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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): April 11, 1996
PAXAR CORPORATION
(Exact name of registrant as specified in its charter)
New York 0-5610 13-5670050
(State or Other Jurisdiction (Commission File Number) (IRS Employer Ident.
of Incorporation) No.)
105 Corporate Park Drive, White Plains, New York 10604
(Address of Principal Executive Offices) (Zip Code)
(914) 697-6800
Registrant's telephone number, including area code
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Item 5. Other Events.
On April 11, 1997, Monarch Marking Systems, Inc., a Delaware
corporation ("Monarch") and a wholly-owned subsidiary of PAXAR Corporation, a
New York corporation (the "Registrant"), completed the purchase of $100 million
of principal amount of Monarch's 12-1/2% Senior Notes due July 1, 2003 (the
"Notes"), which constituted all of the issued and outstanding Notes. Pursuant to
the terms of an Offer to Purchase and Consent Solicitation Statement dated March
13, 1997, as amended on March 20, 1997, and March 25, 1997 (as amended, the
"Offer to Purchase"), Monarch offered (the "Tender Offer") to purchase all of
the outstanding Notes from the holders thereof (the "Holders") that tendered
their Notes on or before April 10, 1997 (the "Expiration Date") and also
solicited (the "Solicitation") consents to the adoption of proposed amendments
to the Indenture, dated as of June 29, 1995, between Monarch (as successor to
Monarch Acquisition Corp.), as Issuer, and Fleet National Bank (formerly known
as Shawmut Bank Connecticut, National Association), as Trustee, pursuant to
which the Notes were issued (as supplemented, the "Indenture"). The purchase
price for the Notes under the Tender Offer was an amount for each $1,000
principal amount of Notes tendered equal to (i) the greater of (A) $1,167.50
(the "Fixed Price") or (B) the price (the "Variable Price") equal to the present
value of the Notes on the date on which payment for the Notes was to be made
(the "Payment Date") determined on the basis of a yield (the "Tender Offer
Yield") to June 30, 1999, which was the day immediately preceding the earliest
redemption date of the Notes (the "Earliest Redemption Date"), equal to the sum
of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30, 1999 (the
"Reference Security"), as calculated by BT Securities Corporation (the "Dealer
Manager") in accordance with standard market practice, based on the bid price
for such Reference Security as of 2:00 P.M., New York City time, on March 26,
1997, the tenth business day immediately preceding the scheduled Expiration Date
of the Tender Offer (the "Price Determination Date"), as currently displayed on
the Bloomberg Government Pricing Monitor on "Page PX3" or any recognized
quotation source selected by the Dealer Manager in its sole discretion if the
Bloomberg Government Pricing Monitor is not available, plus (y) 75 basis points
(such price being rounded to the nearest cent per $1,000 principal amount of
Notes), plus (ii) accrued and unpaid interest, if any, up to, but not including,
the Payment Date (the consideration referred to in clauses (i) and (ii) being
hereinafter referred to as the "Total Consideration"), minus (iii) $30.00 per
Note, which is equal to the Consent Payment, as referred to below (the Total
Consideration minus the Consent Payment being hereafter referred to as the
"Tender Offer Consideration"). The Total Consideration became payable on April
10, 1997, the date that the Notes were accepted for payment pursuant to the
Tender Offer and Solicitation (the "Acceptance Date").
In connection with the Solicitation, Monarch offered to pay to each
Holder that validly tendered its Notes a "Consent Fee" equal to 3% of the
principal amount ($30 per $1,000) of the Notes (the "Consent Payment"), with
such payment to be made promptly following the Acceptance Date.
On the Price Determination Date, the Fixed Price of $1,167.50 per
$1,000 principal amount of the Notes was greater than the Variable Price.
Holders of all of the outstanding Notes tendered their Notes and provided their
Consents on or before the Expiration Date, as provided in the Offer to Purchase.
Accordingly, on April 11, 1997, the Payment Date, Monarch paid aggregate Total
Consideration of $120,222,222 consisting of $100,000,000 of principal,
$3,472,222 of accrued interest, a $13,750,000 premium, and an aggregate Consent
Payment of $3,000,000. Upon payment of the Total Consideration, all of the
outstanding Notes were canceled and the Indenture was terminated.
Monarch financed the purchase of the Notes from cash on hand and a loan
from the Registrant. The Registrant financed its loan to Monarch from loans
under its existing $280 million line of credit.
(c) Exhibits.
10.1 Dealer Manager Agreement, dated March 13, 1997,
between Monarch Marking Systems, Inc. and BT
Securities Corporation.
99.1 Offer to Purchase and Consent Solicitation Statement,
dated March 13, 1997.
99.2 Amendment No. 1 to Offer to Purchase and Consent
Solicitation Statement, dated March 20, 1997.
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99.3 Amendment No. 2 to Offer to Purchase and Consent
Solicitation Statement, dated March 25, 1997.
99.4 Consent and Letter of Transmittal, dated March 13,
1997.
99.5 Notice of Guaranteed Delivery, dated March 13, 1997.
99.6 Brokers' Letter, dated March 13, 1997.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAXAR CORPORATION
(Registrant)
Date: May 7, 1997 By: /s/ George Mitchell
---------------------------
George Mitchell
Treasurer
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10.1 Dealer Manager Agreement, dated March 13, 1997, between
Monarch Marking Systems, Inc. and BT Securities
Corporation.
99.1 Offer to Purchase and Consent Solicitation Statement,
dated March 13, 1997.
99.2 Amendment No. 1 to Offer to Purchase and Consent
Solicitation Statement, dated March 20, 1997.
99.3 Amendment No. 2 to Offer to Purchase and Consent
Solicitation Statement, dated March 25, 1997.
99.4 Consent and Letter of Transmittal, dated March 13, 1997.
99.5 Notice of Guaranteed Delivery, dated March 13, 1997.
99.6 Brokers' Letter, dated March 13, 1997.
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EXHIBIT 10.1
DEALER MANAGER AGREEMENT
March 13, 1997
BT SECURITIES CORPORATION
One Bankers Trust Plaza
New York, New York 10006
Ladies and Gentlemen:
Monarch Marking Systems, Inc. (formerly known as Monarch Acquisition
Corp.), a Delaware corporation (the "Company"), proposes to offer (the "Tender
Offer") to the holders of its 12 1/2% Senior Notes due 2003 (the "Notes"), upon
the terms and subject to the conditions set forth in the Offer to Purchase and
Consent Solicitation Statement dated March 13, 1997 (including all information
incorporated by reference therein and exhibits, appendices and attachments
thereto, as amended, modified or supplemented from time to time, the "Offer to
Purchase"), to purchase for cash $100,000,000 in aggregate principal amount of
the outstanding Notes. Concurrently with the Tender Offer, the Company is
soliciting consents (the "Consent Solicitation") from holders of the Notes to
amendments (the "Proposed Amendments") to certain of the provisions in the
indenture governing the Notes (the "Indenture"), as described in the Offer to
Purchase. Upon receipt of the Requisite Supermajority Consents (as defined in
the Offer to Purchase) or, at the option of the Company, the Requisite Majority
Consents (as defined in the Offer to Purchase) from holders of the Notes
("Holders"), the Company and Fleet National Bank (formerly known as Shawmut Bank
Connecticut, National Association), the trustee under the Indenture (the
"Trustee"), will enter into an amendment and/or a supplement to the Indenture
(the "Supplemental Indenture") which will give effect to some or all, as the
case may be, of the Proposed Amendments. Unless otherwise indicated, the use of
the term Tender Offer herein shall be deemed to include the Consent
Solicitation.
The Company hereby confirms its agreement with you as follows:
1. Tender Offer Materials. The Company agrees to furnish you at its
own expense with as many copies as you may reasonably request of the Offer to
Purchase, Letter of Transmittal, Notice of Guaranteed Delivery, Broker/Dealer
Letters, Client Letters and Taxpayer Guidelines (collectively, the "Letters of
Transmittal"). The Offer to Purchase, together with all other attachments
thereto, the Letters of Transmittal, as such materials may be amended, modified
or supplemented from time to time in accordance with the terms hereof and
thereof, are herein collectively referred to as the "Offering Materials".
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The date or dates on which the Offering Materials are first mailed
or otherwise distributed to Holders is hereinafter referred to as the
"Commencement Date".
2. Retention. (a) The Company hereby retains you to act as exclusive
financial advisor and dealer manager (the "Dealer Manager") to the Company in
connection with the Tender Offer, until the earlier of May 31, 1997 or the date
of the consummation of the Tender Offer (such date of consummation, the "Closing
Date"). As financial advisor and Dealer Manager, you agree, in accordance with
customary practice, to perform those services in connection with the Tender
Offer as are customarily performed by investment banking concerns acting in such
roles in connection with tender offers and consent solicitations of a like
nature, including but not limited to soliciting tenders and consents pursuant to
the Tender Offer and Consent Solicitation, communicating generally regarding the
Tender Offer with brokers, dealers, commercial banks, and trust companies and
other persons, including the holders of the Notes, and providing advice to the
Company with respect to the terms and timing of the Tender Offer and assisting
the Company in the preparation of the Offering Materials to the extent that such
documents relate to the terms of the Tender Offer.
(b) Subject to the last sentence of this clause (b), the Company
agrees that any reference to the Dealer Manager in any Offering Materials or in
any press release or other document or communication related to the Tender Offer
or your activities in connection therewith is subject to the Dealer Manager's
prior approval. If the Dealer Manager resigns or its engagement hereunder is
terminated prior to the dissemination of the Offering Materials or any other
release or communication, no reference shall be made therein to the Dealer
Manager. In the event that applicable law requires a reference to any Dealer
Manager, the Company agrees to provide the Dealer Manager with prompt notice of
such requirement to provide the Dealer Manager a reasonable opportunity to seek
an appropriate protective order or other remedy.
(c) The Company authorizes the Dealer Manager to communicate with
any information agent or depositary designated or retained by the Company with
respect to the Tender Offer (respectively, the "Information Agent" and the
"Depositary") regarding the Tender Offer.
(d) In full payment for services rendered and to be rendered
hereunder by the Dealer Manager, the Company agrees to pay the Dealer Manager's
fees and to reimburse the Dealer Manager for expenses as follows:
(i) An aggregate cash fee equal to $3.50 per $1,000
principal amount of Notes validly tendered and purchased
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pursuant to the Tender Offer shall be paid by the Company on the
Closing Date and such fee shall be paid irrespective of the
termination of this Agreement prior to the dates set forth in
Subsection 2(a).
(ii) In addition to the compensation to be paid as provided in
Subsection d(i) hereof, the Company shall pay, without regard to
whether the Tender Offer is consummated, to or on behalf of the
Dealer Manager, promptly as billed, all reasonable out-of-pocket
expenses (including all reasonable fees and expenses of the Dealer
Manager's legal counsel) incurred in connection with the Tender
Offer.
(iii) If the Dealer Manager resigns or the Company terminates the
Dealer Manager's services for any reason prior to the Closing Date,
the Dealer Manager and its legal counsel shall be entitled to
receive all of the amounts provided for in Subsections d(i) and (ii)
hereof up to and including the effective date of such resignation or
termination, as the case may be.
3. Certain Covenants. The Company covenants with you as follows:
(a) The Company will give the Dealer Manager notice of its intention
to amend or supplement any Offering Materials, will furnish the Dealer
Manager with copies of such amendment or supplement, and will not use any
such amendment or supplement to which the Dealer Manager or counsel for
the Dealer Manager shall reasonably object in writing or which is not in
compliance with the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(b) If, during the Tender Offer, any event occurs as a result of
which it shall, in the reasonable judgment of the Company or its counsel
or the Dealer Manager or its counsel, be necessary to amend or supplement
any of the Offering Materials in order 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, in the reasonable judgment of
any such person, at any time to amend or supplement any of the Offering
Materials to comply in all material respects with the Exchange Act, and
the rules and regulations of the Commission promulgated thereunder or any
other law, rule or regulation, such person shall promptly inform the
Company and the Dealer Manager, and (subject to Section 3(a) above) the
Company shall promptly prepare and furnish copies to you of such
amendments or supplements to such Offering Materials, so that either (i)
the statements in the Offering Materials, as so amended or supplemented,
will
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not, in light of the circumstances under which they were made, be
misleading or (ii) such compliance is effected.
(c) The Company shall comply in all material respects with the
applicable provisions of the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder (the
"Securities Act"), the Exchange Act, and the Trust Indenture Act of 1939,
as amended, and the rules and regulations of the Commission promulgated
thereunder (the "Trust Indenture Act"), in connection with the Offering
Materials, the Tender Offer and the transactions contemplated hereby and
thereby; the Company will take on a timely basis all actions reasonably
necessary or legally required in relation to the Tender Offer and all
other actions contemplated by this Agreement and by the Offering
Materials; and the Company will take all necessary corporate action to
authorize any amendments to or modifications of the Tender Offer.
(d) The Company will notify you, not less than two hours prior
thereto, of the time when it proposes to commence the Tender Offer or,
after commencement, to extend the Tender Offer; will notify you as
promptly as practicable of its receipt of the Requisite Supermajority
Consents and the Requisite Majority Consents; and will notify you as
promptly as practicable following expiration of the Tender Offer on the
Expiration Date (as defined in the Offering Materials), of the aggregate
principal amount of Notes in respect of which a consent and/or tender has
been verified to be in proper form, a consent and/or tender has been
rejected and which are being processed. The Company shall promptly give
you notice of any change in the Expiration Date.
(e) The Company shall advise you promptly of (i) the occurrence of
any event, or the discovery of any fact, which could reasonably be
expected to cause the Company to amend, withdraw or terminate the Tender
Offer, (ii) the occurrence of any event, or the discovery of any fact,
which could reasonably be expected to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material
respect, (iii) the issuance of any comment or order or the taking of any
other action by the Commission or any other governmental or regulatory
agency with respect to the Tender Offer (and, if in writing, will promptly
furnish you a copy thereof), (iv) the occurrence of any event, or the
discovery of any fact, which could reasonably be expected to cause the
Company to amend or supplement any of the Offering Materials, (v) the
issuance or the threatened issuance of any order or the taking of any
other action by any administrative or judicial tribunal or governmental
agency or instrumentality concerning the Tender Offer (and, if in writing,
will promptly
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furnish you a copy thereof) and (vi) any other information relating to the
Tender Offer which you may from time to time reasonably request.
4. Expenses. In addition to the obligation of the Company to
reimburse the Dealer Manager for its reasonable out-of-pocket expenses as
provided in Subsection 2(d)(ii) hereof, the Company 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 8 hereof, including, but not limited
to, all costs and expenses incident to (i) the printing, word processing or
other production of documents with respect to such transactions, including any
costs of printing the Offering Materials, the Supplemental Indenture and all
other agreements related to the Tender Offer or the distribution of any legal
investment memoranda, (ii) all arrangements relating to the delivery to the
Dealer Manager of copies of the foregoing documents, (iii) the fees and
disbursements of counsel, accountants and any other experts or advisors retained
by the Company, (iv) the fees and disbursements of the Trustee, the Transfer
Agent and Registrar, the Information Agent and the Depositary and (v) any
meetings with Holders relating to the Tender Offer.
5. Representations and Warranties. The Company represents and
warrants to and agrees with you that as of the Commencement Date and the Closing
Date:
(i) The Offering Materials, as amended and supplemented from time to
time, do not, as of their respective dates, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light
of the circumstances under which they are made, not misleading,
except that the representations and warranties set forth in this
Section 5(i) do not apply to statements made in reliance upon and in
conformity with information relating to the Dealer Manager furnished
in writing by the Dealer Manager expressly for use in the Offer to
Purchase.
(ii) The Company has all the necessary corporate power and authority
to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby and
by the Offering Materials. The Company has taken all necessary
corporate action to authorize the Tender Offer and the execution,
delivery and performance of this Agreement and the Supplemental
Indenture.
(iii) The consummation of the Tender Offer, as contemplated by the
Offering Materials, complies in all
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material respects with all applicable provisions of the Securities
Act, the Exchange Act and the Trust Indenture Act, and with all
applicable rules or regulations of any governmental or regulatory
authority or body, including applicable "Blue Sky" or similar state
securities laws or statutes; and no consent or approval of, or
filing with, any governmental or regulatory authority or body will
be required by the Company in connection with this Agreement or the
commencement or consummation of the Tender Offer other than those
consents or approvals which will have been obtained and is, or will
be, in full force and effect or any filing which will have been made
prior to the commencement or consummation, as the case may be, of
the Tender Offer.
(iv) The Company has been duly incorporated and is validly existing
in good standing as a corporation under the laws of its jurisdiction
of incorporation, with all requisite corporate power and authority
(corporate or otherwise) under such laws, and has all necessary
authorizations, approvals, orders, licenses, franchises, consents,
certificates and permits of and from regulatory or governmental
officials, bodies and tribunals to own or lease its properties and
conduct its businesses as now conducted as described in the Offering
Materials, and 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
businesses requires such qualification, except where the failure to
have such authorizations, approvals, orders, licenses, franchises,
consents, certificates or permits or to be so qualified would not
have a material adverse effect on the business, condition (financial
or other), results of operations or business prospects of the
Company and its subsidiaries, taken as a whole ("Material Adverse
Effect").
(v) This Agreement has been duly authorized, executed and delivered
by the Company and, assuming the due authorization, execution and
delivery thereof by the Dealer Manager, constitutes the valid and
legally binding obligation of the Company enforceable against it in
accordance with its terms, except that the enforcement hereof may be
limited by subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally, and general principles of equity and
the discretion of the court before which any proceeding therefor may
be brought (regardless of whether such enforcement is considered in
a proceeding in equity or at law). The Company is not (i) in
violation of its
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certificate of incorporation or bylaws, (ii) in violation of any
statute, judgment, decree, order, rule or regulation applicable to
it or any of its respective properties or assets which violation
could reasonably be expected to have a Material Adverse Effect, or
(iii) in default in the performance or observance of (including any
default arising after notice or lapse of time or both) any
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan agreement, note,
lease, license, franchise agreement, permit, certificate or other
agreement or instrument to which it is subject, which default could
reasonably be expected to have a Material Adverse Effect. The
execution, delivery and performance by the Company of this Agreement
and the Supplemental Indenture and the consummation by the Company
of the transactions contemplated hereby and thereby and by the
Offering Materials will not conflict with or constitute or result in
a breach or violation by the Company of any of (x) the terms or
provisions of, or constitute a default (including any default
arising after notice or lapse of time or both) by the Company or any
of its subsidiaries under, any indenture, mortgage, deed of trust,
loan agreement, note, lease, license, franchise agreement, or other
agreement or instrument to which any of them is a party or to which
any of their respective properties is subject, which conflict,
breach, violation or default could reasonably be expected to have a
Material Adverse Effect, (y) the certificate of incorporation or
bylaws of the Company or any of its subsidiaries, or (z) any
statute, judgment, decree, order, rule or regulation (excluding
state securities and "Blue Sky" laws) of any court or governmental
agency or other body applicable to the Company or any of its
subsidiaries or any of their respective properties, which conflict,
breach, violation or default could reasonably be expected to have a
Material Adverse Effect.
(vi) Except as described in the Offering Materials, there is not
pending or, to the knowledge of the Company, threatened, any action,
suit, proceeding, inquiry or investigation to which it or any of its
subsidiaries, or to which any of their respective properties is
subject, before or brought by any court or governmental agency or
body, which could reasonably be expected to have a Material Adverse
Effect.
(vii) Except as stated in the Offering Materials and as provided
herein, the Company has not agreed to pay and does not know of any
outstanding material claims in the nature of a finder's fee,
financial advisory fee,
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origination fee or similar fee to be paid by it with respect to the
transactions contemplated hereby.
6. Conditions of the Dealer Manager's Obligations. Your obligations
to act and to continue to act (as the case may be) as Dealer Manager shall be
subject to the accuracy in all material respects of the representations and
warranties contained herein as of the Commencement Date as if made on and as of
such date (except as expressly provided therein), to the performance in all
material respects by the Company of its covenants and agreements hereunder and
to the following additional conditions, unless waived in writing by the Dealer
Manager:
(a) There shall not have been any legal action, order, decree or
other administrative proceeding instituted or threatened against the
Company or any of its subsidiaries which could reasonably be expected to
have a Material Adverse Effect, or against you relating to the Tender
Offer and your activities in connection therewith or any of the other
transactions contemplated by the Offering Materials.
(b) The proceedings taken at or prior to the Closing Date in
connection with the Tender Offer and any other transactions contemplated
by the Offering Materials shall be in form and substance reasonably
satisfactory to you and your counsel.
(c) On the Commencement Date, you shall have received the opinion of
Snow Becker Krauss P.C., counsel for the Company, substantially in the
form of Exhibit A hereto.
(d) On the Closing Date, you shall have received, dated as of such
date, the opinion of Snow Becker Krauss P.C., counsel for the Company,
substantially in the form of Exhibit B hereto.
(e) Neither the Tender Offer nor any of the other transactions
contemplated by the Offering Materials shall be enjoined (temporarily or
permanently) and no restraining order or other injunctive order shall have
been issued or any action, suit or proceeding shall have been commenced
with respect to the Tender Offer, this Agreement, the Supplemental
Indenture or any of the other transactions contemplated by the Offering
Materials, before any court or governmental authority.
(f) On the Closing Date, the Dealer Manager shall have received a
certificate, dated such date, of the chief executive officer or the chief
financial officer of the Company to the effect that:
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(i) The representations and warranties in this Agreement are true
and correct in all material respects as if made on and as of such
date and the Company has performed all covenants and agreements and
satisfied all conditions on its part to be performed or satisfied at
or prior to such date (after giving effect to the Tender Offer and
the other transactions contemplated by the Offering Materials);
(ii) Subsequent to the date as of which information is given in the
Offering Materials (as amended or supplemented), as of the date of
such certificate, there has not been any change or any development
which, singly or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect on the Company; and
(iii) Neither the Tender Offer, nor any of the other transactions
contemplated hereby or by the Offering Materials has been enjoined
(temporarily or permanently).
(g) On or before the Closing Date, to the extent Requisite
Supermajority Consents or, at the option of the Company, the Requisite
Majority Consents have been received, the Company and the Trustee and all
other necessary parties shall have executed and delivered the Supplemental
Indenture, which shall be reasonably satisfactory in form and substance to
the Dealer Manager and Cahill Gordon & Reindel, counsel for the Dealer
Manager, and the Supplemental Indenture shall be in full force and effect.
On or before the Commencement Date and the Closing Date, you and
your counsel shall have received such further documents, certificates and
schedules relating to the business, corporate, legal and financial affairs of
the Company and its subsidiaries and the Tender Offer as reasonably requested.
In the event that any of the foregoing conditions is not met when
required to be met, then you shall be entitled to withdraw as Dealer Manager in
connection with the Tender Offer without any liability or penalty to you or any
other "indemnified party" (as defined in Section 7) and without loss of any
right to the payment of all expenses and fees payable under this Agreement.
7. Indemnification. The Company agrees to indemnify and hold
harmless the Dealer Manager and the respective affiliates, the directors,
officers, agents, representatives and employees of the Dealer Manager or its
affiliates and each other person, if any, controlling the Dealer Manager (each
an "indemnified party") from and against any and all losses, actions, claims,
damages or liabilities, and will reimburse any indemnified party for all costs
and expenses (including counsel fees) as they are incurred by
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such indemnified party in connection with investigating, preparing to defend or
defending any such action or claim caused by or arising out of, or in connection
with, the Tender Offer (whether or not consummated), including, but not limited
to, actions, claims, liabilities or expenses arising out of or based upon any
breach of any agreement or representation of the Company contained in this
Agreement, the structuring and development of the Tender Offer, an untrue
statement or alleged untrue statement of a material fact in any of the Offering
Materials or an omission or an alleged omission to state a material fact in any
of the Offering Materials necessary to make the statements therein not
misleading, or the transmittal of the Offering Materials to Holders, or which
arise out of or are based upon any failure to accept Notes or consents properly
tendered pursuant to the Tender Offer; provided, however, that the Company will
not be liable to any indemnified party to the extent that any claims,
liabilities, losses, damages, costs or expenses are finally determined by a
court of competent jurisdiction to have resulted primarily from the gross
negligence or willful misconduct of such indemnified party.
The Company will not, without the prior written consent of the
Dealer Manager, settle or compromise or consent to the entry of any judgment in
any pending or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought by an indemnified party hereunder (whether or not
any indemnified party is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an unconditional written
release (in form and substance reasonably satisfactory to the indemnified
parties) of the indemnified parties from all liability arising out of such
claim, action, suit or proceeding.
Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the Company under this Section 7,
notify the Company of the commencement thereof; but the omission so to notify
the Company will not relieve the Company from any liability which it may have to
any indemnified party otherwise than under this Section 7. In case any such
action is brought against any indemnified party, and it notifies the Company of
the commencement thereof, the Company will be entitled to participate therein
and, to the extent it may wish to, may assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the Company
and the indemnified party shall have concluded 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 Company, then the Company
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
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action on behalf of such indemnified party or parties. After notice from the
Company 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 Company will not be liable to such indemnified party under this
Section 7 for any legal or other expenses, other than 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 Company 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 Dealer Manager, representing the indemnified
parties, who are parties to such action or actions) or (ii) the Company has
authorized the employment of counsel for the indemnified party at the expense of
the Company. After such notice from the Company to such indemnified party, the
Company will not be liable for the losses, costs and expenses of any settlement
of such action effected by such indemnified party without the consent of the
Company. If such indemnified party waives all of its rights under this Section
7, the indemnified party may effect such a settlement without the consent of the
Company.
In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 7 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), the Company, 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 Company on the one hand and
the indemnified party or parties on the other from the Tender Offer 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 Company on the one hand and the indemnified party or parties on the other in
connection with such losses, claims, damages or liabilities (or actions in
respect thereof). The relative benefits received by the Company on the one hand
and the indemnified parties on the other shall be deemed to be in the same
proportion as (i) the aggregate principal amount of Notes solicited for tender
and consent pursuant to the Tender Offer bears to (ii) the fees and expenses
paid or proposed to be paid by the Company to the Dealer Manager under this
Agreement. The indemnity, reimbursement and contribution obligations of the
Company under this Agreement shall be in addition to any rights that the Dealer
Manager or any other indemnified party may have at
11
<PAGE> 12
common law or otherwise. The Company and the Dealer Manager agree that it would
not be equitable if the amount of such contribution were determined by pro rata
or per capita allocation (even if the Company on the one hand and the
indemnified parties on the other hand were treated as one entity for such
purpose) 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. For purposes of this paragraph, each person, if any, who controls the
Dealer Manager 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 Dealer Manager.
8. Termination. (a) This Agreement may be terminated (i) by the
Dealer Manager at any time upon notice to the Company if (A) the Company shall
mail or otherwise distribute or propose to mail or otherwise distribute any
supplement to any Offering Materials to which the Dealer Manager shall
reasonably object or which shall be reasonably disapproved by its counsel, (B)
at any time prior to the Closing Date, the Tender Offer is terminated or
withdrawn for any reason (other than the failure of the Dealer Manager to
perform its obligations hereunder) or any restraining order or other injunctive
order shall have been issued or any action, suit or proceeding shall have been
commenced with respect to the Tender Offer, this Agreement or any of the other
transactions contemplated by the Offering Materials, before any court or
governmental authority which makes it inadvisable for the Dealer Manager, in its
discretion, to continue to act as Dealer Manager hereunder, (C) any of the
conditions specified in Section 6 shall not have been fulfilled, or (D) there is
a good faith disagreement between the Dealer Manager and the Company with
respect to a material term or condition of the Tender Offer or the Offering
Materials, or (ii) by the Company upon notice to the Dealer Manager, if there is
a good faith disagreement between the Dealer Manager and the Company with
respect to a material term or condition of the Tender Offer or the Offering
Materials.
(b) Termination of this Agreement pursuant to this Section 8 shall
be without liability of any party to any other party except as provided in
Section 11 hereof.
9. Notices. Any notices required to be given in writing pursuant to
any of the provisions of this Agreement shall be mailed, air couriered or
delivered (a) to the Company:
Monarch Marking Systems, Inc.
170 Monarch Drive
Miamisburg, Ohio 45342
Attention: Arthur Hershaft, Chairman
with a copy to:
12
<PAGE> 13
Paxar Corporation
105 Corporate Park Drive
White Plains, New York 10604
Attention: Arthur Hershaft, Chairman
and Chief Executive Officer
- and -
Snow Becker Krauss P.C.
605 Third Avenue
New York, NY 10158
Attention: Eric Honick, Esq.
or (b) to the Dealer Manager:
BT Securities Corporation
One Bankers Trust Plaza
New York, New York 10006
Attention: Jim Clayton
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Gerard M. Meistrell, Esq.
Any such notice may be made by telecopier or telephone, but if so made shall be
subsequently confirmed in writing.
10. Tombstone. The Company acknowledges that the Dealer Manager may
at any time after the Closing Date place an announcement in such newspapers and
periodicals as it may choose, at the Company's cost, stating that it acted as
financial advisor to the Company in connection with the Tender Offer, provided
that the Dealer Manager will submit a copy of any such announcements to the
Company for its prior approval, which approval shall not be unreasonably
withheld or delayed.
11. Survival. The provisions of Section 2(d) hereof, the indemnity
and contribution agreements contained in Section 7 hereof, the representations
and warranties and agreements set forth in Section 5 hereof and Section 12
hereof shall remain operative and in full force and effect regardless of (i) any
investigation made by or on behalf of the Dealer Manager, or by or on behalf of
any affiliate of the Dealer Manager or any person controlling the Dealer Manager
or affiliate, (ii) consummation of the Tender Offer or (iii) any termination of
this Agreement or of the Dealer Manager's engagement hereunder, and shall be
binding upon and shall inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company, the Dealer Manager and the
indemnified parties referred to in Section 7 hereof.
13
<PAGE> 14
12. APPLICABLE LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAWS, AND ANY RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
CONTEMPLATED BY THIS AGREEMENT IS HEREBY WAIVED. YOU HEREBY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN
THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT OR
ANY MATTERS CONTEMPLATED HEREBY.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
14. Headings. The section headings in this Agreement have been
inserted as a matter of convenience of reference only and are not a part hereof.
15. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, understandings and arrangements, oral or
written, among the parties hereto with respect to the subject matter hereof.
14
<PAGE> 15
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 Dealer
Manager.
Very truly yours,
MONARCH MARKING SYSTEMS, INC.
By: /s/ Arthur Hershaft
---------------------------------
Name: Arthur Hershaft
Title: Chairman
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
BT SECURITIES CORPORATION
By: /s/ James A. Clayton
- ---------------------------------
Name: James A. Clayton
Title: Managing Director
15
<PAGE> 16
Exhibit A
Form of Commencement Date Opinion of Snow Becker Krauss P.C.
1. The Company has been duly incorporated, is validly existing and
in good standing under the laws of the State of Delaware.
2. The Company has the full corporate power and authority to
execute, deliver and perform its obligations under the Dealer Manager Agreement.
3. To the best of our knowledge, there is no action, suit,
proceeding or investigation pending or threatened against or affecting the
Company in any court or before any governmental authority or arbitration board
or tribunal that seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the Tender Offer, the Consent Solicitation or any of the
other transactions contemplated by the Offering Materials.
4. The Dealer Manager Agreement has been duly authorized, executed
and delivered by the Company, and (assuming due authorization, execution and
delivery by the Dealer Manager) is the legally valid and 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, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and by general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
5. The execution and delivery of the Dealer Manager Agreement by the
Company and the performance of its obligations thereunder will not result in the
violation by the Company of its certificate of incorporation and bylaws or in
the breach of or a default by the Company under any Indenture, mortgage, deed or
trust, loan agreement, note, lease or other agreement or instrument known to us
to be applicable to the Company or to which or any of its properties is subject.
1
<PAGE> 17
6. None of (i) the execution or delivery of the Dealer Manager
Agreement by the Company, (ii) performance by the Company of its obligations
under the Dealer Manager Agreement or (iii) the making of the Tender Offer and
Consent Solicitation by the Company, violates any Federal or New York State
statute, law, rule or regulation or any provision of the Delaware General
Corporation Laws known to us or any judgment, decree, order, rule or regulation
of any court or other governmental authority applicable to the Company or any of
its subsidiaries (other than blue sky laws, rules or regulations as to which we
express no opinion).
In addition, we have participated in conferences with officers and
other representatives of the Company and its subsidiaries, representatives of
the independent public accountants for the Company and its subsidiaries, and
your representatives, at which the contents of the Offering Materials and
related matters were discussed and, although we are not passing upon, and do not
assume any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Materials, during the course of such
participation (relying as to materiality to a large extent upon the statements
of officers and other representatives of the Company and its subsidiaries), no
facts came to our attention that caused us to believe that the Offering
Materials 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 the light of the circumstances under which they were made, not
misleading; it being understood that we express no opinion with respect to the
financial statements and other financial and statistical data included in the
Offering Materials.
2
<PAGE> 18
Exhibit B
Form of Closing Date Opinion of Snow Becker Krauss P.C.
1. The Company has been duly incorporated, is validly existing and
in good standing under the laws of the State of Delaware.
2. The Company has the full corporate power and authority to
execute, deliver and perform its obligations under the Dealer Manager Agreement.
3. To the best of our knowledge, there is no action, suit,
proceeding or investigation pending or threatened against or affecting the
Company in any court or before any governmental authority or arbitration board
or tribunal that seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the Tender Offer, the Consent Solicitation or any of the
other transactions contemplated by the Offering Materials.
4. The Supplemental Indenture relating to the Notes has been duly
authorized, executed and delivered by the Company and (assuming due
authorization, execution and delivery by the Trustee) is the legally valid and
binding agreement of the Company, enforceable against it in accordance with its
terms, except that enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and by general principles of equity and
the discretion of the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
5. The execution and delivery of the Supplemental Indenture by the
Company will not result in the violation by the Company of its certificate of
incorporation and bylaws or any statute, rule or regulation known to us to be
applicable to the Company, or in the breach of or a default by the Company under
any indenture, mortgage, deed of trust, loan agreement, note, lease, license or
other agreement or instrument known to us to be applicable to the Company or to
which any of its properties is subject.
6. None of (i) the execution or delivery of the Dealer Manager
Agreement by the Company, (ii) performance by the Company of its obligations
under the Dealer Manager Agreement or (iii) the making of the Tender Offer and
Consent Solicitation by the Company, violates any Federal or New York State
statute, law, rule
3
<PAGE> 19
or regulation or any provision of the Delaware General Corporation Laws known to
us or any judgment, decree, order, rule or regulation of any court or other
governmental authority applicable to the Company or any of its subsidiaries
(other than blue sky laws, rules or regulations as to which we express no
opinion).
7. To the best of our knowledge, no consent, approval, authorization
or order of, or filing with, any court or governmental agency or body is
required for the purchase of the Notes (other than blue sky laws, rules or
regulations as to which we express no opinion).
8. The changes affected by the Supplemental Indenture conform to the
description thereof in the Offering Materials, as amended or supplemented to the
date hereof, in all material respects.
9. The Indenture, as amended by the Supplemental Indenture, complies
with the Trust Indenture Act.
10. The consummation of the Tender Offer and the Consent
Solicitation on the terms set forth in the Offering Materials, as amended and
supplemented to the date hereof, will not conflict with or result in a violation
of Section 14(e) of the Exchange Act and the rules and regulations promulgated
thereunder.
In addition, we have participated in conferences with officers and
other representatives of the Company and its subsidiaries, representatives of
the independent public accountants for the Company and its subsidiaries, and
your representatives, at which the contents of the Offering Materials, as
amended and supplemented to the date hereof, and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Offering Materials, as amended and supplemented to the date hereof (relying as
to materiality to a large extent upon the statements of officers and other
representatives of the Company and its subsidiaries), no facts came to our
attention that caused us to believe that any of the Offering Materials, as
amended and supplemented to the date hereof, 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 the light of the circumstances
under which they were made, not misleading it being understood that we express
no opinion with respect to the financial statements and other
4
<PAGE> 20
financial and statistical data included in any of the Offering Materials, as
amended or supplemented to the date hereof.
5
<PAGE> 1
Exhibit 99.1
OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT
MONARCH MARKING SYSTEMS, INC.
OFFER TO PURCHASE FOR CASH
ALL OF ITS OUTSTANDING
12-1/2% SENIOR NOTES DUE JULY 1, 2003
($100 MILLION PRINCIPAL AMOUNT OUTSTANDING)
AND SOLICITATION OF CONSENTS FOR
AMENDMENT OF RELATED INDENTURE
THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997
UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE").
HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE
EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW).
TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO
12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT,
SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON
THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS
RELEASE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS
REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE
OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A
MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING.
Monarch Marking Systems, Inc., a Delaware corporation (the "Company"),
hereby offers (the "Tender Offer") to purchase for cash, upon the terms and
subject to the conditions set forth in this Offer to Purchase and Consent
Solicitation Statement (as it may be supplemented and amended from time to time,
the "Statement") and in the accompanying Consent and Letter of Transmittal (as
it may be supplemented and amended from time to time, the "Consent and Letter of
Transmittal" and, together with this Statement, the "Offer"), all of its
outstanding 12-1/2% Senior Notes due July 1, 2003 (the "Notes"). In conjunction
with the Tender Offer, the Company hereby solicits (the "Solicitation") consents
(the "Consents") to the adoption of the proposed amendments (the "Proposed
Amendments") to the indenture, dated as of June 29, 1995, between the Company,
as Issuer, and Fleet National Bank (formerly known as Shawmut Bank Connecticut,
National Association), as Trustee (the "Trustee"), pursuant to which the Notes
were issued (as supplemented through the date hereof, the "Indenture").
<PAGE> 2
Adoption of the Proposed Amendments may have adverse consequences for
Holders who elect not to tender Notes in the Offer. See "Certain Significant
Considerations" and "Proposed Amendments to the Indenture."
The consideration for each $1,000 principal amount of Notes tendered
pursuant to the Tender Offer and Solicitation shall be equal to (i) the greater
of (A) $1,167.50 or (B) the price (calculated as described on Schedule I to this
Statement) equal to the present value of the Notes on the Payment Date (as
defined below) determined on the basis of a yield (the "Tender Offer Yield") to
June 30, 1999, which is the day immediately preceding the earliest redemption
date of the Notes (the "Earliest Redemption Date"), equal to the sum of (x) the
yield on the 6-3/4% U.S. Treasury Note due June 30, 1999 (the "Reference
Security"), as calculated by the Dealer Manager in accordance with standard
market practice, based on the bid price for such Reference Security as of 2:00
P.M., New York City time, on March 26, 1997, the tenth business day immediately
preceding the scheduled Expiration Date (the "Price Determination Date"), as
currently displayed on the Bloomberg Government Pricing Monitor on "Page PX3" or
any recognized quotation source selected by the Dealer Manager in its sole
discretion if the Bloomberg Government Pricing Monitor is not available, plus
(y) 75 basis points (such price being rounded to the nearest cent per $1,000
principal amount of Notes), plus (ii) accrued and unpaid interest, if any, up
to, but not including, the Payment Date (the consideration referred to in
clauses (i) and (ii) being hereafter referred to as the "Total Consideration"),
payable on the date that the Notes are accepted for payment pursuant to the
Tender Offer and Solicitation (the"Acceptance Date"). There will be no separate
payment for the Consents. Pursuant to the terms of the Indenture, the earliest
date upon which the Notes may be redeemed is July 1, 1999, at a price equal to
106.250% of the principal amount of the Notes. In the event the Tender Offer and
Solicitation is extended for any period longer than ten business days from the
previously scheduled Expiration Date, a new Price Determination Date will be
established, which will be the tenth business day immediately preceding the
Expiration Date as so extended.
The Proposed Amendments will be effected by a supplemental indenture
(the "Supplemental Indenture") in the form of an amended and restated indenture,
which is to be executed on or promptly after the Consent Date. The "Consent
Date" will be one business day following the announcement (by press release) by
the Company that it has received the Requisite Supermajority Consents or, at the
option of the Company, Requisite Majority Consents to the Proposed Amendments,
as described below. "Requisite Supermajority Consents" shall be the Consents of
Holders who hold not less than a 75% in aggregate principal amount of the Notes
then outstanding (excluding for such purposes any Notes owned at the time by the
Company or any of its affiliates). If the Company receives the Requisite
Supermajority Consents, all of the Proposed Amendments will become operative on
the Acceptance Date. Nevertheless, the Company reserves the right and option to
cause the Consent Date to occur if it has received Requisite Majority Consents
at any time before the Expiration Date. "Requisite Majority Consents" shall be
the Consents of Holders who hold not less than a majority in aggregate principal
amount of the Notes then outstanding (excluding for such purposes any Notes
owned by the Company or any of its affiliates). If the Consent Date occurs after
the Company receives Requisite Majority Consents, but before it receives
Requisite Supermajority Consents, substantially all (but not all) of the
Proposed Amendments will become operative on the Acceptance Date. See "The
Proposed
-ii-
<PAGE> 3
Amendments to the Indenture." Although the Supplemental Indenture will be
executed on or promptly after 12:00 midnight, New York City time, on the Consent
Date, none of the Proposed Amendments will become operative unless and until the
Tender Offer is consummated on the Acceptance Date. The Indenture, without
giving effect to the Proposed Amendments, will remain in effect until all or
substantially all of the Proposed Amendments become operative on the Acceptance
Date. If the Tender Offer is terminated or withdrawn, or the Notes are not
accepted for payment for any reason, none of the Proposed Amendments will become
operative.
HOLDERS WHO TENDER NOTES IN THE TENDER OFFER ARE OBLIGATED TO CONSENT
TO ALL OF THE PROPOSED AMENDMENTS. PURSUANT TO THE TERMS OF THE CONSENT AND
LETTER OF TRANSMITTAL, THE COMPLETION, EXECUTION AND DELIVERY THEREOF BY A
HOLDER IN CONNECTION WITH THE TENDER OF NOTES WILL BE DEEMED TO CONSTITUTE THE
CONSENT OF SUCH TENDERING HOLDER TO ALL OF THE PROPOSED AMENDMENTS. Holders may
not revoke Consents without withdrawing the previously tendered Notes to which
such Consents relate. Tenders of Notes may be withdrawn and consents may be
validly revoked at any time prior to the Consent Date, but, subject to the
limited exceptions set forth below, not thereafter. A valid withdrawal of
tendered Notes on or prior to 12:00 midnight, New York City time, on the Consent
Date will constitute the current valid revocation of such Holder's related
Consent. If, after the Consent Date, the Company (i) reduces the principal
amount of Notes subject to the Tender Offer or (ii) changes the Total
Consideration, then previously tendered Notes may be validly withdrawn until the
expiration of ten business days after the date that notice of such reduction or
change is first published, given or sent to Holders by the Company. In addition,
tenders of Notes may be validly withdrawn if the Tender Offer is terminated
without any Notes being purchased thereunder. In the event of a termination of
the Tender Offer, the Notes tendered pursuant to the Offer will be promptly
returned to the tendering Holders.
The Total Consideration that a tendering Holder is entitled to receive
pursuant to the Tender Offer and the Solicitation will be paid promptly after
the Acceptance Date (the "Payment Date"). Under no circumstances will any
interest be payable because of any delay in the transmission of funds to
Holders. Subject to applicable securities laws and the terms set forth in the
Offer, the Company reserves the right (i) to waive any and all conditions to the
Tender Offer or the Solicitation, (ii) to extend or to terminate the Tender
Offer or the Solicitation, or (iii) otherwise to amend the Tender Offer or the
Solicitation in any respect.
An aggregate of $100 million in principal amount of Notes is presently
outstanding.
The purpose of the Tender Offer is to acquire all of the Notes. The
purpose of the Solicitation and the Proposed Amendments is to eliminate or
modify certain covenants and other provisions contained in the Indenture in
order to improve the operating and financial flexibility of the Company.
Notwithstanding any other provision of the Tender Offer or the
Solicitation, the Company's obligation to accept for payment, and to pay for,
Notes validly tendered pursuant to the Tender Offer and Solicitation is
conditioned upon (i) the execution of the Supplemental Indenture following
receipt of the Requisite Supermajority Consents or, at the option of the
Company, Requisite Majority Consents to the Proposed Amendments (the "Amendment
Condition") and (ii) the General Conditions (defined
-iii-
<PAGE> 4
herein), including the ability of PAXAR Corporation ("PAXAR"), the Company's
parent corporation, to borrow under its existing credit facility and to
contribute the proceeds thereof to the Company to finance all or a portion of
the consideration due in connection with the Tender Offer and Solicitation and
any related fees. The Company may waive any of the conditions of the Tender
Offer and Solicitation, in whole or in part, at any time and from time to time.
See "The Tender Offer and the Consent Solicitation--Conditions of the Tender
Offer and the Consent Solicitation" and "Certain Information Concerning the
Company -- Recent Developments."
See "Certain Significant Considerations" and "Certain Federal Income
Tax Considerations" for discussions of certain factors that should be considered
in evaluating the Tender Offer and the Solicitation.
IN THE EVENT THAT THE TENDER OFFER AND THE SOLICITATION ARE WITHDRAWN
OR OTHERWISE NOT COMPLETED, THE TOTAL CONSIDERATION WILL NOT BE PAID OR BECOME
PAYABLE TO HOLDERS OF THE NOTES WHO HAVE VALIDLY TENDERED THEIR NOTES AND
DELIVERED CONSENTS IN CONNECTION WITH THE TENDER OFFER AND THE SOLICITATION.
NEITHER THE COMPANY NOR THE DEALER MANAGER MAKE ANY RECOMMENDATION AS
TO WHETHER OR NOT HOLDERS SHOULD TENDER NOTES IN RESPONSE TO THE TENDER OFFER OR
PROVIDE CONSENTS TO THE PROPOSED AMENDMENTS IN RESPONSE TO THE SOLICITATION.
Any questions or requests for assistance may be directed to the Dealer
Manager at its address and telephone number set forth below. Requests for
additional copies of this Statement, the Consent and Letter of Transmittal and
the Notice of Guaranteed Delivery may be directed to the Dealer Manager.
Beneficial owners may also contact their broker, dealer, commercial bank or
trust company for assistance concerning the Tender Offer and the Solicitation.
The Dealer Manager for the Tender Offer and the Solicitation is:
BT Securities Corporation
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
(212) 775-2467
Attn: High Yield Capital Markets
The date of this Offer to Purchase and Consent Solicitation is March 13, 1997.
-iv-
<PAGE> 5
IMPORTANT
Any Holder desiring to tender Notes and deliver Consents should either
(i) in the case of a Holder who holds physical certificates evidencing such
Notes, complete and sign the Consent and Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions therein, have his or her signature
thereon guaranteed (if required by Instruction 1 of the Consent and the Letter
of Transmittal) and send or deliver such manually signed Consent and Letter of
Transmittal (or a manually signed facsimile thereof, together with certificates
evidencing such Notes and any other required documents to Fleet National Bank,
as Depositary (the "Depositary"), or (ii) in the case of a Holder who holds
Notes in book-entry form, request such Holder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such Holder
pursuant to the procedures for book-entry delivery herein. See "The Tender Offer
and the Consent Solicitation -- Procedures for Tendering Notes and Delivering
Consents." A beneficial owner who has Notes registered in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if such
beneficial owner desires to tender and deliver Consents for Notes so registered.
The Depository Trust Company ("DTC") has authorized DTC participants
that hold Notes on behalf of beneficial owners of Notes through DTC to tender
their Notes and Consents as if they were Holders. To effect a tender and
consent, DTC participants should either (i) complete and sign the Consent and
Letter of Transmittal or a facsimile thereof, have the signature thereon
guaranteed if required by Instruction 1 of the Consent and Letter of
Transmittal, and mail or deliver the Consent and Letter of Transmittal or such
facsimile to DTC pursuant to the procedure set forth in "The Tender Offer and
the Consent Solicitation - Procedures for Tendering Notes and Delivering
Consents" or (ii) transmit their acceptance to DTC through the DTC Automated
Tender Offer Program ("ATOP") for which the transaction will be eligible and
follow the procedure for book-entry transfer set forth in "The Tender Offer and
the Consent Solicitation -- Procedures for Tendering Notes and Delivering
Consents." A beneficial owner of Notes that are held of record by a custodian
bank, depositary, broker, trust company or other nominee must instruct such
Holder to tender the Notes on the beneficial owner's behalf. A Letter of
Instructions is included in the solicitation materials provided along with this
Statement which may be used by a beneficial owner in this process to effect the
tender.
Any Holder who desires to tender Notes but who cannot comply with the
procedures set forth herein for tender on a timely basis or whose certificates
for Notes are not immediately available may tender the Notes by following the
procedures for guaranteed delivery set forth under "The Tender Offer and the
Consent Solicitation -- Procedures for Tendering Notes and Delivering Consents
- -- Guaranteed Delivery."
Tendering Holders will not be obligated to pay brokerage fees or
commissions.
Questions and requests for assistance may be directed to the Dealer
Manager at its address and telephone number set forth on the back cover of this
Statement. Additional copies of this Statement, the Consent and Letter of
Transmittal, the Notice of Guaranteed Delivery and other related materials may
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<PAGE> 6
be obtained from the Dealer Manager. Beneficial owners may also contact their
brokers, dealers, commercial banks or trust companies through which they hold
the Notes with questions and requests for assistance.
This Statement constitutes neither an offer to purchase nor a
solicitation of consents in any jurisdiction in which, or to or from any person
to or from whom, it is unlawful to make such offer or solicitation under
applicable securities or blue sky laws. The delivery of this Statement shall not
under any circumstances create any implication that the information contained
herein is correct as of any time subsequent to the date hereof or that there has
been no change in the information set forth herein or in any attachments hereto
or in the affairs of the Company or its subsidiaries or affiliates since the
date hereof.
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained in this Statement and,
if given or made, such information or representation may not be relied upon as
having been authorized by the Company or the Dealer Manager.
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<PAGE> 7
TABLE OF CONTENTS
SUMMARY..................................................................... 1
AVAILABLE INFORMATION....................................................... 4
INCORPORATION OF DOCUMENTS BY REFERENCE..................................... 4
CERTAIN SIGNIFICANT CONSIDERATIONS.......................................... 5
Effects of the Proposed Amendments..................................... 5
Limited Trading Market................................................. 5
Tax Matters ........................................................... 6
CERTAIN INFORMATION CONCERNING THE COMPANY.................................. 6
General................................................................ 6
Recent Developments.................................................... 6
THE TENDER OFFER AND THE CONSENT SOLICITATION............................... 8
Purposes of the Tender Offer and the Consent Solicitation ............. 8
Terms of the Tender Offer and the Solicitation......................... 8
Conditions of the Tender Offer and the Consent Solicitation ...........11
Expiration Date; Extension; Amendment; Termination.....................13
Acceptance for Payment and Payment for Notes; Acceptance of Consents ..14
Procedures for Tendering Notes and Delivering Consents.................15
Tender of and Consent for Notes....................................15
Tender of Notes Held in Physical Form..............................15
Tender of Notes Held Through a Custodian...........................16
Tender of Notes Held Through DTC...................................16
Book-Entry Delivery Procedures.....................................16
Signature Guarantees...............................................17
Guaranteed Delivery................................................17
Backup U.S. Federal Income Tax Withholding.........................19
Determination of Validity..........................................19
Withdrawal of Tenders and Revocation of Consents.......................19
Backup Withholding.....................................................20
Source and Amount of Funds.............................................20
Dealer Manager.........................................................21
Depositary ............................................................21
Fees and Expenses......................................................21
Miscellaneous..........................................................22
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<PAGE> 8
PROPOSED AMENDMENTS TO THE INDENTURE..................................23
Purposes and Effects.............................................23
Proposed Amendments .............................................23
Deletion of Restrictive Covenants ............................23
Amendments to Section 4.10 ...................................24
Amendments to Section 5.01 ...................................25
Amendments to Section 6.01 ...................................25
Deletions of Definitions .....................................25
Conforming Amendments ........................................25
Approval.........................................................25
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS.............................26
Sale of Notes Pursuant to the Tender Offer.......................26
Tax Considerations for Non-Tendering Holders.....................27
Information Reporting............................................28
Backup Withholding and Substitute Form W-9.......................28
MISCELLANEOUS.........................................................29
SCHEDULE I............................................................30
SCHEDULE II...........................................................31
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<PAGE> 9
SUMMARY
The following summary is qualified in its entirety by reference to, and
should be read in conjunction with, the information appearing elsewhere in this
Statement and the more detailed information contained in the documents
incorporated by reference herein.
The Company: Monarch Marking Systems, Inc.
The Notes: 12-1/2% Senior Notes due 2003
The Tender Offer: The Company is offering to purchase all of
the outstanding Notes at the price per Note
set forth below.
Expiration Date: The Expiration Date shall be 12:00 midnight,
New York City time, on April 10, 1997,
unless extended by the Company.
The Consent Solicitation: The Company is also seeking Consents from
Holders of the Notes to certain Proposed
Amendments to the Indenture.
Total Consideration for
the Tender Offer and the
Solicitation: The greater of (A) $1,167.50 per $1,000
principal amount of the Notes or (B) the
present value on the Payment Date of the
Notes, determined on the basis of a Tender
Offer Yield to June 30, 1999, the day before
the Earliest Redemption Date, equal to the
sum of (x) the yield on the 6-3/4% U.S.
Treasury Note due June 30, 1999, as of 2:00
P.M., New York City time, on March 26, 1997,
the tenth business day immediately preceding
the scheduled Expiration Date plus (y) 75
basis points, plus accrued and unpaid
interest, if any, up to, but not including
the Payment Date. No additional
consideration will be paid for the Consents.
Consent Date: The Consent Date shall be one business day
following the announcement (by press
release) by the Company that it has received
the Requisite Supermajority Consents to the
Proposed Amendments. If the Company obtains
the Requisite Supermajority Consents, all of
the Proposed Amendments will become
operative. Nevertheless, the Company
reserves the right and option to cause the
Consent Date to occur at any time if it has
obtained
<PAGE> 10
Requisite Majority Consents prior to the
Expiration Date, in which case substantially
all (but not all) of the Proposed Amendments
will become operative. See "The Proposed
Amendments to the Indenture." The Company
will execute the Supplemental Indenture on
or promptly after 12:00 midnight, New York
City time, on the Consent Date.
Requisite
Supermajority Consents: Duly executed (and not revoked) Consents to
the Proposed Amendments from Holders
representing 75% in aggregate principal
amount of the outstanding Notes (excluding
for such purposes any Notes owned at such
time by the Company or any of its
affiliates).
Requisite Majority Consents: Duly executed (and not revoked) Consents to
the Proposed Amendments from Holders
representing a majority in aggregate
principal amount of the outstanding Notes
(excluding for such purposes any Notes owned
at such time by the Company or any of its
affiliates).
Payment Date: The Payment Date shall be promptly after the
Acceptance Date.
Conditions of the Tender and
Solicitation: The Company's obligation to accept for
purchase and pay for the Notes validly
tendered is subject to and conditioned upon
the following: (i) there having been validly
tendered (and not withdrawn) prior to the
Expiration Date not less than 75% in
aggregate principal amount of the Notes
outstanding or, at the option of the
Company, a majority in aggregate principal
amount of the Notes outstanding, (ii) the
execution of the Supplemental Indenture
following receipt of the Requisite
Supermajority Consents or Requisite Majority
Consents, as the case may be, and (iii)
satisfaction of the General Conditions. The
Company may waive any of the conditions of
the Tender Offer and Solicitation, in whole
or in part, at any time and from time to
time.
How to Tender Notes or
Deliver Consents: See "The Tender Offer and the Consent
Solicitation-- Procedures for Tendering
Notes and Delivering Consents." For further
information, call the Dealer Manager or
consult your broker, dealer, commercial bank
or trust company for
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<PAGE> 11
assistance.
Withdrawal Rights: Tenders of Notes may be withdrawn and
Consents may be revoked at any time prior to
12:00 midnight, New York City time, on the
Consent Date. A valid withdrawal of tendered
Notes prior to 12:00 midnight, New York City
time, on the Consent Date will constitute
the concurrent valid revocation of such
Holder's related Consent. To revoke Consents
delivered in connection with tendered Notes,
Holders must withdraw the related tendered
Notes. Subject to certain conditions, after
the Consent Date, Holders may also validly
withdraw tendered Notes if, after the
Consent Date, the Company reduces the
principal amount of Notes subject to the
Tender Offer or changes the Total
Consideration.
Certain Considerations: See "Certain Significant Considerations" for
a discussion of certain factors that should
be considered in evaluating the Tender Offer
and the Solicitation.
Dealer Manager: BT Securities Corporation ("BT Securities")
is serving as dealer manager (the "Dealer
Manager") in connection with the Tender
Offer and the Consent Solicitation. Its
telephone number is (212) 775-2467.
Depositary: Fleet National Bank is serving as depositary
(the "Depositary") in connection with the
Tender Offer and the Consent Solicitation.
Its telephone number is (860) 986-7908. The
Depositary is also the Trustee under the
Indenture.
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<PAGE> 12
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy and information
statements and other information filed by the Company with the Commission
pursuant to the informational requirements of the Exchange Act may be inspected
and copied at the Public Reference Section maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices maintained by the Commission: New York Regional Office, 7 World Trade
Center, 15th Floor, New York, New York 10048, and Chicago Regional Office,
Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material may be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Such material may also be accessed electronically, by means of
the Commission's home page on the Internet (http://www.sec.gov).
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents, heretofore filed by the Company with the
Commission, are hereby incorporated by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995; and
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, June 30, 1996 and September 30, 1996.
Each document filed by the Company subsequent to the date of this
Statement pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, or
filed pursuant to the Securities Act of 1933, as amended (the "Securities Act")
prior to the Expiration Date shall be deemed to be incorporated by reference in
this Statement and shall be part hereof from the date of filing of such
document. Any statement contained herein or in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Statement.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Statement has been delivered, upon the
written or oral request of any such person, a copy of any document described
above (other than exhibits, unless specifically requested). Requests for such
copies should be directed to Monarch Marking Systems, Inc., 170 Monarch Lane,
Miamisburg, Ohio 45342, Attention: Secretary; telephone number:937-865-2000.
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<PAGE> 13
CERTAIN SIGNIFICANT CONSIDERATIONS
The following considerations, in addition to the other information set
forth herein, should be considered carefully by holders and beneficial owners of
Notes.
EFFECTS OF THE PROPOSED AMENDMENTS
If the Proposed Amendments become operative, holders of Notes that are
not purchased pursuant to the Tender Offer for any reason will no longer be
entitled to the benefits of certain provisions contained in the Indenture that
have been modified by the Proposed Amendments. The modification of the Indenture
would provide the Company with increased operating and financial flexibility.
The Indenture, as so amended, will continue to govern the terms of all Notes
that remain outstanding. The elimination (or, in certain cases, amendment) of
restrictive covenants and other provisions would permit the Company and its
subsidiaries to, among other things, incur indebtedness, pay dividends or make
other restricted payments, incur liens or make investments that would otherwise
not have been permitted pursuant to the Indenture. In addition, immediately
following the amendment of the Indenture after the adoption of the Proposed
Amendments, the Company will guarantee PAXAR's indebtedness under PAXAR's Credit
Agreement, as discussed under "Certain Information Concerning the
Company--Recent Developments." It is possible that any such actions that the
Company or its subsidiaries would be permitted to take as a result of the
Proposed Amendments would increase the risk with respect to the Company faced by
the non-tendering Holders or otherwise adversely affect the interests of the
non-tendering Holders. See "Proposed Amendments."
LIMITED TRADING MARKET
There currently is a limited public trading market for the Notes, which
from time to time trade in the over-the-counter market. Prices and trading
volumes of the Notes in the over-the-counter market are not reported and can be
difficult to monitor. Quotations for securities that are not widely traded, such
as the Notes, may differ from actual trading prices and should be viewed as
approximations. Holders are urged to contact their brokers with respect to
current information regarding the Notes.
To the extent that Notes are tendered and accepted for payment in the
Tender Offer, the trading market for Notes that remain outstanding may be
significantly more limited, which might adversely affect the liquidity of the
Notes. One of the Proposed Amendments would authorize the deletion of the
Indenture covenant requiring the Company (i) to file with the Commission all
information documents and reports required to be filed pursuant to Section 13 or
15(d) of the Exchange Act, whether or not the Company is subject to such filing
requirements, and (ii) to provide any Holder with such information concerning
the Company necessary to permit such Holder to sell notes pursuant to Rule 144A
under the Securities Act. If the Proposed Amendments are adopted, the Company
intends to cease providing such information. The extent of any private market
and the availability of price quotations for the Notes will depend upon a number
of factors, including the
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<PAGE> 14
principal amount and the number of holders of Notes remaining at such time. An
issue of securities with a smaller outstanding market value available for
trading (the "float") may command a lower price than would a comparable issue of
securities with a greater float. Therefore, the market price for Notes that are
not tendered in the Tender Offer may be affected adversely to the extent that
the amount of Notes purchased pursuant to the Tender Offer further reduces the
float. The reduced float also may tend to make the trading prices of the Notes
that are not so purchased more volatile. As a result, there can be no assurance
that any trading market for the Notes will exist after consummation of the
Tender Offer and the Solicitation.
TAX MATTERS
See "Certain Federal Income Tax Considerations" for a discussion of
certain tax matters that should be considered in evaluating the Tender Offer and
the Solicitation.
CERTAIN INFORMATION CONCERNING THE COMPANY
GENERAL
The Company is a leading manufacturer and marketer of marking equipment
and supplies in the United States and also sells, directly and through
distributors, marking equipment and supplies in 75 other countries around the
world. Information concerning the Company's historical business activities and
financial position and results of operations can be found in the documents
referenced under "Incorporation of Documents by Reference."
RECENT DEVELOPMENTS
Through a series of transactions, the Company recently became a
wholly-owned subsidiary of PAXAR Corporation ("PAXAR"). PAXAR is a leading
manufacturer and distributor of label systems, labels, tags and related supplies
and services for apparel manufacturers and retailers. The Company believes that
its acquisition by PAXAR will strengthen the Company's marketing presence both
in the United States and internationally and will enable the Company to
capitalize on cross-market sales opportunities associated with joint marketing
of the Company's and PAXAR's products.
Prior to the consummation of the transactions described below, PAXAR
and Odyssey Partners, L.P. ("Odyssey") each owned 495 shares of the Common
Stock, $.001 par value, of Monarch Holdings, Inc. ("Holdings"), which, in turn,
owned all of the issued and outstanding capital stock of the Company. Thomas
Loemker ("Loemker"), the Chairman of Holdings and a director of PAXAR, and John
W. Paxton ("Paxton"), the President and Chief Executive Officer of the Company,
each owned 10 shares of Holdings Common Stock. On March 3, 1997, PAXAR acquired
495 shares of Holdings Common Stock (the "Odyssey Shares") from Odyssey in
consideration of of $100 million in cash and a note and the issuance of Warrants
to purchase one million shares of PAXAR Common Stock at an exercise price of
$17.50 per share and Warrants to purchase 200,000
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<PAGE> 15
shares of PAXAR Common Stock at an exercise price of $21.875 per share.
Concurrently with PAXAR's purchase of the Holdings Shares from Odyssey, PAXAR
entered into a Credit Agreement (the "Credit Agreement") with Fleet Bank and
certain other lenders named therein (collectively, the "Lenders"). Under the
Credit Agreement, the Lenders agreed to make loans of up to $280 million to
PAXAR and its subsidiaries. PAXAR applied a portion of the proceeds of loans
under the Credit Agreement to pay the cash portion of the purchase price for the
Odyssey Shares.
After consummation of PAXAR's purchase of the Odyssey Shares and the
execution of the Credit Agreement, PAXAR merged Holdings, as a 98% owned
subsidiary, into PAXAR and issued 125,129 shares of PAXAR Common Stock to each
of Loemker and Paxton in exchange for their ten shares of Holdings Common Stock.
PAXAR also exchanged options to purchase PAXAR Common Stock for options of
equivalent value to purchase Holdings Common Stock held by Holdings management.
As a result of such merger, the Company became a wholly-owned subsidiary of
PAXAR.
The Company expects to procure all or a portion of the financing
required to pay the Total Consideration from PAXAR, which will borrow under its
existing Credit Agreement to provide such financing to the Company. The ability
of PAXAR to borrow under its existing Credit Agreement in order to provide such
financing to the Company is one of the General Conditions to the Tender Offer.
See "The Tender Offer and the Consent Solicitation--Conditions of the Tender
Offer and Consent Solicitation."
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<PAGE> 16
THE TENDER OFFER AND THE CONSENT SOLICITATION
PURPOSES OF THE TENDER OFFER AND THE CONSENT SOLICITATION
The purpose of the Tender Offer, which is conditioned, among other
things, on the Amendment Condition, is to acquire all of the outstanding Notes.
From time to time in the future, the Company or its affiliates may seek to
acquire any Notes which remain outstanding following expiration of the Tender
Offer, through open market purchases, privately negotiated transactions, tender
offers, exchange offers or otherwise, upon such terms and at such prices as it
may determine, which may be more or less than the Total Consideration and could
be for cash or other consideration. Alternatively, pursuant to the provisions of
the Notes and the Indenture, as then amended, the Company may choose, among
other things, to effect a defeasance in accordance with the terms of the
Indenture, as then amended. There can be no assurance as to which, if any, of
these alternatives (or combinations thereof) the Company may pursue.
The purpose of the Solicitation and the Proposed Amendments is to amend
or eliminate certain of the principal restrictive covenants contained in the
Indenture, and thereby enhance the operating and financial flexibility of the
Company and its subsidiaries. After 12:00 midnight, New York City time, on the
Consent Date, subject to certain limited exceptions, tenders of Notes may not be
withdrawn and Consents theretofore granted may not be revoked.
TERMS OF THE TENDER OFFER AND THE SOLICITATION
Upon the terms and subject to the conditions of the Tender Offer
(including, if the Tender Offer is extended or amended, the terms and conditions
of any such extension or amendment), the Company is offering to purchase for
cash all of the outstanding Notes at a price for each $1,000 principal amount of
Notes tendered pursuant to the Tender Offer, equal to the Total Consideration.
The Total Consideration is equal to (i) the greater of (A) $1,167.50 or (B) the
present value of the Notes on the Payment Date, determined on the basis of a
Tender Offer Yield to June 30, 1999, the day before to the Earliest Redemption
Date of July 1,1999, equal to the sum of (x) the yield on the 6-3/4% U.S.
Treasury Note due June 30, 1999 (the "Reference Security"), as calculated by the
Dealer Manager in accordance with standard market practice, based on the bid
price for such Reference Security as of 2:00 p.m., New York City time, on March
26, 1997, the tenth business day immediately preceding the scheduled Expiration
Date (the "Price Determination Date"), as currently displayed on the Bloomberg
Government Pricing Monitor on "Page PX3" or any recognized quotation source
selected by the Dealer Manager in its sole discretion if the Bloomberg Pricing
Monitor is not available, plus (y) 75 basis points, such price being rounded to
the nearest cent per $1,000 principal amount of Notes, plus (ii) accrued and
unpaid interest, if any, up to, but not including, the Payment Date (the
consideration referred to in clauses (i) and (ii) being referred to as the
"Total Consideration"), payable on the date that the Notes are accepted for
payment pursuant to the Offer (the "Acceptance Date"). In the event the Tender
Offer is extended for any period longer than ten business days from the
previously scheduled Expiration Date, a new Price Determination
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<PAGE> 17
Date will be established, which shall be the tenth business day immediately
preceding the Expiration Date as so extended.
In addition, upon the terms and subject to the conditions of the
Solicitation (including, if the Solicitation is extended or amended, the terms
of any such extension or amendment), the Company is also soliciting Consents to
the Proposed Amendments to the Indenture. There will be no separate payment for
the Consents.
Although the yield on the Reference Security on the Price Determination
Date (and the Tender Offer Yield) will only be determined from the source noted
above, information regarding the closing yield of the Reference Security may
also be found in The Wall Street Journal and The New York Times. The yield on
the Reference Security as of 2:00 p.m., New York City time, on March 12, 1997
was 6.122%. Accordingly, if such yield were determined to be the yield on the
Reference Security on the Price Determination Date and April 15, 1997 were to be
the Payment Date for the Notes, the Tender Offer Yield, the purchase price, and
the Total Consideration per $1,000 principal amount of Notes would be 6.872%,
$1,167.34 and $1,203.10, respectively. A hypothetical calculation of the Total
Consideration demonstrating the application of the assumptions and methodologies
to be used in pricing the Offer is set forth in Schedule II hereto. Since the
purchase price per $1,000 principal amount of the Notes is less than $1,167.50
in this example, a purchase price of $1,167.50 would be used to determine the
Total Consideration.
If at any time following a Price Determination Date the Company extends
the Tender Offer for any period of not more than ten business days, the Total
Consideration for each Note tendered pursuant to the Tender Offer prior to 12:00
midnight, New York City time, on the Consent Date, shall remain the Total
Consideration as determined on such Price Determination Date. If, however, the
Company extends the Tender Offer for any period longer than ten business days
from the previously scheduled Expiration Date based upon which such Price
Determination Date had been established, a new Price Determination Date shall be
established (such new Price Determination Date to be the tenth business day
immediately preceding the Expiration Date as so extended) and the Consideration
for each Note tendered pursuant to the Tender Offer prior to 12:00 midnight, New
York City time, on the Expiration Date, shall be calculated based on the Tender
Offer Yield as of such new Price Determination Date.
Promptly after a Price Determination Date, but in any event before 9:00
a.m., New York City time, on the following business day, the Company will
publicly announce the pricing information referred to above by press release to
the Dow Jones News Service.
IF THE NOTES ARE ACCEPTED FOR PAYMENT PURSUANT TO THE TENDER OFFER,
HOLDERS WHO VALIDLY TENDERED THEIR NOTES PURSUANT TO THE TENDER OFFER PRIOR TO
12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE WILL RECEIVE THE
TOTAL CONSIDERATION. BECAUSE THE TOTAL CONSIDERATION MAY BE BASED ON A FIXED
SPREAD PRICING FORMULA LINKED TO A YIELD ON A REFERENCE SECURITY, THE TOTAL
CONSIDERATION MAY BE AFFECTED BY CHANGES IN SUCH YIELD DURING THE TERM OF THE
TENDER OFFER PRIOR TO THE PRICE DETERMINATION DATE.
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<PAGE> 18
Holders who tender Notes in the Tender Offer are obligated to consent
to the Proposed Amendments. Pursuant to the terms of the Consent and Letter of
Transmittal, the completion, execution and delivery thereof by a Holder in
connection with the tender of Notes will be deemed to constitute the Consent of
such tendering Holder to all of the Proposed Amendments. Holders may not deliver
Consents without tendering the related Notes.
All Notes validly tendered in accordance with the procedures set forth
herein and not withdrawn in accordance with the procedures set forth herein on
or prior to the Expiration Date will, upon the terms and subject to the
conditions hereof, including the Amendment Condition, be accepted for payment by
the Company, and payment will be made therefor, promptly after the Expiration
Date.
The Proposed Amendments will be effected by the execution of the
Supplemental Indenture (in the form of an Amended and Restated Indenture) on the
Consent Date. The "Consent Date" will be one business day following the
announcement (by press release) by the Company that it has received the
Requisite Supermajority Consents to the Proposed Amendments. If the Company
obtains the Requisite Supermajority Consents, all of the Proposed Amendments
become operative. Nevertheless, the Company reserves the right and option to
cause the Consent Date to occur if it has obtained Requisite Majority Consents
at any time prior to the Expiration Date, in which case substantially all (but
not all) of the Proposed Amendments will become operative on the Acceptance
Date. "Requisite Supermajority Consents" shall be the consent of the Holders
holding not less than 75% in aggregate principal amount of the Notes then
outstanding (excluding any Notes owned at the time by the Company or any of its
affiliates). "Requisite Majority Consents" shall be the consent of the Holders
holding not less than a majority in aggregate principal amount of the Notes then
outstanding (excluding any Notes owned at the time by the Company or any of its
affiliates). See "The Proposed Amendments to the Indenture." None of the
Proposed Amendments will become operative unless and until the Tender Offer is
consummated on the Acceptance Date. The "Acceptance Date" is the date that the
Company accepts Notes for purchase pursuant to the Tender Offer. The Indenture,
without giving effect to the Proposed Amendments, will remain in effect until
the Proposed Amendments become operative on the Acceptance Date. If the Tender
Offer is terminated or withdrawn, or the Notes are not accepted for payment,
none of the Proposed Amendments will become operative.
Tenders of Notes may be validly withdrawn and Consents may be validly
revoked at any time prior to 12:00 midnight, New York City time, on the Consent
Date, but, except as set forth below, not thereafter. A valid withdrawal of
tendered Notes prior to 12:00 midnight, New York City time, on the Consent Date
will constitute the concurrent valid revocation of such Holder's related
Consent. In order for a Holder to revoke a Consent, such Holder must withdraw
the related tendered Notes. If, after the Consent Date, the Company (i) reduces
the principal amount of Notes subject to the Tender Offer or (ii) changes the
Total Consideration, then previously tendered Notes may be validly withdrawn
until the expiration of ten business days after the date that notice of any such
reduction or change is first published, given or sent to Holders by the Company.
In addition, tenders of Notes may be validly withdrawn if the Tender Offer is
terminated without any Notes being
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<PAGE> 19
purchased thereunder. In the event of a termination of the Tender Offer, the
Notes tendered pursuant to the Tender Offer will be promptly returned to the
tendering Holder.
The Company's obligation to accept, and pay for, Notes validly tendered
pursuant to the Tender Offer and Solicitation is conditioned upon (a) the
Amendment Condition and (b) the General Conditions, including the ability of
PAXAR to borrow under its existing Credit Agreement and to contribute the
proceeds thereof to the Company to finance all or a portion of the consideration
due in connection with this Tender Offer and Solicitation and any related fees.
Subject to applicable securities laws and the terms set forth in this Statement,
the Company reserves the right, prior to the Expiration Date, (i) to waive any
and all conditions to the Tender Offer or the Solicitation, (ii) to extend or to
terminate the Tender Offer or Solicitation or (iii) otherwise to amend the
Tender Offer or the Solicitation in any respect. See "-- Conditions of the
Tender Offer and the Consent Solicitation." The rights reserved by the Company
in this paragraph are in addition to the Company's rights to terminate the
Tender Offer and Solicitation described elsewhere in this Statement. Any
extension, amendment or termination will be followed as promptly as practicable
by public announcement thereof, the announcement in the case of an extension of
the Tender Offer to be issued no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date. Without
limiting the manner in which any public announcement may be made, the Company
shall have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a release to the Dow Jones News
Service.
If the Company makes a material change in the terms of the Tender Offer
or the Solicitation or the information concerning the Tender Offer or the
Solicitation, the Company will disseminate additional Tender Offer and
Solicitation materials and extend the Tender Offer or, if applicable, the
Solicitation, to the extent required by law. If the Solicitation is amended
prior to the Consent Date in a manner determined by the Company to constitute a
material adverse change to the Holders, the Company promptly will disclose such
amendment and, if necessary, extend the Solicitation for a period deemed by the
Company to be adequate to permit Holders to withdraw their Notes and revoke
their Consents. See "-- Withdrawal of Tenders and Revocation of Consents."
CONDITIONS OF THE TENDER OFFER AND THE CONSENT SOLICITATION
Notwithstanding any other provision of the Tender Offer and the Consent
Solicitation, the Company will not be required to accept for payment, or to pay
for, Notes tendered pursuant to the Tender Offer may terminate, extend or amend
the Tender Offer and the Solicitation and may, subject to Rule 14e-1 under the
Exchange Act, postpone the acceptance of Notes so tendered if (a) the Amendment
Condition shall not have been satisfied or (b) any of the General Conditions
shall not have been satisfied.
For purposes of the foregoing provisions, all the "General Conditions"
shall be deemed to have been satisfied unless any of the following conditions
shall occur prior to the Acceptance Date:
(i) PAXAR shall be unable to borrow under its existing Credit
Agreement or to
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<PAGE> 20
contribute the proceeds of such borrowing to the
Company to finance all or a portion of the
consideration due in connection with the Tender Offer
and Solicitation and any related fees;
(ii) there shall have been instituted or threatened or be
pending any action or proceeding before or by any
court or governmental regulatory or administrative
agency or instrumentality, or by any other person, in
connection with the Tender Offer or the Solicitation
that is, or is reasonably likely to be, in the sole
judgment of the Company, materially adverse to the
business, operations, properties, condition
(financial or otherwise), assets, liabilities or
prospects of the Company;
(iii) any order, statute, rule, regulation, executive
order, stay, decree, judgment or injunction shall
have been proposed, enacted, entered, issued,
promulgated, enforced or deemed applicable by any
court or governmental, regulatory or administrative
agency or instrumentality that, in the sole judgment
of the Company, would or might prohibit, prevent,
restrict or delay consummation of the Tender Offer or
the Solicitation or that is, or is reasonably likely
to be, materially adverse to the business,
operations, properties, condition (financial or
otherwise), assets, liabilities or prospects of the
Company;
(iv) there shall have occurred or be likely to occur any
event that, in the sole judgment of the Company,
would or might prohibit, prevent, restrict or delay
consummation of the Tender Offer or the Solicitation
or that will, or is reasonably likely to, materially
impair the contemplated benefits to the Company of
the Tender Offer or the Solicitation, or otherwise
result in the consummation of the Tender Offer or the
Solicitation not being or not being reasonably likely
to be in the best interests of the Company;
(v) the Trustee under the Indenture shall have objected
in any respect to, or taken any action that could, in
the sole judgment of the Company, adversely affect
the consummation of, the Tender Offer or the
Solicitation or the Company's ability to cause the
Proposed Amendments to be effected, or shall have
taken any action that challenges the validity or
effectiveness of the procedures used by the Company
in soliciting the Consents to the Proposed Amendments
(including the form thereof) or in making the Tender
Offer or the Solicitation or the acceptance of, or
payment for, any of the Notes; or
(vi) there shall have occurred (a) any general suspension
of, or limitation on prices for, trading in
securities in the United States securities or
financial markets, (b) any significant adverse change
in the trading prices for the Notes or in the
Company's other securities, or any financial markets,
(c) a material impairment in the trading market for
debt securities that could, in the sole
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<PAGE> 21
judgment of the Company, affect the Tender Offer or
the Solicitation, (d) a declaration of a banking
moratorium or any suspension of payments in respect
of banks in the United States, (e) any limitation
(whether or not mandatory) by any government or
governmental, administrative or regulatory authority
or agency, domestic or foreign, on, or other event
that, in the reasonable judgment of the Company,
might affect, the extension of credit by, banks or
other lending institutions, (f) a commencement of a
war or armed hostilities or other national or
international calamity directly or indirectly
involving the United States, or (g) in the case of
any of the foregoing existing on the date hereof, a
material acceleration or worsening thereof.
The conditions to the Tender Offer and the Solicitation are for the
sole benefit of the Company and may be asserted by the Company in its sole
discretion regardless of the circumstances giving rise to such conditions or may
be waived by the Company, in whole or in part, at any time and from time to
time, in its sole discretion, whether or not any other condition of the Tender
Offer and the Solicitation is also waived. Any determination by the Company
concerning the events described in this section shall be final and binding upon
all persons.
EXPIRATION DATE; EXTENSION; AMENDMENT; TERMINATION
The Tender Offer and the Solicitation will expire at 12:00 midnight,
New York City time, on April 10, 1997, unless extended by the Company. The
Company expressly reserves the right to extend the Tender Offer and the
Solicitation on a daily basis or for such period or periods as it may determine
in its sole discretion from time to time by giving written or oral notice to the
Depositary and by making a public announcement by press release (which shall
include disclosure of the approximate principal amount of Notes deposited to
date) to the Dow Jones News Service prior to 9:00 A.M., New York City time, the
next business day following the previously scheduled Expiration Date. During any
extension of the Tender Offer and the Solicitation, all Notes previously
tendered and not accepted for payment will remain subject to the Tender Offer
and the Solicitation and, subject to the terms and conditions of the Tender
Offer and the Solicitation, may be accepted for payment by the Company.
Notwithstanding anything herein to the contrary, the Company expressly
reserves the absolute right, in its sole discretion, to (a) waive any condition
to the Tender Offer and the Solicitation, (b) amend any term of the Tender Offer
and the Solicitation and (c) modify the Total Consideration. The Tender Offer
and the Solicitation may be modified independently of each other. If the Company
makes a material change in the terms of either the Tender Offer or the
Solicitation, the Company will disseminate additional Tender Offer and
Solicitation materials and will extend the Tender Offer and the Solicitation, in
each case to the extent required by applicable law. If the Company reduces the
principal amount of Notes subject to the Tender Offer or changes the cash
purchase price for the Notes subject to the Tender Offer and the Solicitation,
the Company will, to the extent required by applicable law, cause the Tender
Offer and the Solicitation to be extended,
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<PAGE> 22
if necessary, so that the Tender Offer and the Solicitation remain open at least
until the expiration of ten business days from the date that notice of such
decrease or change is first published, sent or given by the Company to Holders.
For purposes of the Tender Offer and the Solicitation, the term "business day"
means any day other than a Saturday, Sunday or federal holiday and consists of
the time period from 12:01 a.m. through 12:00 midnight, New York City time.
The Company expressly reserves the right, in its sole discretion, to
terminate the Tender Offer, including if any of the conditions applicable
thereto set forth above under "-- Conditions of the Tender Offer and the Consent
Solicitation" shall not have been satisfied or waived by the Company. Any such
termination will be followed promptly by public announcement thereof. The Tender
Offer and the Solicitation may not be terminated independently of each other. In
the event the Company shall terminate the Tender Offer, it shall give immediate
notice thereof to the Depositary, and all Notes theretofore tendered and not
accepted for payment and all Consents theretofore delivered shall be returned
promptly to the tendering and delivering holders thereof and the Supplemental
Indenture, if previously entered into, will terminate. See "-- Withdrawal of
Tenders and Revocation of Consents" below and "-- Conditions of the Tender Offer
and the Consent Solicitation" above.
ACCEPTANCE FOR PAYMENT AND PAYMENT FOR NOTES; ACCEPTANCE OF CONSENTS
Upon the terms and subject to the conditions of the Tender Offer
(including if the Tender Offer is extended or amended, the terms and conditions
of any such extension or amendment) and applicable law, the Company will
purchase, by accepting for payment, and will promptly pay for, all Notes validly
tendered pursuant to the Tender Offer and Solicitation (and not withdrawn, or if
withdrawn validly retendered) after the Acceptance Date, such payment to be made
by the deposit in immediately available funds by the Company promptly after the
Acceptance Date with the Depositary, which will act as agent for tendering
Holders for the purpose of receiving payment from the Company and transmitting
such payment to tendering Holders. Under no circumstances will interest be paid
by the Company by reason of any delay in making payment.
The Company expressly reserves the right, in its sole discretion and
subject to Rule 14e-l(c) under the Exchange Act, to delay acceptance for payment
of, or payment for, Notes in order to comply, in whole or in part, with any
applicable law. In all cases, payment by the Depositary to Holders or beneficial
owners of the consideration for Notes purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates
representing such Notes or timely confirmation of a book-entry transfer of such
Notes into the Depositary's account at DTC pursuant to the procedures set forth
herein, (ii) a properly completed and duly executed Consent and Letter of
Transmittal (or manually signed facsimile thereof) or a properly transmitted
Agent's Message (as defined below) and (iii) any other documents required by the
Consent and Letter of Transmittal.
For purposes of the Solicitation, Consents received by the Depositary
will be deemed to have been accepted if, as and when (i) the Company and the
Trustee execute the Supplemental Indenture on or promptly after 12:00 midnight,
New York City time, on the Consent Date, and (ii) the
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<PAGE> 23
Company has accepted the Notes for purchase and payment pursuant to the Tender
Offer. For purposes of the Tender Offer, tendered Notes will be deemed to have
been accepted for payment, if, as and when the Company gives oral or written
notice thereof to the Depositary.
If any tendered Notes are not purchased pursuant to the Tender Offer
for any reason, such Notes not purchased will be returned, without expense, to
the tendering Holder promptly (or, in the case of Notes tendered by book-entry
transfer, such Notes will be credited to the account maintained at DTC from
which such Notes were delivered) after the expiration or termination of the
Tender Offer.
Tendering Holders will not be obligated to pay brokerage fees or
commissions or, except as set forth in the Instructions to the Consent and
Letter of Transmittal, transfer taxes on the purchase of Notes pursuant to the
Tender Offer.
It is a condition precedent to the Company's obligation to purchase the
Notes pursuant to the Tender Offer, among other conditions, that the
Supplemental Indenture have been executed. It is a condition subsequent to
effectiveness of the Proposed Amendments contained in the Supplemental Indenture
that the Company accept for payment all the Notes validly tendered (and not
withdrawn) pursuant to the Tender Offer (in which event, the Company will be
obligated to promptly pay all the Total Consideration for the Notes so
accepted). See "-- Conditions of the Tender Offer and the Consent Solicitation."
PROCEDURES FOR TENDERING NOTES AND DELIVERING CONSENTS
THE TENDER OF NOTES PURSUANT TO THE TENDER OFFER AND IN ACCORDANCE WITH
THE PROCEDURES DESCRIBED BELOW WILL CONSTITUTE THE DELIVERY OF A CONSENT WITH
RESPECT TO THE NOTES TENDERED. HOLDERS WHO DESIRE TO TENDER THEIR NOTES PURSUANT
TO THE TENDER OFFER AND RECEIVE THE TOTAL CONSIDERATION ARE REQUIRED TO DELIVER
CONSENTS TO THE PROPOSED AMENDMENTS. HOLDERS MAY NOT DELIVER CONSENTS WITHOUT
VALIDLY TENDERING THEIR NOTES PURSUANT TO THE TENDER OFFER.
Tender of and Consent for Notes. The tender by a Holder of Notes (and
subsequent acceptance of such tender by the Company) pursuant to one of the
procedures set forth below will constitute a binding agreement between such
Holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Consent and Letter of Transmittal.
Only Holders are authorized to tender their Notes and consent to the
Proposed Amendments. The procedures by which the Notes may be tendered and
Consents given by beneficial owners that are not Holders will depend upon the
manner in which the Notes are held.
Tender of Notes Held in Physical Form. To effectively tender Notes held
in physical form pursuant to the Tender Offer, a properly completed Consent and
Letter of Transmittal (or a facsimile thereof duly executed by the Holder
thereof), and any other documents required by the Consent and Letter of
Transmittal, must be received by the Depositary at its address set forth on the
back cover
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<PAGE> 24
of this Statement (or delivery of Notes may be effected through the deposit of
Notes with DTC and making book-entry delivery as set forth below) on or prior to
the Consent Date or the Expiration Date, as applicable; provided, however, that
the tendering Holder may instead comply with the guaranteed delivery procedure
set forth below. Consents and Letters of Transmittal and Notes should be sent
only to the Depositary and should not be sent to the Company, the Dealer Manager
or the Trustee.
Tender of Notes Held Through a Custodian. To effectively tender Notes
that are held of record by a custodian bank, depositary, broker, trust company
or other nominee, the beneficial owner thereof must instruct such Holder to
tender the Notes on the beneficial owner's behalf. A Letter of Instructions is
included in the Solicitation materials provided with this Statement which may be
used by a beneficial owner in this process to effect the tender. Any beneficial
owner of Notes held of record by DTC or its nominee, through authority granted
by DTC, may direct the DTC participant through which such beneficial owner's
Notes are held in DTC to tender, on such beneficial owner's behalf.
Tender of Notes Held Through DTC. To effectively tender Notes that are
held through DTC, DTC participants should transmit their acceptance through ATOP
for which the transaction will be eligible and DTC will then edit and verify the
acceptance and send an Agent's Message to the Depositary for its acceptance.
Delivery of tendered Notes must be made to the Depositary pursuant to the
book-entry delivery procedures set forth below or the tendering DTC participant
must comply with the guaranteed delivery procedures set forth below.
THE METHOD OF DELIVERY OF NOTES AND CONSENTS AND LETTERS OF
TRANSMITTAL, ANY REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OF AN AGENT'S MESSAGE
TRANSMITTED THROUGH ATOP, IS AT THE ELECTION AND RISK OF THE PERSON TENDERING
NOTES AND DELIVERING CONSENTS AND LETTERS OF TRANSMITTAL AND, EXCEPT AS
OTHERWISE PROVIDED IN THE CONSENT AND LETTER OF TRANSMITTAL DELIVERY, WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE
OF THE CONSENT DATE OR EXPIRATION DATE, AS APPLICABLE, TO PERMIT DELIVERY TO THE
DEPOSITARY PRIOR TO SUCH DATE.
Except as provided below, unless the Notes being tendered are deposited
with the Depositary on or prior to the Consent Date or the Expiration Date, as
applicable (accompanied by a properly completed and duly executed Consent, as
applicable, and a Consent and Letter of Transmittal or a properly transmitted
Agent's Message), the Company may, at its option, treat such tender as defective
for purposes of the right to receive the Total Consideration. Payment for the
Notes will be made only against deposit of the tendered Notes and delivery of
all other required documents.
Book-Entry Delivery Procedures. The Depositary will establish accounts
with respect to the Notes at DTC for purposes of the Tender Offer within two
business days after the date of this Statement, and any financial institution
that is a participant in DTC may make book entry delivery
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<PAGE> 25
of the Notes by causing DTC to transfer such Notes into the Depositary's account
in accordance with DTC's procedures for such transfer. However, although
delivery of Notes may be effected through book-entry transfer into the
Depository's account at DTC, the Consent and Letter of Transmittal (or facsimile
thereof), with any required signature guarantees or an Agent's Message in
connection with a book-entry transfer, and any other required documents, must,
in any case, be transmitted to and received by the Depositary at one or more of
its addresses set forth on the back cover of this Statement on or prior to the
Consent Date or the Expiration Date, as applicable, or the guaranteed delivery
procedure described below must be complied with. Delivery of documents to DTC
does not constitute delivery to the Depositary. The confirmation of a book-entry
transfer into the Depositary's account at DTC as described above is referred to
herein as a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of the Book-Entry Confirmation,
which states that DTC has received an express acknowledgment from the
participants in DTC described in such Agent's Message, stating, the aggregate
principal amount of Notes which have been tendered by such participants pursuant
to the Tender Offer and for which Consents have thereby been delivered and that
such participants have received this Statement and the Consent and Letter of
Transmittal and agree to be bound by the terms of this Statement and the Consent
and Letter of Transmittal, and the Company may enforce such agreement against
such participants.
Signature Guarantees. Signatures on all Consents and Letters of
Transmittal must be guaranteed by a recognized participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Program or the Stock Exchange Medallion Program (a "Medallion
Signature Guarantor"), unless the Notes tendered thereby are tendered (i) by a
registered Holder of Notes (or by a participant in DTC whose name appears on a
security position listing as the owner of such Notes) who has not completed
either the box entitled "Special Delivery Instructions" or "Special Payment or
Issuance Instructions" on the Consent and Letter of Transmittal, or (ii) for the
account of a member firm of a registered national securities exchange, a member
of the National Association of Securities Dealers, Inc. ("NASD") or a commercial
bank or trust company having any office or correspondent in the United States
(each of the foregoing being referred to as an "Eligible Institution"). See
Instruction 1 of the Consent and Letter of Transmittal. If the Notes are
registered in the name of a person other than the signer of the Consent and
Letter of Transmittal or if Notes not accepted for payment or not tendered are
to be returned to a person other than the registered Holder, then the signatures
on the Consents and Letters of Transmittal accompanying the tendered Notes must
be guaranteed by a medallion Signature Guarantor as described above. See
Instructions 1 and 5 of the Consent and Letter of Transmittal.
Guaranteed Delivery. If a Holder desires to deliver Consents and tender
Notes pursuant to the Tender Offer and Solicitation and time will not permit the
Consents and Letter of Transmittal, certificates representing such Notes and all
other required documents to reach the Depositary, or the procedures for
book-entry transfer cannot be completed, on or prior to the Consent Date or the
Expiration Date, as applicable, such Holder may nevertheless deliver its
Consents, and such Notes may nevertheless be tendered, with the effect such
delivery and tender will be deemed to have been
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<PAGE> 26
received prior to the Consent Date or the Expiration Date, respectively, if all
the following conditions are satisfied.
(i) the tender is made by or through an Eligible
Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form
provided by the Company herewith, or an Agent's
Message with respect to guaranteed delivery is
received by the Depositary prior to 12:00 midnight,
New York City time, on the Consent Date or Expiration
Date, as applicable, as provided below; and
(iii) the certificates for the tendered Notes, in proper
form for transfer (or a Book Entry Confirmation of
the transfer of such Notes into the Depositary's
account at DTC as described above), together with a
Consent and Letter of Transmittal (or facsimile
thereof) properly completed and duly executed, with
any required signature guarantees and any other
documents required by the Consent and Letter
Transmittal or a properly transmitted Agent's
Message, are received by the Depositary within three
business days after the date of execution of the
Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be sent by hand delivery,
facsimile transmission or mail to the Depositary and must include a guarantee by
an Eligible Institution in the form set forth in the Notice of Guaranteed
Delivery.
Notwithstanding any other provision hereof, payment of the Total
Consideration for Notes tendered and accepted for payment pursuant to the Offer
will, in all cases, be made only after timely receipt (i.e., prior to 12:00
midnight, New York City time, on the Expiration Date) by the Depositary of the
tendered Notes (or Book-Entry Confirmation of the transfer of such Notes into
the Depositary's account at DTC as described above or a properly executed
Agent's Message for guaranteed delivery), and a Consent and Letter of
Transmittal (or facsimile thereof) with respect to such Notes, properly
completed and duly executed, with any required signature guarantees and any
other documents required by the Consent and Letter of Transmittal, or a properly
transmitted Agent's Message.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE COMPANY BY REASON
OF ANY DELAY IN MAKING PAYMENT TO ANY PERSON USING THE GUARANTEED DELIVERY
PROCEDURES. THE TOTAL CONSIDERATION FOR NOTES TENDERED PURSUANT TO THE
GUARANTEED DELIVERY PROCEDURES WILL BE THE SAME AS THAT FOR NOTES DELIVERED TO
THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE, EVEN IF THE NOTES TO BE
DELIVERED PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES ARE NOT SO DELIVERED TO
THE DEPOSITARY, AND THEREFORE PAYMENT BY THE DEPOSITARY ON ACCOUNT OF SUCH NOTES
IS NOT MADE, UNTIL AFTER THE PAYMENT DATE.
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<PAGE> 27
Backup U.S. Federal Income Tax Withholding. To prevent backup U.S.
federal income tax withholding each tendering Holder of Notes must provide the
Depositary with such Holder's correct taxpayer identification number and certify
that such Holder is not subject to backup U.S. federal income tax withholding by
completing the Substitute Form W 9 included in the Consent and Letter of
Transmittal.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tendered Notes and
Consents pursuant to any of the procedures described above will be determined by
the Company in the Company's sole discretion (whose determination shall be final
and binding). The Company reserves the absolute right to reject any or all
tenders of any Notes or Consents determined by it not to be in proper form or,
in the case of Notes, if the acceptance for payment, or payment for, such Notes
may, in the opinion of the Company's counsel, be unlawful. The Company also
reserves the absolute right, in its sole discretion, to waive any of the
conditions of the Tender Offer and Solicitation or any defect or irregularity in
any tender with respect to Notes or the giving of any Consents of any particular
Holder, whether or not similar defects or irregularities are waived in the case
of other Holders. The Company's interpretation of the terms and conditions of
the Tender Offer and Solicitation (including the Consent and Letter of
Transmittal and the Instructions thereto) will be final and binding. None of the
Company, the Depositary, the Dealer Manager, the Trustee or any other person
will be under any duty to give notification of any defects or irregularities in
tenders or consents or will incur any liability for failure to give any such
notification. If the Company waives its right to reject a defective tender of
Notes, the Holder will be entitled to the Total Consideration.
WITHDRAWAL OF TENDERS AND REVOCATION OF CONSENTS
Tenders of Notes may be withdrawn and the concurrent Consents may be
revoked at any time prior to 12:00 midnight, New York City time, on the Consent
Date but, subject to the exceptions indicated below, not thereafter if the
Company accepts the Notes for payment. A valid withdrawal of tendered Notes
effected prior to 12;00 midnight, New York City time, on the Consent Date will
constitute the concurrent valid revocation of such Holder's related Consent. In
order for a Holder to revoke a Consent. such Holder must withdraw the related
tendered Notes. Except as set forth below, tenders of Notes may not be
withdrawn, and Consents may not be revoked, after 12:00 midnight, New York City
time, on the Consent Date. In order for a Holder to revoke a Consent, such
Holder must withdraw the related tendered Notes. If the Company (i) reduces the
principal amount of Notes subject to the Tender Offer or (ii) changes the Total
Consideration, then previously tendered Notes may be validly withdrawn until the
expiration of ten business days after the date that notice of any such reduction
or change its first published, given or sent to Holders by the Company. In
addition, tenders of Notes may be validly withdrawn if the Offer is terminated
without any Notes being purchased thereunder. In the event of a termination of
the Offer, the Notes tendered pursuant to the Tender Offer will be promptly
returned to the tendering Holder.
For a withdrawal of a tender of Notes (and the concurrent revocation of
Consents) to be effective, a written telegraphic or facsimile transmission
notice of withdrawal must be received by
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<PAGE> 28
the Depositary prior to 12:00 midnight, New York City time, on the Consent Date
at its address set forth on the back cover of this Statement. Any such notice of
withdrawal must (i) specify the name of the person who tendered the Notes to be
withdrawn, (ii) contain the description of the Notes to be withdrawn and
identify the certificate number or numbers shown on the particular certificates
evidencing such Notes (unless such Notes were tendered by book-entry transfer)
and the aggregate principal amount represented by such Notes and (iii) be signed
by the Holder of such Notes in the same manner as the original signature on the
Consent and Letter of Transmittal by which such Notes were tendered (including
any required signature guarantees), if any, or be accompanied by (x) documents
of transfer sufficient to have the Trustee register the transfer of the Notes
into the name of the person withdrawing such Notes and (y) a properly completed
irrevocable proxy that authorized such person to effect such revocation on
behalf of such Holder. If the Notes to be withdrawn have been delivered or
otherwise identified to the Depositary, a signed notice of withdrawal is
effective immediately upon written or facsimile notice of withdrawal even if
physical release is not yet effected. Any Notes properly withdrawn will be
deemed to be not validly tendered for purposes of the Tender Offer, and will
constitute the concurrent valid revocation of such Holder's Consent.
Withdrawal of Notes (and the concurrent revocation of Consents) can
only be accomplished in accordance with the foregoing procedures.
All questions as to the validity (including time of receipt) of notices
of withdrawal and revocation of Consents will be determined by the Company, in
the Company's sole discretion (whose determination shall be final and binding).
None of the Company, the Depositary, the Dealer Manager, the Trustee or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or revocation of Consents, or incur
any liability for failure to give any such notification.
BACKUP WITHHOLDING
For a discussion of federal income tax considerations relating to
backup withholding, see "Certain Federal Income Tax Considerations--Backup
Withholding and Substitute Form W-9."
SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Company to pay the Total
Consideration in connection with the Tender Offer and Solicitation is estimated
to be approximately $120,500,000 (assuming 100% of the outstanding principal
amount of Notes is tendered prior to the Consent Date and is accepted for
payment). The Company intends to pay all or a portion of the aggregate
consideration due in connection with the Tender Offer and Solicitation from the
proceeds of a loan under PAXAR's Credit Agreement, which PAXAR will contribute
to the Company. The Company will use its own cash reserves to pay any remaining
balance of such consideration not financed through PAXAR.
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<PAGE> 29
DEALER MANAGER
The Company has retained BT Securities to act as Dealer Manager in
connection with the Tender Offer and the Solicitation. In its capacity as Dealer
Manager, BT Securities may contact holders regarding the Tender Offer and the
Solicitation and may request brokers, dealers, commercial banks, trust companies
and other nominees to forward the Statement and related materials to beneficial
owners of Notes. BT Securities will be paid customary fees for its services as
Dealer Manager and will be reimbursed for its reasonable out-of-pocket expenses
incurred in connection therewith (including the reasonable fees and
disbursements of counsel). The Company has also agreed to indemnify BT
Securities and its affiliates against certain liabilities under federal or state
law or otherwise caused by, relating to or arising out of the Tender Offer and
the Solicitation.
The Dealer Manager does not assume any responsibility for the accuracy
or completeness of the information concerning the Company or its affiliates
contained herein or for any failure by the Company to disclose events which may
have occurred and may affect the significance or accuracy of such information.
Unless otherwise indicated, all information contained in this Statement has been
supplied by the Company. The Company assumes full responsibility for the
accuracy or completeness of such information.
Requests for assistance or additional copies of this Statement and the
Consent and Letter of Transmittal should be directed to the Deal Manager, at its
address set forth on the back cover of this Statement.
DEPOSITARY
Fleet National Bank has been appointed Depositary for the Tender Offer
and the Consent Solicitation. All deliveries and correspondence sent to the
Depositary should be directed to its address set forth on the back cover of this
Statement.
FEES AND EXPENSES
In addition to the fees and expenses payable to the Dealer Manager, the
Company will pay the Depositary reasonable and customary fees for their services
(and will reimburse them for their reasonable out-of-pocket expenses in
connection therewith), and will pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them
in forwarding copies of this Statement and related documents to the beneficial
owners of the Notes and in handling or forwarding tenders for purchase. In
addition, the Company has agreed to indemnify the Depositary against certain
liabilities in connection with their services, including liabilities under the
federal securities laws.
The Company will pay all transfer taxes, if any, applicable to the
purchase of Notes pursuant to the Tender Offer. If, however, Notes for principal
amounts not accepted for tender are to be
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<PAGE> 30
delivered to, or are to be registered or issued in the name of, any person other
than the registered holder of the Notes, or if tendered Notes are to be
registered in the name of any person other than the person signing the Consent
and Letter of Transmittal, of if a transfer tax is imposed for any reason other
than the purchase of Notes pursuant to the Tender Offer, then the amount of any
such transfer tax (whether imposed on the registered holder or any other person)
will be payable by the tendering holder. If satisfactory evidence of payment of
such tax or exemption therefrom is not submitted, then the amount of such
transfer tax will be deducted from the Total Consideration otherwise payable to
such tendering holder.
MISCELLANEOUS
In connection with the Tender Offer and the Solicitation, directors,
officers and employees of the Company (who will not be specifically compensated
for such services) may solicit tenders and consents by use of the mails,
personally or by telephone, telegram or facsimile transmissions.
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<PAGE> 31
PROPOSED AMENDMENTS TO THE INDENTURE
PURPOSES AND EFFECTS
The primary purpose of the Proposed Amendments is to provide the
Company with greater operating and financial flexibility. The Supplemental
Indenture (in the form of an Amended and Restated Indenture) will be executed
promptly on or after the Consent Date after receipt of the Requisite
Supermajority Consents or, at the option of the Company, the Requisite Majority
Consents. However, none of the Proposed Amendments will become operative until
the Acceptance Date. Each Holder, by executing and delivering a Consent, will
consent to all of the Proposed Amendments.
PROPOSED AMENDMENTS
Set forth below is a summary description of the proposed modifications
to the Indenture for which the Consents of the holders are being solicited
hereby. This description is qualified by reference to the full provisions of the
existing Indenture and the provisions of the proposed Supplemental Indenture,
which may be obtained from the Company. The capitalized terms used herein and
not otherwise defined shall have the meanings ascribed to them in the form of
the Supplemental Indenture.
The Proposed Amendments are as follows:
Deletion of Restrictive Covenants
If the Company receives the Requisite Supermajority Consents or, at the
option of the Company, the Requisite Majority Consents, the Proposed Amendments
would delete in their entirety the following restrictive covenants and
references thereto from the Indenture as well as the events of default relating
to such restrictive covenants.
Section 4.03 - Limitations on Restricted Payments. Restricts the Company and
its Subsidiaries from making restricted payments, including
(i) dividends or distributions in respect of, or purchase or
redemption of, capital stock of the Company, or (ii)
repurchases, redemptions or retirements of capital stock of
the Company.
Section 4.04 - Limitation on Indebtedness. Prohibits the Company from
Incurring any Indebtedness other than certain Permitted
Indebtedness unless no Event of Default has occurred and is
continuing and certain financial ratios are satisfied.
Section 4.06 - Payment of Taxes and Other Claims. Requires the Company to pay
all material taxes and other governmental charges and all
lawful claims for
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<PAGE> 32
materials, labor and supplies that, if unpaid, might become a
Lien on the Company's property.
Section 4.12 - Limitation on Transactions with Affiliates and Related
Persons. Restricts the Company and its Restricted Subsidiaries
from engaging in transactions with Affiliates.
Section 4.13 - Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. Restricts the Company and its
Subsidiaries from permitting to exist any encumbrance or
restriction on the ability of any Subsidiary of the Company
(i) to pay dividends or make any other distributions in
respect of its Capital Stock or pay any Indebtedness or other
obligation owed to the Company or any other Subsidiary of the
Company, (ii) to make loans or advances to the Company or any
Subsidiary of the Company or (iii) to transfer any of its
property or assets to the Company.
Section 4.14 - Limitations on Liens. Restricts the Company and its
Subsidiaries from incurring any liens upon any of their
properties or assets except those in existence on the Issue
Date and Permitted Liens.
Section 4.17 - Limitation on Preferred Stock of Subsidiaries. Prohibits any
of the Company's Subsidiaries from issuing any Preferred
Stock.
In addition, if the Company receives the Requisite Supermajority
Consents prior to the Consent Date, the Proposed Amendments would delete in
their entirety the following restrictive covenants and references thereto from
the Indenture as well as the events of default relating to such restrictive
covenants.
Section 4.15 - Change of Control. Provides for repurchase of the Notes by the
Company upon the occurrence of a Change of Control.
Section 4.16 - Limitation on Sale of Assets. Restricts the Company and its
Subsidiaries from making certain asset sales.
If the Company receives the Requisite Supermajority Consents or, at the
option of the Company, the Requisite Majority Consents, the Proposed Amendments
would also modify the following provisions of the Indenture.
Amendments to Section 4.10
Section 4.10 ("SEC Reports") requires the Company to file certain
information with the Securities and Exchange Commission and to provide Holders
with certain information and reports.
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<PAGE> 33
The Proposed Amendments would delete all requirements in this section other than
the requirement that the Company provide the Trustee with certain financial
information concerning the Company.
Amendments to Section 5.01
Section 5.01 of the Indenture ("Merger, Consolidation, and Sale of
Assets") places limitations on the ability of the Company to consolidate or
merge with another company or sell, convey, assign, transfer, lease or otherwise
dispose of all or substantially all of its properties and assets. The Proposed
Amendments would delete all requirements in this section other than the
requirements that the Surviving Corporation be an entity organized under the
laws of the United States or any jurisdiction thereof and that the Company
deliver an Officer's Certificate and Opinion of Counsel to the effect that such
transaction complies with the Indenture.
Amendments to Section 6.01
The Proposed Amendments would modify the "Events of Default" to
eliminate (a) references to restrictive covenants which are being deleted, as
provided above, (b) the cross default provisions (Sections 6.01(4) and 6.01(5))
and (c) the bankruptcy provisions (Sections 6.01(b) and 6.01(7)).
Deletions of Definitions
The Proposed Amendments would delete certain definitions from the
Indenture when references to such definitions would be eliminated as a result of
the foregoing.
Conforming Amendments
The Proposed Amendments would modify certain other sections of the
Indenture to conform with the foregoing changes.
IF THE PROPOSED AMENDMENTS BECOME OPERATIVE, THE HOLDERS OF UNTENDERED
NOTES WILL BE BOUND THEREBY.
APPROVAL
Pursuant to the terms of the Indenture, the Proposed Amendments, other
than the deletion of Sections 4.15 and 4.16 of the Indenture, require the
written consent of the Holders of not less than a majority in aggregate
principal amount of the outstanding Notes; the deletion of Sections 4.15 and
4.16 require the written consent of Holders of not less than 75% in aggregate
principal amount of the outstanding Notes. In each instance, outstanding Notes
do not include any Notes owned at the time by the Company or any of its
affiliates.
The valid tender by a Holder of Notes pursuant to the Tender Offer will
be deemed to
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<PAGE> 34
constitute the giving of a Consent by such Holder to the Proposed Amendments
with respect to such Notes.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes certain federal income tax
consequences resulting from the sale of the Notes pursuant to the Tender Offer
and the adoption of the Proposed Amendments. This summary is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations
promulgated thereunder, Internal Revenue Service ("IRS") rulings, and judicial
decisions, all as in effect on the date hereof, and all of which are subject to
change, possibly with retroactive effect. This summary does not address all of
the federal income tax consequences that may be relevant to a Holder in light of
such Holder's particular tax situation or to certain classes of Holders subject
to special treatment under the federal income tax laws (for example, dealers in
securities, banks, insurance companies, subchapter S corporations, nonresident
aliens, foreign corporations, tax exempt entities, employee stock ownership
plans, individual retirement and other tax-deferred accounts, and persons who
hold the Notes as a hedge, who have otherwise hedged the risk of holding Notes,
who hold the Notes as part of a straddle with other investments, or who hold the
Notes in connection with a conversion transaction), nor does it address any
aspect of gift, estate, state, local or foreign taxation. This discussion is
directed at Holders who are United States persons and assumes that the Notes are
held as "capital assets" within the meaning of section 1221 of the Code.
HOLDERS OF NOTES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING
THE TAX CONSEQUENCES OF TENDERING OR FAILING TO TENDER NOTES, INCLUDING THE
APPLICATION AND EFFECT OF ANY GIFT, ESTATE, STATE, LOCAL, FOREIGN OR OTHER TAX
LAWS.
SALE OF NOTES PURSUANT TO THE TENDER OFFER
A sale of Notes by a Holder pursuant to the Tender Offer will be a
taxable transaction to such Holder for federal income tax purposes. A Holder
will generally recognize capital gain (subject to the market discount rules
discussed below) or loss on the sale of a Note in an amount equal to the
difference between (i) the amount of cash received for such Note, other than the
portion of such amount that is properly allocable to accrued but unpaid
interest, which will be taxed as ordinary income, and (ii) the Holder's
"adjusted tax basis" for such Note at the time of the sale. Such capital gain or
loss will be long-term if the Holder held the Note for more than one year at the
time of such sale. Generally, a Holder's adjusted tax basis for a Note will be
equal to the cost of the Note to such Holder, less principal payments received
on the Note. If applicable, a Holder's tax basis in a Note also would be
increased by any market discount previously included in income by such Holder
pursuant to an election to include market discount in gross income currently as
it accrues, and would be reduced by the accrual of amortizable bond premium
which the Holder has previously elected to
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<PAGE> 35
deduct from gross income on an annual basis. Certain limitations exist on the
deduction of capital losses by both corporations and individual taxpayers. If a
portion of the cash received by a Holder in a sale pursuant to the Tender Offer
is properly treated as a separate fee for consenting to the Proposed Amendments,
it is possible that such amount would be taxable as ordinary income to such
Holder (rather than as sale proceeds, discussed above). Tendering Holders of
Notes should consult their own tax advisors with respect to the tax consequences
to them of the receipt of cash in a sale pursuant to the Tender Offer.
An exception to the capital gain treatment described above may apply to
a Holder who purchased a Note at a "market discount". Subject to a statutory de
minimis exception, market discount is the excess of the "face amount" of such
Note over the Holder's tax basis in such Note immediately after its acquisition
by such Holder. In general, unless the Holder has elected to include market
discount in income currently as it accrues, any gain realized by a Holder on the
sale of a Note having market discount in excess of a de minimis amount will be
treated as ordinary income to the extent of the market discount that has accrued
(on a straight line basis or, at the election of the Holder, on a constant
interest basis) while such Note was held by the Holder.
TAX CONSIDERATIONS FOR NON-TENDERING HOLDERS
The federal income tax consequences to non-tendering Holders of the
adoption of the Proposed Amendments will depend on whether or not, under IRS
regulations, the adoption of the Proposed Amendments results in a "significant
modification" of the Notes. If the adoption of the Proposed Amendments does not
result in a significant modification of the Notes, a non-tendering Holder should
not recognize any income, gain, or loss for United States federal income tax
purposes as a result of the adoption of the Proposed Amendments.
The Company does not believe that the adoption of the Proposed
Amendments will result in a significant modification of the Notes. Consequently,
a non-tendering Holder should not recognize any income, gain, or loss for United
States federal income tax purposes as a result of the adoption of the Proposed
Amendments.
Notwithstanding the above, the Internal Revenue Service could assert
that the adoption of the Proposed Amendments resulted in a significant
modification of the Notes. If it were determined that a significant modification
of the Notes occurred as a result of the adoption of the Proposed Amendments,
Holders who retain their Notes may be treated as having exchanged their Notes
for new Notes (the "Modified Notes") in a taxable transaction. In such a deemed
exchange, a Holder would recognize taxable gain or loss equal to the difference
between the amount realized by the Holder in the deemed exchange and the
Holder's tax basis in the Notes. The Holder's amount realized in the deemed
exchange would be the fair market value of the Modified Notes at the time the
deemed exchange occurred. All or a portion of any recognized gain would be
subject to ordinary income treatment if the Holder acquired the Notes at a
market discount. Subject to a statutory de minimis exception, if the fair market
value of the Notes at the time of the deemed exchange were less than their
stated redemption price at maturity, the Modified Notes would have original
issue discount
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<PAGE> 36
("OID") for United States federal income tax purposes, and each Holder of a
Modified Note would be required to include OID in income as it accrued under a
constant yield method in advance of cash payments attributable to such income
(regardless of whether the Holder was a cash or accrual basis taxpayer).
Finally, the Holder would have a new holding period for the modified Notes that
did not include such Holder's holding period for the Notes.
INFORMATION REPORTING
Information statements will be provided to the IRS and to Holders whose
Notes are sold pursuant to the Tender Offer reporting the payment of the
consideration for the Notes (except with respect to Holders that are exempt from
the information reporting rules, such as corporations).
BACKUP WITHHOLDING AND SUBSTITUTE FORM W-9
Certain Holders whose Notes are accepted for payment are required to
provide the Depositary (as payer) with such Holder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 (included as part of the
Consent and Letter of Transmittal). If the Holder is an individual, the TIN is
his or her social security number. If the Depositary is not provided with the
correct TIN, the Holder may be subject to a $50 penalty imposed by the IRS. In
addition, payments that are made to such Holder may be subject to backup
withholding. Certain Holders (including, among others, corporations) are not
subject to these backup withholding and reporting requirements. If backup
withholding applies, the Depositary is required to withhold 31% of any payment
made to the Holder. Backup withholding is not an additional federal income tax.
Rather, the federal income tax liability of persons subject to backup
withholding will be offset by the amount of tax withheld. If backup withholding
results in an overpayment of federal income taxes, a refund may be obtained from
the IRS provided the required information is furnished.
To prevent backup withholding, the Holder or other payee is required to
complete the Substitute Form W-9 on the Consent and Letter of Transmittal
certifying that the TIN provided on such form is correct and that such Holder or
other payee is not subject to backup withholding.
THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
DOES NOT CONSIDER THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY HOLDER'S
SITUATION OR STATUS. THE SUMMARY IS BASED ON THE PROVISIONS OF THE CODE,
REGULATIONS, PROPOSED REGULATIONS, RULINGS AND JUDICIAL DECISIONS NOW IN EFFECT,
ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY ON A RETROACTIVE BASIS. HOLDERS OF
NOTES (INCLUDING HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES) SHOULD CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM, INCLUDING
THE TAX CONSEQUENCES UNDER STATE. LOCAL, FOREIGN AND OTHER LAWS, OF THE SALE OF
THE NOTES AND THE ADOPTION OF THE PROPOSED AMENDMENTS.
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<PAGE> 37
MISCELLANEOUS
The Tender Offer and the Solicitation is not being made to (nor will
tenders of Notes be accepted from or on behalf of) Holders in any jurisdiction
in which the making or acceptance of the Tender Offer and the Solicitation would
not be in compliance with the laws of such jurisdiction. However, the Company,
in its sole discretion, may take such action as it may deem necessary to make
the Tender Offer and the Solicitation in any such jurisdiction, and may extend
the Tender Offer and the Solicitation to Holders of Notes in such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY WHICH IS NOT CONTAINED IN THIS STATEMENT
OR IN THE CONSENT AND LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON.
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<PAGE> 38
SCHEDULE I
YLD = Tender Offer Yield as a decimal number.
CPN = the normal rate of interest payable on a Note
expressed as a decimal number.
N = the number of semi-annual interest payments, based on
the Earliest Redemption Date, from (but not
including) the expected Payment Date to (and
including) the Earliest Redemption Date.
S = the number of days from and including the semi-annual
interest payment date immediately preceding the
expected Payment Date up to, but not including, the
expected Payment Date. The number of days is computed
using the 30/360 day-count method.
exp = Exponentiate. The term to the left of "exp" is raised
to the power indicated by the term to the right of
"exp".
rv = the assumed redemption amount based on the Earliest
Redemption Date, for each Note per $1,000 principal
amount of Note (as rounded to the nearest one
hundredth of one percent).
<TABLE>
<S> <C>
Purchase Price = rv N 1,000(CPN/2)
--------------------------- + (Sigma) [ ------------------------- ] - 1,000 (CPN/2)(S/180)
(1 + YLD/2) exp ( N- S/180) k = 1 (1 + YLD/2) exp (k - S/180)
</TABLE>
Accrued and
Unpaid Interest = 1,000 (CPN/2)(S/180)
Total
Consideration = Purchase Price + Accrued and Unpaid Interest
<PAGE> 39
SCHEDULE II
This Schedule provides a hypothetical illustration of the Purchase
Price of the 12-1/2% Notes due July 1, 2003 of Monarch Marking Systems, Inc.,
based on hypothetical data, and should, therefore, be used solely for the
purpose of obtaining an understanding of the calculation of the Purchase Price,
as quoted at hypothetical rates and times, and should not be used or relied upon
for any other purpose. Since the Purchase Price per $1,000 principal amount of
the Notes is less than $1,167.50 in this example, the Total Consideration would
be determined by using a Purchase Price of $1,167.50.
12-1/2% NOTES DUE JULY 1, 2003
Earliest Redemption Date: July 1, 1999
Reference Security: 6-3/4% U.S. Treasury Note due June 30, 1999
as currently displayed on the Bloomberg
Current Pricing Monitor on "Page PX5".
Fixed Spread: .75 (75 basis points)
Example:
Assumed Price Determination
Date and Time: 2:00 P.M. New York City time, March 12, 1997
Assume Payment Date: April 15, 1997
Assumed Reference Security = 6.122%
Yield as of Assumed Price
Determination Date and
Time
YLD = 6.872%
CPN = 12.5%
N = 5
S = 103
Purchase Price: = $1,167.34
Accrued and Unpaid Interest = $ 35.76
Total Consideration = $1,203.10
<PAGE> 40
Facsimile copies of the Consent and Letter of Transmittal, properly completed
and validly executed, will be accepted. Consents and Letters of Transmittal,
certificates for Notes and any other required documents should be sent or
delivered by each Holder of Notes or such Holder's broker, dealer, commercial
bank or trust company to the Depositary at one of its addresses set forth below.
The Depositary for the Tender Officer and the Consent Solicitation is: Fleet
National Bank
<TABLE>
<S> <C> <C>
By Registered or Certified Mail By Hand By Overnight Courier
Fleet National Bank Fleet National Bank Fleet National Bank
Corporate Trust Operations Corporate Trust Operations Corporate Trust Operations
CT OP TO6D Customer Service Window, CT OP TO6D
P.O. Box 1440 5th Floor 1 Talcolt Plaza
Hartford, Connecticut 06143 1 Talcott Plaza Hartford, Connecticut 06103
Attention: Patricia Williams Hartford, Connecticut 06106 Attention: Patricia Williams
Attention: Patricia Williams
By Facsimile Transmission
(860) 986-7908
Attention: Patricia Williams
Confirm by Telephone:
(860) 986-1271
</TABLE>
Requests for assistance or additional copies of this Statement, and the
Consent and Letter of Transmittal, should be directed to the Dealer Manager. You
may also contact your broker, dealer, commercial bank, trust company or nominee
for assistance concerning the Offer.
The Dealer Manager for the Tender Offer and the Solicitation is:
BT Securities Corporation
130 Liberty Street, 30th Floor
New York, NY 10006
212-775-2467
THE DATE OF THIS OFFER TO PURCHASE AND CONSENT SOLICITATION IS MARCH 13, 1997.
<PAGE> 1
Exhibit 99.2
AMENDMENT NO. 1 TO OFFER TO
PURCHASE AND CONSENT SOLICITATION STATEMENT
OF MONARCH MARKING SYSTEMS, INC.
Offer to Purchase for Cash
All Outstanding 12-1/2% Senior Notes due July 1, 2003
THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997
UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE").
HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE
EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW).
TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO
12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT,
SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON
THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS
RELEASE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS
REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE
OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A
MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING.
Amendment No. 1 to the Offer to Purchase and Consent Solicitation
Statement of Monarch Marking Systems, Inc., dated as of March 13, 1997 (the
"Statement").
Subject to the terms and conditions set forth in the Statement, Monarch
Marking Systems, Inc., a Delaware corporation (the "Company"), has offered (the
"Tender Offer") to purchase for cash all of its outstanding 12-1/2% Senior Notes
due July 1, 2003 (the "Notes") and has solicited consents to the adoption of the
proposed amendments to the indenture, dated as of June 29, 1995, between the
Company, as Issuer, and Fleet National Bank, as Trustee, pursuant to which the
Notes were issued.
The Company wishes to amend the Tender Offer as set forth below.
Reference is made to the "Expiration Date; Extension; Amendment; Termination"
provision of the Statement in which the Company expressly reserved the right to
amend any term of the Tender Offer and the Solicitation and modify the Total
Consideration.
Capitalized terms not otherwise defined herein have the meanings set
forth in the Statement.
1. The consideration to be paid pursuant to the Tender Offer and
Solicitation as set forth in the Statement is hereby amended and restated in its
entirety to read as follows:
<PAGE> 2
The consideration for each $1,000 principal amount of Notes
tendered pursuant to the Tender Offer and Solicitation shall
be equal to (i) the greater of (A) $1,167.50 or (B) the price
(calculated as described on Schedule I to this Statement)
equal to the present value of the Notes on the Payment Date
(as defined below) determined on the basis of a yield (the
"Tender Offer Yield") to June 30, 1999, which is the day
immediately preceding the earliest redemption date of the
Notes (the "Earliest Redemption Date"), equal to the sum of
(x) the yield on the 6-3/4% U.S. Treasury Note due June 30,
1999 (the "Reference Security"), as calculated by the Dealer
Manager in accordance with standard market practice, based on
the bid price for such Reference Security as of 2:00 P.M., New
York City time, on March 26, 1997, the tenth business day
immediately preceding the scheduled Expiration Date (the
"Price Determination Date"), as currently displayed on the
Bloomberg Government Pricing Monitor on "Page PX5" or any
recognized quotation source selected by the Dealer Manager in
its sole discretion if the Bloomberg Government Pricing
Monitor is not available, plus (y) 75 basis points (such price
being rounded to the nearest cent per $1,000 principal amount
of Notes), plus (ii) accrued and unpaid interest, if any, up
to, but not including, the Payment Date (the consideration
referred to in clauses (i) and (ii) being hereafter referred
to as the "Total Consideration"), minus (iii) $20.00 per Note,
which is equal to the Consent Payment, as defined below (the
Total Consideration minus the Consent Payment being hereafter
referred to as the "Tender Offer Consideration"), payable on
the date that the Notes are accepted for payment pursuant to
the Tender Offer and Solicitation (the "Acceptance Date").
Pursuant to the terms of the Indenture, the earliest date upon
which the Notes may be redeemed is July 1, 1999, at a price
equal to 106.250% of the principal amount of the Notes. In the
event the Tender Offer and Solicitation is extended for any
period longer than ten business days from the previously
scheduled Expiration Date, a new Price Determination Date will
be established, which will be the tenth business day
immediately preceding the Expiration Date as so extended.
In conjunction with the Tender Offer, the Company hereby
solicits (the "Solicitation") consents to the adoption of the
proposed amendments to the indenture, dated as of June 29,
1995, between the Company, as Issuer, and Fleet National Bank
(formerly known as Shawmut Bank Connecticut, National
Association), as Trustee (the "Trustee"), pursuant to which
the Notes were issued (as supplemented through the date
hereof, the "Indenture"). Subject to the terms and conditions
set forth in this Statement and the Consent and Letter of
Transmittal, the Company hereby offers to pay to each holder
of Notes (a "Holder") who validly tenders Notes and thereby
delivers Consents to the Proposed Amendments on or prior to
12:00 midnight, New York City time, on the Expiration Date, an
amount in cash equal to 2% of the principal amount ($20 per
$1,000 principal amount) of the Notes for which Consents have
been validly delivered and not validly revoked (the "Consent
Payment"), with such payment to be made promptly following the
Acceptance Date if, but only if, the Notes are
2
<PAGE> 3
accepted for payment pursuant to the terms of the Offer. If a
Holder's Notes are not properly tendered pursuant to the Offer
on or prior to 12:00 midnight, New York City time on the
Expiration Date (and Consents thereby delivered with respect
to such Notes), such Holder will not receive the Consent
Payment, even though the Proposed Amendments will be effective
as to all Notes that are not purchased in the Offer. Adoption
of the Proposed Amendments may have adverse consequences for
Holders who elect not to tender Notes in the Offer. See
"Certain Significant Considerations" and "Proposed Amendments
to the Indenture."
2. The "Sale of Notes Pursuant to the Tender Offer" section of the
"Certain Federal Income Tax Considerations" provision of the Statement is hereby
amended and restated in its entirety to read as follows:
SALE OF NOTES PURSUANT TO THE TENDER OFFER
A sale of Notes by a Holder pursuant to the Tender Offer will
be a taxable transaction to such Holder for federal income tax purposes. A
Holder will generally recognize capital gain (subject to the market discount
rules discussed below) or loss on the sale of a Note in an amount equal to the
difference between (i) the amount of cash received for such Note, other than the
portion of such amount that is properly allocable to accrued but unpaid
interest, which will be taxed as ordinary income, and (ii) the Holder's
"adjusted tax basis" for such Note at the time of the sale. Such capital gain or
loss will be long-term if the Holder held the Note for more than one year at the
time of such sale. Generally, a Holder's adjusted tax basis for a Note will be
equal to the cost of the Note to such Holder, less principal payments received
on the Note. If applicable, a Holder's tax basis in a Note also would be
increased by any market discount previously included in income by such Holder
pursuant to an election to include market discount in gross income currently as
it accrues, and would be reduced by the accrual of amortizable bond premium
which the Holder has previously elected to deduct from gross income on an annual
basis. Certain limitations exist on the deduction of capital losses by both
corporations and individual tax payers. Tendering Holders of Notes should
consult their own tax advisors with respect to the tax consequences to them of
the receipt of cash in a sale pursuant to the Tender Offer.
An exception to the capital gain treatment described above may apply to
a Holder who purchased a Note at a "market discount." Subject to a statutory de
minimis exception, market discount is the excess of the "face amount" of such
Note over the Holder's tax basis in such Note immediately after its acquisition
by such Holder. In general, unless the Holder has elected to include market
discount in income currently as it accrues, any gain realized by a Holder on the
sale of a Note having market discount in excess of a de minimis amount will be
treated as ordinary income to the extent of the market discount that has accrued
(on a straight line basis or, at the election of the Holder, on a constant
interest basis) while such Note was held by the Holder.
3
<PAGE> 4
Consent Payment
Although there is no legal authority directly on point, the Consent
Payment may be treated as either (i) additional consideration in exchange for
the tendered Notes, in which case such amounts would be taken into account in
determining the amount of capital gain or loss on the exchange (see "Sale of
Notes Pursuant to the Tender Offer" above) or (ii) separate consideration for
consenting to the Proposed Amendments.
In the event that the Consent Payment is treated as separate
consideration for consenting to the Proposed Amendments, Holders who receive the
Consent Payment might be treated as receiving either (i) additional interest
with respect to the Notes or (ii) a fee for consenting to certain transactions
or waiving certain rights. In either case, the Consent Payment would be taxable
to such Holders as ordinary income in an amount equal to the cash received. The
Company intends to treat the Consent Payment as a fee for consenting to certain
transactions or waiving certain rights.
3. Except as otherwise amended by this Amendment No. 1 to the
Statement, the Statement shall remain in full force and effect.
NEITHER THE COMPANY NOR THE DEALER MANAGER MAKE ANY RECOMMENDATION AS
TO WHETHER OR NOT HOLDERS SHOULD TENDER NOTES IN RESPONSE TO THE TENDER OFFER OR
PROVIDE CONSENTS TO THE PROPOSED AMENDMENTS IN RESPONSE TO THE SOLICITATION.
Any questions or requests for assistance may be directed to
the Dealer Manager at its address and telephone number set forth below. Requests
for additional copies of this Amendment No. 1 to the Statement, the Statement,
the Consent and Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Dealer Manager. Beneficial owners may also contact their
broker, dealer, commercial bank or trust company for assistance concerning the
Tender Offer and the Solicitation.
The Dealer Manager for the Tender Offer and the Solicitation is:
BT Securities Corporation
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
(212) 775-2467
Attn: High Yield Capital Markets
The date of this Amendment No. 1 to the Offer to Purchase and Consent
Solicitation Statement of Monarch Marking Systems, Inc. is March 20, 1997.
4
<PAGE> 1
Exhibit 99.3
AMENDMENT NO. 2 TO OFFER TO
PURCHASE AND CONSENT SOLICITATION STATEMENT
OF MONARCH MARKING SYSTEMS, INC.
Offer to Purchase for Cash
All Outstanding 12-1/2% Senior Notes due July 1, 2003
THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997
UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE").
HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE
EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW).
TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO
12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT,
SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON
THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS
RELEASE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS
REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE
OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A
MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING.
Amendment No. 2 to the Offer to Purchase and Consent Solicitation
Statement of Monarch Marking Systems, Inc., dated as of March 13, 1997 (the
"Statement").
Subject to the terms and conditions set forth in the Statement, Monarch
Marking Systems, Inc., a Delaware corporation (the "Company"), has offered (the
"Tender Offer") to purchase for cash all of its outstanding 12-1/2% Senior Notes
due July 1, 2003 (the "Notes") and has solicited consents to the adoption of the
proposed amendments to the indenture, dated as of June 29, 1995, between the
Company, as Issuer, and Fleet National Bank, as Trustee, pursuant to which the
Notes were issued.
The Company wishes to amend the Tender Offer as set forth below.
Reference is made to the "Expiration Date; Extension; Amendment; Termination"
provision of the Statement in which the Company expressly reserved the right to
amend any term of the Tender Offer and the Solicitation and modify the Total
Consideration.
Capitalized terms not otherwise defined herein have the meanings set
forth in the Statement.
1. The consideration to be paid pursuant to the Tender Offer and
Solicitation as set forth in the Statement is hereby amended and restated in its
entirety to read as follows:
The consideration for each $1,000 principal amount of Notes
tendered pursuant to the Tender Offer and Solicitation shall
be equal to (i) the greater of (A) $1,167.50 or
<PAGE> 2
(B) the price (calculated as described on Schedule I to this
Statement) equal to the present value of the Notes on the
Payment Date (as defined below) determined on the basis of a
yield (the "Tender Offer Yield") to June 30, 1999, which is
the day immediately preceding the earliest redemption date of
the Notes (the "Earliest Redemption Date"), equal to the sum
of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30,
1999 (the "Reference Security"), as calculated by the Dealer
Manager in accordance with standard market practice, based on
the bid price for such Reference Security as of 2:00 P.M., New
York City time, on March 26, 1997, the tenth business day
immediately preceding the scheduled Expiration Date (the
"Price Determination Date"), as currently displayed on the
Bloomberg Government Pricing Monitor on "Page PX5" or any
recognized quotation source selected by the Dealer Manager in
its sole discretion if the Bloomberg Government Pricing
Monitor is not available, plus (y) 75 basis points (such price
being rounded to the nearest cent per $1,000 principal amount
of Notes), plus (ii) accrued and unpaid interest, if any, up
to, but not including, the Payment Date (the consideration
referred to in clauses (i) and (ii) being hereafter referred
to as the "Total Consideration"), minus (iii) $30.00 per Note,
which is equal to the Consent Payment, as defined below (the
Total Consideration minus the Consent Payment being hereafter
referred to as the "Tender Offer Consideration"), payable on
the date that the Notes are accepted for payment pursuant to
the Tender Offer and Solicitation (the "Acceptance Date").
Pursuant to the terms of the Indenture, the earliest date upon
which the Notes may be redeemed is July 1, 1999, at a price
equal to 106.250% of the principal amount of the Notes. In the
event the Tender Offer and Solicitation is extended for any
period longer than ten business days from the previously
scheduled Expiration Date, a new Price Determination Date will
be established, which will be the tenth business day
immediately preceding the Expiration Date as so extended.
In conjunction with the Tender Offer, the Company hereby
solicits (the "Solicitation") consents to the adoption of the
proposed amendments to the indenture, dated as of June 29,
1995, between the Company, as Issuer, and Fleet National Bank
(formerly known as Shawmut Bank Connecticut, National
Association), as Trustee (the "Trustee"), pursuant to which
the Notes were issued (as supplemented through the date
hereof, the "Indenture"). Subject to the terms and conditions
set forth in this Statement and the Consent and Letter of
Transmittal, the Company hereby offers to pay to each holder
of Notes (a "Holder") who validly tenders Notes and thereby
delivers Consents to the Proposed Amendments on or prior to
12:00 midnight, New York City time, on the Expiration Date, an
amount in cash equal to 3% of the principal amount ($30 per
$1,000 principal amount) of the Notes for which Consents have
been validly delivered and not validly revoked (the "Consent
Payment"), with such payment to be made promptly following the
Acceptance Date if, but only if, the Notes are accepted for
payment pursuant to the terms of the Offer. If a Holder's
Notes are not properly tendered pursuant to the Offer on or
prior to 12:00 midnight, New York City time on the Expiration
Date (and Consents thereby delivered with respect to such
Notes), such Holder will not receive
2
<PAGE> 3
the Consent Payment, even though the Proposed Amendments will
be effective as to all Notes that are not purchased in the
Offer. Adoption of the Proposed Amendments may have adverse
consequences for Holders who elect not to tender Notes in the
Offer. See "Certain Significant Considerations" and "Proposed
Amendments to the Indenture."
2. The "Sale of Notes Pursuant to the Tender Offer" section of the
"Certain Federal Income Tax Considerations" provision of the Statement is hereby
amended and restated in its entirety to read as follows:
SALE OF NOTES PURSUANT TO THE TENDER OFFER
A sale of Notes by a Holder pursuant to the Tender Offer will
be a taxable transaction to such Holder for federal income tax purposes. A
Holder will generally recognize capital gain (subject to the market discount
rules discussed below) or loss on the sale of a Note in an amount equal to the
difference between (i) the amount of cash received for such Note, other than the
portion of such amount that is properly allocable to accrued but unpaid
interest, which will be taxed as ordinary income, and (ii) the Holder's
"adjusted tax basis" for such Note at the time of the sale. Such capital gain or
loss will be long-term if the Holder held the Note for more than one year at the
time of such sale. Generally, a Holder's adjusted tax basis for a Note will be
equal to the cost of the Note to such Holder, less principal payments received
on the Note. If applicable, a Holder's tax basis in a Note also would be
increased by any market discount previously included in income by such Holder
pursuant to an election to include market discount in gross income currently as
it accrues, and would be reduced by the accrual of amortizable bond premium
which the Holder has previously elected to deduct from gross income on an annual
basis. Certain limitations exist on the deduction of capital losses by both
corporations and individual tax payers. Tendering Holders of Notes should
consult their own tax advisors with respect to the tax consequences to them of
the receipt of cash in a sale pursuant to the Tender Offer.
An exception to the capital gain treatment described above may apply to
a Holder who purchased a Note at a "market discount." Subject to a statutory de
minimis exception, market discount is the excess of the "face amount" of such
Note over the Holder's tax basis in such Note immediately after its acquisition
by such Holder. In general, unless the Holder has elected to include market
discount in income currently as it accrues, any gain realized by a Holder on the
sale of a Note having market discount in excess of a de minimis amount will be
treated as ordinary income to the extent of the market discount that has accrued
(on a straight line basis or, at the election of the Holder, on a constant
interest basis) while such Note was held by the Holder.
Consent Payment
Although there is no legal authority directly on point, the Consent
Payment may be treated as either (i) additional consideration in exchange for
the tendered Notes, in which case such amounts would be taken into account in
determining the amount of capital gain or loss on the exchange (see
3
<PAGE> 4
"Sale of Notes Pursuant to the Tender Offer" above) or (ii) separate
consideration for consenting to the Proposed Amendments.
In the event that the Consent Payment is treated as separate
consideration for consenting to the Proposed Amendments, Holders who receive the
Consent Payment might be treated as receiving either (i) additional interest
with respect to the Notes or (ii) a fee for consenting to certain transactions
or waiving certain rights. In either case, the Consent Payment would be taxable
to such Holders as ordinary income in an amount equal to the cash received. The
Company intends to treat the Consent Payment as a fee for consenting to certain
transactions or waiving certain rights.
3. Except as otherwise amended by this Amendment No. 2 to the
Statement, the Statement shall remain in full force and effect.
NEITHER THE COMPANY NOR THE DEALER MANAGER MAKE ANY RECOMMENDATION AS
TO WHETHER OR NOT HOLDERS SHOULD TENDER NOTES IN RESPONSE TO THE TENDER OFFER OR
PROVIDE CONSENTS TO THE PROPOSED AMENDMENTS IN RESPONSE TO THE SOLICITATION.
Any questions or requests for assistance may be directed to
the Dealer Manager at its address and telephone number set forth below. Requests
for additional copies of this Amendment No. 2 to the Statement, Amendment No. 1
to the Statement, the Statement, the Consent and Letter of Transmittal and the
Notice of Guaranteed Delivery may be directed to the Dealer Manager. Beneficial
owners may also contact their broker, dealer, commercial bank or trust company
for assistance concerning the Tender Offer and the Solicitation.
The Dealer Manager for the Tender Offer and the Solicitation is:
BT Securities Corporation
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
(212) 775-2467
Attn: High Yield Capital Markets
The date of this Amendment No. 2 to the Offer to Purchase and Consent
Solicitation Statement of Monarch Marking Systems, Inc. is March 25, 1997.
4
<PAGE> 1
Exhibit 99.4
CUSIP 608908-AA-7
CONSENT AND LETTER OF TRANSMITTAL
TO TENDER AND TO GIVE CONSENT TO CERTAIN PROPOSED AMENDMENTS
WITH RESPECT TO THE
12-1/2% SENIOR NOTES DUE JULY 1, 2003
OF
MONARCH MARKING SYSTEMS, INC.
PURSUANT TO THE OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT
DATED MARCH 13, 1997
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997
UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE").
HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE
EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW).
TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO
12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT,
SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON
THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS
RELESE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS
REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE
OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A
MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING.
The Depositary for the Offer to
Purchase and Consent Solicitation:
Fleet National Bank
<TABLE>
<S> <C> <C>
By Resigstered or Certified Mail By Hand By Overnight Courier
Fleet National Bank Fleet National Bank Fleet National Bank
Corporate Trust Operations Corporate Trust Operations Corporate Trust Operations
CT OP TO6D Customer Service Window, 5th Floor CT OP TO6D
P.O. Box 1440 1 Talcott Plaza 1 Talcolt Plaza
Hartford, Connecticut 06143 Hartford, Connecticut 06106 Hartford, Connecticut 06103
Attention: Patricia Williams Attention: Patricia Williams Attention: Patricia Williams
</TABLE>
By Facsimile Transmission
(860) 986-7908
Attention: Patricia Williams
Confirm by Telephone:
(860) 986-1271
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE THE TENDER OFFER CONSIDERATION
PURSUANT TO THE OFFER MUST VALIDLY TENDER (OR RETENDER IF SUCH HOLDERS HAVE
PRIOR TO THE CONSENT DATE PREVIOUSLY WITHDRAWN OR REVOKED) THEIR NOTES TO THE
DEPOSITARY PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE.
TENDERS MAY NOT BE WITHDRAWN AND CONSENTS MAY NOT BE REVOKED AT ANY TIME
FOLLOWING 12:00 MIDNIGHT NEW YORK CITY TIME ON THE CONSENT DATE.
<PAGE> 2
Delivery of this Consent and Letter of Transmittal to an address, or
transmission of instructions via facsimile other than as set forth above will
not constitute a valid delivery. The instructions accompanying this Consent and
Letter of Transmittal should be read carefully before this Consent and Letter of
Transmittal is completed.
This Consent and Letter of Transmittal should be used only to tender the
Notes and to thereby consent (the "Consent") to the adoption of the proposed
amendments (the "Proposed Amendments") to (i) the Indenture dated as of June 29,
1995, pursuant to which the Notes were issued (the "Indenture") as described in
the Offer to Purchase and Consent Solicitation Statement of Monarch Marking
Systems, Inc., dated March 13, 1997 (as the same may be amended or supplemented
from time to time, the "Statement").
HOLDERS WHO TENDER NOTES ARE REQUIRED TO CONSENT TO ALL OF THE PROPOSED
AMENDMENTS. THE COMPLETION, EXECUTION AND DELIVERY OF THIS CONSENT AND LETTER OF
TRANSMITTAL WILL BE DEEMED TO CONSTITUTE THE CONSENT OF THE TENDERING HOLDER TO
THE PROPOSED AMENDMENTS. HOLDERS OF NOTES MAY NOT TENDER NOTES WITHOUT
DELIVERING CONSENTS.
This Consent and Letter of Transmittal is to be used (i) if Notes are to be
physically delivered to the Depositary, (ii) if delivery of Notes is to be made
by book-entry transfer to the account maintained by the Depositary at the
Depository Trust Company ("DTC") pursuant to the procedures set forth in the
Statement under the caption "The Tender Offer and the Consent Solicitation--
Procedures for Tendering Notes and Delivering Consents - Book-Entry Delivery
Procedures" or (iii) if Notes are being tendered in accordance with the
guaranteed delivery procedures set forth in the Statement under, the caption
"The Tender Offer and Consent Solicitation--Procedures for Tendering Notes and
Delivering Consents--Guaranteed Delivery." Delivery of documents to DTC does not
constitute delivery to the Depositary.
Holders of Notes that are tendering by book-entry transfer to the
Depositary's account at DTC can execute the tender through the DTC Automated
Tender Offer Program ("ATOP") for which the transaction will be eligible. DTC
participants that are accepting the Offer should transmit their acceptance to
DTC, which will edit and verify the acceptance and execute a book-entry delivery
to the Depositary's account at DTC. DTC will then send an Agent's Message to the
Depositary for its acceptance. Delivery of the Agent's Message by DTC will
satisfy the terms of the Offer as to execution and delivery of a Consent and
Letter of Transmittal by the participant identified in the Agent's Message. DTC
participants may also accept the Offer by submitting a notice of guaranteed
delivery through ATOP.
Holders whose Notes are not available or who cannot deliver their Notes and
all other documents required hereby to the Depositary prior to, or on, the
Expiration Date may nevertheless tender their Notes (and thereby consent to the
Proposed Amendments) in accordance with the guaranteed delivery procedures set
forth in the Statement under the caption "The Tender Offer and the Consent
Solicitation--Procedures for Tendering Notes and Delivering
Consents--Guaranteed Delivery." See Instruction 2 herein.
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<PAGE> 3
THE TENDER OFFER AND THE SOLICITATION ARE NOT BEING MADE TO (NOR WILL
TENDERS OF NOTES BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION
ON WHICH THE MAKING OR ACCEPTANCE OF THE TENDER OFFER OR SOLICITATION WOULD NOT
BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.
All capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Statement.
Holders who wish to consent to the Proposed Amendments and tender their
Notes must complete the box below entitled "Method of Delivery" and complete
columns (1) through (3) in the box herein entitled "Description of Notes
Tendered and With Respect to Which Consent is Given" and sign in the appropriate
box below. Holders who complete this Consent and Letter of Transmittal will be
deemed to have consented to all of the Proposed Amendments with respect to, and
to have tendered, all Notes listed in the box. Holders may not tender Notes
without delivering Consents with respect to such Notes nor may Holders consent
to the Proposed Amendments without tendering their Notes.
-3-
<PAGE> 4
METHOD OF DELIVERY
/ / CHECK HERE IF CERTIFICATES FOR TENDERED NOTES ARE ENCLOSED HEREWITH.
/ / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER
FACILITY SPECIFIED ABOVE AND COMPLETE THE FOLLOWING:
NAME OF TENDERING INSTITUTION: __________________________________
NAME OF BOOK-ENTRY TRANSFER FACILITY:
/ / THE DEPOSITORY TRUST COMPANY
ACCOUNT NUMBER: _______________ TRANSACTION CODE NUMBER: _______
/ / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
NAME(S) OF REGISTERED OWNER(S):_________________________________________
WINDOW TICKET NUMBER (IF ANY):__________________________________________
DATE OF EXECUTION OF NOTICE OF GUARANTEED DELIVERY:_____________________
NAME OF ELIGIBLE INSTITUTION WHICH GUARANTEED DELIVERY:_________________
IF DELIVERED BY A BOOK-ENTRY TRANSFER FACILITY, CHECK BOX OF BOOK-ENTRY
TRANSFER FACILITY:
/ / THE DEPOSITORY TRUST COMPANY
ACCOUNT NUMBER:__________________TRANSACTION CODE NUMBER:_______________
-4-
<PAGE> 5
DESCRIPTION OF NOTES TENDERED AND WITH RESPECT TO WHICH CONSENT IS GIVEN*
<TABLE>
<CAPTION>
Name(s) and Address(es) of Holder(s) Notes Tendered and With Respect to Which Consent
(Please fill in, if blank, is Given (Attach additional schedule, if necessary
exactly as name(s) appear(s) on Notes)
<S> <C> <C>
(1) (2) (3)
Security Number(s) Total Principal Amount
of Notes Tendered
_____________________ ______________________
_____________________ ______________________
_____________________ ______________________
_____________________ ______________________
</TABLE>
- --------------------
*You must consent to all of the Proposed Amendments with respect to all
Notes tendered. Completion of this Consent and Letter of Transmittal
will constitute the tender of all Notes delivered and a Consent to all
of the Proposed Amendments with respect to all such Notes.
-5-
<PAGE> 6
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
By execution hereof, the undersigned hereby acknowledges receipt of the
Offer to Purchase and Consent Solicitation Statement dated March 13, 1997 (as
the same may be amended or supplemented from time to time, the "Statement") of
Monarch Marking Systems, Inc. (the "Company"), and this Consent and Letter of
Transmittal and instructions hereto (the "Consent and Letter of Transmittal"),
relating to (a) the Company's offer to purchase (the "Tender Offer") all of its
outstanding 12-1/2% Notes due July 1, 2003 (the "Notes") upon the terms and
subject to the conditions set forth in the Statement, and (b) the Company's
solicitation (the "Solicitation") of consents (the "Consents") from holders of
the Notes to the proposed amendments (the "Proposed Amendments") to the
indenture dated as of June 29, 1995 (the "Indenture"), between the Company and
Fleet National Bank (formerly known as Shawmut Bank Connecticut, National
Association), as Trustee (the "Trustee"). Holders of Notes may not tender Notes
without delivering their corresponding Consents in the Solicitation.
Upon the terms and subject to the conditions of the Tender Offer and
the Solicitation as set forth in the Statement, the receipt of which is hereby
acknowledged, the undersigned hereby consents to all of the Proposed Amendments
and hereby tenders to the Company the principal amount of Notes indicated above.
The undersigned acknowledges that the Proposed Amendments require the
receipt by the Company of the Requisite Supermajority Consents (Consents from
holders representing at least 75% in aggregate principal amount of the
outstanding Notes) or, at the option of the Company, Requisite Majority
Consents, (Consents from Holders representing at least a majority in aggregate
principal amount of the outstanding Notes) on or prior to April 10, 1997 (the
"Expiration Date").
Subject to, and effective upon, the acceptance for payment of the
principal amount of Notes tendered hereby, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Company all right, title and
interest in and to, and any and all claims in respect of or arising or having
arisen as a result of the undersigned's status as a holder of, all Notes
tendered hereby. The undersigned hereby irrevocably constitutes and appoints the
Depositary as the true and lawful agent and attorney-in-fact of the undersigned
with respect to such Notes, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest) to
(a) deliver such Notes, or transfer ownership of such Notes on the account books
maintained by DTC, together with all accompanying evidences of transfer and
authenticity, to or upon the order of the Company, (b) present such Notes for
transfer on the register, (c) deliver the Consent contained herein to the
Company and the Trustee and (d) receive all benefits and otherwise all rights of
beneficial ownership of such Notes, all in accordance with the terms of the
Tender Offer and the Solicitation.
The undersigned agrees and acknowledges that, by the execution and
delivery hereof, the undersigned makes and provides the written Consent, with
respect to the Notes tendered hereby, to all of the Proposed Amendments, as
permitted by Section 902 of the Indenture. The undersigned
-6-
<PAGE> 7
understands that the Consent provided hereby shall remain in full force and
effect and may only be revoked under the circumstances described herein and in
the Statement. Upon receipt of the Requisite Supermajority Consents or, at the
option of the Company, Requisite Majority Consents, the Company will enter into
the supplemental indenture (in the form of an amended and restated indenture,
the "Supplemental Indenture") reflecting the Proposed Amendments. See "The
Tender Offer and the Consent Solicitation--Terms of the Offer and the
Solicitation" in the Statement. However, none of the Proposed Amendments will
become operative unless and until the Tender Offer is consummated on the date
the Company accepts Notes for purchase pursuant to the Tender Offer. The
undersigned authorizes the Depositary to deliver certification to the Company
and the Trustee that the Consent to the Proposed Amendments duly executed by the
Holder of the Notes tendered hereby (or the agent thereof duly appointed by
written proxy delivered to the Depositary) has been received and authorizes the
Company and the Trustee under the Indenture to rely on such certification.
Tenders of Notes pursuant to the Tender Offer may be withdrawn and
Consents may be revoked, subject to the procedures described in the Statement
under "The Tender Offer and the Consent Solicitation--Withdrawal of Tenders and
Revocation of Consents" and Instruction 4 herein, at any time on or prior to the
Consent Date. Tenders of any Notes may also be withdrawn if the Tender Offer and
the Solicitation is terminated without any such Notes being purchased
thereunder, or as otherwise provided herein or in the Statement.
The undersigned hereby represents and warrants that the undersigned (a)
has full power and authority to tender, sell, assign and transfer the Notes
tendered hereby, and that when such Notes are accepted for payment by the
Company, the Company will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances,
and that none of such Notes will be subject to any adverse claim or right, and
(b) either has full power and authority to consent to the Proposed Amendments or
is delivering a validly executed Consent (which is included in this Consent and
Letter of Transmittal) from a person or entity having such power and authority.
The undersigned, upon request, will execute and deliver all additional documents
deemed by the Depositary or the Company to be necessary or desirable to complete
the sale, assignment and transfer of the Notes tendered hereby, to perfect the
undersigned's Consent to the Proposed Amendments or to the execution of the
Supplemental Indenture.
The undersigned understands that tenders of Notes pursuant to any of
the procedures described in the Statement under the caption "The Tender Offer
and the Consent Solicitation--Procedures for Tendering Notes and Delivering
Consents" and in the instructions hereto will constitute the undersigned's
acceptance of the terms and conditions of the Tender Offer and the Solicitation.
The Company's acceptance of such Notes for payment will constitute a binding
agreement between the undersigned and the Company upon the terms and subject to
the conditions of the Tender Offer and the Solicitation. All authority conferred
or agreed to be conferred by this Consent and Letter of Transmittal shall
survive the death or incapacity of the undersigned and every obligation of the
undersigned under this Consent and Letter of Transmittal shall be binding upon
the undersigned's heirs, personal representatives, executors, administrators,
successors, assigns, trustees in bankruptcy and other legal representatives.
-7-
<PAGE> 8
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions", please issue the check for the Total Consideration with respect
to Notes accepted for payment, and return any certificates for Notes not
tendered or not accepted for payment, in the name(s) of the registered holder(s)
appearing above under "Description of Notes Tendered and With Respect to Which
Consent is Given." Similarly, unless otherwise indicated herein in the box
entitled "Special Delivery Instructions", please mail the check for the Total
Consideration with respect to Notes accepted for payment, together with any
certificates for Notes not tendered or not accepted for payment (and any
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Notes Tendered and With Respect
to Which Consent is Given." If both the "Special Payment Instructions" box and
the "Special Delivery Instructions" box are completed, please issue the check
for the Total Consideration with respect to any Notes accepted for payment, and
return any certificates for Notes not tendered or not accepted for payment, in
the name(s) of, and mail the check and any such Notes not tendered or not
accepted for payment, in the name(s) of, and mail the check and any such
certificates to the person(s) at the address(es) so indicated. The undersigned
recognizes that the Company has no obligations pursuant to the "Special Payment
Instructions" box or "Special Delivery Instructions" box provisions of this
Consent and Letter of Transmittal to transfer any Note from the name of the
registered holder(s) thereof if the Company does not accept for payment any of
the principal amount of such Notes.
-8-
<PAGE> 9
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if certificates for Notes in a principal amount
not tendered or not accepted for payment and/or the check for the related
consideration are to be issued in the name of someone other than the
undersigned, or if Notes are to be returned by credit to an account maintained
by DTC.
Issue Check and/or Notes to:
Name:___________________________________________________________________________
(Please Print)
Address:________________________________________________________________________
Zip Code
________________________________________________________________________________
Taxpayer Identification Number
(You must also complete Substitute Form W-9 below)
Credit unaccepted Notes tendered by book-entry transfer to:
/ / The Depository Trust Company
account set forth below:
________________________________________________________________________________
(DTC account number)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if certificates for Notes in a principal amount not
tendered or not accepted for payment and/or the check for the related
consideration are to be sent to someone other than the undersigned at an address
other than that shown above.
Deliver Check and/or Notes to:
Name:___________________________________________________________________________
(Please Print)
Address:________________________________________________________________________
Zip Code
________________________________________________________________________________
Taxpayer Identification Number
(You must also complete Substitute Form W-9 below)
-9-
<PAGE> 10
SIGN HERE
(To Be Completed by All Tendering and Consenting
Holders of Notes Regardless of Whether
Notes Are Being Physically Delivered Herewith)
The completion, excecution and delivery of this Consent and
Letter of Transmittal will be deemed to constitute a Consent to all of the
Proposed Amendments.
If the signature(s) appearing below is (are) not of the registered holder(s)
of the Notes (or the agent thereof duly appointed by written proxy delivered to
the Depositary), then the registered holder(s) must sign the form of Consent
appearing in the "Consent Box" on the next page.
X_______________________________________________________________________________
X_______________________________________________________________________________
(Signature(s) of Holder(s) or Authorized Signatory)
Must be signed by the registered holder(s) of Notes exactly as their
name(s) appear(s) on certificate(s) for the Notes or by person(s) authorized to
become registered holder(s) by endorsements and documents transmitted with this
Consent and Letter of Transmittal. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation, agent or
other person acting in a fiduciary or representative capacity, please provide
the following information and see Instruction 5 herein.
Name(s):________________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (full title):__________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
(Including Zip Code)
Area Code and Telephone No.:____________________________________________________
-10-
<PAGE> 11
SIGNATURE GUARANTEE (See Instructions 1 and 5 below)
________________________________________________________________________________
(Name of Eligible Institution Guaranteeing Signature(s))
________________________________________________________________________________
(Address (including zip code) and Telephone No. (including area code) of Firm)
________________________________________________________________________________
(Authorized Signature)
________________________________________________________________________________
(Printed Name)
________________________________________________________________________________
(Title)
Date: ______________, 1997
-11-
<PAGE> 12
CONSENT BOX
IF THIS CONSENT AND LETTER OF TRANSMITTAL IS SIGNED BY A HOLDER OF
NOTES WHO IS NOT EITHER (X) THE REGISTERED HOLDER OR (Y) THE AGENT THEREOF DULY
APPOINTED BY WRITTEN PROXY DELIVERED TO THE DEPOSITARY, THEN THE REGISTERED
HOLDER MUST SIGN THE FOLLOWING CONSENT (OR A SEPARATE DOCUMENT SUBSTANTIALLY IN
THE FORM OF THE FOLLOWING CONSENT), WHICH DOCUMENT MUST BE DELIVERED TO THE
DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE, WITH SIGNATURES GUARANTEED BY AN
ELIGIBLE INSTITUTION, IN ORDER FOR SUCH HOLDER TO RECEIVE THE TENDER OFFER
CONSIDERATION.
Pursuant to the Tender Offer and Solicitation, the undersigned holder(s) of the
Notes tendered pursuant to this Consent and Letter of Transmittal hereby
Consent(s) to all of the Proposed Amendments.
X_______________________________________________________________________________
X_______________________________________________________________________________
(Signature(s) of Holder(s))
Dated: ________________________, 1997
Must be signed by the holder(s) exactly as name(s) appear(s) on Notes.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation, agent or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5 herein.
Name(s):________________________________________________________________________
________________________________________________________________________________
(Please Print)
Capacity (full title):__________________________________________________________
Address:________________________________________________________________________
________________________________________________________________________________
(Including Zip Code)
Area Code and Telephone No.:____________________________________________________
-12-
<PAGE> 13
SIGNATURE GUARANTEE (See Instructions 1 and 5 below)
________________________________________________________________________________
(Name of Eligible Institution Guaranteeing Signature(s))
________________________________________________________________________________
(Address (including zip code) and Telephone No. (including area code) of Firm)
________________________________________________________________________________
(Authorized Signature)
________________________________________________________________________________
(Printed Name)
________________________________________________________________________________
(Title)
Date:___________________ , 1997
-13-
<PAGE> 14
INSTRUCTIONS
Forming Part of the Terms and Conditions of the
Tender Offer and the Solicitation
1. GUARANTEE OF SIGNATURES. All signatures on this Consent and Letter
of Transmittal or a notice of withdrawal must be guaranteed by a financial
institution that is a member of the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange
Medallion Signature Program (each of the foregoing being referred to herein as
an "Eligible Institution"), unless (i) this Consent and Letter of Transmittal is
signed by the registered holder(s) (which term, for purposes of this Consent and
Letter of Transmittal, shall include DTC) of the Notes tendered herewith and
neither the "Special Payment Instructions" box nor the "Special Delivery
Instructions" box of this Consent and Letter of Transmittal has been completed
or (ii) such Notes are tendered for the account of an Eligible Institution. See
Instruction 5 herein.
2. DELIVERY OF CONSENT AND LETTER OF TRANSMITTAL AND NOTES; GUARANTEED
DELIVERY PROCEDURES. This Consent and Letter of Transmittal is to be completed
by Holders if (i) certificates representing Notes are to be physically delivered
to the Depositary herewith by such Holders; (ii) tender of Notes is to be made
by book-entry transfer to the Depositary's account at DTC pursuant to the
procedures set forth under the caption "The Tender Offer and the Consent
Solicitation--Procedures for Tendering Notes and Delivering Consents--Book-Entry
Delivery Procedures" in the Statement; or (iii) tender of Notes is to be made
according to the guaranteed delivery procedures set forth under the caption "The
Tender Offer and the Consent Solicitation--Procedures for Tendering Notes and
Delivering Consents-- Guaranteed Delivery" in the Statement; and such Holders
desire to consent to the Proposed Amendments relating to the Notes, and in each
case, instructions are not being transmitted through ATOP. All physically
delivered Notes, or a confirmation of a book-entry transfer into the
Depositary's account at DTC of all Notes delivered electronically, as well as a
properly completed and duly executed Consent and Letter of Transmittal (or
manually signed facsimile thereof) and any other documents required by this
Consent and Letter of Transmittal, must be received by the Depositary at its
address set forth herein prior to 12:00 midnight, New York City time, on the
Consent Date or the Expiration Date, as applicable, or the tendering Holder must
comply with the guaranteed delivery procedures set forth below. Delivery of
documents to DTC does not constitute delivery to the Depositary.
If a Holder desires to consent to the Proposed Amendments and tender
Notes pursuant to the Tender Offer and Solicitation and time will not permit
this Consent and Letter of Transmittal, certificates representing such Notes and
all other required documents to reach the Depositary, or the procedures for
book-entry transfer cannot be completed, on or prior to the Consent Date or the
Expiration Date, as applicable, then such Holder must consent and tender such
Notes pursuant to the guaranteed delivery procedures set forth under the caption
"The Tender Offer and the Consent Solicitation--Procedures for Tendering Notes
and Delivering Consents--Guaranteed Delivery" in the Statement. Pursuant to such
procedures, (i) such tender must be made by or through an Eligible Institution,
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially
-14-
<PAGE> 15
in the form provided by the Company, or an Agent's Message with respect to
guaranteed delivery that is accepted by Company, must be received by the
Depositary, either by hand delivery, mail, telegram or facsimile transmission
prior to 12:00 midnight, New York City time, on the Consent Date or the
Expiration Date, as applicable, and (iii) the certificates for all tendered
Notes, in proper form for transfer (or confirmation of a book-entry transfer of
all Notes delivered electronically into the Depositary's account at DTC pursuant
to the procedures for such transfer set forth in the Statement), together with a
properly completed and duly executed Consent and Letter of Transmittal (or
manually signed facsimile thereof) and any required signature guarantee and any
other documents required by this Consent and Letter of Transmittal or a properly
transmitted Agent's Message, must be received by the Depositary within three
business days after the date of the execution of such Notice of Guaranteed
Delivery.
THE METHOD OF DELIVERY OF THIS CONSENT AND LETTER OF TRANSMITTAL, THE
NOTES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY
ACCEPTANCE OR AGENT'S MESSAGE DELIVERED THROUGH ATOP, IS AT THE OPTION AND RISK
OF THE TENDERING HOLDER. If delivery is by mail, registered mail with return
receipt requested, properly insured, is recommended. In all cases, sufficient
time should be allowed for such documents to reach the Depositary. Except as
otherwise provided in this Instruction 2, delivery will be deemed made only when
actually received by the Depositary.
No alternative, conditional or contingent tenders will be accepted. All
tendering Holders, by execution of this Consent and Letter of Transmittal (or a
facsimile thereof), waive any right to receive any notice of the acceptance of
their Notes for payment.
Notwithstanding any other provision hereof, the purchase of the Notes
pursuant to the Tender Offer will in all cases be made only after timely receipt
by the Depositary of certificates for such Notes and this Consent and Letter of
Transmittal (or a facsimile thereof) in respect thereof, properly completed and
duly executed, together with any required signature guarantees and any other
documents required by the Statement and this Consent and Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance, withdrawal and revocation of tendered Notes and delivered
Consents will be resolved by the Company, whose determination will be final and
binding. The Company reserves the absolute right to reject any or all tenders
and withdrawals of Notes and deliveries and revocations of Consents that are not
in proper form or the acceptance of which would, in the opinion of the Company
or counsel for the Company, be unlawful. The Company also reserves the right to
waive any irregularities or conditions of a tender or consent as to particular
Notes. The Company's interpretation of the terms and conditions of the Tender
Offer (including the instructions in this Consent and Letter of Transmittal)
will be final and binding. Unless waived, any irregularities in connection with
tenders and withdrawals of Notes and deliveries and revocations of Consents must
be cured within such time as the Company shall determine. Tenders and
withdrawals of Notes and deliveries and revocations of Consents will not be
deemed to have been made until such irregularities have been cured or waived.
Any Notes received by the Depositary that are not properly tendered or delivered
and to
-15-
<PAGE> 16
which the irregularities have not been cured or waived will be returned by the
Depositary to the tendering holder unless otherwise provided in this Consent and
Letter of Transmittal as soon as practicable following the Expiration Date.
None of the Company, the Depositary, the Dealer Manager, the Trustee or
any other person shall be obligated to give notification of defects or
irregularities in any tender, withdrawal, delivery or revocation or shall incur
any liability for failure to give any such notification.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Notes Tendered and With Respect to Which Consent is Given" is inadequate, the
certificate numbers of the Notes and the principal amount of Notes tendered
should be listed on a separate schedule and attached hereto.
4. WITHDRAWAL OF TENDERS; REVOCATION OF CONSENTS. Tenders of Notes may
be withdrawn and the concurrent Consents may be revoked at any time prior to
12:00 midnight, New York City time, on the Consent Date (but, subject to the
exceptions indicated below) not thereafter if the Company accepts the Notes for
payment). A valid withdrawal of tendered Notes effected prior to 12:00 midnight,
New York City time, on the Consent Date will constitute the concurrent valid
revocation of such Holder's related Consent. In order for a Holder to revoke a
Consent, such Holder must withdraw the related tendered Notes. Except as set
forth below, tenders of Notes may not be withdrawn, and Consents may not be
revoked, after 12:00 midnight, New York City time, on the Consent Date. In
order for a Holder to revoke a Consent, such Holder must withdraw the related
tendered Notes. If the Company (i) reduces the principal amount of Notes subject
to the Tender Offer or (ii) changes the Tender Offer Consideration, then
previously tendered Notes may be validly withdrawn until the expiration of ten
business days after the date that notice of any such reduction or change its
first published, given or sent to Holders by the Company. In addition, tenders
of Notes may be validly withdrawn if the Tender Offer is terminated without any
Notes being purchased thereunder. In the event of a termination of the Offer,
the Notes tendered pursuant to the Tender Offer will be promptly returned to the
tendering Holder.
For a withdrawal of a tender of Notes (and the concurrent revocation of
Consents) to be effective, a written telegraphic or facsimile transmission
notice of withdrawal must be received by the Depositary prior to 12:00 midnight,
New York City time, on the Consent Date at its address set forth on the back
cover of this Statement. Any such notice of withdrawal must (i) specify the name
of the person who tendered the Notes to be withdrawn, (ii) contain the
description of the Notes to be withdrawn and identify the certificate number or
numbers shown on the particular certificates evidencing such Notes (unless such
Notes were tendered by book entry transfer) and the aggregate principal amount
represented by such Notes and (iii) be signed by the Holder of such Notes in the
same manner as the original signature on the Consent and Letter of Transmittal
by which such Notes were tendered (including any required signature guarantees),
if any, or be accompanied by (x) documents of transfer sufficient to have the
Trustee register the transfer of the Notes into the name of the person
withdrawing such Notes and (y) a properly completed irrevocable proxy that
authorized such person to effect such revocation on behalf of such Holder. If
the Notes to be withdrawn have
-16-
<PAGE> 17
been delivered or otherwise identified to the Depositary, a signed notice of
withdrawal is effective immediately upon written or facsimile notice of
withdrawal even if physical release is not yet effected. Any Notes properly
withdrawn will be deemed to be not validly tendered for purposes of the Tender
Offer, and will constitute the concurrent valid revocation of such Holder's
Consent.
Withdrawal of Notes (and the concurrent revocation of Consents) can
only be accomplished in accordance with the foregoing procedures.
All questions as to the validity (including time of receipt) of notices
of withdrawal and revocation of Consents will be determined by the Company, in
the Company's sole discretion (whose determination shall be final and binding).
None of the Company, the Depositary, the Dealer Manager, the Trustee or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or revocation of Consents, or incur
any liability for failure to give any such notification.
5. SIGNATURES ON CONSENT AND LETTER OF TRANSMITTAL; BOND POWERS AND
ENDORSEMENTS. If this Consent and Letter of Transmittal is signed by the
registered holder(s) of the Notes tendered hereby, the signature(s) must
correspond to the name(s) as written on the face of the Notes without
alteration, enlargement or any other change whatsoever. If this Consent and
Letter of Transmittal is signed by a participant in DTC whose name is shown as
the owner of the Notes tendered hereby, the signature must correspond with the
name shown on the security position listing as the owner of the Notes.
IF THIS CONSENT AND LETTER OF TRANSMITTAL IS EXECUTED BY A HOLDER OF
NOTES WHO IS NOT EITHER (X) THE REGISTERED HOLDER OR (Y) THE AGENT THEREOF DULY
APPOINTED BY WRITTEN PROXY DELIVERED TO THE DEPOSITARY, THEN THE REGISTERED
HOLDER MUST SIGN THE CONSENT SET FORTH ABOVE WITH THE SIGNATURE OF SUCH
REGISTERED HOLDER GUARANTEED BY AN ELIGIBLE INSTITUTION.
If any Notes tendered hereby are owned of record by two or more
persons, all such persons must sign this Consent and Letter of Transmittal.
If any Notes tendered hereby are registered in the names of different
holders, it will be necessary to complete, sign and submit as many separate
Consents and Letters of Transmittal, and any necessary accompanying documents,
as there are different registrations of such Notes.
If this Consent and Letter of Transmittal is signed by the registered
holder of Notes tendered hereby, no endorsements of such Notes or separate bond
powers are required, unless payment is to be made to, or Notes not tendered or
not accepted for payment are to be issued in the name of, a person other than
the registered holder(s), in which case the Notes tendered hereby must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such Notes.
Signatures on such Notes and bond powers must be
-17-
<PAGE> 18
guaranteed by an Eligible Institution. See Instruction 1 herein.
If this Consent and Letter of Transmittal, any Consents, or any Notes
or bond powers are signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Company of such person's authority so to act
must be submitted with this Consent and Letter of Transmittal.
6. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the purchase of Notes pursuant to the Tender Offer. If, however,
Notes for principal amounts not accepted for tender are to be delivered to, or
are to be registered or issued in the name of, any person other than the
registered holder of the Notes, or if tendered Notes are to be registered in the
name of any person other than the person signing the Consent and Letter of
Transmittal, of if a transfer tax is imposed for any reason other than the
purchase of Notes pursuant to the Tender Offer, then the amount of any such
transfer tax (whether imposed on the registered holder or any other person) will
be payable by the tendering holder. If satisfactory evidence of payment of such
tax or exemption therefrom is not submitted, then the amount of such transfer
tax will be deducted from the Tender Offer Consideration otherwise payable to
such tendering holder.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the
payment of the Tender Offer Consideration or Consent Payment with respect to any
Notes tendered hereby is to be issued, Notes not tendered or not accepted for
payment are to be issued in the name of a person other than the person(s)
signing this Consent and Letter of Transmittal or if such check or any such Note
is to be sent to someone other than the person(s) signing this Consent and
Letter of Transmittal or to the person(s) signing this Consent and Letter of
Transmittal, but at an address other than that shown in the box entitled
"Description of Notes Tendered and With Respect to Which Consent is Given", the
appropriate boxes in this Consent and Letter of Transmittal must be completed.
If no such instruction is given, the Tender Offer Consideration, Consent Payment
and/or Notes not accepted for payment or not tendered, as the case may be, will
be sent to the person signing this Consent and Letter of Transmittal or, at the
Company's option, paid and delivered by crediting the account at DTC designated
in the box entitled "Special Payment Instructions."
8. TAXPAYER IDENTIFICATION NUMBER. Each tendering holder is required to
provide the Depositary with the holder's correct taxpayer identification number
("TIN"), generally, the holder's Social Security or Federal Employer
Identification number, on Substitute Form W-9, which is provided under
"Important Tax Information" below, and to certify whether such person is subject
to backup withholding of federal income tax.
9. CONFLICTS. In the event of any conflict between the terms of the
Statement and the terms of this Consent and Letter of Transmittal, the terms of
the Statement will control.
-18-
<PAGE> 19
10. WAIVER OF CONDITIONS. The Company reserves the absolute right,
subject to applicable law, to amend in any respect or waive any of the specified
conditions in the Tender Offer and the Solicitation in the case of any
particular Note tendered or Consent delivered.
11. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. If a Holder desires to
tender Notes pursuant to the Tender Offer, but any such Note has been mutilated,
lost, stolen or destroyed, such Holder should write to or telephone the Trustee,
at the address listed below, concerning the procedures for obtaining replacement
certificates for such Note, arranging for indemnification or any other matter
that requires handling by the Trustee:
Fleet National Bank
777 Main Street, CT M00238
Hartford, Connecticut 06115
Attention: Corporate Trust Administration
Telephone: (860) 986-4545
12. REQUESTS FOR ASSISTANCE OR ADDITION COPIES. Questions relating to
the procedure for tendering, as well as requests for additional copies of the
Statement and the related Consents and Letter of Transmittal, may be directed to
the Dealer Manager, BT Securities Corporation, 130 Liberty Street, 30th Floor,
New York, New York, 10006, (212) 775-2467 (collect).
-19-
<PAGE> 20
IMPORTANT TAX INFORMATION
Under federal income tax law, certain holders whose Notes are accepted
for payment are required to provide the Depositary (as payer) with such holder's
correct taxpayer identification number ("TIN") on a Substitute Form W-9
(included below). If the holder is an individual, the TIN is his or her social
security number. If the Depositary is not provided with the correct TIN, the
holder may be subject to a $50 penalty imposed by the IRS. In addition, payments
that are made to such holder may be subject to backup withholding. Certain
holders (including, among others, corporations) are not subject to these backup
withholding and reporting requirements. If backup withholding applies, the
Depositary is required to withhold 31% of any payment made to the holder. A
corporation, however, must complete the Substitute Form W-9, including providing
its TIN and indicating that it is exempt from backup withholding, in order to
establish its exemption from backup withholding. In order for a foreign
individual to qualify as an exempt recipient, that holder must submit to the
Depositary a properly complete Internal Revenue Service Form W-8 signed under
penalties of perjury, attesting to such individual's exempt status. Forms of
such statements can be obtained from the Dealer Manager.
Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of persons subject to backup withholding will be
offset by the amount of tax withheld. If backup withholding results in an
overpayment of federal income taxes, a refund may be obtained from the IRS
provided the required information is furnished.
To prevent backup withholding, the holder or other payee is required to
complete a Substitute Form W-9 certifying that the TIN provided on such form is
correct and that such holder or other payee is not subject to backup
withholding.
THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
DOES NOT CONSIDER THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY HOLDER'S
SITUATION OR STATUS. THE SUMMARY IS BASED ON THE PROVISIONS OF THE CODE,
REGULATIONS, PROPOSED REGULATIONS, RULINGS AND JUDICIAL DECISIONS NOW IN EFFECT,
ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY ON A RETROACTIVE BASIS. HOLDERS OF
NOTES (INCLUDING HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES) SHOULD CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM, INCLUDING
THE TAX CONSEQUENCES. UNDER STATE. LOCAL, FOREIGN AND OTHER LAWS, OF THE SALE OF
THE NOTES AND THE ADOPTION OF THE PROPOSED AMENDMENTS. FOR ADDITIONAL
INFORMATION, SEE "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" IN THE STATEMENT.
-20-
<PAGE> 1
Exhibit 99.5
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF AND DELIVERY OF CONSENTS
WITH RESPECT TO
12-1/2% SENIOR NOTES DUE JULY 1, 2003
OF
MONARCH MARKING SYSTEMS, INC.
PURSUANT TO THE OFFER TO PURCHASE AND CONSENT
SOLICITATION STATEMENT
DATED MARCH 13, 1997
This Notice of Guaranteed Delivery or a form substantially equivalent hereto
must be used to accept the Tender Offer and simultaneously to consent to the
proposed amendments (the "Proposed Amendments") to the indenture pursuant to
which the 12-1/2% Senior Notes due July 1, 2003 (the "Notes") of Monarch Marking
Systems, Inc. (the "Company") were issued, as amended to date (the "Indenture"),
if time will not permit the Consent and Letter of Transmittal, certificates
representing the Notes or any other required documents to reach the Depositary,
or the procedures for book-entry transfer cannot be completed, on or prior to
the Expiration Date (as defined below) or the Consent Date (as defined below),
as applicable. This form may be delivered by an Eligible Institution by hand
delivery, telegram, facsimile transmission or mail to the Depositary as set
forth below. All capitalized terms used herein but not defined herein shall have
the meanings ascribed to them in the Offer to Purchase and Consent Solicitation
Statement dated March 13, 1997 (as the same may be amended or supplemented from
time to time, the "Statement") of the Company.
THE TENDER OFFER AND SOLICITATION ARE NOT BEING MADE TO (NOR WILL THE SURRENDER
OF NOTES FOR PURCHASE BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY
JURLSDICTION IN WHICH THE MAKING OR ACCEPTANCE OF THE TENDER OFFER OR
SOLICITATION WOULD NOT BE IN COMPLIANCE WITH THE
LAWS OF SUCH JURISDICTION.
THE TENDER OFFER AND THE SOLICITATION WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON APRIL 10, 1997 (THE "EXPIRATION DATE"). TENDERS OF NOTES MAY BE
WITHDRAWN AND THE CORRESPONDING CONSENT MAY ONLY BE REVOKED UDNER THE
CIRCUMSTANCES DESCRIBED IN THE STATEMENT.
The Depositary for the Offer to
Purchase and Consent Solicitation:
Fleet National Bank
<TABLE>
<S> <C> <C>
By Registered or Certified Mail By Hand By Overnight Courier
Fleet National Bank Fleet National Bank Fleet National Bank
Corporate Trust Operations Corporate Trust Operations Corporate Trust Operations
CT OP TO6D Customer Service Window, CT OP TO6D
P.O. Box 1440 5th Floor, 1 Talcott Plaza 1 Talcolt Plaza
Hartford, Connecticut 06143 Hartford, Connecticut 06106 Hartford, Connecticut 06103
Attention: Patricia Williams Attention: Patricia Williams Attention: Patricia Williams
</TABLE>
By Facsimile Transmission
(860) 986-7908
Attention: Patricia Williams
Confirm by Telephone:
(860) 986-1271
<PAGE> 2
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE, WILL NOT
CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on the
Consent and Letter of Transmittal is required to be guaranteed by an "Eligible
Institution" under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box on the Consent and
Letter of Transmittal.
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tender(s) to the Company, upon the terms and
subject to the conditions set forth in the Statement and Consent and Letter of
Transmittal, receipt of which is hereby acknowledged, the principal amount of
Notes set forth below, pursuant to the guaranteed delivery procedures set forth
in the Statement under the heading "The Tender Offer and the Consent
Solicitation - Procedures for Tendering Notes and Delivering Consents -
Guaranteed Delivery."
The undersigned understand(s) that holders of Notes who tender Notes
are obligated to consent to the Proposed Amendments as described in the
Statement under the caption "Proposed Amendments to the Indenture" and,
accordingly, the undersigned hereby consents to the Proposed Amendments and
acknowledges that tendering such Notes in accordance with the Tender Offer
constitutes a consent (a "Consent") with respect to such Notes.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to give the Consent. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Depositary
or the Company to be necessary or desirable for the perfection of the
undersigned's Consent to all of the Proposed Amendments and to the execution of
the supplemental indenture to the Indenture which effects such Proposed
Amendments.
The undersigned authorize(s) the Depositary to deliver this Notice of
Guaranteed Delivery to the Company and the Trustee as evidence of the
undersigned's Consent to all of the Proposed Amendments and as certification
that Requisite Supermajority Consents or, at the option of the Company,
Requisite Majority consents to the Proposed Amendments executed by Holders of
Notes have been received.
All authority herein conferred or agreed to be conferred by this Notice
of Guaranteed Delivery shall survive the death or incapacity of the undersigned
and every obligation of the undersigned under this Notice of Guaranteed Delivery
shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
3
<PAGE> 4
PLEASE SIGN AND COMPLETE
Signature(s) of Registered Holders Address(es):______________________
__________________________________
or Authorized Signatory: __________________________________
_________________________________________
_________________________________________
Name(s) of Registered Holder(s): Area Code and Telephone No.:
_________________________________________ __________________________________
_________________________________________
_________________________________________
Principal Amount of Notes Tendered:
_________________________________________
Certificate No(s). of Notes (if available)
_________________________________________
_________________________________________
If Notes will be delivered by a
book-entry transfer, check trust
company:
/ /The Depository Trust Company
Transaction Code No.:____
Depository Account No. : ________
HOLDERS WHO TENDER NOTES ARE OBLIGATED TO CONSENT TO ALL OF THE PROPOSED
AMENDMENTS. DELIVERY OF NOTES PURSUANT TO THIS NOTICE OF GUARANTEED DELIVERY
WILL BE DEEMED TO CONSTITUTE A CONSENT TO ALL OF THE PROPOSED AMENDMENTS WITH
RESPECT TO SUCH NOTES.
This Notice of Guaranteed Delivery must be signed by the registered holder(s) of
Notes exactly as their name(s) appear(s) on the Notes or by person(s) authorized
to become registered holder(s) by endorsements and documents transmitted with
this Notice of Guaranteed Delivery. If signature is by a trustee, guardian,
attorney-in-fact, officer of a corporation, executor, administrator, agent or
other representative, such person must provide the following information.
Please print name(s) and address(es)
Name(s): _______________________________________________________________
_______________________________________________________________
Capacity: _______________________________________________________________
_______________________________________________________________
Address(es):_______________________________________________________________
_______________________________________________________________
Do not send Notes with this form. Notes should be sent to the Depositary,
together with a properly completed and validly executed Consent and Letter of
Transmittal.
4
<PAGE> 5
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange
Medallion Signature Program, hereby guarantees that, within three business days
from the date of this Notice of Guaranteed Delivery, a properly completed and
validly executed Consent and Letter of Transmittal (or a facsimile thereof),
together with Notes tendered hereby in proper form for transfer (or confirmation
of the book-entry transfer of such Notes into the Depositary's account at DTC
pursuant to the procedures for book entry transfer set forth in the Statement
under the caption "The Tender Offer and the Consent Solicitation--Procedures for
Tendering Notes and Delivering Consents") and all other required documents will
be deposited by the undersigned with the Depositary at its address set forth
above.
Name of Firm:________________________________ _______________________
Authorized Signature
Address: ____________________________________ Name:_______________________
Title:______________________
Area Code and
Telephone No.:_______________________________ Date:_______________________
DO NOT SEND NOTES WITH THIS FORM. ACTUAL SURRENDER OF NOTES MUST BE MADE
PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND VALIDLY EXECUTED
CONSENT AND LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS.
5
<PAGE> 1
Exhibit 99.6
CUSIP 608908-AA-7
MONARCH MARKING SYSTEMS, INC.
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING 12-1/2% SENIOR NOTES DUE JULY 1, 2003
PURSUANT TO THE OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT
DATED MARCH 13, 1997
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997,
UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE").
HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE
EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW).
TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO
12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT,
SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON
THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS
RELEASE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS
REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE
OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A
MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING.
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Enclosed for your consideration is an Offer to Purchase and Consent
Solicitation Statement (the "Statement") and a form of Consent and Letter of
Transmittal (the "Consent and Letter of Transmittal" and, together with the
Statement, the "Offer"), relating to the offer by Monarch Marking Systems, Inc.,
a Delaware corporation (the "Company"), to purchase for cash all of its
outstanding 12-1/2% Senior Notes due July 1, 2003 (the "Notes"). In conjunction
with the Offer, the Company is soliciting (the "Solicitation") consents (the
"Consents") for certain proposed amendments (the "Proposed Amendments") to the
indenture dated as of June 29, 1995 (as supplemented through the date hereof,
the "Indenture"), pursuant to which the Notes were issued. Capitalized terms
used herein but not defined herein shall have the meanings ascribed to such
terms in the Statement.
<PAGE> 2
The consideration for each $1,000 principal amount of Notes tendered
pursuant to the Tender Offer and Solicitation shall be equal to (I) the greater
of (A) $1,167.50 or (B) the present value on the Payment Date (as defined below)
of the Notes, determined on the basis of a yield (the "Tender Offer Yield") to
June 30, 1999, which is the day before the earliest redemption date of the Notes
(the "Earliest Redemption Date"), equal to the sum of (x) the yield on the
6-3/4% U.S. Treasury Note due June 30, 1999 (the "Reference Security"), as
calculated by the Dealer Manager in accordance with standard market practice,
based on the bid price for such Reference Security as of 2:00 p.m., New York
City time, on March 26, 1997, the tenth business day immediately preceding the
scheduled Expiration Date (the "Price Determination Date"), as displayed on the
Bloomberg Government Pricing Monitor on "Page PX5" or any recognized quotation
source selected by the Dealer Manager in its sole discretion if the Bloomberg
Government Pricing Monitor is not available, plus (y) 75 basis points (such
price being rounded to the nearest cent per $1,000 principal amount of Notes),
plus (ii) accrued and unpaid interest, if any, up to, but not including, the
Payment Date (the consideration referred to in clauses (i) and (ii) being
hereinafter referred to as the "Total Consideration"). In the event the Tender
Offer is extended for any period longer than ten business days from the
previously scheduled Expiration Date, a new Price Determination Date will be
established which shall be the tenth business day immediately preceding the
Expiration Date as so extended.
Enclosed herewith are copies of the following documents:
1. Statement dated March 13, 1997;
2. A Consent and Letter of Transmittal for your use and for the
information of your clients, together with guidelines of the Internal Revenue
Service for Certification of Taxpayer Identification Number on Substitute Form
W-9 providing information relating to backup federal income tax withholding;
3. A Notice of Guaranteed Delivery to be used to accept the Tender
Offer and the Solicitation if (i) the Notes and all other required documents
cannot be delivered to the Depositary or (ii) the required procedures for
book-entry transfer cannot be completed on or prior to the Consent Date or
Expiration Date, as applicable; and
4. A form of letter which may be sent to your clients for whose account
you hold the Notes in your name or in the name of a nominee, with space provided
for obtaining such clients' instructions with regard to the Tender Offer and
Solicitation.
DTC Participants will be able to execute tender and deliver Consents
through the DTC Automated Tender Offer Program.
PLEASE NOTE THAT THE TENDER OFFER AND THE SOLICITATION WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997 UNLESS EXTENDED (THE
"EXPIRATION DATE"). WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
2
<PAGE> 3
The Company will not pay any fees or commissions to any broker or
dealer or other person for soliciting tenders of the Notes pursuant to the
Tender Offer and the Solicitation. You will be reimbursed for customary mailing
and handling expenses incurred by you in forwarding the enclosed materials to
your clients as described in the Statement under the caption "The Tender Offer
and the Consent Solicitation -- Fees and Expenses".
Additional copies of the enclosed materials may be obtained from the
Dealer Manager, at its address and telephone number set forth on the back cover
of the enclosed Statement.
Very truly yours,
BT SECURITIES CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE COMPANY, THE DEPOSITARY OR THE DEALER MANAGER
OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE TENDER OFFER AND
SOLICITATION NOT CONTAINED IN THE STATEMENT OR THE CONSENT AND LETTER OF
TRANSMITTAL.
3
