(a) of the Exchange Act (each a
"Shareholder Indemnified Party") against any and all losses, claims,
damages, liabilities or expenses, joint or several (collectively,
"Damages") to which they or any of them may become subject: (i) under
the Securities Act, the Exchange Act, or otherwise, insofar as such
Damages (or actions in respect thereof) arise out of or are based upon
any untrue or alleged untrue statement of a material fact contained in
any registration statement, prospectus, preliminary prospectus or any
amendment to any of the foregoing, or arise out of or are based upon
any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; or (ii) as a result of or in connection with
any violation of applicable Federal, state or foreign laws or
regulations (collectively, "Laws") by the Company (other than as a
result of any act committed by or knowing omission of a Shareholder
Indemnified Party without the Company's approval) or any of the
Company's employees, officers or directors in connection with any such
registration; provided, however, that the Company will not be liable
if any such Damages arise out of or are based upon any such untrue
statement or alleged untrue statement or
8
<PAGE>
omission or alleged omission made therein in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of such Shareholder Indemnified Party in a signed document
stating that such information is specifically for use therein;
provided, further, that the foregoing indemnity is subject to the
condition that, insofar as it related to any untrue statement, alleged
untrue statement, omission or alleged omission made in a preliminary
prospectus but eliminated or remedied in the final prospectus (filed
pursuant to Rule 424(b) under the Securities Act), such indemnity
shall not inure to the benefit of the Sellers from whom the Person
asserting any Damages purchased the Registrable Securities which are
the subject thereof, if copies of such final prospectus were delivered
to such Seller on a timely basis and such Seller did not deliver to
such Person the final prospectus with or prior to the written
confirmation for the sale of such Registrable Securities to such
Person. In connection with an underwritten offering, the Company will
indemnify the underwriters thereof to the same extent as provided
above with respect to the indemnification of Shareholder Indemnified
Parties and use its reasonable best efforts to obtain a reciprocal and
mutual indemnity from the underwriters. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on
behalf of such Shareholder Indemnified Party and shall survive any
transfer by the same of the Registrable Securities of the Sellers.
(ii) Indemnification by Sellers. Each Seller will furnish to the
Company in writing such information and affidavits with respect to
such Seller as the Company reasonably requests for use in connection
with any registration statement or prospectus to be filed or used
under this Agreement and each of them, upon executing and delivering
an underwriting agreement or otherwise upon registration of the
Registrable Securities pursuant to the terms of this Agreement, shall
agree to indemnify and hold harmless to the fullest extent permitted
by law, the Company, each person who signed the registration
statement, any underwriter, and each Person who controls the Company
within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act (each, a "Company Indemnified Party" and,
collectively with Shareholder Indemnified Parties, the "Indemnified
Parties") against joint or several Damages to which they or any of
them may become subject: (i) under the Securities Act, the Exchange
Act or otherwise, insofar as such Damages (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue
statement of a material fact contained in any registration statement,
prospectus, preliminary prospectus or any amendment thereof or
supplement thereto, or arise out of or are based upon any omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that
any Damages arise out of or are based upon any such untrue statement
or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with information furnished
in writing by such Seller or on such Seller's behalf to the Company in
a signed document stating that such information is specifically for
use therein; or (ii) as a result of or in connection with any
violation of applicable Laws by such Seller or any general or limited
partners, employees, officers or directors of such Seller in
connection with any such registration; provided that, as to any
underwriter or any person controlling any underwriter, the foregoing
indemnity does not apply to any Damages based upon any untrue
statement, alleged untrue statement, omission or alleged omission made
in a preliminary prospectus but eliminated or remedied in the final
prospectus (filed pursuant to Rule 424(b) under the Securities Act) if
a copy of the final prospectus was not sent to or given by or on
behalf of any underwriter to such person asserting such Damages at or
prior to the written confirmation of the sale of the Registrable
Securities as required by the Securities Act.
9
<PAGE>
Notwithstanding the foregoing, the liability of a Seller, except for
any liability resulting from the willful misconduct or intentional
action of such Seller, shall not exceed an amount equal to the
proceeds realized by such Seller of Registrable Securities sold as
contemplated herein.
(iii) Conduct of Indemnification Proceedings. Promptly after
receipt by an Indemnified Party under subsection (a) or (b) above of
notice of the commencement of any action, such Indemnified Party
shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against
whom indemnification is to be sought in writing at the commencement
thereof (but the failure so to notify an indemnifying party shall not
relieve it from any liability which such party may have under this
Section 2(g) except to the extent that the indemnifying party has been
prejudiced in any material respect by such failure or from any
liability which such party may have otherwise). In case any such
action is brought against any Indemnified Party, and the Indemnified
Party notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party, if
any, so notified, with counsel reasonably satisfactory to such
Indemnified Party, and after notice from the indemnifying party to
such Indemnified Party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such
Indemnified Party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other
than reasonable costs of investigation. Notwithstanding the foregoing,
the Indemnified Party shall have the right to employ its counsel in
any such case, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Party unless (i) the employment of
such counsel shall have been authorized in writing by the indemnifying
party in connection with the defense of such action, (ii) the
indemnifying party shall not have employed counsel to take charge of
the defense of such action within a reasonable time after notice of
the commencement of the action, or (iii) the named parties to any such
action or proceeding (including any impleaded parties) include both
such Indemnified Party and the indemnifying party, and such
Indemnified Party has been advised in good faith by counsel that there
is a conflict of interest on the part of counsel employed by the
indemnifying party to represent such Indemnified Party (in which case,
if such Indemnified Party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party will not have the right to
assume the defense of such action or proceeding on behalf of such
Indemnified Party; it being understood, however, that the indemnifying
party will not, in connection with any one such action or proceeding
or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (together with appropriate
local counsel) at any time for all such Indemnified Parties). Anything
in this subsection to the contrary notwithstanding: (A) an
indemnifying party shall not be liable for any settlement of any claim
or action effected without its written consent; and (B) no
indemnifying party shall, without the consent of the Indemnified
Party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
(iv) Contribution. In order to provide for contribution in
circumstances in which the indemnification provided for in this
Section 2(g) is for any reason held to be unavailable or is
insufficient to hold harmless an Indemnified Party, then the
indemnifying party and the Indemnified Party shall contribute to the
aggregate Damages of the nature contemplated
10
<PAGE>
by such indemnification provision (including any investigation, legal
and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted,
but after deducting from Damages suffered by the Indemnified Party any
contribution received by the Indemnified Party from Persons, other
than the indemnifying party, who may also be liable for contribution,
including Persons who control the indemnifying party within the
meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act) to which the indemnifying party, on the one hand, and
the Indemnified Party, on the other hand, may be subject, in such
proportions as are appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and the Indemnified Party, on the
other hand, in connection with the statements or omissions which
resulted in Damages, as well as any other relevant equitable
considerations.
The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by a party and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
parties agree that it would not be just and equitable if contribution
pursuant to this Section 2(g)(iv) was determined by pro rata
allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above.
Notwithstanding the foregoing, (i) any underwriting agreement entered
into pursuant hereto may provide that in no case shall any underwriter
(except as may be provided in any agreement among underwriters) be
liable or responsible for any amount in excess of the underwriting
discount applicable to the Registrable Securities purchased by such
underwriters, and (ii) no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation. Any party
entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another
party or parties under this Section 2(g)(iv), notify such party or
parties from which contribution may be sought of any obligation it or
they may have under this Section 2(g)(iv) or otherwise. No party shall
be liable for contribution with respect to any action or claim settled
without its consent, which consent may not be unreasonably withheld or
delayed. Notwithstanding the foregoing, the liability of a Seller,
except for any liability resulting from the willful misconduct or
intentional action of such Seller, shall not exceed an amount equal to
the proceeds realized by such Seller of the Registrable Securities
sold as contemplated herein.
(h) Rule 144 Sales.
(i) Compliance. The Company covenants that, to the extent that it
is subject to the reporting requirements of the Exchange Act, it will
use its reasonable best efforts to file the reports required to be
filed by it under the Exchange Act so as to enable any Holder to sell
Registrable Securities without registration pursuant to Rule 144 under
the Securities Act.
(ii) Cooperation with Holders. In connection with any sale,
transfer or other disposition by any Holder of any Registrable
Securities pursuant to Rule 144 under the Securities Act, the Company
shall, to the extent permissible under applicable law, cooperate with
such Holder to facilitate the timely preparation and delivery of
certificates representing Registrable
11
<PAGE>
Securities to be sold and not bearing any Securities Act legend, and
enable certificates for such Registrable Securities to be issued at
least two business days prior to any sale of such Registrable
Securities for such number of shares and registered in such names as
the Holder may reasonably request upon ten (10) business days prior
notice. The Company's obligation set forth in the previous sentence
shall be subject to the delivery, if reasonably requested by the
Company or its transfer agent, by counsel to such Holder (which
counsel shall be reasonably acceptable to the Company and its transfer
agent), in form and substance reasonably satisfactory to the Company
and its transfer agent, of an opinion that such Securities Act legend
need not appear on such certificate.
(i) Selection of Managing Underwriter. In the event that a Demand
Registration is proposed to be effected through an underwritten offering,
the Holders participating therein who are Investcorp Investors shall have
the right to select the managing underwriter or underwriters. With respect
to any other registration statement covered by Section 2(a) or (b) hereof,
the Company shall select the managing underwriter or underwriters subject
to the consent of a majority in interest of the Sellers, which consent will
not be unreasonably withheld.
(j) Underwriter Cutbacks. Notwithstanding anything in this Agreement
to the contrary and in addition to any other limitations on rights to
participate in a registration statement hereunder:
(A) if (x) the registration statement relates to an underwritten
offering which includes common shares to be offered and sold for the
account of the Company and (y) the managing underwriter of any such
offering advises the Company in writing (with a copy to the Holders
and the Other Rights Holders) that the total number of common shares
which the Company, the Holders, and other Persons whose contractual
rights (now existing or hereafter granted) give them the right to be
included in such registration (the "Other Rights Holders") intend to
include in such offering is sufficiently large to affect adversely the
ability of such underwriter to complete successfully an offering that
does not significantly and adversely impact the market price of the
common shares being offered, then the number of common shares to be
included in such registration statement and offering for the account
of the Holders and the Other Rights Holders shall be reduced pro rata
so that the aggregate amount of common shares included in such
registration statement and offering for the account of the Holders and
the Other Rights Holders, together with the common shares to be sold
for the account of the Company, does not exceed the amount that such
managing underwriter determines in good faith can be sold in such
offering without adversely affecting the ability of such managing
underwriter to complete successfully such offering without
significantly and adversely affecting the market price of the common
shares being offered; and
(B) if (x) the registration statement relates to an underwritten
offering which does not include common shares to be sold for the
account of the Company and (y) the managing underwriter advises (in
writing) the Holders and the Other Rights Holders who have requested
that common shares be included therein that the total number of common
shares which the Holders and the Other Rights Holders intend to
include in such offering is sufficiently large to affect adversely the
ability of such underwriter to complete successfully an offering that
does not significantly and adversely affect the market price of the
common shares being offered, then the number of common shares to be
included in such registration statement and offering for the
12
<PAGE>
accounts of the Holders and the Other Rights Holders shall be reduced
pro rata so that the aggregate amount of common shares included in
such registration statement and offering for the accounts of Holders
and the Other Rights Holders in the aggregate does not exceed the
amount that such managing underwriters determine in good faith can be
sold in such offering without adversely affecting the ability of such
managing underwriter to complete successfully such offering without
significantly and adversely affecting the market price of the common
shares being offered.
SECTION 3. Miscellaneous.
(a) Notices. Any notices in connection with this Agreement shall be in
writing and may be given by (i) personal delivery, (ii) fax, (iii)
certified mail, return receipt requested, postage prepaid, or (iv) a
nationally recognized overnight courier as follows: (x) if to an Initial
Holder, at the address of such Initial Holder set forth on Schedule I (or
such other address as such Initial Holder shall furnish the Company in
writing to receive notices hereunder); (y) if to any other Holder, at the
address of record for such Holder on the shareholder records of the Company
(or such other address as such Holder shall furnish the Company in writing
to receive notices hereunder); and (z) if to the Company, to Jostens, Inc.,
5501 Norman Center Drive, Minneapolis, Minnesota 55437, with a copy to
Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York 10166,
Attention: E. Michael Greaney.
Notices shall be deemed to have been given (A) when actually delivered
(including by fax with confirmation of transmission), (B) the next business
day if sent by overnight courier (with proof of delivery), and (C) on the
fifth day after mailing by certified mail.
(b) Assignability. This Agreement may not be assigned by any Holder
under any circumstances except in connection with a transfer of Registrable
Securities to a Permitted Assignee. As used herein, "Permitted Assignee"
means (i) a Person to whom record ownership of Registrable Securities is
transferred by a Holder without violation or breach of the Charter or any
agreement restricting such transfer or (ii) any Investcorp Investor. This
Agreement shall be binding upon the Company and its successors and upon the
successors and Permitted Assignees of the Holders. Any Holder wishing to
transfer Registrable Securities to a Permitted Assignee shall give at least
ten days' advance notice of such transfer to the Company; provided that the
failure to give such notice shall not deprive any assignee of its status as
a "Permitted Assignee" for all purposes of this Agreement.
(c) Amendment and Waiver. The rights of the Holders and the
obligations the Company hereunder are subject to amendment upon the written
consent of the Company and a majority in interest of the Holders; provided,
however, that any amendment which would have an adverse effect on the
rights of the DB Investors and would not similarly effect the rights of all
other Holders shall require the approval of DB Investors holding a majority
in interest of Registrable Securities held at such time by DB Investors.
Any noncompliance of any provision of this Agreement by the Company may be
waived by written consent of a majority in interest of the Holders;
provided, however, that any such waiver which would have an adverse effect
on the rights of the DB Investors and would not similarly effect the rights
of all other Holders shall require the approval of DB Investors holding a
majority in interest of Registrable Securities held at such time by DB
Investors. Any such amendment or waiver shall be binding upon all Holders.
13
<PAGE>
(d) Governing Law. This Agreement shall be construed both as to
validity and performance in accordance with, and governed by, the laws of
the State of New York without regard to principles of conflict of laws of
such jurisdiction or any other jurisdiction.
(e) Headings; Sections. All headings and captions in this Agreement
are for purposes of reference only and shall not be construed to limit or
affect the substance of this Agreement. All references to Section in this
Agreement refer to Sections of this Agreement, unless the context otherwise
expressly provides.
(f) Entire Agreement. This Agreement contains, and is intended as, a
complete statement of all the terms of the arrangements provided for
herein, and supersedes any previous agreements and understandings with
respect to such arrangements.
(g) Specific Performance. The Company acknowledges and agrees that in
the event of any breach of this Agreement by the Company, the Holders would
be irreparably harmed and could not be made whole by monetary damages.
Accordingly, the Company hereby agrees that in addition to any other remedy
to which the Holders may be entitled at law or in equity, the Holders shall
be entitled to compel specific performance of this Agreement in any action
instituted in any court of the United States or any state thereof having
subject matter jurisdiction for such action.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
JOSTENS, INC.,
a Minnesota corporation
By: /s/ Lee U. McGrath
-------------------------------------
Name: Lee U. McGrath
Title: Vice President and Treasurer
15
<PAGE>
Schedule I
Initial Holders
<TABLE>
<CAPTION>
Name Address Shares
---- ------- ------
<S> <C> <C>
Ballet Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Denary Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Gleam Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Highlands Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Noble Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Outrigger Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Quill Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Radial Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Shoreline Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Zinnia Limited West Wind Building 1,840 shares of Class D
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Investcorp Investments West Wind Building 1,600 shares of Class D
Equity Limited P.O. Box 1111 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Averill Limited West Wind Building 1,325,000 shares of Class B
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Cloquet Limited West Wind Building 1,325,000 shares of Class B
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Fridley Limited West Wind Building 1,325,000 shares of Class B
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Paynesville Limited West Wind Building 1,325,000 shares of Class B
P.O. Box 2197 Common Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
Saturn Equity Limited West Wind Building 811,020 shares of Class C
P.O. Box 2197 Comon Stock
George Town, Grand Cayman
Cayman Islands, B.W.I.
DB Capital Investors, L.P. 130 Liberty Street, 25th Floor 590,000 shares of Class A
New York, New York 10006 Common Stock
1,346,036 shares of Class E
Common Stock
Warrants to purchase 531,325 shares
of Class E Common Stock
First Union Leveraged One First Union Center, 5th Floor 198,019 shares of Class A
Capital, LLC 301 South College Street Common Stock
Charlotte, North Carolina 28288
</TABLE>
18
<PAGE>
EXHIBIT 4.12
JOSTENS, INC.
225,000 Units Consisting of
$225,000,000 12 3/4% Senior Subordinated Notes due 2010
and Warrants to Purchase 425,060 Shares
of Class E Common Stock
PURCHASE AGREEMENT
------------------
May 5, 2000
DEUTSCHE BANK SECURITIES INC.
UBS WARBURG LLC
GOLDMAN, SACHS & CO.
c/o Deutsche Bank Securities Inc.
130 Liberty Street
New York, New York 10006
Ladies and Gentlemen:
Jostens, Inc., a Minnesota corporation (the "Company"), and American
Yearbook Company, Inc., a Kansas corporation (the "Guarantor"), hereby confirm
their agreement with you (the "Initial Purchasers"), as set forth below.
1. The Securities. The Company proposes to issue and sell to the Initial
Purchasers 225,000 Units (the "Units") consisting of $225,000,000 aggregate
principal amount of its 12 3/4% Senior Subordinated Notes due 2010 (the "Notes")
and Warrants (the "Warrants") to purchase 425,060 shares of the Company's Class
E Common Stock, par value $0.01 per share (the "Warrant Shares"), determined on
a fully diluted basis as of the Closing Date (as defined herein). The Notes will
be unconditionally guaranteed (the "Guarantee") on a senior subordinated basis
by the Guarantor. The Units, the Notes, the Guarantee and the Warrants are
collectively referred to herein as the "Initial Securities." The Initial
Securities and the Warrant Shares are collectively referred to herein as the
"Securities."
<PAGE>
-2-
The Notes and Guarantee are to be issued under an indenture (the
"Indenture") to be dated as of the Closing Date by and among the Company, the
Guarantor and The Bank of New York, as Trustee (the "Trustee"). The Warrants
will be issued pursuant to a warrant agreement (the "Warrant Agreement") to be
dated as of the Closing Date by and between the Company and The Bank of New
York, as warrant agent (the "Warrant Agent").
The Units will be offered and sold to the Initial Purchasers without being
registered under the Securities Act of 1933, as amended (the "Act"), in reliance
on exemptions therefrom.
In connection with the sale of the Units, the Company has prepared a
preliminary offering memorandum dated April 17, 2000 (the "Preliminary
Memorandum") and a final offering memorandum dated May 5, 2000 (the "Final
Memorandum"; the Preliminary Memorandum and the Final Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description of
the terms of the Units, the terms of the offering of the Units, a description of
the Company and any material developments relating to the Company occurring
after the date of the most recent historical financial statements included
therein.
The Initial Purchasers and their direct and indirect transferees of the
Notes and Guarantee will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A (the
"Registration Rights Agreement"), pursuant to which the Company and the
Guarantor will agree, among other things, to file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") registering the Notes and/or the Exchange Notes (as defined in the
Registration Rights Agreement) under the Act.
Holders (including subsequent transferees) of Warrants and Warrant Shares
will have the registration rights with respect to the Warrants and Warrant
Shares set forth in a registration rights agreement (the "Warrant Registration
Rights Agreement") between the Company and the Initial Purchasers to be dated as
of the Closing Date, and in form and substance satisfactory to the Initial
Purchasers and conforming to the description thereof in the Final Memorandum.
This Agreement, the Securities, the Exchange Notes, the Indenture, the
Registration Rights Agreement, the Warrant Agreement and the Warrant
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "Unit Documents."
The Units are being sold in connection with (i) the consummation of a
merger (the "Merger") of Saturn Acquisition Corporation with and into the
Company, pursuant to an Agreement and Plan of Merger dated as of December 27,
1999 (the "Merger Agreement"), and (ii) the repayment of all of the Company's
existing debt (the "Debt Refinancing"). In addition, the Company will (i) enter
into a credit agreement (the "Credit Agreement") with
<PAGE>
-3-
The Chase Manhattan Bank, as administrative agent, and certain lenders thereto
whereby the Company will borrow $485 million in term loans in connection with
the Merger and related transactions and have available a $150 million revolving
credit facility and (ii) issue and sell redeemable preferred stock and warrants
to purchase common stock of the Company, for aggregate gross proceeds of $60
million (the "Preferred Stock Investment").
The offering of the Units, the Merger, the Debt Refinancing, the borrowings
under the Credit Agreement on the Closing Date (as defined below) and the
Preferred Stock Investment are collectively referred to as the
"Recapitalization."
The Unit Documents, the Credit Agreement and the Credit Documents (as
defined in the Credit Agreement), the Merger Agreement and the certificate of
designation, warrant agreement, purchase agreement, preferred stock registration
rights agreement and common stock registration rights agreement relating to the
Preferred Stock Investment (the "Preferred Stock Investment Documents") are
collectively referred to herein as the "Recapitalization Documents."
2. Representations and Warranties. The Company and the Guarantor, jointly
and severally, represent and warrant to and agree with each of the Initial
Purchasers that:
(a) Neither the Preliminary Memorandum as of the date thereof nor the
Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as
defined in Section 3 below) contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information relating
to any of the Initial Purchasers furnished to the Company and the Guarantor
in writing by the Initial Purchasers expressly for use in the Preliminary
Memorandum, the Final Memorandum or any amendment or supplement thereto, as
the case may be.
(b) The Company has prepared and filed with the Commission in
accordance with the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), a proxy statement and form of proxy relating to a special
meeting of the Company's stockholders (the "Stockholders Meeting") at which
the Company's stockholders will be asked to approve the Merger Agreement.
As used in this Agreement, the term "Proxy Statement" means the definitive
proxy statement and form of proxy, including any annexes, financial
statements and schedules, and any amendments or supplements thereto in the
form filed with the Commission pursuant to Rule 14a-6(b) under the Exchange
Act.
<PAGE>
-4-
(c) The Proxy Statement complied and will comply, on the date that the
Proxy Statement was mailed to the Company's stockholders and on the date of
the Stockholders Meeting, in all material respects with the provisions of
the Exchange Act, and the Proxy Statement at such times and on the Closing
Date did not and will not, as the case may be, contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(d) After giving effect to the Recapitalization, the Company will have
the authorized, issued and outstanding capitalization set forth in the
Final Memorandum under the heading "Capitalization" and "Description of
Capital Stock"; all of the subsidiaries of the Company are listed in
Schedule 2 attached hereto (each, a "Subsidiary" and collectively, the
"Subsidiaries"); all of the outstanding shares of capital stock of the
Company and the Subsidiaries have been, and as of the Closing Date will be,
duly authorized and validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights; except as
disclosed in the Final Memorandum, all of the outstanding shares of capital
stock of each of the Subsidiaries are owned by the Company free and clear
of all liens, encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Act and the securities or
"Blue Sky" laws of certain jurisdictions and the Credit Agreement) or
voting; except as set forth in the Final Memorandum and except for certain
warrants in favor of Investcorp S.A. or its affiliates that will be
exercisable for Class B common stock of the Company to the extent an equal
number of shares of such Class B common stock is being redeemed
contemporaneously, there are no (i) options, warrants or other rights to
purchase, (ii) agreements or other obligations to issue or (iii) other
rights to convert any obligation into, or exchange any securities for,
shares of capital stock of or ownership interests in the Company or any of
the Subsidiaries outstanding. Except for the Subsidiaries or as disclosed
in the Final Memorandum, the Company does not own, directly or indirectly,
any shares of capital stock or any other equity or long-term debt
securities or have any equity interest in any firm, partnership, joint
venture or other entity.
(e) Each of the Company and the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and conduct its business as now conducted
and as described in the Final Memorandum; each of the Company and the
Subsidiaries is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions where the ownership or leasing of
its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or in
the aggregate, have (i) a material adverse effect on the business,
financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole, or (ii) an
<PAGE>
-5-
adverse effect on the ability of the Company or any Subsidiary to perform
any of its material obligations under any of the Recapitalization Documents
to which it is or will be a party or to consummate the Recapitalization
(any such event, a "Material Adverse Effect").
(f) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the
Registration Rights Agreement). The Notes, the Exchange Notes and the
Private Exchange Notes, when issued, will be in the form contemplated by
the Indenture. The Notes, the Exchange Notes and the Private Exchange Notes
have each been duly and validly authorized by the Company and, when
executed by the Company and authenticated by the Trustee in accordance with
the provisions of the Indenture and, in the case of the Notes, when
delivered to and paid for by the Initial Purchasers in accordance with the
terms of this Agreement, will constitute valid and legally binding
obligations of the Company, entitled to the benefits of the Indenture, and
enforceable against the Company in accordance with their terms, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(g) The Guarantor has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Guarantee
and the guarantee of the Exchange Notes and Private Exchange Notes. The
Guarantee and the guarantee of the Exchange Notes and the Private Exchange
Notes, when issued, will be in the form contemplated by the Indenture. The
Guarantee and the guarantee of the Exchange Notes and Private Exchange
Notes have been duly and validly authorized by the Guarantor and, when
executed by the Guarantor and delivered in accordance with the provisions
of the Indenture, will constitute valid and legally binding obligations of
the Guarantor, entitled to the benefits of the Indenture and enforceable
against the Guarantor in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(h) Each of the Company and the Guarantor has all requisite corporate
power and authority to execute, deliver and perform its obligations under
the Indenture. The Indenture meets the requirements for qualification under
the Trust Indenture Act of 1939, as amended (the "TIA"). The Indenture has
been duly and validly authorized by the Company and the Guarantor and, when
executed and
<PAGE>
-6-
delivered by the Company and the Guarantor (assuming the due authorization,
execution and delivery by the Trustee), will constitute a valid and legally
binding agreement of the Company and the Guarantor, enforceable against the
Company and the Guarantor in accordance with its terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(i) Each of the Company and the Guarantor has all requisite corporate
power and authority to execute, deliver and perform its obligations under
the Registration Rights Agreement. The Registration Rights Agreement has
been duly and validly authorized by the Company and the Guarantor and, when
executed and delivered by the Company and the Guarantor, will constitute a
valid and legally binding agreement of the Company and the Guarantor
enforceable against the Company and the Guarantor in accordance with its
terms, except that (A) the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
(j) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Warrant Agreement.
The Warrant Agreement has been duly and validly authorized by the Company
and, when executed and delivered by the Company (assuming the due
authorization, execution and delivery thereof by the Warrant Agent), will
constitute a valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity and the discretion of the court before which any proceedings
therefor may be brought.
(k) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Warrants and the
Warrant Shares. The Warrants and the Warrant Shares have been duly and
validly authorized for issuance and sale by the Company. The Warrants, when
issued, authenticated and delivered by the Company against payment by the
Initial Purchasers in accordance with the terms of this Agreement and the
Warrant Agreement, will constitute valid and legally binding obligations of
the Company, entitled to the benefits of the Warrant Agreement and
enforceable against the Company in accordance with their terms,
<PAGE>
-7-
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceedings therefor may be brought. When issued in accordance with the
terms and conditions contained in the Warrant Agreement, upon exercise of
the Warrants, the Warrant Shares will be duly authorized, validly issued,
fully paid and nonassessable and will not be subject to any preemptive or
similar rights. The Warrant Shares have been duly reserved for issuance in
accordance with the terms of the Warrants and the Warrant Agreement.
(l) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Warrant Registration
Rights Agreement. The Warrant Registration Rights Agreement has been duly
and validly authorized by the Company and, when duly executed and delivered
by the Company, will constitute a valid and legally binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except that (A) the enforceability thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceedings therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities laws
and public policy considerations.
(m) Each of the Company and the Guarantor has all requisite corporate
power and authority to execute, deliver and perform its obligations under
the Credit Agreement. The Credit Agreement has been duly and validly
authorized by the Company and the Guarantor and, when executed and
delivered by the Company and the Guarantor (assuming the due authorization,
execution and delivery by the other parties thereto), will constitute a
valid and legally binding agreement of the Company and the Guarantor,
enforceable against the Company and the Guarantor in accordance with its
terms, except that the enforcement thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought.
(n) Each of the Company and the Guarantor has all requisite corporate
power and authority to execute, deliver and perform its obligations under
this Agreement and to consummate the Recapitalization. This Agreement and
the consummation by the Company and the Guarantor of the Recapitalization
have been duly and validly authorized by the Company and the Guarantor.
This Agreement has been duly executed and delivered by the Company and the
Guarantor.
<PAGE>
-8-
(o) Assuming the accuracy of the representations and warranties of the
Initial Purchasers and compliance by the Initial Purchasers with the
covenants set forth in Section 8 hereof, no consent, approval,
authorization or order of any court or governmental agency or body, or
third party is required for the issuance and sale by the Company and the
Guarantor of the Initial Securities to the Initial Purchasers or the
consummation by the Company and the Guarantor of the Recapitalization,
except such as have been obtained and such as may be required under state
securities or "Blue Sky" laws in connection with the purchase and resale of
the Initial Securities by the Initial Purchasers and except for approval by
the Company's stockholders of the Merger. None of the Company or the
Subsidiaries is (i) in violation of its certificate of incorporation or
bylaws (or similar organizational document), (ii) in breach or violation of
any statute, judgment, decree, order, rule or regulation applicable to any
of them or any of their respective properties or assets, except for any
such breach or violation which would not, individually or in the aggregate,
have a Material Adverse Effect, or (iii) in breach of or default under (nor
has any event occurred which, with notice or passage of time or both, would
constitute a default under) or in violation of any of the terms or
provisions of any indenture, mortgage, deed of trust, loan agreement, note,
merger agreement, lease, license, franchise agreement, permit, certificate,
contract or other agreement or instrument to which any of them is a party
or to which any of them or their respective properties or assets is subject
(collectively, "Contracts"), except for any such breach, default, violation
or event which would not, individually or in the aggregate, have a Material
Adverse Effect.
(p) The execution, delivery and performance by the Company and the
Guarantor of the Recapitalization Documents and the consummation by the
Company and the Guarantor of the transactions contemplated thereby
(including, without limitation, the issuance and sale of the Initial
Securities to the Initial Purchasers and the other components of the
Recapitalization) will not constitute or result in a breach of or a default
under (or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any Contract, except for any such breach, violation, default
or event which would not, individually or in the aggregate, have a Material
Adverse Effect, (ii) the certificate of incorporation or bylaws (or similar
organizational document) of the Company or any of the Subsidiaries, or
(iii) (assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of the representations and warranties
of the Initial Purchasers and compliance by the Initial Purchasers with the
covenants set forth in Section 8 hereof) any statute, judgment, decree,
order, rule or regulation applicable to the Company or any of the
Subsidiaries or any of their respective properties or assets, except for
any such breach or violation which would not, individually or in the
aggregate, have a Material Adverse Effect.
<PAGE>
-9-
(q) The consolidated financial statements of the Company and the
Subsidiaries included in the Final Memorandum present fairly in all
material respects the financial position, results of operations and cash
flows of the Company and the Subsidiaries at the dates and for the periods
to which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except as
otherwise stated therein. The summary and selected financial and
statistical data in the Final Memorandum present fairly in all material
respects the information shown therein and have been prepared and compiled
on a basis consistent with the consolidated financial statements included
therein, except as otherwise stated therein. Ernst & Young LLP (the
"Independent Accountants") is an independent public accounting firm within
the meaning of the Act and the rules and regulations promulgated
thereunder.
(r) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final
Memorandum (i) comply as to form in all material respects with the
applicable requirements of Regulation S-X promulgated under the Exchange
Act, (ii) have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, and (iii) have
been properly computed on the bases described therein; the assumptions used
in the preparation of the pro forma financial data and other pro forma
financial information included in the Final Memorandum are reasonable and
the adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(s) Except as set forth in the Final Memorandum, there is not pending
or, to the knowledge of the Company, threatened any action, suit,
proceeding, inquiry or investigation to which the Company or any of the
Subsidiaries is a party, or to which the property or assets of the Company
or any of the Subsidiaries is subject, before or brought by any court,
arbitrator or governmental agency or body which would reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect or which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Initial Securities to be
sold hereunder or the consummation of any other component of the
Recapitalization.
(t) Each of the Company and the Subsidiaries possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities, all self-regulatory organizations
and all courts and other tribunals, presently required or necessary to own
or lease, as the case may be, and to operate its respective properties and
to carry on its respective businesses as now or proposed to be conducted as
set forth in the Final Memorandum ("Permits"), except where the failure to
obtain such Permits would not, individually or in the aggregate,
<PAGE>
-10-
reasonably be expected to have a Material Adverse Effect. Each of the
Company and the Subsidiaries has fulfilled and performed all of its
obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or
termination thereof or results in any other material impairment of the
rights of the holder of any such Permit, and none of the Company or the
Subsidiaries has received any notice of any proceeding relating to
revocation or modification of any such Permit, except, in each case, (i) as
described in the Final Memorandum and (ii) where any nonfulfillment or
nonperformance of such revocation or modification would not, individually
or in the aggregate, have a Material Adverse Effect.
(u) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein, (i) none of the
Company or the Subsidiaries has incurred any liabilities or obligations,
direct or contingent, or entered into or agreed to enter into any
transactions or contracts (written or oral) not in the ordinary course of
business which liabilities, obligations, transactions or contracts would,
individually or in the aggregate, be material to the business, financial
condition or results of operations of the Company and its Subsidiaries,
taken as a whole, (ii) none of the Company or the Subsidiaries has
purchased any of its outstanding capital stock, nor declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock (other than (a) with respect to any of such Subsidiaries, the
purchase of, or dividend or distribution on, capital stock owned by the
Company and (b) the dividend paid on March 1, 2000) and (iii) there shall
not have been any material change in the capital stock or long-term
indebtedness of the Company and the Subsidiaries taken as a whole.
(v) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where
the failure to so file such returns would not, individually or in the
aggregate, have a Material Adverse Effect, and has paid all taxes shown as
due thereon; and other than tax deficiencies which the Company or any
Subsidiary is contesting in good faith and for which the Company or such
Subsidiary has provided adequate reserves, there is no tax deficiency that
has been asserted against the Company or any of the Subsidiaries that would
have, individually or in the aggregate, a Material Adverse Effect.
(w) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Company and the
Subsidiaries believe to be reliable and accurate.
(x) None of the Company, the Subsidiaries or any agent acting on their
behalf has taken or will take any action that might cause this Agreement or
the sale of the Units to violate Regulation T, U or X of the Board of
Governors of the Federal
<PAGE>
-11-
Reserve System, in each case as in effect, or as the same may hereafter be
in effect, on the Closing Date.
(y) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property
described in the Final Memorandum as being owned by it and good and
marketable title to a leasehold estate in the real and personal property
described in the Final Memorandum as being leased by it free and clear of
all liens, charges, encumbrances or restrictions, except as described in
the Final Memorandum or to the extent the failure to have such title or the
existence of such liens, charges, encumbrances or restrictions would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. All leases, contracts and agreements to which the Company
or any of the Subsidiaries is a party or by which any of them is bound are
valid and enforceable against the Company or such Subsidiary, and are valid
and enforceable against the other party or parties thereto and are in full
force and effect with only such exceptions as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company and the Subsidiaries own or possess adequate licenses or other
rights to use all patents, trademarks, service marks, trade names,
copyrights and know-how necessary to conduct the businesses now or proposed
to be operated by them as described in the Final Memorandum, except where
the failure to so own or possess any of the foregoing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect and none of the Company or the Subsidiaries has received any
notice of infringement of, or conflict with (or knows of any such
infringement of or conflict with), asserted rights of others with respect
to any patents, trademarks, service marks, trade names, copyrights or
know-how which, if such assertion of infringement or conflict were
sustained, would reasonably be expected to have a Material Adverse Effect.
(z) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary or any of their respective
properties or assets which would be required to be described in a
prospectus pursuant to the Act that are not described in the Final
Memorandum, nor are there any material contracts or other documents which
would be required to be described in a prospectus pursuant to the Act that
are not described in the Final Memorandum.
(aa) Except as set forth in the Final Memorandum or except as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (A) each of the Company and the Subsidiaries is in
compliance with and not subject to liability under applicable Environmental
Laws (as defined below), (B) each of the Company and the Subsidiaries has
made all filings and provided all notices required under any applicable
Environmental Law, and has and is in compliance with all Permits required
under any applicable Environmental Laws and each of them is in
<PAGE>
-12-
full force and effect, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or,
to the knowledge of the Company or any of the Subsidiaries, threatened
against the Company or any of the Subsidiaries under any Environmental Law,
(D) no lien, charge, encumbrance or restriction has been recorded under any
Environmental Law with respect to any assets, facility or property owned,
operated, leased or controlled by the Company or any of the Subsidiaries,
(E) none of the Company or the Subsidiaries has received notice that it has
been identified as a potentially responsible party under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or any comparable state law, (F) no property or facility of the
Company or any of the Subsidiaries is (i) listed or proposed for listing on
the National Priorities List under CERCLA or (ii) listed in the
Comprehensive Environmental Response, Compensation, Liability Information
System List promulgated pursuant to CERCLA, or on any comparable list
maintained by any state or local governmental authority.
For purposes of this Agreement, "Environmental Laws" means the common
law and all applicable federal, state, local and foreign laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of the environment, including, without limitation, laws relating
to (i) emissions, discharges, releases or threatened releases of hazardous
materials into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials, and (iii)
underground and aboveground storage tanks and related piping, and
emissions, discharges, releases or threatened releases therefrom.
(bb) There is no strike, labor dispute, slowdown or work stoppage with
the employees of the Company or any of the Subsidiaries which is pending
or, to the knowledge of the Company or any of the Subsidiaries, threatened.
(cc) Each of the Company and the Subsidiaries carries insurance in
such amounts and covering such risks as is consistent with industry
practice to protect the Company and its Subsidiaries and their respective
businesses.
(dd) None of the Company or the Subsidiaries has any material
liability for any prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), to which the Company or
any of the Subsidiaries makes (or within the preceding six years has made)
a contribution and in which any employee of the Company or of any
Subsidiary
<PAGE>
-13-
is or has ever been a participant. With respect to such plans, the Company
and each Subsidiary is in compliance in all material respects with all
applicable provisions of ERISA.
(ee) Except as stated in the Final Memorandum, the Company knows of no
outstanding claims for service in the nature of a finder's fee, financial
advisory fee, origination fee or similar fee, with respect to the
Recapitalization.
(ff) As of the Closing Date, each of the representations and
warranties of the Company and the Subsidiaries set forth in the Credit
Agreement will be true and correct as if made at and as of such date (other
than to the extent any such representation or warranty is expressly made as
to only a certain other date).
(gg) Each of the Company and the Subsidiaries (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded
as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
(hh) None of the Company or the Subsidiaries is now, or after giving
effect to the Recapitalization will be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder.
(ii) Each of the Recapitalization Documents conforms or will conform
in all material respects to the description thereof in the Final
Memorandum.
(jj) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the registration
statements required to be filed by the Company and the Guarantor pursuant
to the Registration Rights Agreement or the Warrant Registration Rights
Agreement other than as expressly permitted thereby.
(kk) Immediately after the consummation of the Recapitalization, the
fair value and present fair saleable value of the assets of each of the
Company and the Guarantor (each on a consolidated basis) will exceed the
sum of its stated liabilities and identified contingent liabilities; none
of the Company or the Guarantor (each on a consolidated basis) is, nor will
any of the Company or the Guarantor (each on a consolidated basis) be,
after giving effect to the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby,
<PAGE>
-14-
(a) left with unreasonably small capital with which to carry on its
business as it is proposed to be conducted, (b) unable to pay its debts
(contingent or otherwise) as they mature or (c) otherwise insolvent.
(ll) None of the Company, the Subsidiaries or any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any "security" (as
defined in the Act) which is or could be integrated with the sale of the
Initial Securities in a manner that would require the registration under
the Act of any of the Initial Securities or (ii) engaged in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the Initial
Securities or in any manner involving a public offering within the meaning
of Section 4(2) of the Act. Assuming the accuracy of the representations
and warranties of the Initial Purchasers and compliance by the Initial
Purchasers with the covenants set forth in Section 8 hereof, it is not
necessary in connection with the offer, sale and delivery of the Initial
Securities to the Initial Purchasers in the manner contemplated by this
Agreement to register any of the Initial Securities under the Act or to
qualify the Indenture under the TIA.
(mm) No securities of the Company or any Subsidiary are of the same
class (within the meaning of Rule 144A under the Act) as any of the Initial
Securities and listed on a national securities exchange registered under
Section 6 of the Exchange Act, or quoted in a U.S. automated inter-dealer
quotation system.
(nn) None of the Company or the Subsidiaries has taken, nor will any
of them take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or manipulation
of the price of any of the Initial Securities.
(oo) None of the Company, the Subsidiaries, any of their respective
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers) has engaged in any directed selling efforts (as that
term is defined in Regulation S under the Act ("Regulation S")) with
respect to the Initial Securities; the Company, the Subsidiaries and their
respective Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers) have complied with the offering restrictions
requirement of Regulation S.
(pp) As of the Closing Date, the Company will have delivered to the
Initial Purchasers a true and correct copy of each of the Recapitalization
Documents, together with all related agreements and all schedules and
exhibits thereto, and there shall have been no material amendments,
alterations, modifications and waivers as to which the Initial Purchasers
have not been advised in writing; and there exists as of the Closing
<PAGE>
-15-
Date (after giving effect to the Recapitalization) no event or condition
which would constitute a default or an event of default (in each case as
defined in each of the Recapitalization Documents) under any of the
Recapitalization Documents which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
Any certificate signed by any officer of the Company or any Subsidiary and
delivered to any Initial Purchaser or to counsel for the Initial Purchasers
shall be deemed a joint and several representation and warranty by the Company
and each of the Subsidiaries to each Initial Purchaser as to the matters covered
thereby.
3. Purchase, Sale and Delivery of the Units. On the basis of the
representations, warranties, agreements and covenants herein contained, the
Company agrees to issue and sell to the Initial Purchasers and, on the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Initial Purchasers,
acting severally and not jointly, agree to purchase the number of Units set
forth opposite such Initial Purchaser's name on Schedule 1 hereto from the
Company at a price of $930.6471 per Unit. One or more certificates in definitive
form for the Initial Securities that the Initial Purchasers have agreed to
purchase hereunder, and in such denomination or denominations and registered in
such name or names as the Initial Purchasers request upon notice to the Company
at least 36 hours prior to the Closing Date, shall be delivered by or on behalf
of the Company to the Initial Purchasers, against payment by or on behalf of the
Initial Purchasers of the purchase price therefor by wire transfer (same day
funds), to such account or accounts as the Company shall specify prior to the
Closing Date, or by such means as the parties hereto shall agree prior to the
Closing Date. Such delivery of and payment for the Units shall be made at the
offices of Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, New York at
10:00 A.M., New York time, on May 10, 2000, or at such other place, time or date
as the Initial Purchasers, on the one hand, and the Company, on the other hand,
may agree upon, such time and date of delivery against payment being herein
referred to as the "Closing Date." The Company will make such certificate or
certificates for the Initial Securities available for checking and packaging by
the Initial Purchasers at the offices of Deutsche Bank Securities Inc. in New
York, New York, or at such other place as Deutsche Bank Securities Inc. may
designate, at least 24 hours prior to the Closing Date.
4. Offering by the Initial Purchasers. The Initial Purchasers propose to
make an offering of the Units at the price, upon the terms and in the manner set
forth in the Final Memorandum, as soon as practicable after this Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.
5. Covenants of the Company and the Guarantor. The Company and the
Guarantor, jointly and severally, covenant and agree with each of the Initial
Purchasers that:
<PAGE>
-16-
(a) The Company and the Guarantor will not amend or supplement the
Final Memorandum or any amendment or supplement thereto of which the
Initial Purchasers shall not previously have been advised and furnished a
copy for a reasonable period of time prior to the proposed amendment or
supplement and as to which the Initial Purchasers shall not have given
their consent. The Company and the Guarantor will promptly, upon the
reasonable request of the Initial Purchasers or counsel for the Initial
Purchasers, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be necessary or advisable in
connection with the resale of the Securities by the Initial Purchasers.
(b) The Company and the Guarantor will cooperate with the Initial
Purchasers in arranging for the qualification of the Initial Securities for
offering and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Initial Purchasers may designate and will continue
such qualifications in effect for as long as may be necessary to complete
the resale of the Initial Securities; provided, however, that in connection
therewith, neither the Company nor the Guarantor shall be required to
qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction or subject itself to taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not now so
subject.
(c) If, at any time prior to the completion of the distribution by the
Initial Purchasers of the Initial Securities or the Private Exchange Notes,
any event occurs or information becomes known as a result of which the
Final Memorandum as then amended or supplemented would include any untrue
statement of a material fact, or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, or if for any other reason it is necessary
at any time to amend or supplement the Final Memorandum to comply with
applicable law, the Company will promptly notify the Initial Purchasers
thereof and will prepare, at the expense of the Company, an amendment or
supplement to the Final Memorandum that corrects such statement or omission
or effects such compliance.
(d) The Company will, without charge, provide to the Initial
Purchasers and to counsel for the Initial Purchasers as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchasers may reasonably request.
(e) The Company will apply the net proceeds from the sale of the Units
as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Initial Securities or the Exchange Notes
remain outstanding, the Company will furnish to the Initial Purchasers
copies of all reports and other communications (financial or otherwise)
furnished by the Company
<PAGE>
-17-
to the Trustee or the Warrant Agent or to the holders of any of the Initial
Securities or the Exchange Notes and, as soon as available and upon the
reasonable request in writing by any Initial Purchaser, copies of any
reports or financial statements furnished to or filed by the Company with
the Commission or any national securities exchange on which any class of
securities of the Company may be listed.
(g) Prior to the Closing Date, the Company will furnish to the Initial
Purchasers, as soon as they have been prepared in the ordinary course by
the Company, a copy of any unaudited interim financial statements of the
Company for any period subsequent to the period covered by the most recent
financial statements appearing in the Final Memorandum.
(h) None of the Company or any of its Affiliates (as defined in the
Act) will sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any "security" (as defined in the Act) which could
be integrated with the sale of the Securities in a manner which would
require the registration under the Act of the Securities.
(i) The Company will not, and will not permit any of the Subsidiaries
to, engage in any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) in connection with the
offering of the Securities or in any manner involving a public offering
within the meaning of Section 4(2) of the Act.
(j) For so long as any of the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144 under the Act, the
Company will make available at its expense, upon request, to any holder of
such Securities and any prospective purchasers thereof the information
specified in Rule 144A(d)(4) under the Act, unless the Company is then
subject to Section 13 or 15(d) of the Exchange Act.
(k) The Company will use its reasonable best efforts to (i) permit the
Units (and following separation of the Units, the Notes and the Warrants)
to be designated as PORTAL-eligible securities in accordance with the rules
and regulations adopted by the NASD relating to trading in the NASD's
Portal Market (the "Portal Market") and (ii) permit the Units (and
following separation of the Units, the Notes and the Warrants) to be
eligible for clearance and settlement through The Depository Trust Company.
(l) In connection with Securities offered and sold in an offshore
transaction (as defined in Regulation S) the Company and the Guarantor will
not register any transfer of such Securities not made in accordance with
the provisions of
<PAGE>
-18-
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Securities in the form of
definitive securities.
6. Expenses. Each of the Company and the Guarantor, jointly and severally,
agrees to pay all costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated
herein are consummated or this Agreement is terminated pursuant to Section 11 or
12 hereof, including all costs and expenses incident to (i) the printing, word
processing or other production of documents with respect to the transactions
contemplated hereby, including any costs of printing the Preliminary Memorandum
and the Final Memorandum and any amendment or supplement thereto, and any "Blue
Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchasers of copies of the foregoing documents, (iii) the fees and
disbursements of the counsel, the accountants and any other experts or advisors
retained by the Company or the Guarantor, (iv) preparation (including printing),
issuance and delivery to the Initial Purchasers of the Securities, (v) the
qualification of the Securities under state securities and "Blue Sky" laws,
including filing fees and fees and disbursements of counsel for the Initial
Purchasers relating thereto, (vi) expenses in connection with the "roadshow" and
any other meetings with prospective investors in the Units, (vii) fees and
expenses of the Trustee including fees and expenses of counsel, (viii) all
expenses and listing fees incurred in connection with the application for
quotation of the Initial Securities on the Portal Market and (ix) any fees
charged by investment rating agencies for the rating of the Notes; provided,
however, that except as expressly provided in this Section 6, the Initial
Purchasers shall pay their own costs and expenses, including the costs and
expenses of their counsel. If the sale of the Units provided for herein is not
consummated because any condition to the obligations of the Initial Purchasers
set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated or because of any failure, refusal or inability on the part of the
Company or the Guarantor to perform all obligations and satisfy all conditions
on their part to be performed or satisfied hereunder (other than solely by
reason of a default by the Initial Purchasers of their obligations hereunder
after all conditions hereunder have been satisfied in accordance herewith), the
Company and the Guarantor, jointly and severally, agree to promptly reimburse
the Initial Purchasers upon demand for all out-of-pocket expenses (including
reasonable fees, disbursements and charges of Cahill Gordon & Reindel, counsel
for the Initial Purchasers) that shall have been incurred by the Initial
Purchasers in connection with the proposed purchase and sale of the Units.
7. Conditions of the Initial Purchasers' Obligations. The obligation of the
Initial Purchasers to purchase and pay for the Units shall, in their sole
discretion, be subject to the satisfaction or waiver of the following conditions
on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of William J. George, Vice President, General Counsel and
Corporate Secretary of the
<PAGE>
-19-
Company, in form and substance reasonably satisfactory to counsel for the
Initial Purchasers, substantially to the effect that:
(i) Each of the Company and the Guarantor is duly qualified to do
business as a foreign corporation in good standing in all
jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(ii) The Company has the authorized, issued and outstanding
capitalization set forth in the Final Memorandum under the heading
"Capitalization" and "Description of Capital Stock"; all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and to
the knowledge of such counsel were not issued in violation of any
preemptive or similar rights; all of the outstanding shares of capital
stock of the Subsidiaries are owned, directly or indirectly, by the
Company, free and clear of all perfected security interests and, to
the knowledge of such counsel, free and clear of all other liens,
encumbrances, equities and claims or restrictions on transferability
(other than those imposed by the Act, the securities or "Blue Sky"
laws of certain jurisdictions and the Credit Agreement) or voting;
when issued in accordance with the terms and conditions contained in
the Warrant Agreement, upon exercise of the Warrants, the Warrant
Shares will be duly authorized, validly issued, fully paid and
nonassessable and to the knowledge of such counsel will not be subject
to any preemptive or similar rights.
(iii) Except as set forth in the Final Memorandum and except for
certain warrants in favor of Investcorp S.A. or its affiliates that
will be exercisable for Class B common stock of the Company to the
extent an equal number of shares of such Class B common stock is being
redeemed contemporaneously, to the knowledge of such counsel (A) no
options, warrants or other rights to purchase from the Company or any
Subsidiary shares of capital stock or ownership interests in the
Company or any Subsidiary are outstanding, (B) no agreements or other
obligations to issue, or other rights to convert, any obligation into,
or exchange any securities for, shares of capital stock or ownership
interests in the Company or any Subsidiary are outstanding and (C) no
holder of securities of the Company or any Subsidiary is entitled to
have such securities registered under a registration statement filed
by the Company pursuant to the Registration Rights Agreement or the
Warrant Registration Rights Agreement.
<PAGE>
-20-
(iv) Except as set forth in the Final Memorandum, no legal or
governmental proceedings are pending or, to the knowledge of such
counsel, threatened to which any of the Company or the Subsidiaries is
a party or to which the property or assets of the Company or any
Subsidiary are subject which would reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect, or
which seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the issuance or sale of the Units to be sold
hereunder or the consummation of the other transactions described in
the Final Memorandum under the caption "Use of Proceeds."
(v) The execution, delivery and performance of the
Recapitalization Documents and the consummation of the transactions
contemplated thereby (including, without limitation, the issuance and
sale of the Initial Securities to the Initial Purchasers and the other
components of the Recapitalization) will not constitute or result in a
breach or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of any of
the terms or provisions of any Contract known to such counsel
(including in any event any of the foregoing which have been filed by
the Company with the Commission), except for any such breach,
violation, default or event which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(vi) Each of the Recapitalization Documents has been duly and
validly executed and delivered by the Company and the Guarantor to the
extent a party thereto.
(vii) The Company and the Guarantor have obtained all Permits
necessary to conduct the businesses now or proposed to be conducted by
them as described in the Final Memorandum, the lack of which would,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect; each of the Company and the Guarantor has
fulfilled and performed all of its obligations with respect to such
Permits and no event has occurred which allows, or after notice or
lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder
of any such Permit.
(viii) To the knowledge of such counsel, the Company and the
Guarantor own or possess adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights and
know-how necessary to conduct the businesses now or proposed to be
operated by them as described in the Final Memorandum, and neither the
Company nor the Guarantor has received any notice of infringement of
or conflict with asserted rights of others
<PAGE>
-21-
with respect to any patents, trademarks, service marks, trade names,
copyrights or know-how which, if such assertion of infringement or
conflict were sustained, would reasonably be expected to have a
Material Adverse Effect.
(ix) To the knowledge of such counsel, there are no legal or
governmental proceedings involving or affecting the Company or the
Subsidiaries or any of their respective properties or assets which
would be required to be described in a prospectus pursuant to the Act
that are not described in the Final Memorandum, nor are there any
material contracts or other documents which would be required to be
described in a prospectus pursuant to the Act that are not described
in the Final Memorandum.
At the time the foregoing opinion is delivered, William J. George
shall additionally state that he has participated in conferences with
officers and other representatives of the Company and the Guarantor,
representatives of the independent public accountants for the Company,
representatives of the Initial Purchasers and counsel for the Initial
Purchasers, at which conferences the contents of the Final Memorandum and
related matters were discussed, and, although he has not independently
verified and is not passing upon and assumes no responsibility for the
accuracy, completeness or fairness of the statements contained in the Final
Memorandum, no facts have come to his attention which lead him to believe
that the Final Memorandum, on the date thereof or at the Closing Date,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which
they were made, not misleading (it being understood that he need express no
opinion with respect to the financial statements and related notes thereto
and the other financial, statistical and accounting data included in the
Final Memorandum). The opinion of William J. George described in this
Section shall be rendered to the Initial Purchasers at the request of the
Company and shall so state therein.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Gibson Dunn & Crutcher LLP, counsel for the Company and the
Guarantor, in form and substance reasonably satisfactory to counsel for the
Initial Purchasers, substantially to the effect that:
(i) The Indenture meets the requirements for qualification under
the TIA. The Indenture (assuming the due authorization, execution and
<PAGE>
-22-
delivery thereof by the parties thereto) constitutes the valid and
legally binding agreement of the Company and the Guarantor,
enforceable against the Company and the Guarantor in accordance with
its terms.
(ii) The Warrant Agreement (assuming the due authorization,
execution and delivery thereof by the parties thereto) constitutes the
valid and legally binding agreement of the Company, enforceable
against the Company in accordance with its terms.
(iii) The Notes and the Guarantee are each in the form
contemplated by the Indenture. The Notes and the Guarantee, when paid
for by the Initial Purchasers in accordance with the terms of this
Agreement (assuming the due authorization, execution and delivery of
the Indenture, the Notes and the Guarantee by the parties thereto and
due authentication and delivery of the Notes by the Trustee in
accordance with the Indenture), will constitute the valid and legally
binding obligations of the Company and the Guarantor, entitled to the
benefits of the Indenture, and enforceable against the Company and the
Guarantor in accordance with their terms.
(iv) The Warrants are in the form contemplated by the Warrant
Agreement. The Warrants, when paid for by the Initial Purchasers in
accordance with the terms of this Agreement and the Warrant Agreement
(assuming the due authorization, execution and delivery of the Warrant
Agreement by the parties thereto) will constitute the valid and
legally binding obligations of the Company, entitled to the benefits
of the Warrant Agreement, and enforceable against the Company in
accordance with their terms.
(v) The Exchange Notes and the Private Exchange Notes and the
guarantee thereof, when duly executed and delivered by the Company and
the Guarantor, as applicable, in accordance with the terms of the
Registration Rights Agreement and the Indenture (assuming the due
authorization, execution and delivery of the Indenture by the parties
thereto and due authentication and delivery of the Exchange Notes and
the Private Exchange Notes by the parties thereto in accordance with
the Indenture), will constitute the valid and legally binding
obligations of the Company and the Guarantor, entitled to the benefits
of the Indenture, and enforceable against the Company and the
Guarantor in accordance with their terms.
(vi) The Registration Rights Agreement (assuming due
authorization, execution and delivery thereof by the parties thereto)
constitutes the valid and legally binding agreement of the Company and
the Guarantor, enforceable against the Company and the Guarantor in
accordance with its terms.
<PAGE>
-23-
(vii) The Warrant Registration Rights Agreement (assuming due
authorization, execution and delivery thereof by the parties thereto)
constitutes the valid and legally binding agreement of the Company,
enforceable against the Company in accordance with its terms.
(viii) The Indenture, the Warrant Agreement, the Notes, the
Guarantee, the Warrants, the Registration Rights Agreement, the
Warrant Registration Rights Agreement, the Preferred Stock Investment
Documents, the Merger Agreement and the Credit Agreement conform in
all material respects to the descriptions thereof contained in the
Final Memorandum.
(ix) Except as set forth in the Final Memorandum, to the
knowledge of such counsel, no legal or governmental proceedings are
pending or threatened to which any of the Company or the Subsidiaries
is a party or to which the property or assets of the Company or any
Subsidiary is subject which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the
Initial Securities to be sold hereunder or the consummation of the
other transactions described in the Final Memorandum under the caption
"Use of Proceeds."
(x) The execution, delivery and performance of the
Recapitalization Documents and the consummation of the transactions
contemplated hereby and thereby (including, without limitation, the
issuance and sale of the Initial Securities to the Initial Purchasers
and the other components of the Recapitalization) will not constitute
or result in a breach or a default under (or an event which with
notice or passage of time or both would constitute a default under) or
violation of any of (i) the terms or provisions of any
Recapitalization Document, except for any such breach, violation,
default or event which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, or (ii)
(assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of the representations and
warranties of the Initial Purchasers and compliance by the Initial
Purchasers with the covenants set forth in Section 8 hereof) any
statute, judgment, decree, order, rule or regulation known to such
counsel to be applicable to the Company or any of the Subsidiaries or
any of their respective properties or assets, except for any such
breach or violation which would not, individually or in the aggregate,
have a Material Adverse Effect.
(xi) No consent, approval, authorization or order of any
governmental authority of the United States or the State of New York
is required for the issuance and sale by the Company and the Guarantor
of the Initial Securities to the Initial Purchasers or the
consummation by the
<PAGE>
-24-
Company and the Guarantor of the Recapitalization, except such as may
be required under Blue Sky laws, as to which such counsel need express
no opinion, or the Act or the TIA (which are addressed in subparagraph
(xiii) below) and those which have previously been obtained.
(xii) Neither the Company nor the Guarantor is, or immediately
after the sale of the Initial Securities to be sold hereunder and the
application of the proceeds from such sale (as described in the Final
Memorandum under the caption "Use of Proceeds") will be, an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended.
(xiii) Assuming the accuracy of the representations and
warranties by the Initial Purchasers under, and compliance by the
Initial Purchasers with the provisions in, this Agreement, no
registration under the Act of the Securities is required in connection
with the sale of the Initial Securities to the Initial Purchasers as
contemplated by this Agreement and the Final Memorandum or in
connection with the initial resale of the Initial Securities by the
Initial Purchasers in accordance with Section 8 of this Agreement, and
prior to the effectiveness of the Exchange Registration Statement (as
defined in the Registration Rights Agreement) or the effectiveness of
the Shelf Registration Statement (as defined in the Registration
Rights Agreement), the Indenture is not required to be qualified under
the TIA, in each case assuming (i) (A) that the purchasers who buy
such Initial Securities in the initial resale thereof are qualified
institutional buyers as defined in Rule 144A promulgated under the Act
("QIBs") or (B) that the offer or sale of the Initial Securities is
made in an offshore transaction as defined in Regulation S, (ii) the
accuracy of the Initial Purchasers' representations in Section 8 and
those of the Company and the Guarantor contained in this Agreement
regarding the absence of a general solicitation in connection with the
sale of such Initial Securities to the Initial Purchasers and the
initial resale thereof and (iii) the due performance by the Initial
Purchasers of the agreements set forth in Section 8 hereof.
(xiv) Neither the consummation of the transactions contemplated
by this Agreement nor the sale, issuance, execution or delivery of the
Units will violate Regulation T, U or X of the Board of Governors of
the Federal Reserve System.
(xv) The statements set forth under the caption "Description of
Capital Stock" and "Certain United States Federal Tax Consequences" in
the Final Memorandum, insofar as such statements are summaries of
matters of law or legal conclusions, are accurate summaries in all
material respects and
<PAGE>
-25-
insofar as such statements purport to summarize provisions of legal
documents or of statutes, laws, rules or regulations, fairly summarize
such provisions.
The foregoing opinions as to enforceability and the legal, valid and
binding nature of obligations may be subject to (i) the effect of any
bankruptcy, insolvency, reorganization, moratorium, arrangement or similar
laws affecting the rights and remedies of creditors generally (including,
without limitation, the effect of statutory or other laws regarding
fraudulent transfers or preferential transfers) and (ii) general principles
of equity, including without limitation concepts or materiality,
reasonableness, good faith and fair dealing and the possible unavailability
of specific performance, injunctive relief or other equitable remedies
regardless of whether enforceability is considered in a proceeding in
equity or at law. The opinion of Gibson Dunn & Crutcher LLP may be subject
to other customary exceptions, assumptions and qualifications reasonably
acceptable to the Initial Purchasers and substantially to the effect as
previously delivered to the Initial Purchasers in draft form.
At the time the foregoing opinion is delivered, Gibson Dunn & Crutcher
LLP shall additionally state that it has participated in conferences with
officers and other representatives of the Company and the Guarantor,
representatives of the independent public accountants for the Company,
representatives of the Initial Purchasers and counsel for the Initial
Purchasers, at which conferences the contents of the Final Memorandum and
related matters were discussed, and, although it has not independently
verified and is not passing upon and assumes no responsibility for the
accuracy, completeness or fairness of the statements contained in the Final
Memorandum (except to the extent specified in subsections 7(b)(viii) and
7(b)(xv), no facts have come to its attention which lead it to believe that
the Final Memorandum, on the date thereof or at the Closing Date, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading (it being understood that such firm need express no opinion with
respect to the financial statements and related notes thereto and the other
financial, statistical and accounting data included in the Final
Memorandum).
The opinion of Gibson Dunn & Crutcher LLP described in this Section
shall be rendered to the Initial Purchasers at the request of the Company
and shall so state therein. In addition, such opinion shall also state that
the Initial Purchasers are entitled to rely on such counsel's opinions
delivered pursuant to the other Recapitalization Documents in the same
manner as if each of such opinions were directly addressed to the Initial
Purchasers.
<PAGE>
-26-
References to the Final Memorandum in this subsection (b) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(c) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Faegre & Benson LLP, counsel for the Company, in form and
substance reasonably satisfactory to counsel for the Initial Purchasers,
substantially to the effect that:
(i) The Company is duly incorporated, validly existing and in
good standing under the laws of the State of Minnesota and has all
requisite corporate power and authority to own its properties and to
conduct its business as described in the Final Memorandum.
(ii) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive
or similar rights expressly created by law or the articles of
incorporation or bylaws (or similar organizational documents) of the
Company. When issued in accordance with the terms and conditions
contained in the Warrant Agreement, upon exercise of the Warrants, the
Warrant Shares will be duly authorized, validly issued, fully paid and
nonassessable and will not be subject to any preemptive or similar
rights expressly created by law or the articles of incorporation or
bylaws (or similar organizational documents) of the Company. The
Warrant Shares have been duly reserved for issuance in accordance with
the terms of the Warrants and the Warrant Agreement.
(iii) The Company has all requisite corporate power and authority
to execute, deliver and perform each of its obligations under the
Recapitalization Documents and to consummate the Recapitalization;
each of the Recapitalization Documents has been duly and validly
authorized by the Company.
(iv) The Exchange Notes and the Private Exchange Notes have been
duly and validly authorized by the Company.
(v) The execution, delivery and performance of the
Recapitalization Documents and the consummation of the transactions
contemplated thereby (including, without limitation, the issuance and
sale of the Initial Securities to the Initial Purchasers and the other
components of the Recapitalization) will not constitute or result in a
breach or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of any of
(i) the certificate of incorporation or bylaws (or similar
<PAGE>
-27-
organizational document) of the Company, or (ii) (assuming compliance
with all applicable state securities or "Blue Sky" laws and assuming
the accuracy of the representations and warranties of the Initial
Purchasers and compliance by the Initial Purchasers with the covenants
set forth in Section 8 hereof) any Minnesota statute, judgment,
decree, order, rule or regulation known to such counsel to be
applicable to the Company or the Guarantor or any of their respective
properties or assets, except for any such breach or violation which
would not, individually or in the aggregate, have a Material Adverse
Effect.
(vi) No consent, approval, authorization or order of any
Minnesota governmental authority is required for the issuance and sale
by the Company and the Guarantor of the Initial Securities to the
Initial Purchasers or the consummation by the Company and the
Guarantor of the Recapitalization, except such as may be required
under Blue Sky laws, as to which such counsel need express no opinion,
and those which have previously been obtained.
(vii) The Certificate of Merger has been duly filed with the
Secretary of State of the State of Minnesota and the Merger has become
effective in accordance with Minnesota law.
For the purposes of this opinion, the term "Recapitalization
Documents" shall not include the Credit Agreement, the Credit Documents or
the Preferred Stock Investment Documents. Such excluded documents shall be
covered by the opinions referenced in the last sentence of this paragraph.
The opinion of Faegre & Benson LLP described in this Section shall be
rendered to the Initial Purchasers at the request of the Company and shall
so state therein. In addition, such opinion shall also state that the
Initial Purchasers are entitled to rely on such counsel's opinions
delivered pursuant to the other Recapitalization Documents in the same
manner as if each of such opinions were directly addressed to the Initial
Purchasers.
References to the Final Memorandum in this subsection (c) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(d) On the Closing Date, the Initial Purchasers shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchasers, of Husch & Eppenberger, LLC, counsel for the Guarantor in form
and substance reasonably satisfactory to counsel for the Initial
Purchasers, substantially to the effect that:
(i) The Guarantor is duly incorporated, validly existing and in
good standing under the laws of the State of Kansas and has all
requisite corporate power and authority to own its properties and to
conduct its business as described in the Final Memorandum.
<PAGE>
-28-
(ii) All of the outstanding shares of capital stock of the
Guarantor have been duly authorized and validly issued, are fully paid
and nonassessable and were not issued in violation of any preemptive
or similar rights expressly created by law or the certificate of
incorporation or bylaws (or similar organizational document) of the
Guarantor; all of the outstanding shares of capital stock of the
Guarantor are owned, directly or indirectly, by the Company, free and
clear of all perfected security interests and, to the knowledge of
such counsel, free and clear of all other liens, encumbrances,
equities and claims or restrictions on transferability (other than
those imposed by the Act and the securities or "Blue Sky" laws of
certain jurisdictions) or voting.
(iii) The Guarantor has all requisite corporate power and
authority to execute, deliver and perform each of its obligations
under the Recapitalization Documents to which it is a party and to
consummate the Recapitalization; each of the Recapitalization
Documents to which the Guarantor is a party has been duly and validly
authorized by the Guarantor.
(iv) The guarantee of the Exchange Notes and the Private Exchange
Notes have been duly and validly authorized by the Guarantor.
(v) The execution, delivery and performance of the
Recapitalization Documents and the consummation of the transactions
contemplated thereby (including, without limitation, the issuance and
sale of the Initial Securities to the Initial Purchasers and the other
components of the Recapitalization) will not constitute or result in a
breach or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of any of
(i) the certificate of incorporation or bylaws (or similar
organizational document) of the Guarantor, or (ii) (assuming
compliance with all applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and warranties of the
Initial Purchasers and compliance by the Initial Purchasers with the
covenants set forth in Section 8 hereof) any Kansas statute, judgment,
decree, order, rule or regulation known to such counsel to be
applicable to the Company or the Guarantor or any of their respective
properties or assets, except for any such breach or violation which
would not, individually or in the aggregate, have a Material Adverse
Effect.
(vi) No consent, approval, authorization or order of any Kansas
governmental authority is required for the issuance and sale by the
Company and the Guarantor of the Initial Securities to the Initial
Purchasers or the consummation by the Company and the Guarantor of the
Recapitalization,
<PAGE>
-29-
except such as may be required under Blue Sky laws, as to which such
counsel need express no opinion, and those which have previously been
obtained.
For the purposes of this opinion, the term "Recapitalization
Documents" shall not include the Credit Agreement, the Credit Documents or
the Preferred Stock Investment Documents. Such excluded documents shall be
covered by the opinions referenced in the last sentence of this paragraph.
The opinion of Husch & Eppenberger, LLC described in this Section shall be
rendered to the Initial Purchasers at the request of the Company and shall
so state therein. In addition, such opinion shall also state that the
Initial Purchasers are entitled to rely on such counsel's opinions
delivered pursuant to the other Recapitalization Documents in the same
manner as if each of such opinions were directly addressed to the Initial
Purchasers.
References to the Final Memorandum in this subsection (d) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(e) On the Closing Date, the Initial Purchasers shall have received
the opinion, in form and substance satisfactory to the Initial Purchasers,
dated as of the Closing Date and addressed to the Initial Purchasers, of
Cahill Gordon & Reindel, counsel for the Initial Purchasers, with respect
to certain legal matters relating to this Agreement and such other related
matters as the Initial Purchasers may reasonably require. In rendering such
opinion, Cahill Gordon & Reindel shall have received and may rely upon such
certificates and other documents and information as it may reasonably
request to pass upon such matters.
(f) The Initial Purchasers shall have received from the Independent
Accountants comfort letters dated the date hereof and the Closing Date, in
form and substance reasonably satisfactory to counsel for the Initial
Purchasers.
(g) The representations and warranties of the Company and the
Guarantor contained in this Agreement shall be true and correct on and as
of the date hereof and on and as of the Closing Date as if made on and as
of the Closing Date; the statements of the Company's and the Guarantor's
officers made pursuant to any certificate delivered in accordance with the
provisions hereof shall be true and correct in all material respects on and
as of the date made and on and as of the Closing Date; the Company and the
Guarantor shall have performed all covenants and agreements in all material
respects and satisfied all conditions on their part to be performed or
satisfied hereunder at or prior to the Closing Date; and, except as
described in the Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of the most recent
financial statements in such Final Memorandum, there shall have been no
event or development, and no information
<PAGE>
-30-
shall have become known, that, individually or in the aggregate, has or
would be reasonably likely to have a Material Adverse Effect.
(h) Neither the sale of the Units hereunder nor any other component of
the Recapitalization shall be enjoined (temporarily or permanently) on the
Closing Date.
(i) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto
after the date hereof), none of the Company or any of the Subsidiaries
shall have sustained any loss or interference with respect to its business
or properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slow down or work stoppage or from any legal or governmental proceeding,
order or decree, which loss or interference, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse
Effect.
(j) The Initial Purchasers shall have received a certificate of the
Company and the Guarantor, dated the Closing Date, signed on behalf of the
Company and the Guarantor by its respective Chairman of the Board,
President or any Senior Vice President and the Chief Financial Officer, to
the effect that:
(i) The representations and warranties of the Company and the
Guarantor contained in this Agreement are true and correct on and as
of the date hereof and on and as of the Closing Date, and each of the
Company and the Guarantor has performed all covenants and agreements
in all material respects and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date
of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), no event or development has occurred, and no information has
become known, that, individually or in the aggregate, has or would be
reasonably likely to have a Material Adverse Effect;
(iii) Neither the sale of the Units hereunder nor any other
component of the Recapitalization has been enjoined (temporarily or
permanently);
(iv) There have been no material amendments, alterations,
modifications, or waivers of any provisions of any of the
Recapitalization Documents since the date of the execution and
delivery thereof by the parties thereto (other than amendments,
alterations, modifications or waivers copies of which have previously
been distributed to the Initial Purchasers prior to the date of this
Agreement); and
<PAGE>
-31-
(v) The Company and the Subsidiaries, to the extent each is a
party thereto, have complied in all material respects with all
agreements and covenants in the Recapitalization Documents and
performed in all material respects all conditions specified therein to
be complied with or performed by them at or prior the Closing Date.
(k) On the Closing Date, the Company and the Subsidiaries shall have,
to the extent each is a party thereto, complied in all material respects
with all agreements and covenants in the Recapitalization Documents and
performed all conditions specified therein (other than agreements or
covenants which have been waived but only if copies of such waivers have
previously been distributed to the Initial Purchasers prior to the date of
this Agreement) to be complied with or performed at or prior to the Closing
Date, and each of the Recapitalization Documents shall be in full force and
effect.
(l) On the Closing Date, the Initial Purchasers shall have received
the Registration Rights Agreement executed by the Company and the Guarantor
and such agreement shall be in full force and effect at all times from and
after the Closing Date.
(m) On the Closing Date, the Initial Purchasers shall have received
the Warrant Registration Rights Agreement executed by the Company and such
agreement shall be in full force and effect at all times from and after the
Closing Date.
(n) All of the Recapitalization (other than the offering of the Units)
shall have been consummated, or shall be consummated simultaneously with
the offering of the Units, on the terms and conditions set forth in the
Recapitalization Documents in the forms previously delivered to the Initial
Purchasers and to which they shall not have reasonably objected.
(o) On the Closing Date, the Certificate of Merger with respect to the
Merger shall be in form and substance satisfactory to the Initial
Purchasers and shall have been filed with the Secretary of State of the
State of Minnesota.
On or before the Closing Date, the Initial Purchasers and counsel for the
Initial Purchasers shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested from the Company.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchasers and counsel for the Initial Purchasers. The Company and the
Guarantor shall furnish to the Initial Purchasers
<PAGE>
-32-
such conformed copies of such documents, opinions, certificates, letters,
schedules and instruments in such quantities as the Initial Purchasers shall
reasonably request.
8. Offering of Units; Restrictions on Transfer. (a) Each of the Initial
Purchasers agrees with the Company and the Guarantor (as to itself only) that
(i) it has not and will not solicit offers for, or offer or sell, the Initial
Securities by any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Act and (ii) it has
and will solicit offers for the Initial Securities only from, and will offer the
Initial Securities only to (A) in the case of offers inside the United States,
persons whom the Initial Purchasers reasonably believe to be QIBs or, if any
such person is buying for one or more institutional accounts for which such
person is acting as fiduciary or agent, only when such person has represented to
the Initial Purchasers that each such account is a QIB, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A and (B) in the case of offers outside
the United States, to persons other than U.S. persons ("non-U.S. purchasers,"
which term shall include dealers or other professional fiduciaries in the United
States acting on a discretionary basis for non-U.S. beneficial owners (other
than an estate or trust)); provided, however, that, in the case of this clause
(B), in purchasing such Initial Securities such persons are deemed to have
represented and agreed as provided under the caption "Transfer Restrictions"
contained in the Final Memorandum (or, if the Final Memorandum is not in
existence, in the most recent Memorandum). Each of the Initial Purchasers
represents and warrants (as to itself only) that such Initial Purchaser is a
QIB.
(b) Each of the Initial Purchasers represents and warrants (as to
itself only) with respect to offers and sales outside the United States
that (i) it has and will comply with all applicable laws and regulations in
each jurisdiction in which it acquires, offers, sells or delivers Initial
Securities or has in its possession or distributes any Memorandum or any
such other material, in all cases at its own expense; (ii) the Initial
Securities have not been and will not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Act or pursuant to an exemption from
the registration requirements of the Act; and (iii) it has offered the
Initial Securities and will offer and sell the Initial Securities (A) as
part of its distribution at any time and (B) otherwise during the relevant
distribution compliance period, only in accordance with Rule 903 of
Regulation S and, accordingly, neither it nor any persons acting on its
behalf have engaged or will engage in any directed selling efforts (within
the meaning of Regulation S) with respect to the Initial Securities, and
any such persons have complied and will comply with the offering
restrictions requirement of Regulation S.
Terms used in this Section 8 and not defined in this Agreement have the
meanings given to them in Regulation S.
<PAGE>
-33-
9. Indemnification and Contribution. (a) Each of the Company and the
Guarantor, jointly and severally, agrees to indemnify and hold harmless each
Initial Purchaser and each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
against any losses, claims, damages or liabilities to which any Initial
Purchaser or such controlling person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by the
Company or the Guarantor in Section 2 hereof;
(ii) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto; or
(iii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and will reimburse, as incurred, the Initial Purchasers and each such
controlling person for any reasonable legal or other expenses incurred by the
Initial Purchasers or such controlling person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, the Company
and the Guarantor will not be liable in any such case to the extent that any
such loss, claim, damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Memorandum or any amendment or supplement thereto in reliance upon and in
conformity with written information concerning the Initial Purchasers furnished
to the Company and the Guarantor by the Initial Purchasers through Deutsche Bank
Securities Inc. specifically for use therein. The indemnity provided for in this
Section 9 will be in addition to any liability that the Company and the
Guarantor may otherwise have to the indemnified parties. The Company and the
Guarantor shall not be liable under this Section 9 for any settlement of any
claim or action effected without its prior written consent, which shall not be
unreasonably withheld; provided further, however, that the Company and the
Guarantor will not be liable to any Initial Purchaser or any person controlling
such Initial Purchaser with respect to any such untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Memorandum that is corrected in the Final Memorandum (or any amendment or
supplement thereto) if the person asserting any such loss, claim, damage or
liability purchased Initial Securities from such Initial Purchaser but was not
sent or given a copy of the Final Memorandum (as amended or supplemented) in any
case where such delivery of the Final Memorandum (as amended or supplemented)
was required by the Act, unless such failure to deliver the Final Memorandum (as
amended or supplemented) was a result of noncompliance by the Company or the
Guarantor with Section 5 hereof.
<PAGE>
-34-
(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless each of the Company and the Guarantor, its
directors, its officers and each person, if any, who controls the Company
or the Guarantor within the meaning of Section 15 of the Act or Section 20
of the Exchange Act against any losses, claims, damages or liabilities to
which the Company or the Guarantor or any such director, officer or
controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in any
Memorandum or any amendment or supplement thereto, or (ii) the omission or
the alleged omission to state therein a material fact required to be stated
in any Memorandum or any amendment or supplement thereto, or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity
with written information concerning such Initial Purchaser, furnished to
the Company and the Guarantor by the Initial Purchasers through Deutsche
Bank Securities Inc. specifically for use therein; and subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses incurred by the Company or the
Guarantor or any such director, officer or controlling person in connection
with investigating or defending against or appearing as a third party
witness in connection with any such loss, claim, damage, liability or
action in respect thereof. The indemnity provided for in this Section 9
will be in addition to any liability that the Initial Purchasers may
otherwise have to the indemnified parties. The Initial Purchasers shall not
be liable under this Section 9 for any settlement of any claim or action
effected without their consent, which shall not be unreasonably withheld.
The Company and the Guarantor shall not, without the prior written consent
of the Initial Purchasers, effect any settlement or compromise of any
pending or threatened proceeding in respect of which any Initial Purchaser
is or could have been a party, or indemnity could have been sought
hereunder by any Initial Purchaser, unless such settlement (A) includes an
unconditional written release of the Initial Purchasers, in form and
substance reasonably satisfactory to the Initial Purchasers, from all
liability on claims that are the subject matter of such proceeding and (B)
does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of any Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action for which such indemnified
party is entitled to indemnification under this Section 9, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party of
the commencement thereof in writing; but the omission to so notify the
indemnifying party (i) will not relieve it from any liability under
paragraph (a) or (b) above unless and to the extent such failure results in
the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification
obligation provided in paragraphs (a) and (b) above. In case any such
action is brought against any indemnified
<PAGE>
-35-
party, and it notifies the indemnifying party of the commencement thereof,
the indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if (i) the
use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest,
(ii) the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnified party shall have been
advised by counsel that there may be one or more legal defenses available
to it and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory
to the indemnified party to represent the indemnified party within a
reasonable time after receipt by the indemnifying party of notice of the
institution of such action, then, in each such case, the indemnifying party
shall not have the right to direct the defense of such action on behalf of
such indemnified party or parties and such indemnified party or parties
shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be liable
to such indemnified party under this Section 9 for any legal or other
expenses, other than reasonable costs of investigation, subsequently
incurred by such indemnified party in connection with the defense thereof,
unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that in connection with such action the indemnifying
party shall not be liable for the expenses of more than one separate
counsel (in addition to local counsel) in any one action or separate but
substantially similar actions in the same jurisdiction arising out of the
same general allegations or circumstances, designated by the Initial
Purchasers in the case of paragraph (a) of this Section 9 or by the Company
and the Guarantor in the case of paragraph (b) of this Section 9,
representing the indemnified parties under such paragraph (a) or paragraph
(b), as the case may be, who are parties to such action or actions) or (ii)
the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party. All
reasonable fees and expenses reimbursed pursuant to this paragraph (c)
shall be reimbursed as they are incurred. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will
not be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld),
unless such indemnified party waived in writing its rights under this
Section 9, in which case the indemnified party may effect such a settlement
without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or
insufficient to hold harmless, an indemnified party in respect of any
losses, claims, damages or liabilities (or actions in respect
<PAGE>
-36-
thereof), each indemnifying party, in order to provide for just and
equitable contribution, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party on
the other from the offering of the Initial Securities or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault
of the indemnifying party or parties on the one hand and the indemnified
party on the other in connection with the statements or omissions or
alleged statements or omissions that resulted in such losses, claims,
damages or liabilities (or actions in respect thereof). The relative
benefits received by the Company and the Guarantor on the one hand and any
Initial Purchaser on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses)
received by the Company bear to the total discounts and commissions
received by such Initial Purchaser. The relative fault of the parties shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company and the Guarantor on the one hand, or such Initial Purchaser on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate
in the circumstances. The Company, the Guarantor and the Initial Purchasers
agree that it would not be equitable if the amount of such contribution
were determined by pro rata or per capita allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to in the first sentence of this paragraph (d). Notwithstanding
any other provision of this paragraph (d), no Initial Purchaser shall be
obligated to make contributions hereunder that in the aggregate exceed the
total discounts, commissions and other compensation received by such
Initial Purchaser under this Agreement, less the aggregate amount of any
damages that such Initial Purchaser has otherwise been required to pay by
reason of the untrue or alleged untrue statements or the omissions or
alleged omissions to state a material fact, and no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this paragraph (d),
each person, if any, who controls an Initial Purchaser within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act shall have the
same rights to contribution as the Initial Purchasers, and each director of
the Company or the Guarantor, each officer of the Company or the Guarantor
and each person, if any, who controls the Company or the Guarantor within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
shall have the same rights to contribution as the Company or such
Guarantor, as applicable.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, the
Guarantor, their respective officers and the Initial Purchasers set forth in
this Agreement or made by or on
<PAGE>
-37-
behalf of them pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, the
Guarantor, any of their respective officers or directors, the Initial Purchasers
or any controlling person referred to in Section 9 hereof and (ii) delivery of
and payment for the Securities. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6, 9 and 16 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
11. Default by an Initial Purchaser. If any one or more Initial Purchasers
shall fail to purchase and pay for any of the Units agreed to be purchased by
such Initial Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this Agreement, the
remaining Initial Purchasers shall be obligated severally to take up and pay for
(in the respective proportions which the number of Units set forth opposite
their names in Schedule 1 hereto bears to the total number of Units set forth
opposite the names of all the remaining Initial Purchasers) the Units which the
defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase; provided, however, that in the event that the number of Units which
the defaulting Initial Purchaser or Initial Purchasers agreed but failed to
purchase shall exceed 10% of the total number of Units set forth in Schedule 1
hereto, the remaining Initial Purchasers shall have the right to purchase all,
but shall not be under any obligation to purchase any, of the Units, and if such
nondefaulting Initial Purchasers do not purchase all the Units, this Agreement
will terminate without liability to any nondefaulting Initial Purchaser or the
Company except as provided in Section 10 hereof. In the event of a default by
any Initial Purchaser as set forth in this Section 11, the Closing Date shall be
postponed for such period, not exceeding five business days, as the
nondefaulting Initial Purchasers shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company or any nondefaulting
Initial Purchaser for damages occasioned by its default hereunder.
12. Termination. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date in the event that the Company or the Guarantor shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Closing Date:
(i) any of the Company or the Subsidiaries shall have sustained
any loss or interference with respect to its businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any strike, labor dispute, slow down
or work stoppage or any legal or governmental proceeding, which loss
or interference, in the reasonable judgment of the Initial Purchasers,
has had or has a Material Adverse Effect, or there shall have been, in
the reasonable
<PAGE>
-38-
judgment of the Initial Purchasers, any event or development that,
individually or in the aggregate, has or could be reasonably likely to
have a Material Adverse Effect (including without limitation a change
in control of the Company or the Subsidiaries), except in each case as
described in the Final Memorandum (exclusive of any amendment or
supplement thereto);
(ii) trading in securities of the Company or in securities
generally on the New York Stock Exchange, American Stock Exchange or
the Nasdaq National Market shall have been suspended or materially
limited or minimum or maximum prices shall have been established on
any such exchange or market;
(iii) a banking moratorium shall have been declared by New York
or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial
markets of the United States which, in the case of (A), (B) or (C)
above and in the sole judgment of the Initial Purchasers, makes it
impracticable or inadvisable to proceed with the offering or the
delivery of the Securities as contemplated by the Final Memorandum; or
(v) any debt of the Company or the Guarantor shall have been
downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization.
(b) Termination of this Agreement pursuant to Section 11 or this
Section 12 shall be without liability of any party to any other party
except as provided in Section 10 hereof.
13. Information Supplied by the Initial Purchasers. The statements set
forth (i) in the last paragraph on the front cover page and (ii) in the third
paragraph, the third and fourth sentences of the fifth paragraph, the seventh
paragraph and, with respect to affiliations of the Initial Purchasers only, the
eighth paragraph, in each case, under the heading "Private Placement" in the
Final Memorandum (to the extent such statements relate to the Initial
Purchasers) constitute the only information furnished by the Initial Purchasers
to the Company and the Guarantor for the purposes of Sections 2(a) and 9 hereof.
14. Notices. All communications hereunder shall be in writing and, if sent
to the Initial Purchasers, shall be mailed or delivered to (i) Deutsche Bank
Securities Inc., 130 Liberty Street, New York, New York 10006, Attention:
Corporate Finance Department, with a copy to Cahill Gordon & Reindel, 80 Pine
Street, New York, New York 10005, Attention:
<PAGE>
-39-
William Hartnett, Esq.; if sent to the Company or the Guarantor, shall be mailed
or delivered to the Company at 5501 Norman Center Drive, Minneapolis, Minnesota
55437, Attention: General Counsel; with a copy to Gibson Dunn & Crutcher LLP,
200 Park Avenue, New York, New York 10166, Attention: Joerg H. Esdorn, Esq.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier.
15. Successors. This Agreement shall inure to the benefit of and be binding
upon the Initial Purchasers, the Company, the Guarantor and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Guarantor contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control the
Initial Purchasers within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of the Initial Purchasers contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and the Guarantor, their officers and any person or persons who
control the Company or the Guarantor within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act. No purchaser of Securities from the Initial
Purchasers will be deemed a successor because of such purchase.
16. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND
THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS
THEREOF RELATING TO CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION OF ANY
OTHER LAW.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>
S-1
If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter shall constitute a binding agreement among the Company, the
Guarantor and the Initial Purchasers.
Very truly yours,
JOSTENS, INC.
By: /s/ Robert C. Buhrmaster
-------------------------------------
Name: Robert C. Buhrmaster
Title: Chairman, President & CEO
AMERICAN YEARBOOK COMPANY, INC.
By: /s/ Robert C. Buhrmaster
-------------------------------------
Name: Robert C. Buhrmaster
Title: President
<PAGE>
S-2
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
DEUTSCHE BANK SECURITIES INC.
By: /s/ Matthew Headington
------------------------------
Name: Matthew Headington
Title: Vice President
UBS WARBURG LLC
By: /s/ Robert Parsons
------------------------------
Name: Robert Parsons
Title: Managing Director
Leveraged Finance
By: /s/ Arthur Penn
------------------------------
Name: Arthur Penn
Title: Managing Director
Leveraged Finance
GOLDMAN, SACHS & CO.
/s/ [Signature Illegible]
- ----------------------------------
<PAGE>
SCHEDULE 1
----------
Initial Purchaser Number of Units
- ----------------- ---------------
Deutsche Bank Securities Inc. ............................... 105,750
UBS Warburg LLC.............................................. 79,875
Goldman, Sachs & Co. ........................................ 39,375
-------
Total.............................................. 225,000
<PAGE>
SCHEDULE 2
----------
Subsidiaries of the Company
---------------------------
Jurisdiction of
Name Incorporation
- ---- -------------
American Yearbook Company, Inc. Kansas
Jostens Canada, Ltd. Canada
Balfirm Canada, Inc. Canada
Jostens Can Investments B.V. The Netherlands
Jostens International Holding B.V. The Netherlands
C.V. Jostens Global Trading The Netherlands
JC Trading, Inc. Puerto Rico
Conceptos Jostens, S.A. de C.V. Mexico
Reconocimientos E Incentivos, S.A. de C.V. Mexico
JostFer S.A. de C.V. Mexico
Reconocimientos, S.A. Colombia
