<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 25,
1999 REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
VALASSIS COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7310 38-2760940
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
<TABLE>
<S> <C>
19975 VICTOR PARKWAY BARRY P. HOFFMAN, ESQ.
LIVONIA, MICHIGAN 48152 EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL &
(734) 591-3000 SECRETARY
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE 19975 VICTOR PARKWAY
NUMBER, LIVONIA, MICHIGAN 48152
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL (734) 591-3000
EXECUTIVE OFFICES) (NAME, ADDRESS, INCLUDING ZIP CODE, AND
TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
------------------------
COPIES TO:
AMY S. LEDER, ESQ.
MCDERMOTT, WILL & EMERY
50 ROCKEFELLER PLAZA
NEW YORK, NY 10020
(212) 547-5400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
- ------------
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER UNIT AGGREGATE OFFERING PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 5/8% Senior Notes due 2009....... $100,000,000 100% $100,000,000 $27,800.00
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The proposed maximum offering price per unit and the proposed maximum
aggregate offering price are estimated solely for the purpose of calculating the
registration fee.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
THIS PROSPECTUS, DATED MARCH 25, 1999,
IS SUBJECT TO COMPLETION AND AMENDMENT
PROSPECTUS
VALASSIS COMMUNICATIONS, INC.
OFFER TO EXCHANGE ALL OF OUR OUTSTANDING AND UNREGISTERED
6 5/8% SENIOR NOTES DUE 2009
FOR OUR REGISTERED
6 5/8% SENIOR NOTES DUE 2009
We hereby offer upon the terms and conditions described in this Prospectus
and the accompanying Letter of Transmittal (which together constitute the
"Exchange Offer"), to exchange all of our outstanding and unregistered 6 5/8%
Senior Notes due 2009 ("Old Notes") for our registered 6 5/8% Senior Notes due
2009 ("Exchange Notes"). The Old Notes were issued on January 12, 1999 and, as
of the date of this Prospectus, an aggregate principal amount of $100.0 million
is outstanding. The terms of the Exchange Notes are substantially the same as
the terms of the Old Notes except that the Exchange Notes will be registered
under the Securities Act of 1933, as amended, and except for certain transfer
restrictions, registration rights and terms providing for an increase in the
interest rate on the Old Notes under certain events relating to registration of
the Exchange Notes. The Exchange Notes will evidence the same debt as the Old
Notes and will be issued pursuant to, and entitled to the same benefits of, the
indenture governing the Old Notes. We are making the Exchange Offer in order to
satisfy certain contractual obligations. The Exchange Notes and the Old Notes
are sometimes collectively referred to as the "Notes."
INFORMATION ABOUT THE EXCHANGE NOTES
*PLEASE CONSIDER THE FOLLOWING:
YOU SHOULD CAREFULLY REVIEW THE RISK FACTORS BEGINNING ON PAGE 6 OF THIS
PROSPECTUS.
Our offer to exchange the Old Notes for Exchange Notes will be open until
, New York City time, on , 1999, unless we extend the offer.
You should also carefully review the procedures for tendering the Old Notes
beginning on page 20 of this Prospectus.
If you fail to tender your Old Notes, you will continue to hold
unregistered securities and your ability to transfer them could be adversely
affected.
- - MATURITY
The Exchange Notes will mature on January 15, 2009, unless previously
redeemed.
- -SECURITY AND RANKING
The Exchange Notes will not be secured by any collateral.
The Exchange Notes will rank equally with all of our existing and future senior
debt.
The Exchange Notes will rank senior to all of our existing and future
subordinated debt.
- - INTEREST
We will pay interest semiannually on January 15 and July 15 of each year
beginning July 15, 1999.
- - GUARANTEES
None of our subsidiaries will guarantee the Exchange Notes.
- - REDEMPTION
We may redeem some or all of the Exchange Notes at any time.
See page 31 for the redemption prices.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1999
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE> 3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN CONTAIN
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES LAWS. THESE
FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES,
MANY OF WHICH ARE BEYOND OUR CONTROL. ALL STATEMENTS OTHER THAN STATEMENTS OF
HISTORICAL FACTS INCLUDED IN THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN, INCLUDING THE STATEMENTS UNDER "PROSPECTUS SUMMARY,"
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS," AND "BUSINESS," AND ELSEWHERE IN THIS PROSPECTUS AND THE DOCUMENTS
INCORPORATED BY REFERENCE HEREIN REGARDING OUR STRATEGY, FUTURE OPERATIONS,
FINANCIAL POSITION, ESTIMATED REVENUES, PROJECTED COSTS, PROSPECTS, PLANS AND
OBJECTIVES OF MANAGEMENT ARE FORWARD-LOOKING STATEMENTS. WHEN USED IN THIS
PROSPECTUS OR THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN, THE WORDS "WILL,"
"BELIEVE," "ANTICIPATE," "INTEND," "ESTIMATE," "EXPECT," "PROJECT" AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, ALTHOUGH NOT
ALL FORWARD-LOOKING STATEMENTS CONTAIN SUCH IDENTIFYING WORDS. ALL
FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS PROSPECTUS OR THE
DOCUMENTS INCORPORATED BY REFERENCE HEREIN. WE DO NOT UNDERTAKE ANY OBLIGATION
TO UPDATE OR REVISE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT
OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. ALTHOUGH WE BELIEVE THAT OUR
PLANS, INTENTIONS AND EXPECTATIONS REFLECTED IN OR SUGGESTED BY THE FORWARD-
LOOKING STATEMENTS WE MAKE IN THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY
REFERENCE HEREIN ARE REASONABLE, WE CAN GIVE NO ASSURANCE THAT SUCH PLANS,
INTENTIONS OR EXPECTATIONS WILL BE ACHIEVED.
WE DISCLOSE IMPORTANT FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER
MATERIALLY FROM OUR EXPECTATIONS ("CAUTIONARY STATEMENTS") UNDER "RISK FACTORS"
AND ELSEWHERE IN THIS PROSPECTUS AND THE DOCUMENTS INCORPORATED BY REFERENCE
HEREIN. SUCH FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING: THE ENTRY OF A NEW
COMPETITOR IN OUR CORE FREE-STANDING INSERT BUSINESS AND ANY CONSEQUENT INTENSE
PRICE COMPETITION; NEW TECHNOLOGY THAT WOULD MAKE FREE-STANDING INSERTS LESS
ATTRACTIVE; A SHIFT IN CUSTOMER PREFERENCE FOR DIFFERENT PROMOTIONAL MATERIALS,
PROMOTIONAL STRATEGIES OR COUPON DELIVERY METHODS, INCLUDING IN-STORE
ADVERTISING SYSTEMS AND OTHER FORMS OF COUPON DELIVERY; AN INCREASE IN OUR PAPER
COSTS; OR GENERAL BUSINESS AND ECONOMIC CONDITIONS. THE CAUTIONARY STATEMENTS
QUALIFY ALL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR PERSONS ACTING ON
OUR BEHALF.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, file
annual and quarterly reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy statements
and other information may be inspected and copied at the public reference
facilities maintained by the SEC at Room 1024, 450 Fifth Street, N.W., Judiciary
Plaza, Washington, D.C. 20549, and at the SEC's Regional Offices in New York
(Seven World Trade Center, 13th Floor, New York, New York 10048), and Chicago
(500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511). Copies of
these materials may be obtained from the Public Reference Section of the SEC,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. You may
obtain information on the operations of the Public Reference Room by calling the
SEC at 1-800-SEC-0330. In addition, the SEC maintains a World Wide Web site on
the Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC. Reports, proxy statements and other information concerning the
Company may be inspected at the offices of the New York Stock Exchange, Inc.
(the "NYSE"), 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON REQUEST FROM
BARRY P. HOFFMANN, ESQ., SECRETARY, VALASSIS COMMUNICATIONS, INC., 19975 VICTOR
PARKWAY, LIVONIA, MICHIGAN 48152, TELEPHONE NUMBER (734) 591-3000. IN ORDER TO
ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY [DATE
FIVE DAYS PRIOR TO THE DATE ON WHICH THE FINAL INVESTMENT DECISION MUST BE
MADE].
i
<PAGE> 4
The following documents are incorporated in and are an integral part of
this Prospectus:
(i) our Annual Report on Form 10-K for the year ended December 31,
1998; and
(ii) our current Report on Form 8-K dated January 13, 1999.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, prior to the
consummation of the Exchange Offer are a part of and shall be deemed to be
incorporated by reference in this Prospectus and to be a part thereof from the
date of filing of such document.
All references herein to this "Prospectus" shall be deemed to include all
such materials incorporated by reference herein. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained in this Prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus. Any
person receiving a copy of this Prospectus may obtain without charge, upon oral
or written request, a copy of any and all of the documents incorporated by
reference herein (not including exhibits to the information that is incorporated
by reference unless such exhibits are specifically incorporated by reference
into the information that this Prospectus incorporates). Requests should be
directed to Valassis Communications, Inc., Attention: Barry P. Hoffman, Esq.,
Secretary, 19975 Victor Parkway, Livonia, Michigan 48152, telephone number (734)
591-3000.
ii
<PAGE> 5
PROSPECTUS SUMMARY
The following summary highlights information contained elsewhere in this
Prospectus. It may not contain all of the information that is important to you.
We encourage you to read this entire Prospectus and the documents to which we
have referred you to fully understand the terms of the Exchange Notes and the
Exchange Offer. Unless otherwise specifically indicated, "Valassis," the
"Company," "we," "our," "ours," and "us" each refers to Valassis Communications,
Inc. and its consolidated subsidiaries.
THE COMPANY
We are a leading marketing services company in the field of sales
promotion. We generate most of our revenues by printing and publishing cents-off
coupons and other consumer purchase incentives primarily for package goods
manufacturers. We are one of the country's largest printers and publishers of
these coupons.
We offer a broad array of marketing products, including:
- Free-Standing Inserts ("FSIs") -- four-color promotional booklets
containing the coupons of multiple advertisers that are distributed by us
to nearly 58 million households through Sunday newspapers;
- Valassis Impact Promotions ("VIP") -- solo specialized promotional
programs for single advertisers;
- Valassis Sampling -- newspaper-delivered sampling programs;
- Valassis of Canada -- consumer promotion and direct response
merchandising; and
- Run-of-Press ("ROP") -- advertising on the pages of newspapers.
We produced our first FSI in 1972. In 1998, we inserted our cooperative
FSIs in the Sunday edition of over 500 newspapers with a combined average paid
circulation of approximately 57.7 million on 46 publishing dates. By comparison,
there were approximately 93.3 million households in the United States, according
to information published in 1990 by the U.S. Census Bureau.
BUSINESS STRATEGY
We believe that our existing products put us in a strong position to meet
the mass and geo-demographic targeted needs of our customers. Our strategy is to
build on the strength of our core FSI product to offer a range of integrated
marketing solutions to a broader base of customers. In order to accomplish this,
we will continue our commitment to the FSI segment of our business while
providing high levels of product quality and customer service. In addition, we
will attempt to capitalize on our expertise in consumer promotion to further
develop our existing VIP, Valassis Sampling, and Valassis of Canada divisions
and to expand our business through acquisitions and joint ventures. We will
continue to offer more highly targeted and one-to-one marketing solutions via
direct mail and the Internet utilizing database marketing techniques.
Our principal executive offices are located at 19975 Victor Parkway,
Livonia, Michigan 48152, and our telephone number is (734) 591-3000.
1
<PAGE> 6
THE EXCHANGE OFFER
THE EXCHANGE OFFER......... We are offering to exchange $1,000 principal amount
of Exchange Notes for each $1,000 principal amount
of Old Notes. As of the date hereof, $100.0 million
aggregate principal amount of Old Notes are
outstanding. The terms of the Exchange Notes are
substantially the same as the terms of the Old
Notes except that the Exchange Notes will be
registered under the Securities Act of 1933, as
amended, and except for certain transfer
restrictions, registration rights and terms
providing for an increase in the interest rate on
the Old Notes under certain events relating to
registration of the Exchange Notes.
Based on interpretations by the staff of the
Securities and Exchange Commission (the "SEC"), as
set forth in no-action letters issued to certain
third parties unrelated to us in other
transactions, we believe that Exchange Notes issued
pursuant to the Exchange Offer in exchange for Old
Notes may be offered for resale, resold or
otherwise transferred by holders thereof (other
than any holder which is an "affiliate" of the
Company within the meaning of Rule 405 promulgated
under the Securities Act, or a broker-dealer who
purchased Old Notes directly from us to resell
pursuant to Rule 144A or any other available
exemption promulgated under the Securities Act),
without compliance with the registration and
prospectus delivery requirements of the Securities
Act, provided that such Exchange Notes are acquired
in the ordinary course of such holders' business
and such holders have no arrangement with any
person to engage in a distribution of Exchange
Notes.
However, the SEC has not considered the Exchange
Offer in the context of a no-action letter and we
cannot be sure that the staff of the SEC would make
a similar determination with respect to the
Exchange Offer as in such other circumstances.
Furthermore, each holder, other than a
broker-dealer, must acknowledge that it is not
engaged in, and does not intend to engage in, a
distribution of such Exchange Notes and has no
arrangement or understanding to participate in a
distribution of Exchange Notes. Each broker-dealer
that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge
that it will comply with the prospectus delivery
requirements of the Securities Act in connection
with any resale of such Exchange Notes. Broker-
dealers who acquired Old Notes directly from us and
not as a result of market-making activities or
other trading activities may not rely on the
staff's interpretations discussed above or
participate in the Exchange Offer and must comply
with the prospectus delivery requirements of the
Securities Act in order to resell the Old Notes.
EXPIRATION DATE............ The Exchange Offer will expire at ,
New York City time, , 1999 or such
later date and time to which it is extended.
WITHDRAWAL................. The tender of the Old Notes pursuant to the
Exchange Offer may be withdrawn at any time prior
to , New York City time, on
, 1999, or such later date and time
to which we extend the offer. Any Old Notes not
accepted for exchange for any reason will be
returned without expense to the tendering holder
thereof as soon as practicable after the expiration
or termination of the Exchange Offer.
2
<PAGE> 7
INTEREST ON THE EXCHANGE
NOTES AND THE OLD NOTES.... Interest on the Exchange Notes will accrue from the
date of issuance of the Old Notes (January 12,
1999) for which the Exchange Notes are exchanged or
from the date of the last periodic payment of
interest on the Old Notes, whichever is later.
Interest on the Exchange Notes will be at the same
rate and upon the same terms as interest on the Old
Notes. No additional interest will be paid on Old
Notes tendered and accepted for exchange.
CONDITIONS TO THE EXCHANGE
OFFER...................... The Exchange Offer is subject to certain customary
conditions, certain of which may be waived by us.
See "The Exchange Offer --Conditions to the
Exchange Offer" beginning on page 25.
PROCEDURES FOR TENDERING
OLD NOTES.................. Each holder of the Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a copy thereof, in
accordance with the instructions contained herein
and therein, and mail or otherwise deliver the
Letter of Transmittal, the copy, together with the
Old Notes and any other required documentation, to
the exchange agent at the address set forth herein.
Persons holding the Old Notes through the
Depository Trust Company, DTC, and wishing to
accept the Exchange Offer must do so pursuant to
the DTC's Automated Tender Offer Program, by which
each tendering participant will agree to be bound
by the Letter of Transmittal. By executing or
agreeing to be bound by the Letter of Transmittal,
each holder will represent to us that, among other
things, (i) the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the
ordinary course of business of the person receiving
such Exchange Notes, whether or not such person is
the registered holder of the Old Notes, (ii) the
holder is not engaging in and does not intend to
engage in a distribution of such Exchange Notes,
(iii) the holder does not have an arrangement or
understanding with any person to participate in the
distribution of such Exchange Notes and (iv) the
holder is not an "affiliate," as defined under Rule
405 promulgated under the Securities Act, of the
Company.
We will accept for exchange any and all Old Notes
which are properly tendered (and not withdrawn) in
the Exchange Offer prior to , New
York City time, on , 1999. The
Exchange Notes issued pursuant to the Exchange
Offer will be delivered promptly following the
expiration date. See "The Exchange Offer -- Terms
of the Exchange Offer" beginning on page 21.
EXCHANGE AGENT............. The Bank of New York is serving as exchange agent
(sometimes referred to herein as the "Exchange
Agent") in connection with the Exchange Offer.
FEDERAL INCOME TAX
CONSIDERATIONS............. The exchange of Old Notes for Exchange Notes
pursuant to the Exchange Offer should not
constitute a sale or an exchange for federal income
tax purposes. See "Certain Federal Income Tax
Considerations" beginning on page 42.
EFFECT OF NOT TENDERING.... Old Notes that are not tendered or that are
tendered but not accepted will, following the
completion of the Exchange Offer, continue to be
3
<PAGE> 8
subject to the existing restrictions upon transfer
thereof. We will have no further obligation to
provide for the registration under the Securities
Act of such Old Notes.
USE OF PROCEEDS............ We will not receive any cash from the exchange of
the Old Notes pursuant to the Exchange Offer.
THE EXCHANGE NOTES
ISSUER..................... Valassis Communications, Inc.
SECURITIES OFFERED......... $100.0 million principal amount of 6 5/8% Senior
Notes due 2009
MATURITY................... January 15, 2009
INTEREST PAYMENT DATES..... January 15 and July 15 of each year. The first
payment will be made on July 15, 1999.
OPTIONAL REDEMPTION........ We may redeem some or all of the Exchange Notes at
any time at the redemption price listed under
"Description of Exchange Notes -- Optional
Redemption," plus any interest that is due and
unpaid on the date that we redeem the Exchange
Notes.
SECURITY AND RANKING....... The Exchange Notes will be unsecured and will rank
equally with our existing and future unsecured
senior debt, including:
- our Revolving Credit Facility; and
- our 9.55% Senior Notes due 2003.
The Exchange Notes will rank senior to our existing
and future subordinated debt.
RESTRICTIVE COVENANTS OF
INDENTURE.................. The indenture with The Bank of New York under which
the Old Notes were, and the Exchange Notes are
being, issued contains certain provisions that,
among other things, restrict our ability to:
- sell all or substantially all of our assets or
merge or consolidate with or into other
companies;
- permit certain liens securing debt;
- enter into sale and leaseback transactions; and
- redeem or repurchase shares of our capital
stock.
RISK FACTORS
You should consider carefully all of the information set forth in this
Prospectus and, in particular, you should evaluate the specific factors under
"Risk Factors" before exchanging your Old Notes for Exchange Notes.
4
<PAGE> 9
SUMMARY FINANCIAL DATA
The summary financial information set forth below should be read in
conjunction with the Company's consolidated financial statements and related
notes in the documents incorporated by reference in this Prospectus and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the selected consolidated financial data set forth elsewhere in
this Prospectus. During the quarter ended March 31, 1998, the Company changed
its method of accounting for inventories from the last-in, first-out (LIFO)
method to the first-in, first-out (FIFO) method. The change in method of
inventory costing has been applied retroactively. Due to the debit balance LIFO
reserves and corresponding lower-of-cost-or-market reserves, the change had no
effect on the balance sheet at December 31, 1997 or the income statement for the
year then ended. The financial statements for year ended December 31, 1996 have
been restated. The effect of this restatement was to reduce net income in 1996
by $3.1 million.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
DECEMBER 31,
--------------------------------
1996 1997 1998
---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues........................................... $659,108 $675,496 $741,383
Cost of products sold.............................. 478,302 436,174 485,103
-------- -------- --------
Gross profit....................................... 180,806 239,322 256,280
Selling, general and administrative expenses....... 67,127 77,406 77,224
Amortization of intangibles........................ 8,181 8,574 8,097
-------- -------- --------
Operating earnings................................. 105,498 153,342 170,959
Interest expense................................... 39,625 38,312 34,450(1)
-------- -------- --------
Earnings before income taxes and extraordinary
loss............................................. 65,873 115,030 136,509
Income taxes....................................... 26,098 45,100 52,223
-------- -------- --------
Earnings before extraordinary loss................. 39,775 69,930 84,286
Extraordinary loss (net of tax).................... -- -- 13,598
-------- -------- --------
Net earnings....................................... $ 39,775 $ 69,930 $ 70,688
======== ======== ========
OTHER OPERATING DATA:
EBITDA(2).......................................... $120,543 $168,714 $186,678
Ratio of earnings to fixed charges(3).............. 2.61x 3.92x 4.83x
Ratio of EBITDA to interest expense................ 3.04x 4.40x 5.42x
Total debt to EBITDA............................... 3.34x 2.18x 1.82x
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
--------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
BALANCE SHEET DATA:
Current assets..................................... $177,761 $151,087 $143,059
Current liabilities (excluding current portion of
long-term debt).................................. 154,110 148,453 158,566
Total assets....................................... 273,734 240,885 232,014
Total debt......................................... 403,155 367,075 340,461
Stockholders' deficit.............................. (286,594) (276,967) (268,524)
</TABLE>
- -------------------------
(1) Assuming that the Company had repurchased $125.2 million in aggregate
principal amount of the Company's 9.55% Senior Notes due 2003 as of January
1, 1998 and financed such repurchase with $47.9 million from the Revolving
Credit Facility (assuming an interest rate of 6.29% per annum) and
approximately $98.7 million of net proceeds from the offering of the Old
Notes, interest expense would have been reduced by approximately $2.3
million (assuming interest income on cash balances remained constant).
(2) EBITDA represents operating earnings before interest, taxes, depreciation
and amortization. The Company has included information concerning EBITDA
because the Company understands that it is used by certain investors as a
measure of the Company's historical ability to service its debt. EBITDA does
not represent cash generated from operations as defined by generally
accepted accounting principles and it is not necessarily indicative of cash
available to fund cash needs.
(3) The ratio of earnings to fixed charges was computed by dividing (a) earnings
before fixed charges, income taxes and extraordinary items by (b) fixed
charges, which consist of interest expense, amortization of debt issuance
costs and the interest portion of rent expense.
5
<PAGE> 10
RISK FACTORS
You should consider carefully the following specific risk factors, together
with the other information contained and incorporated by reference in this
Prospectus, before you exchange your Old Notes for Exchange Notes.
COMPETITION -- INCREASED COMPETITION CAN HAVE A MATERIAL ADVERSE EFFECT ON
VALASSIS.
We compete in the cooperative FSI business principally with News America
FSI, Inc., a company owned by The News Corporation Limited. This competitor has
substantially greater financial resources than we do. We compete for business
primarily on the basis of the following:
- customer service and sales relationships;
- price; and
- category availability.
We also compete with in-store marketing and other forms of promotional
strategies or coupon delivery and may compete with any new technology that would
make FSIs less attractive to our customers.
In the past, new competitors have tried to establish themselves in the FSI
market. As a result, we have experienced periods of intense price competition.
During such times, the number of total FSI programs increased, which led to a
meaningful decrease in the number of pages per FSI program and, as a result, a
decrease in the average revenue per page. These significant decreases had a
material adverse effect on our financial performance. Business booked under
these pricing conditions severely impacted our results for the fiscal year ended
June 30, 1994 and the six months ended December 31, 1994.
If new competitors enter the FSI market or our existing competitor tries to
increase market share by reducing prices, our financial performance could be
materially adversely affected.
COST OF PAPER -- SIGNIFICANT INCREASES IN THE COST OF PAPER (WHICH WE CANNOT
CONTROL) COULD ADVERSELY AFFECT THE FINANCIAL HEALTH OF VALASSIS AND PREVENT US
FROM FULFILLING OUR OBLIGATIONS UNDER THE EXCHANGE NOTES.
In 1995 and 1996, our paper prices experienced dramatic fluctuations,
increasing nearly 70% in 1995 before returning in early 1997 to levels
approximating those in 1994. Paper prices again increased in 1997 and the first
half of 1998, although at a much lesser rate. Paper costs decreased during the
second half of 1998. We have limited ability to protect ourselves from these
types of fluctuations or to pass increased costs along to our customers. We
maintain on average less than 30 days of paper inventory. Significant increases
in the cost of paper could have a material adverse effect on our financial
performance.
OUR SUBSIDIARIES ARE NOT GUARANTORS -- YOUR RIGHT TO RECEIVE PAYMENTS ON THE
EXCHANGE NOTES COULD BE ADVERSELY AFFECTED IF ANY OF OUR SUBSIDIARIES DECLARE
BANKRUPTCY, LIQUIDATE, OR REORGANIZE.
None of our subsidiaries will guarantee the Exchange Notes. In the event of
a bankruptcy, liquidation or reorganization of any of our subsidiaries, holders
of their indebtedness and their trade creditors will generally be entitled to
payment of their claims from the assets of those subsidiaries before any assets
are made available for distribution to us.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD NOTES -- THERE ARE RISKS ASSOCIATED WITH
FAILING TO EXCHANGE THE OLD NOTES.
Holders of the Old Notes who do not exchange their Old Notes for Exchange
Notes pursuant to the Exchange Offer will continue to be subject to restrictions
on transfer and exchange of their Old Notes. In general, the Old Notes may not
be offered or sold, unless they are registered under the Securities Act and
applicable state securities laws. After this Exchange Offer, we do not
anticipate registering any Old Notes
6
<PAGE> 11
under the Securities Act. Accordingly, the liquidity of the market for a
holder's Old Notes may be adversely affected upon the completion of the Exchange
Offer if a holder does not participate. See "The Exchange Offer" beginning on
page 20.
NO PRIOR MARKET FOR THE EXCHANGE NOTES -- THERE IS NO ASSURANCE THAT AN ACTIVE
TRADING MARKET WILL DEVELOP FOR THE EXCHANGE NOTES.
There is no active trading market for the Exchange Notes. We do not intend
to apply for listing of the Exchange Notes on any securities exchange or to seek
the admission thereof for trading in the NASDAQ National Market. Bear, Stearns &
Co. Inc. and Wasserstein Perella Securities, Inc., the Initial Purchasers of the
Old Notes, have told us that they intend to make a market in the Exchange Notes.
However, they are not obligated to do so, and any such market making activities
may be discontinued at any time without notice. Therefore, there can be no
assurance that an active market for the Exchange Notes will develop or, if such
a market develops, that it will continue.
YEAR 2000 COMPLIANCE -- THE YEAR 2000 PROBLEM MAY ADVERSELY AFFECT US IF OUR
CUSTOMERS AND SUPPLIERS DO NOT ADEQUATELY ADDRESS THEIR YEAR 2000 CONCERNS.
Many computer software programs refer to years in terms of their final two
digits only. Such programs may interpret the Year 2000 to mean the year 1900
instead. If not corrected, those programs could cause computers to either shut
down or provide incorrect data information.
In response to the Year 2000 issue, we have created two project plans: one
for program modifications and another for implementing new financial software
upgrades. We expect all critical systems to be Year 2000 compliant by the end of
the first quarter of 1999. We estimate the costs related to the implementation
of the program modification plan and the financial software upgrade plan to be
approximately $400,000 and $300,000, respectively. The costs have been, and will
be funded through operating cash flows and expensed as incurred. In addition, we
are asking our vendors, service providers and customers about their progress in
identifying and addressing problems that their computer systems may face in
correctly processing date information related to the Year 2000. The Company
cannot quantify the aggregate cost to the Company with respect to vendors,
service providers and customers with Year 2000 problems, although the Company
does not anticipate it will have a material adverse impact on its business. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Year 2000 Compliance."
7
<PAGE> 12
USE OF PROCEEDS
The Company will receive no proceeds from the exchange of the Old Notes
pursuant to the Exchange Offer. The Company received approximately $98.7 million
in proceeds from the sale of the Old Notes. The Company used such proceeds to
retire the then outstanding indebtedness under the Company's Revolving Credit
Facility. The Company used borrowings of $70.0 million under the Revolving
Credit Facility and borrowings of $40.0 million under the Company's then
existing credit facility (which borrowings were refinanced at par with
borrowings of $40.0 million under the Revolving Credit Facility) along with
$36.6 million of available cash to repurchase approximately $125.2 million in
aggregate principal amount of the Company's 9.55% Senior Notes due 2003 for
$146.6 million.
The Revolving Credit Facility matures on October 31, 2001. See "Description
of Other Indebtedness -- Description of Revolving Credit Facility."
8
<PAGE> 13
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data presented below as of
and for each of the years ended December 31, 1997 and 1998 are derived from the
consolidated financial statements of the Company, which have been audited by our
independent auditors, Deloitte & Touche LLP. The financial statements as of and
for each of the years ended June 30, 1994 and December 31, 1995 and 1996 and as
of and for the six month period ended December 31, 1994 are derived from our
audited consolidated financial statements which were audited by Ernst & Young
LLP, prior to restatement for the change in accounting for inventory costs
discussed below. During the quarter ended March 31, 1998, the Company changed
its method of accounting for inventories from the last-in, first-out (LIFO)
method to the first-in, first-out (FIFO) method. The change in method of
inventory costing has been applied retroactively. Due to the debit balance LIFO
reserves and corresponding lower-of-cost-or-market reserves, the change had no
effect on the balance sheet at December 31, 1997, December 31, 1994 or June 30,
1994 or the income statements for the periods then ended. The financial
statements for the years ended December 31, 1995 and 1996 have been restated.
The effect of this restatement was to reduce net income in 1996 by $3.1 million
and increase net income and reduce accumulated deficit in 1995 by $3.1 million.
The restatement for the change in inventory costs was audited by Deloitte &
Touche LLP.
The information set forth below should be read in conjunction with the
Company's consolidated financial statements and the related notes thereto in the
documents incorporated by reference in this Prospectus and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
FISCAL YEAR SIX MONTHS
ENDED ENDED
JUNE 30, DECEMBER 31, FISCAL YEAR ENDED DECEMBER 31,
----------- ------------ --------------------------------------------
1994 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.......................... $542,609 $279,034 $613,752 $659,108 $675,496 $741,383
Cost of products sold............. 432,492 223,456 460,941 478,302 436,174 485,103
-------- -------- -------- -------- -------- --------
Gross profit...................... 110,117 55,578 152,811 180,806 239,322 256,280
Selling, general and
administrative expenses(1)...... 62,625 27,211 58,071 67,127 77,406 77,224
Amortization of intangibles....... 10,902 4,672 26,496(2) 8,181 8,574 8,097
-------- -------- -------- -------- -------- --------
Operating earnings................ 36,590 23,695 68,244 105,498 153,342 170,959
Interest expense(3)............... 38,217 19,623 40,451 39,625 38,312 34,450
-------- -------- -------- -------- -------- --------
Earnings (loss) before income
taxes and extraordinary loss.... (1,627) 4,072 27,793 65,873 115,030 136,509
Income taxes...................... (6,800) 2,149 15,092 26,098 45,100 52,223
Extraordinary loss (net of tax)... -- 4,176 -- -- -- 13,598
-------- -------- -------- -------- -------- --------
Net earnings (loss)............... $ 5,173 $ (2,253) $ 12,701 $ 39,775 $ 69,930 $ 70,688
======== ======== ======== ======== ======== ========
OTHER OPERATING DATA:
EBITDA(4)......................... $ 60,290 $ 33,417 $103,991 $120,543 $168,714 $186,678
Depreciation and Amortization..... 23,700 9,722 35,747 15,045 15,372 15,719
Capital expenditures.............. 4,069 9,173 6,530 7,104 13,023 13,418
Ratio of earnings to fixed
charges(5)...................... -- 1.20x 1.67x 2.61x 3.92x 4.83x
Ratio of EBITDA to interest
expense......................... 1.58x 1.70x 2.57x 3.04x 4.40x 5.42x
Total debt to EBITDA(6)........... 6.95x 6.25x 4.00x 3.34x 2.18x 1.82x
</TABLE>
9
<PAGE> 14
<TABLE>
<CAPTION>
AT
AT SIX MONTHS
FISCAL YEAR ENDED
ENDED DECEMBER
JUNE 30, 31, AT DECEMBER 31,
----------- ---------- ---------------------------------------------
1994 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Current assets................. $ 117,902 $ 109,281 $ 160,234 $ 177,761 $ 151,087 $ 143,059
Current liabilities (excluding
current portion of long-term
debt)........................ 133,211 130,658 150,826 154,110 148,453 158,566
Total assets................... 239,709 234,330 264,111 273,734 240,885 232,014
Total debt..................... 419,000 417,927 416,034 403,155 367,075 340,461
Stockholders' deficit.......... (316,779) (319,032) (307,222) (286,594) (276,967) (268,524)
</TABLE>
- -------------------------
(1) Includes $(0.3) million and $(1.4) million of minority interests for the six
months ended December 31, 1994 and the fiscal year ended December 31, 1995,
respectively.
(2) Includes writedown of intangibles and loss on the sale of a business of
$16.9 million.
(3) Assuming that the Company had repurchased $125.2 million in aggregate
principal amount of the Company's 9.55% Senior Notes due 2003 as of January
1, 1998 and financed such repurchase with $47.9 million from the Revolving
Credit Facility (assuming an interest rate of 6.29% per annum) and
approximately $98.7 million of net proceeds from the offering of the Old
Notes, interest expense would have been reduced by approximately $2.3
million (assuming interest income on cash balances remained constant).
(4) EBITDA represents operating earnings before interest, taxes, depreciation,
and amortization. The Company has included information concerning EBITDA
because the Company understands that it is used by certain investors as a
measure of the Company's historical ability to service its debt. EBITDA does
not represent cash generated from operations as defined by generally
accepted accounting principles and it is not necessarily indicative of cash
available to fund cash needs.
(5) The ratio of earnings to fixed charges was computed by dividing (a) earnings
before fixed charges, income taxes and extraordinary items by (b) fixed
charges, which consist of interest expense, amortization of debt issuance
costs and the interest portion of rent expense. Earnings were inadequate to
cover fixed charges by $1.6 million for the fiscal year ended June 30, 1994.
(6) In calculating this ratio, EBITDA is annualized by multiplying by two for
the six months ended December 31, 1994.
10
<PAGE> 15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
Valassis derives revenues primarily from the sale of space in promotional
materials printed on the Company's printing presses. The Company's prime cost
components include paper, payments to newspapers for insertion of promotional
materials (media), printing costs (including labor) and shipping.
Paper represents approximately 40% of the cost of products sold for the
Company's FSI business. In 1995 and 1996, the Company's paper prices experienced
dramatic fluctuations, increasing nearly 70% in 1995 before returning in early
1997 to levels approximating those in 1994. Paper prices again increased in 1997
and the first half of 1998, although at a much lesser rate. Paper costs
decreased during the second half of 1998.
Valassis purchases coated ground wood No. 5 sheet from three primary
suppliers. In 1998, Valassis entered into a three-year contract with one of
these suppliers for the purchase of approximately 23% of its paper volume
requirement. This contract limits the amount of increases or decreases (to
approximately 10% in any twelve-month period) of the Company's cost of paper.
Such cost is adjusted quarterly. The remainder of the Company's paper
requirement is bought pursuant to contracts that are typically three to six
months in duration. The Company maintains on average less than 30 days of paper
inventory.
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated, certain income
and expense items from continuing operations and the percentages that such items
bear to revenues:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
DECEMBER 31,
--------------------------------------------------------------
1996 1997 1998
------------------ ------------------ ------------------
% OF % OF % OF
$ REVENUES $ REVENUES $ REVENUES
- -------- - -------- - --------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
FSI sales................................. $504.1 76.5% $521.3 77.2% $567.7 76.6%
VIP sales................................. 89.4 13.6 89.2 13.2 103.1 13.9
ROP sales................................. 25.5 3.9 23.8 3.5 17.8 2.4
Other sales............................... 40.1 6.0 41.2 6.1 52.8 7.1
------ ----- ------ ----- ------ -----
Revenues................................ 659.1 100.0 675.5 100.0 741.4 100.0
Cost of products sold..................... 478.3 72.6 436.2 64.6 485.1 65.4
------ ----- ------ ----- ------ -----
Gross profit............................ 180.8 27.4 239.3 35.4 256.3 34.6
Selling, general and administrative
expenses................................ 67.1 10.2 77.4 11.4 77.2 10.4
Amortization of Intangibles............... 8.2 1.2 8.6 1.3 8.1 1.1
------ ----- ------ ----- ------ -----
Operating earnings...................... 105.5 16.0 153.3 22.7 171.0 23.1
Interest expense.......................... 39.6 6.0 38.3 5.7 34.5 4.7
------ ----- ------ ----- ------ -----
Earnings before Income taxes and
Extraordinary loss................... 65.9 10.0 115.0 17.0 136.5 18.4
Income taxes............................ 26.1 4.0 45.1 6.7 52.2 7.1
------ ----- ------ ----- ------ -----
Earnings before Extraordinary loss...... 39.8 6.0 69.9 10.3 84.3 11.3
Extraordinary loss (net of tax)........... -- -- -- -- 13.6 1.8
------ ----- ------ ----- ------ -----
Net earnings............................ $ 39.8 6.0% $ 69.9 10.3% $ 70.7 9.5%
====== ===== ====== ===== ====== =====
</TABLE>
As a result of the acquisition of Valassis in 1986, the Company recorded
significant amounts of intangible assets. As a consequence, the Company's
results of operations include non-cash expenses related to the amortization of
intangible assets, including goodwill.
11
<PAGE> 16
Calendar 1998 Compared to Calendar 1997
Total revenues for 1998 increased 9.8% to $741.4 million from $675.5
million for 1997. This increase was primarily as a result of an 8.9% rise in FSI
revenue from $521.3 million in 1997 to $567.7 million for 1998. The FSI revenue
increase is attributable to overall industry page growth, as well as slightly
higher market share and moderate price increases. In addition, VIP experienced
volume growth resulting in a 15.6% increase in sales during 1998. Also, Valassis
Sampling revenue rose 79.1% in 1998 to $28.3 million, compared to $15.8 million
for 1997 due to increased activity during 1998.
The favorable impact of increases in FSI page volume and higher pricing was
offset by an increase in paper costs during 1998. However, the Company believes
that the effect of paper price increases peaked in the third quarter of 1998.
The Company has already experienced paper price decreases and expects average
paper costs to be down in 1999 versus 1998. Gross margin decreased from 35.4% in
1997 to 34.6% for 1998.
Selling, general and administrative expenses were flat at $77.2 million in
1998. The Company's results for 1998 include a one-time charge of $6.0 million
related to the early retirement of the Company's former CEO, and the results for
1997 include a charge of $7.3 million for a one-time bonus paid to certain of
the Company's executives, funded by Consolidated Press Holdings (CPH), upon the
sale of its interest in the Company in the Company's secondary offering that was
completed in July 1997. Without these one-time charges, SG&A would have
increased 1.6% during 1998, versus the prior year.
Interest expense was down for the year ended December 31, 1998 to $34.5
million from $38.3 million in 1997. The Company retired $129.7 million of its
public debt in 1998 and $36.2 million of its public debt in 1997. During 1998,
the Company repurchased on the open market approximately $125.2 million in
aggregate principal amount of its 9.55% Senior Notes due 2003 for $146.6 million
using approximately $70.0 million under its Revolving Credit Facility,
approximately $40.0 million under its then existing facility (which borrowings
were refinanced at par with the Revolving Credit Facility) and $36.6 million of
cash.
The effective tax rate was 38.3% for the year ended December 31, 1998,
compared with 39.2% for the same period in 1997. The effective tax rate decrease
is the result of a portion of the special one-time charge in 1997, referred to
above, being non-deductible.
Earnings before extraordinary items for the year ended December 31, 1998
were up 20.6% to $84.3 million versus $69.9 million for 1997. This earnings
improvement is primarily the result of increases in FSI page volume and higher
pricing, offset in part by higher paper cost.
In connection with the buyback of the 9.55% Senior Notes due 2003 discussed
above, the Company paid a premium in an amount equal to $21.4 million and wrote
off $0.5 million of unamortized debt issuance costs. Accordingly, the Company
incurred extraordinary charges of $13.6 million (net of tax) due to early
extinguishment of $129.7 million of debt in 1998.
Calendar 1997 Compared to Calendar 1996
Revenues for 1997 were $675.5 million, up 2.5% from $659.1 million in 1996.
FSI revenue increased 3.4% to $521.3 million in 1997. This was due to slightly
higher FSI prices and increased page due to improved market share. VIP revenue
was flat for 1997 at $89.2 million, due largely to the fact that two major
customers reduced spending on print promotions, which offset the growth
experienced from other customers. ROP revenue was down 6.7% to $23.8 million in
1997. Valassis Sampling sales were up 10.5% in 1997.
Gross profit as a percentage of revenue increased to 35.4% in 1997 compared
to 27.4% in 1996. This increase was primarily due to lower average paper costs
in 1997 versus 1996, as well as smaller declines in media and print costs. After
declining throughout 1996 and early 1997, paper prices began to increase during
1997.
Selling, general and administrative expenses increased to $77.4 million in
1997 versus $67.1 million in 1996. SG&A expenses for 1997 include a one-time
charge of $7.3 million for the one-time bonus paid to certain of the Company's
executives, funded by CPH upon the sale of its interest in the Company in July
12
<PAGE> 17
1997. The remaining increase was due to increased advertising and promotional
activity, as well as incentive/reward programs associated with the increased
level of earnings.
Interest expense was down in 1997 to $38.3 million from $39.6 million in
1996. The Company retired $36.2 million and $13.0 million of its public
subordinated debt in 1997 and 1996, respectively.
Net earnings increased 75.6% to $69.9 million in 1997 from $39.8 million in
1996. This increase was due to the strength of the Company's core FSI business,
coupled with a significant decrease in the average cost of paper in 1997 versus
1996.
FINANCIAL CONDITION, LIQUIDITY AND SOURCES OF CAPITAL
The Company's liquidity requirements arise mainly from its working capital
needs, primarily accounts receivable, inventory and debt service requirements.
The Company does not offer financing to its customers. FSI customers are billed
for 75% of each order eight weeks in advance of the publication date and are
billed for the balance immediately prior to the publication date. The Company
inventories its work in progress at cost while it accrues progress billings as a
current liability at full sales value. Although the Company receives
considerable payments from its customers prior to publication of promotions,
revenue is recognized only upon publication dates. Therefore, the progress
billings on the balance sheet include any profits in the related receivables,
and, accordingly, the Company can operate with low, or even negative, working
capital.
Cash and cash equivalents totaled $6.9 million at December 31, 1998, down
$28.5 million from December 31, 1997. This was the result of cash provided by
operating activities of $87.9 million, and cash used in investing activities and
financing activities of $13.9 million and $102.5 million, respectively, in 1998.
Cash flow from operating activities decreased to $87.9 million for the year
ended December 31, 1998 from $90.5 million for the year ended December 31, 1997.
The Company used this cash flow during 1998 in addition to amounts available
under its credit facility then in existence (as discussed more fully above) to
repurchase $129.7 million of its public debt and $105.7 million of its common
stock.
The Company experienced a significant improvement in cash flow during 1997,
due primarily to increased earnings. Cash provided by operating activities was
$90.5 million in 1997, compared with $66.7 million in 1996. The Company used its
available cash to purchase $91.5 million of its common stock and to retire $36.2
million of its 9 3/8% Subordinated Notes due 1999 in 1997.
A portion of the Company's debt (which totaled $340.5 million as of
December 31, 1998), in the amount of $107.7 million, was due on March 15, 1999.
In November 1998, the Company replaced its then existing credit facility with a
$160.0 million Revolving Credit Facility. See "Description of Other
Indebtedness -- Description of Revolving Credit Facility." The Company used
borrowings under the Revolving Credit Facility to retire approximately $125.2
million in aggregate principal amount of its 9.55% Senior Notes due 2003 for
$146.6 million. In January 1999, the Company issued the Old Notes. The Company
used the net proceeds from such offering to retire the then outstanding
indebtedness under the Revolving Credit Facility. The Company borrowed
additional amounts under the Revolving Credit Facility to pay the debt due in
March 1999.
The Company intends to use cash generated by operations to meet interest
and principal repayment obligations, for general corporate purposes, to reduce
its indebtedness and from time to time to repurchase stock through the Company's
stock repurchase program. As of December 31, 1998, the Company had authorization
to repurchase an additional 2.2 million shares of its common stock under its
existing share repurchase program.
Management believes the Company will generate sufficient funds from
operations and will have sufficient lines of credit available to meet currently
anticipated liquidity needs, including interest and required principal payments
on indebtedness.
13
<PAGE> 18
CAPITAL EXPENDITURES
The Company operates three printing facilities. Capital expenditures were
$13.4 million for the year ended December 31, 1998. Management expects future
capital expenditure requirements of approximately $10.0 million to $15.0 million
over each of the next three to five years to meet increased capacity needs and
to replace or rebuild equipment as required. It is expected that equipment will
be purchased using funds provided by operations.
YEAR 2000 COMPLIANCE
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than 2000. This problem could force computers to
either shut down or provide incorrect data or information.
In response to the Year 2000 issue, the Company has implemented a
multi-faceted project plan, which covers both IT and non-IT systems. This plan
encompasses three areas: (1) program modifications; (2) implementing new
financial software upgrades; and (3) testing readiness of vendors and customers.
Phases associated with the project plan are: identification and ranking of
components of the Company's systems and equipment and those of its suppliers
that may be vulnerable to Year 2000 problems; assessment of those components;
remediation or replacement of non-compliant systems and components; testing of
systems and components following remediation; and the development of contingency
plans.
With regard to program modification and implementing new software upgrades,
the Company is currently in the testing phase and expects to have all critical
systems Year 2000 compliant by the end of the first quarter of 1999. With
regards to readiness of vendors and customers, the Company is currently in the
assessment phase and plans to have testing completed by June 30, 1999.
The Company's plans include the development of a full contingency plan. The
Company believes that by June 30, 1999, it will be able to fully determine its
most likely worst case scenarios and will have its contingency plans in place.
Potential sources of risk include the inability of suppliers (principally paper
suppliers) to be Year 2000 compliant in a timely manner, which could result in
delays in product deliveries from such suppliers, the disruption of the
distribution of the Company's products to the consumer, and disruption of the
Company's own production facilities as a result of general failure of necessary
infrastructure such as electricity supply.
The Company estimates the total costs related to the implementation of the
program modification plan and the financial software upgrade plan to be
approximately $400,000 and $300,000, respectively, which will be funded through
operating cash flows and expensed as incurred. To date, expenses have totaled
approximately $300,000 for program modifications and $30,000 for financial
software upgrades. It is not possible to quantify the aggregate cost to the
Company with respect to vendors, service providers and customers who fail to
become Year 2000 compliant. See "Risk Factors -- Year 2000 Compliance."
This is a Year 2000 Readiness Disclosure Statement within the meaning of
the Year 2000 Information and Readiness Disclosure Act (P.L. 105-271).
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities" was issued by the
Financial Accounting Standards Board. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. The Company
has not determined the impact on its consolidated financial statements. SFAS No.
133 is effective for fiscal years beginning after June 15, 1999.
14
<PAGE> 19
BUSINESS OUTLOOK
The following statements are based on current expectations. These
statements are forward-looking and actual results may differ materially.
- Price and volume increases for the Company's principal product, the FSI,
are expected to result in a modest increase in FSI revenue for 1999.
- The average price of paper, which is a major cost factor in the Company's
business, increased in 1998. However, prices have begun to decrease, and
the average price of paper in 1999 is expected to be lower than the
average in 1998.
The above expectations are forward-looking statements that involve a number
of risks and uncertainties. Among the factors that could affect expectations are
the following: the entry of a new competitor in the Company's core FSI business
and any consequent intense price competition; new technology that would make
FSIs less attractive; a shift in customer preference for different promotional
materials, promotional strategies or coupon delivery methods, including in-store
advertising systems and other forms of coupon delivery; an increase in the
Company's paper costs; or general business and economic conditions.
15
<PAGE> 20
BUSINESS
THE COMPANY
We are a leading marketing services company in the field of sales
promotion. We generate most of our revenues by printing and publishing cents-off
coupons and other consumer purchase incentives primarily for package goods
manufacturers. We are one of the country's largest printers and publishers of
these coupons.
We offer a broad array of marketing products, including:
- Free-Standing Inserts ("FSIs") -- four-color promotional booklets
containing the coupons of multiple advertisers that are distributed by us
to nearly 58 million households through Sunday newspapers;
- Valassis Impact Promotions ("VIP") -- solo specialized promotional
programs for single advertisers;
- Valassis Sampling -- newspaper-delivered sampling programs;
- Valassis of Canada -- consumer promotion and direct response
merchandising; and
- Run-of-Press ("ROP") -- advertising on the pages of newspapers.
We produced our first FSI in 1972. In 1998, we inserted our cooperative
FSIs in the Sunday edition of over 500 newspapers with a combined average paid
circulation of approximately 57.7 million on 46 publishing dates. By comparison,
there were approximately 93.3 million households in the United States, according
to information published in 1990 by the U.S. Census Bureau.
BUSINESS STRATEGY
We believe that our existing products put us in a strong position to meet
the mass and geo-demographic targeted needs of our customers. Our strategy is to
build on the strength of our core FSI product to offer a range of integrated
marketing solutions to a broader base of customers. In order to accomplish this,
we will continue our commitment to the FSI segment of our business while
providing high levels of product quality and customer service. In addition, we
will attempt to capitalize on our expertise in consumer promotion to further
develop our existing VIP, Valassis Sampling, and Valassis of Canada divisions.
We will continue to offer more highly targeted and one-to-one marketing
solutions via direct mail and the Internet utilizing database marketing
techniques.
THE COMPANY'S PRODUCTS
We print and publish cents-off coupons, refund offers, premiums,
sweepstakes and contests distributed to households throughout the United States.
We offer our customers a variety of consumer promotion alternatives. Depending
upon the particular promotion goal, a customer can choose to include its
promotional materials in FSIs or ROP, can elect to distribute a customized
printed solo insert (VIP), or distribute a product sampling program. We market
our products through our own sales force and rely to a significant extent on
repeat business.
Account Managers personally call on existing customers to maintain
relationships and on potential customers to describe the advantages afforded by
our products compared to other promotion alternatives. In addition,
approximately 25% of each cooperative FSI program is sold to direct mail
marketers who purchase space (referred to as "remnant space") at reduced costs
in exchange for accepting such space on a space-available basis.
FREE-STANDING INSERTS (FSIS)
Most of the consumer purchase incentives that we publish are featured in
cooperative FSIs which are four-color promotional booklets printed by us at our
own facilities and distributed through Sunday newspapers. Cooperative FSIs are
booklets containing promotions from multiple advertisers. We produced our first
FSI in 1972. In 1998, we inserted our cooperative FSIs in the Sunday edition of
over 500 newspapers with a combined average paid circulation of approximately
57.7 million on 46 publishing dates. By comparison, there
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were approximately 93.3 million households in the United States, according to
information published in 1990 by the U.S. Census Bureau.
Many FSI sales are made significantly in advance of program dates. We
typically announce our annual publication schedule approximately 12 to 18 months
in advance of the first publication date and customers may reserve categories at
any time thereafter. Account Managers work closely with customers to select
their FSI publication dates from our schedule and coordinate all aspects of FSI
printing and publication, as well as to obtain commitments from customers in the
form of signed contracts. Our proprietary order entry and ad placement software
allows us to produce as many different FSI versions as customers require,
typically over 270 different layout versions per publication date. By offering
different versions in different markets, we offer our customers greater
flexibility to target precise geographic areas or tailor promotional offers to
particular markets by varying coupon values, promotion copy and terms of the
promotional offer.
At the end of the selling cycle for each cooperative FSI program, there is
generally space in the booklet that has not been sold. This remnant space is
sold at a discount, primarily to direct mail marketers, who place themselves on
a waiting list for space that may become available. We select direct mail
marketers as remnant space customers on the basis of a number of factors,
including price, circulation, reputation and credit-worthiness. Remnant space
customers are subject to being "bumped" in favor of a regular price customer in
need of space at the last minute. Remnant space sales are included in total
cooperative FSI sales for financial reporting purposes.
Total cooperative FSI sales during the year ended December 31, 1998 were
$567.7 million, or 76.6% of our net sales. The top ten FSI customers accounted
for approximately 25.0% of FSI sales during the year ended December 31, 1998,
and no single customer accounted for more than 10.0% of FSI sales during the
same period.
VALASSIS IMPACT PROMOTIONS (VIP)
VIP offers our customers specialty print promotion products in multiple,
customized formats such as die-cuts, posters and calendars, as well as
traditional FSI formats. Because these promotions feature only one manufacturer
(referred to as "solos"), the customer has the ability to create a completely
individualized promotion. While VIP does produce printed material for direct
mail programs or for shipment to store locations, its primary product is
newspaper-delivered promotions. VIP offers customers the flexibility to run
promotions any day of the year in any newspaper throughout the United States.
VIP specializes in producing turnkey promotions for franchise and retail
marketers, such as fast food chains, allowing orders to be placed on a national,
regional or local basis.
VIP sales during the year ended December 31, 1998 were $103.1 million, or
13.9% of our net sales. VIP customers are made up primarily of franchise food
and retail operations. Two VIP customers accounted for 27.0% of VIP sales for
the year ended December 31, 1998, with the top ten customers accounting for
approximately 61.0% of total VIP sales.
VALASSIS SAMPLING
We offer a newspaper-delivered sampling product that gives manufacturers
the ability to cost-effectively reach up to 58 million households in one
weekend. Samples can either be machine-inserted into newspapers (Newspac(R)),
placed in a polybag alongside the newspaper, or pre-sealed in a pouch that forms
part of the polybag (Newspouch(R)). In 1997, Valassis Sampling expanded its
product line with the addition of Brand Bag(TM) and Brand Bag Plus(TM). This
product offers marketers the opportunity to deliver an impactful advertising
message on a newspaper polybag without a sample included. Both products offer
customers home-delivered newspaper circulation of up to 40 million households in
one weekend. The bags feature the customer's advertising with the option of a
weather-resistant tear-off coupon.
In 1998, Valassis Sampling generated total revenue of $28.3 million, or
3.8% of net sales. The top ten customers accounted for approximately 88.0% of
Valassis Sampling sales during the year ended December 31, 1998, with three
customers accounting for 62.0% of Valassis Sampling sales during the same
period.
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VALASSIS OF CANADA
In March 1995, Valassis acquired McIntyre & Dodd Marketing (now known as
Valassis of Canada), a leader in consumer promotion and direct response
merchandising in Canada. Several challenges were faced in 1995 including an
industry price/market share battle, poor economy, and mail order volume decline.
Since then, we have streamlined or repositioned existing products, dropped
unprofitable offerings and added new products and services to better meet the
needs of our customers.
RUN-OF-PRESS (ROP)
We arrange for the publication of ROP promotions in either a cooperative or
solo format. Cooperative programs, which group the promotions of several
customers together, are sold on a product exclusive basis, and usually run each
week when a newspaper runs its food section. Solo programs, which feature a
single advertiser, offer the marketer the flexibility to run in any newspaper
throughout the United States (including newspapers targeted to specific
demographic groups), on any day of the year and in any section of the newspaper.
Media (newspaper placement fees) is the major cost component of ROP
distribution, which generally accounts for approximately 98.0% of our total
direct ROP costs. We believe that our customers use us to place ROP because of
our ability to negotiate favorable media rates, our well-developed production
and placement capabilities, and our capacity to execute integrated FSI and ROP
programs. We do not project this division to be a growth area, but rather an
additional service offered to our customers.
ROP customers include primarily package goods manufacturers, pharmaceutical
companies and their advertising and promotion agencies. Our total ROP sales were
$17.8 million during the year ended December 31, 1998, or 2.4% of net sales. Our
top ten ROP customers accounted for approximately 85.0% of the ROP sales during
the same period.
COMPETITION
We compete in the cooperative FSI business principally with News America
FSI, Inc., a company owned by The News Corporation Limited. This competitor has
substantially greater financial resources than we do. We compete for business
primarily on the basis of the following:
- customer service and sales relationships;
- price; and
- category availability.
We also compete with in-store marketing and other forms of promotional
strategies or coupon delivery and may compete with any new or products in the
sales promotion field.
In the past, new competitors have tried to establish themselves in the FSI
market. As a result, we experienced periods of intense price competition. During
such times, the number of FSI programs increased which led to a meaningful
decrease in the number of pages per FSI program and, as a result, a decrease in
the average revenue per page. These significant decreases had a material adverse
effect on our financial performance. Business booked under these competitive
pricing conditions severely impacted our results for the fiscal year ended June
30, 1994 and the six months ended December 31, 1994.
If new competitors enter the FSI market or our existing competitor tries to
increase market share by reducing prices, our financial performance could be
materially adversely affected.
Although we believe that cooperative FSIs are currently the most efficient
means of distributing coupons to the public, we compete with other media for the
promotion and marketing dollars of our customers. It is possible that
alternative media or changes in promotional strategies could make FSIs less
attractive to our customers or could cause a shift in their preference to
different promotional materials or coupon delivery modes.
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The VIP division competes with News America FSI, Inc. for package goods and
fast food business, and with commercial printers. VIP continues to add new
services and product formats to meet the needs of an expanding customer base.
We compete with several newspaper network groups in the ROP market. As
there are no significant capital investments associated with this business,
other competitors could easily enter the ROP market. An increase in the number
of ROP competitors could result in a loss of market share for our ROP division.
EMPLOYEES
As of December 31, 1998, we had 1,456 full-time employees: 473 of these
employees are on our sales, sales operations and marketing staff; 867 are
involved in manufacturing; 34 are on our management information systems staff;
and 82 are involved with administration. None of our employees are represented
by a labor union. We consider labor relations with employees to be good and have
not experienced any interruption of our operations due to labor disagreements.
PROPERTIES
Our principal executive offices are located in a leased office complex in
Livonia, Michigan. We also lease sales offices in Los Angeles (Seal Beach),
Chicago (Schaumburg), Atlanta, Dallas, Boston, Minneapolis, Connecticut
(Wilton), and various other localities.
We operate three printing facilities. We own the Livonia printing facility
which consists of approximately 225,000 square feet and includes VIP, printing
and warehouse facilities. We also own printing facilities in Durham, North
Carolina and Wichita, Kansas, consisting of approximately 110,000 square feet
and 138,000 square feet, respectively. In addition, we lease a facility in
Plymouth, Michigan, which houses our pre-press operations. These facilities
generally have sufficient capacity to handle present volumes although, during
periods of unusual demand, we may require services of a contract printer.
LEGAL PROCEEDINGS
On February 24, 1999, we commenced litigation against The News Corporation
Limited and News America Incorporated in the State of Michigan Circuit Court for
the County of Wayne. The complaint seeks $150 million in compensatory damages,
$300 million in punitive damages and injunctive relief based on allegations of
tortious interference with contract, tortious interference with prospective
contractual relations and aiding and abetting a breach of fiduciary duty. The
principal factual allegation is that the defendants induced Arthur Andersen LLP
to repudiate a joint venture agreement with us relating to the development of a
new product. The time for defendants to answer or move with respect to the
complaint has not yet expired. We have also asked Arthur Andersen to pursue ADR
procedures mandated by the joint venture agreement with respect to this dispute.
We are involved in various routine litigation arising in the ordinary
course of business. In our opinion, the ultimate disposition of these matters
will not have a material effect on our financial position, results of operations
or liquidity.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT
The Old Notes were sold by the Company on January 12, 1999, in a private
placement in reliance on Section 4(2) of the Securities Act and immediately
resold by the Initial Purchasers thereof in reliance on Rule 144A under the
Securities Act. In connection with that placement, the Company entered into the
Registration Rights Agreement, which requires that the Company file the
Registration Statement under the Securities Act with respect to the Exchange
Notes and, upon the effectiveness of that Registration Statement, offer to the
holders of the Old Notes the opportunity to exchange their Old Notes for a like
principal amount of Exchange Notes, which will be issued without a restrictive
legend and which generally may be reoffered and resold by the holder without
registration under the Securities Act. The Registration Rights Agreement further
provides that the Company must use its reasonable efforts to (i) cause the
Registration Statement with respect to the Exchange Offer to be declared
effective on or before June 11, 1999 and (ii) consummate the Exchange Offer on
or before July 12, 1999. Except as provided below, upon the completion of the
Exchange Offer, the Company's obligations with respect to the registration of
the Old Notes and the Exchange Notes will terminate. A copy of the Registration
Rights Agreement has been filed as an exhibit to the Registration Statement, of
which this Prospectus is a part, and the summary herein of the material
provisions thereof does not purport to be complete and is qualified in its
entirety by reference thereto. As a result of the timely filing and the
effectiveness of the Registration Statement, the Additional Interest provided
for in the Registration Rights Agreement will not become payable by the Company.
Following the completion of the Exchange Offer (except as set forth in the
paragraph immediately below), holders of Old Notes not tendered will not have
any further registration rights and those Old Notes will continue to be subject
to certain restrictions on transfer. Accordingly, the liquidity of the market
for the Old Notes could be adversely affected upon consummation of the Exchange
Offer. See "Risk Factors -- Consequences of Failure to Exchange Old Notes."
In order to participate in the Exchange Offer, a holder must represent to
the Company, among other things, that (i) the Exchange Notes acquired pursuant
to the Exchange Offer are being acquired in the ordinary course of business of
the person receiving the Exchange Notes, (ii) neither the holder nor any such
other person has an arrangement or understanding with any person to participate
in the distribution of the Notes within the meaning of the Securities Act and
(iii) neither the holder nor any such other person is an "affiliate," as defined
under Rule 405 promulgated under the Securities Act, of the Company. Pursuant to
the Registration Rights Agreement if (i) the Company determines that it is not
permitted to effect the Exchange Offer as contemplated hereby because of any
applicable law or policy, or (ii) any holder of Transfer Restricted Securities
notifies the Company prior to July 12, 1999 (a) that it is prohibited by law or
SEC policy from participating in the Exchange Offer, (b) that it may not resell
the Exchange Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and that this Prospectus is not appropriate or available
for such resales, or (c) that it is a broker-dealer and owns Old Notes acquired
directly from the Company or an affiliate of the Company, the Company is
required to file a "shelf" registration statement for a continuous offering
pursuant to Rule 415 under the Securities Act in respect of the Old Notes. For
purposes of the foregoing, "Transfer Restricted Securities" means each Old Note
until (i) the date on which such Old Note has been exchanged for an Exchange
Note in the Exchange Offer, (ii) the date on which such Old Note has been
electively registered under the Securities Act and disposed of in accordance
with such "shelf" registration statement, (iii) the date on which such Old Note
is sold pursuant to Rule 144 under circumstances in which any legend borne by
such Old Note relating to restrictions on transferability thereof, under the
Securities Act or otherwise, is removed or such Old Note is eligible to be sold
pursuant to paragraph (k) of Rule 144, or (iv) such Old Note shall cease to be
outstanding. Other than as set forth in this paragraph, no holder will have the
right to participate in the "shelf" registration statement nor otherwise require
that the Company register such holder's shares of Old Notes under the Securities
Act. See "-- Procedures for Tendering."
Based on an interpretation by the SEC's staff set forth in no-action
letters issued to third parties unrelated to the Company, the Company believes
that, with the exceptions set forth below, Exchange Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold and
otherwise
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<PAGE> 25
transferred by any person receiving such Exchange Notes, whether or not such
person is the registered holder (other than any such holder or such other person
which is (i) an "affiliate" of the Company within the meaning of Rule 405 under
the Securities Act or (ii) a broker-dealer that purchased such Old Notes
directly from the Company to resell pursuant to Rule 144A or any other available
exemption under the Securities Act or (iii) a person participating in the
distribution of the Exchange Notes) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that the Exchange
Notes are acquired in the ordinary course of business of the holder or such
other person and neither the holder nor such other person has an arrangement or
understanding with any person to participate in the distribution of such
Exchange Notes. Holders of Old Notes accepting the Exchange Offer will represent
to the Company in the Letter of Transmittal that such conditions have been met.
Any holder who tenders in the Exchange Offer for the purpose of participating in
a distribution of the Exchange Notes cannot rely on this interpretation by the
SEC's staff and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction. Each broker-dealer that receives Exchange Notes for its own account
in exchange for Old Notes, where such Old Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Notes. See "Plan of Distribution."
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it acquired the Old Notes
as a result of market-making activities or other trading activities and will
deliver a prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Notes received in
exchange for Old Notes where such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities. The Letter
of Transmittal states that by acknowledging and delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
Except as stated above, this Prospectus may not be used for an offer to
resell, resale or other retransfer of Exchange Notes.
The Exchange Offer is not being made to, nor will the Company accept
tenders for exchange from, holders of Old Notes in any jurisdiction in which the
Exchange Offer or the acceptance thereof would not be in compliance with the
securities or blue sky laws of such jurisdiction.
CONSEQUENCES OF FAILURE TO EXCHANGE
Following the completion of the Exchange Offer (except as set forth in the
second paragraph under " -- Purpose and Effect" above), holders of Old Notes not
tendered will not have any further registration rights and those Old Notes will
continue to be subject to certain restrictions on transfer. Accordingly, the
liquidity of the market for a holder's Old Notes could be adversely affected
upon completion of the Exchange Offer if the holder does not participate in the
Exchange Offer. See "Risk Factors -- Consequences of Failure to Exchange Old
Notes."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old Notes
validly tendered and not withdrawn prior to , New York City time,
on the Expiration Date. The Company will issue $1,000 principal amount of
Exchange Notes in exchange for each $1,000 principal amount of outstanding Old
Notes accepted in the Exchange Offer. Holders may tender some or all of their
Old Notes pursuant to the Exchange Offer. However, Old Notes may be tendered
only in integral multiples of $1,000 in principal amount.
The form and terms of the Exchange Notes are substantially the same as the
terms of the Old Notes except that the Exchange Notes have been registered under
the Securities Act and except for certain transfer restrictions, registration
rights and terms providing for an increase in the interest rate on the Old Notes
under certain events relating to registration of the Exchange Notes. The
Exchange Notes will evidence the same
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<PAGE> 26
debt as the Old Notes and will be issued pursuant to, and entitled to the
benefits of, the Indenture pursuant to which the Old Notes were issued.
As of the date of this Prospectus, Old Notes representing $100.0 million
aggregate principal amount were outstanding and there was one registered holder,
a nominee of DTC. This Prospectus, together with the Letter of Transmittal, is
being sent to such registered holder and to others believed to have beneficial
interests in the Old Notes. The Company intends to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the SEC promulgated thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
for the purpose of receiving the Exchange Notes from the Company. If any
tendered Old Notes are not accepted for exchange because of an invalid tender,
the occurrence of certain other events set forth herein or otherwise,
certificates for any such unaccepted Old Notes will be returned, without
expense, to the tendering holder thereof as promptly as practicable after the
Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes, in connection with the Exchange Offer. See
"-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean , New York City time,
on , 1999, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date," shall mean the latest
date and time to which the Exchange Offer is extended. In order to extend the
Exchange Offer, the Company will notify the Exchange Agent and each registered
holder of any extension by oral or written notice (which may be by means of a
press release or other public announcement) prior to 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
In addition, the Company reserves the right, in its sole discretion, (i) to
delay accepting any Old Notes, or, if any of the conditions set forth under
"-- Conditions to Exchange Offer" shall not have been satisfied, to terminate
the Exchange Offer, by giving oral or written notice of such delay or
termination to the Exchange Agent, or (ii) to amend the terms of the Exchange
Offer in any manner.
PROCEDURES FOR TENDERING
Only a holder of Old Notes may tender the Old Notes in the Exchange Offer.
Except as set forth under "-- Book-Entry Transfer," to tender in the Exchange
Offer a holder must complete, sign, and date the Letter of Transmittal, or a
copy thereof, have the signatures thereon guaranteed if required by the Letter
of Transmittal, and mail or otherwise deliver the Letter of Transmittal or copy
to the Exchange Agent prior to the Expiration Date. In addition, (i)
certificates for such Old Notes must be received by the Exchange Agent along
with the Letter of Transmittal prior to the Expiration Date, (ii) a timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Old
Notes, if that procedure is available, into the Exchange Agent's account at DTC
(the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date or (iii) the holder must comply with the guaranteed delivery
procedures described below. To be tendered effectively, the Letter of
Transmittal and other required documents must be received by the Exchange Agent
at the address set forth under "-- Exchange Agent" prior to , New
York City time, on the Expiration Date.
The tender by a holder that is not withdrawn before the Expiration Date
will constitute an agreement between that holder and the Company in accordance
with the terms and subject to the conditions set forth herein and in the Letter
of Transmittal.
THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF
THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS
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RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE
AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD
BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THESE TRANSACTIONS FOR
SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company, or other nominee and who wishes
to tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. If the beneficial
owner wishes to tender on the owner's own behalf, the owner must, prior to
completing and executing the Letter of Transmittal and delivering the owner's
Old Notes, either make appropriate arrangements to register ownership of the Old
Notes in the beneficial owner's name or obtain a properly completed bond power
from the registered holder. The transfer of registered ownership may take
considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless Old Notes tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled "Special Issuance Instruction" or
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. If signatures on a Letter of Transmittal or
a notice of withdrawal, as the case may be, are required to be guaranteed, the
guarantee must be by a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or by a commercial bank or trust company having an office or
correspondent in the United States (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, the Old Notes must be
endorsed or accompanied by appropriate bond powers, signed by the registered
holder as that registered holder's name appears on the Old Notes.
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations, or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and evidence satisfactory to the
Company of their authority to so act must be submitted with the Letter of
Transmittal unless waived by the Company.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance, and withdrawal of tendered Old Notes will be determined by
the Company in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any and all Old Notes
not properly tendered or any Old Notes, the Company's acceptance of which would,
in the opinion of counsel for the Company, be unlawful. The Company also
reserves the right to waive any defects, irregularities or conditions of tender
as to particular Old Notes. The Company's interpretation of the terms and
conditions of the Exchange Offer (including the instructions in the Letter of
Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Company shall determine. Although the Company intends to
notify holders of defects or irregularities with respect to tenders of Old
Notes, neither the Company, the Exchange Agent, nor any other person shall incur
any liability for failure to give such notification. Tenders of Old Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering holders,
unless otherwise provided in the Letter of Transmittal, as soon as practicable
following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding after the
Expiration Date or, as set forth under "-- Conditions to the Exchange Offer," to
terminate the Exchange Offer and, to the extent permitted by applicable law,
purchase Old Notes in the open market, in privately negotiated transactions, or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
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<PAGE> 28
By tendering, each holder will represent to the Company that, among other
things, (i) the Exchange Notes acquired pursuant to the Exchange Offer are being
obtained in the ordinary course of business of the person receiving such
Exchange Notes, whether or not such person is the registered holder, (ii)
neither the holder nor any such other person has an arrangement or understanding
with any person to participate in the distribution of such Exchange Notes and
(iii) neither the holder nor any such other person is an "affiliate," as defined
under Rule 405 of the Securities Act, of the Company.
In all cases, issuance of Exchange Notes for Old Notes that are accepted
for exchange pursuant to the Exchange Offer will be made only after timely
receipt by the Exchange Agent of certificates for such Old Notes or a timely
Book-Entry Confirmation of such Old Notes into the Exchange Agent's account at
the Book-Entry Transfer Facility, a properly completed and duly executed Letter
of Transmittal (or, with respect to the DTC and its participants, electronic
instructions in which the tendering holder acknowledges its receipt of and
agreement to be bound by the Letter of Transmittal), and all other required
documents. If any tendered Old Notes are not accepted for any reason set forth
in the terms and conditions of the Exchange Offer or if Old Notes are submitted
for a greater principal amount than the holder desires to exchange, such
unaccepted or non-exchanged Old Notes will be returned without expense to the
tendering holder thereof (or, in the case of Old Notes tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry transfer procedures described below, such
nonexchanged Old Notes will be credited to an account maintained with such
Book-Entry Transfer Facility) as promptly as practicable after the expiration or
termination of the Exchange offer.
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Notes. See "Plan of Distribution."
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Old Notes at the Book-Entry Transfer Facility for purposes of the
Exchange Offer within two business days after the date of this Prospectus, and
any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Notes being tendered by
causing the Book-Entry Transfer Facility to transfer such old Notes into the
Exchange Agent's account at the Book-Entry Transfer Facility in accordance with
such Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Old Notes may be effected through book-entry transfer at the
Book-Entry Transfer Facility, the Letter of Transmittal or copy thereof, with
any required signature guarantees and any other required documents, must, in any
case other than as set forth in the following paragraph, be transmitted to and
received by the Exchange Agent at the address set forth under " Exchange Agent"
on or prior to , New York City time, on the Expiration Date or
the guaranteed delivery procedures described below must be complied with.
DTC's Automated Tender Offer Program ("ATOP") is the only method of
processing exchange offers through DTC. To accept the Exchange Offer through
ATOP, participants in DTC must send electronic instructions to DTC through DTC's
communication system in lieu of sending a signed, hard copy Letter of
Transmittal. DTC is obligated to communicate those electronic instructions to
the Exchange Agent. To tender Old Notes through ATOP, the electronic
instructions sent to DTC and transmitted by DTC to the Exchange Agent must
contain the character by which the participant acknowledges its receipt of and
agrees to be bound by the Letter of Transmittal.
GUARANTEED DELIVERY PROCEDURES
If a registered holder of the Old Notes desires to tender such Old Notes
and the Old Notes are not immediately available, or time will not permit such
holder's Old Notes or other required documents to reach the Exchange Agent
before the Expiration Date, or the procedure for book-entry transfer cannot be
completed on a timely basis, a tender may be effected if (i) the tender is made
through an Eligible Institution, (ii) prior to the Expiration Date, the Exchange
Agent receives from such Eligible Institution a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) and Notice of Guaranteed
Delivery, substantially
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in the form provided by the Company (by telegram, telex, facsimile transmission,
mail or hand delivery), setting forth the name and address of the holder of Old
Notes and the amount of Old Notes tendered, stating that the tender is being
made thereby and guaranteeing that within three New York Stock Exchange ("NYSE")
trading days after the date of execution of the Notice of Guaranteed Delivery,
the certificates for all physically tendered Old Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, and any other
documents required by the Letter of Transmittal will be deposited by the
Eligible Institution with the Exchange Agent and (iii) the certificates for all
physically tendered Old Notes, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, and any other documents required by the Letter
of Transmittal, are received by the Exchange Agent within three NYSE trading
days after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL RIGHTS
Tenders of Old Notes may be withdrawn at any time prior to ,
New York City time, on the Expiration Date.
For a withdrawal of a tender of Old Notes to be effective, a written or
(for DTC participants) electronic ATOP transmission notice of withdrawal must be
received by the Exchange Agent at its address set forth under " Exchange Agent"
prior to , New York City time, on the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having deposited
the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to
be withdrawn (including the certificate number or numbers and principal amount
of such Old Notes), (iii) be signed by the holder in the same manner as the
original signature on the Letter of Transmittal by which such Old Notes were
tendered (including any required signature guarantees) or be accompanied by
documents of transfer sufficient to have the Trustee register the transfer of
such Old Notes into the name of the person withdrawing the tender, and (iv)
specify the name in which any such Old Notes are to be registered, if different
from that of the Depositor. All questions as to the validity, form, and
eligibility (including time of receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties. Any
Old Notes so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer; provided, however, that withdrawn
Old Notes may be tendered again following one of the procedures described herein
and in the Letter of Transmittal at any time prior to the Expiration Date. Any
Old Notes which have been tendered for exchange but which are not exchanged for
any reason will be returned to the holder thereof without cost to such holder as
soon as practicable after withdrawal, rejection of tender, or termination of the
Exchange Offer. Properly withdrawn Old Notes may be retendered by following one
of the procedures under " -- Procedures for Tendering" at any time on or prior
to the Expiration Date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company
shall not be required to accept for exchange, or to issue Exchange Notes in
exchange for, any Old Notes and may terminate or amend the Exchange Offer if at
any time before the acceptance of such Old Notes for exchange or the exchange of
the Exchange Notes for such Old Notes, the Company determines that the Exchange
Offer violates applicable law, any applicable interpretation of the staff of the
SEC or any order of any governmental agency or court of competent jurisdiction.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its sole discretion. The failure by the Company at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
In addition, the Company will not accept for exchange any Old Notes
tendered, and no Exchange Notes will be issued in exchange for any such Old
Notes, if at such time any stop order shall be threatened or in effect with
respect to the Registration Statement of which this Prospectus constitutes a
part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended. In any such event the
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Company is required to use every reasonable effort to obtain the withdrawal of
any stop order at the earliest possible time.
EXCHANGE AGENT
All executed Letters of Transmittal should be directed to the Exchange
Agent. The Bank of New York has been appointed as Exchange Agent for the
Exchange Offer. Questions, requests for assistance and requests for additional
copies of this Prospectus or of the Letter of Transmittal should be directed to
the Exchange Agent addressed as follows:
THE BANK OF NEW YORK
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street
Floor 7-E
New York, NY 10286
Attn: Reorganization Section,
Jacqueline Warren
(212) 815-5924
By Hand or Overnight Delivery before p.m.
The Bank of New York
101 Barclay Street
Corporate Trust Services
Ground Level
New York, NY 10286
Attn: Reorganization Section,
Jacqueline Warren
(212) 815-5924
By Facsimile (for Eligible Institutions):
(212) 815-6339
For Information or
Confirmation by Telephone:
(212) 815-5924
(Originals of all documents sent by facsimile should be sent promptly by
registered or certified mail,
by hand or by overnight delivery service.)
FEES AND EXPENSES
The Company will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The principal solicitation is
being made by mail; however, additional solicitations may be made in person or
by telephone by officers and employees of the Company.
The estimated cash expenses to be incurred in connection with the Exchange
Offer will be paid by the Company including fees and expenses of the Exchange
Agent, accounting, legal, printing, and related fees and expenses.
TRANSFER TAXES
Holders who tender their Old Notes for exchange will not be obligated to
pay any transfer taxes in connection therewith, except that holders who instruct
the Company to register Exchange Notes in the name of, or request that Old Notes
not tendered or not accepted in the Exchange Offer be returned to, a person
other than the registered tendering holder will be responsible for the payment
of any applicable transfer tax thereon. See "Certain Federal Income Tax
Considerations."
ACCOUNTING TREATMENT
The Exchange Notes will be recorded at the same carrying value as the Old
Notes, as reflected in the Company's accounting records on the date of the
exchange. Accordingly, no gain or loss for accounting purposes will be
recognized. The expenses of the Exchange Offer will be expensed over the term of
the Exchange Notes.
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DESCRIPTION OF OTHER INDEBTEDNESS
DESCRIPTION OF REVOLVING CREDIT FACILITY
The Company is party to a Credit Agreement, dated as of November 16, 1998,
as amended by Amendment No. 1 thereto, dated as of November 25, 1998, with
several financial institutions and Comerica Bank, as Agent for such financial
institutions (the "Credit Agreement"). The Credit Agreement provides the Company
with a $160.0 million unsecured revolving credit facility, including a $10.0
million sublimit for the issuance of letters of credit and a $10.0 million
sublimit for swing line loans (the "Revolving Credit Facility"). The Credit
Agreement matures on October 31, 2001, which maturity date may be extended for
up to two additional one-year periods at the request of the Company and the
approval of all of the banks party thereto.
Revolving credit advances under the Credit Agreement bear interest at an
annual rate, from the original closing date until delivery of the Company's 1998
fiscal year audited financial statements, at either:
- the reserve-adjusted "Eurocurrency-based Rate" plus a margin of
0.725%; or
- the "Prime-based Rate" (which is defined as the greater of (A)
Comerica Bank's "prime rate" and (B) the Federal funds effective
rate plus 0.500%), at the option of the Company.
Thereafter, the margin on revolving credit advances that bear interest at
the Eurocurrency-based Rate will range from 0.525% per annum to 0.875% per
annum, depending on the Company's Funded Debt to EBITDA ratio. There is no
margin on revolving credit advances that bear interest at the Prime-based Rate.
Swing line advances bear interest at either the Prime-based Rate or a rate
quoted by the Swing Line Bank (which is Comerica Bank), at the option of the
Company. Each swing line advance is required to be repaid within 30 days after
the date of such advance.
The Company is required to pay an issuance fee on letters of credit equal
to 0.125% of the face amount and a fee on the undrawn amount of each letter of
credit ranging from 0.525% per annum to 0.875% per annum, depending on the
Company's Funded Debt to EBITDA ratio. The Company is also required to pay a
facility fee on the aggregate amount of commitments under the Credit Agreement
at a rate that ranges from 0.15% per annum to 0.275% per annum, depending on the
Company's Funded Debt to EBITDA ratio. So long as any Event of Default shall
exist, the Company is required to pay default interest on all advances and other
monetary obligations of the Company at a per annum rate equal to 3% in excess of
the interest rate(s) then in effect (and, with respect to Eurocurrency-based
Rate advances, calculated on the basis of the maximum margin chargeable with
respect thereto).
The Credit Agreement contains customary affirmative covenants, including,
without limitation:
- preservation of existence;
- keeping of books and records;
- delivery of financial statements and other information;
- maintenance of a minimum fixed charge coverage ratio;
- maintenance of a maximum funded debt to EBITDA ratio;
- payment of taxes;
- permitting inspection of books, records and properties;
- compliance with leases;
- obtaining necessary governmental approvals;
- maintenance of insurance;
- compliance with laws; and
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- compliance with Year 2000 requirements.
The Credit Agreement also contains customary negative covenants of the
Company and its subsidiaries, including, without limitation:
- a limitation on redemptions of the capital stock of the Company
(such redemptions may not exceed, on any date of determination, the
sum of $75.0 million plus 50% of the Company's consolidated net
income from November 16, 1998 through such date of determination);
- limitations on mergers and dispositions of assets;
- limitations on indebtedness (which includes a cap of $600.0 million
on the aggregate funded debt of the Company and its subsidiaries);
- limitations on liens;
- limitations on acquisitions (which includes a cap of $50.0 million
on certain permitted acquisitions and permitted mergers);
- limitations on the payment of dividends (subject to an exception for
up to $12.5 million in any fiscal quarter so long as no Default or
Event of Default under the Credit Agreement is continuing or would
result therefrom);
- limitations on investments and loans;
- limitations on amendments to the terms of any permitted subordinated
debt; and
- a limitation on existing and future investments in subsidiaries and
joint ventures.
The Credit Agreement contains customary Events of Default, including,
without limitation:
- the non-payment of principal, interest or fees when due;
- the non-payment of other amounts within five business days after
written notice from the Agent that the same is due and payable;
- subject to applicable grace periods in certain circumstances, the
default in the performance of the covenants described above;
- any representation or warranty proves to be untrue or misleading in
any material adverse respect when made;
- cross-default to certain other indebtedness;
- certain events of bankruptcy and insolvency;
- certain judgment defaults; and
- certain changes in control or ownership of the Company.
DESCRIPTION OF OTHER SENIOR NOTES
In November 1994, the Company completed the sale of $255.0 million in
aggregate principal amount of its 9.55% Senior Notes due 2003 (the "2003 Senior
Notes"). Such Notes are general unsecured obligations of the Company and rank
equally in right of payment with all other senior indebtedness of the Company.
As of December 31, 1998, $129.8 million in aggregate principal amount of the
2003 Notes was outstanding. The 2003 Senior Notes mature on December 1, 2003 and
bear interest at the rate per annum of 9.55%. Interest on the 2003 Senior Notes
is payable semiannually on June 1 and December 1 of each year.
The 2003 Senior Notes were issued under an indenture dated November 15,
1994 between the Company and The Bank of New York, as Trustee (the "Senior Notes
Indenture"). The 2003 Senior Notes are subject to all terms of the Senior Notes
Indenture, and holders of the Notes are referred to the Senior Notes Indenture
and the Trust Indenture Act for a statement of such terms. The statements under
this caption
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relating to the 2003 Senior Notes are summaries and do not purport to be
complete and are qualified in their entirety by express reference to the Senior
Notes Indenture which can be obtained as provided under the section in this
Prospectus entitled "Available Information."
The 2003 Senior Notes are not redeemable by the Company prior to maturity.
The Senior Notes Indenture contains certain covenants that affect, and in
certain cases significantly limit or prohibit:
- liens;
- sale and leaseback transactions;
- restricted payments;
- indebtedness;
- transactions with affiliates; and
- asset sales, mergers and consolidations.
In addition, the Senior Notes Indenture provides that upon a "Change of
Control" of the Company (as defined in the Senior Notes Indenture), the Company
will be required to make an offer to purchase the 2003 Senior Notes at a
purchase price equal to 101% of their principal amount, plus accrued interest.
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DESCRIPTION OF THE NOTES
You can find the definitions of certain terms used in this description
under the subheading "-- Certain Definitions."
The Company will issue the Exchange Notes under the Indenture (the
"Indenture") between itself and The Bank of New York, as trustee (the "Trustee")
dated as of January 12, 1999, as amended. The terms of the Exchange Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act.
The following description is a summary of the material provisions of the
Indenture. It does not restate the Indenture in its entirety. We urge you to
read the Indenture because it, and not this description, defines your rights as
holders of the Exchange Notes. A copy of the Indenture and the form of Exchange
Note is included as an exhibit to the Registration Statement of which this
Prospectus constitutes a part and is available as set forth under "Available
Information."
The following summary applies to both the Old Notes and the Exchange Notes
offered hereby. The terms of the Exchange Notes will be substantially the same
as the terms of the Old Notes except that the Exchange Notes have been
registered under the Securities Act and except for certain transfer
restrictions, registration rights and terms providing for an increase in the
interest rate on the Old Notes under certain events relating to registration of
the Exchange Notes.
BRIEF DESCRIPTION OF THE NOTES
These Notes:
- are unsecured general obligations of the Company;
- rank equally in right of payment with all existing and future
unsecured senior debt of the Company; and
- are senior in right of payment to any existing and future subordinated
debt of the Company.
PRINCIPAL, MATURITY AND INTEREST
The Notes will be limited in aggregate principal amount to $350.0 million,
of which $100.0 million will be issued in the Offering. The Company will issue
Notes in fully registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000. The Notes will mature on January 15, 2009.
Interest on these Notes will accrue at the rate of 6 5/8% per annum and
will be payable semi-annually in arrears on January 15 and July 15, commencing
on July 15, 1999. The Company will make each interest payment to the Holders of
record of these Notes on the immediately preceding January 1 and July 1.
Interest on these Notes will accrue from the date of original issuance or,
if interest has already been paid, from the date it was most recently paid.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months.
METHODS OF RECEIVING PAYMENTS ON THE NOTES
If a Holder has given wire transfer instructions to the Company, the
Company will make all principal, premium and interest payments on those Notes in
accordance with those instructions. All other payments on these Notes will be
made at the office or agency of the Paying Agent and Registrar within the City
and State of New York unless the Company elects to make interest payments by
check mailed to the Holders at their address set forth in the register of
Holders.
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PAYING AGENT AND REGISTRAR FOR THE NOTES
The Trustee will initially act as Paying Agent and Registrar. The Company
may change the Paying Agent or Registrar without prior notice to the Holders of
the Notes, and the Company may act as Paying Agent or Registrar.
TRANSFER AND EXCHANGE
A Holder may transfer or exchange Notes in accordance with the Indenture.
The Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents. No service charge will
be made for any registration of transfer or exchange of the Notes, but the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company is not required to transfer or exchange
any Note selected for redemption. Also, the Company is not required to transfer
or exchange any Note for a period of 15 days before the mailing of a notice of
redemption of the Notes.
The registered Holder of a Note will be treated as the owner of it for all
purposes.
OPTIONAL REDEMPTION
The Company may redeem the Notes, in whole or in part, at any time at the
option of the Company upon not less than 30 nor more than 60 days prior notice
mailed by first-class mail to each Holder's registered address, at a redemption
price equal to the greater of (i) 100% of the principal amount thereof or (ii)
the sum of the present values of the remaining scheduled payments discounted to
the redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Treasury Rate plus 50 basis points, plus, in each
case, accrued and unpaid interest to the date of redemption.
If less than all of the Notes are to be redeemed at any time, the Trustee
will select Notes for redemption on a pro rata basis, by lot or by such method
as the Trustee shall deem fair and appropriate.
If any Note is to be redeemed in part only, the notice of redemption that
relates to that Note shall state the portion of the principal amount thereof to
be redeemed. A new Note in principal amount equal to the unredeemed portion of
the original Note will be issued in the name of the Holder thereof upon
cancellation of the original Note. Notes called for redemption become due on the
date fixed for redemption. Unless the Company defaults in payment of the
redemption price, on and after the redemption date, interest will cease to
accrue on Notes or portions of them called for redemption. No Notes of $1,000 or
less shall be redeemed in part.
CERTAIN COVENANTS
The Indenture contains certain covenants including the following:
LIMITATIONS ON MERGER, CONSOLIDATION, AND SALE OF ASSETS
The Company will not directly or indirectly: (1) consolidate or merge with
or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of its properties or assets, in one or more related
transactions, to another Person; unless:
(1) either: (a) the Company is the surviving corporation; or (b) the
Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, conveyance
or other disposition shall have been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all
the obligations of the Company under the Notes and the Indenture pursuant
to agreements reasonably satisfactory to the Trustee; and
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<PAGE> 36
(3) immediately after such transaction no Default or Event of Default
exists.
In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person. This "Limitations on Merger, Consolidation,
and Sale of Assets" covenant will not apply to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Company and any
of its wholly owned Subsidiaries.
LIMITATIONS ON LIENS
The Company will not, and will not permit any Subsidiary to, directly or
indirectly, create, incur, assume or suffer to exist any Lien of any kind on or
with respect to any asset owned or hereafter acquired securing Indebtedness
without making effective provision to secure all the Notes then outstanding by
such Lien, equally and ratably with or, in the event that such other
Indebtedness is subordinated in right of payment to the Notes, prior to any and
all other such Indebtedness thereby secured, so long as such other Indebtedness
is so secured, except that the foregoing restrictions shall not apply to (a)
Permitted Liens or (b) other Liens, if after giving effect thereto, the
aggregate outstanding amount of all such Indebtedness secured by Liens (other
than Permitted Liens) does not exceed the greater of $50.0 million or 15% of
Consolidated Tangible Assets determined in accordance with the Company's most
recent published consolidated balance sheet prepared in accordance with GAAP.
LIMITATIONS ON SALE AND LEASEBACK TRANSACTIONS
The Company will not, nor will it permit any Subsidiary to, enter into any
arrangement with any Person providing for the leasing by the Company of any
property now owned or hereafter acquired which has been or is to be sold or
transferred by the Company to such Person with the intention of taking back a
lease of such property (a "Sale and Leaseback Transaction"); provided that the
Company may enter into a Sale and Leaseback Transaction if:
(1) after giving effect to such Sale and Leaseback Transaction, the
aggregate outstanding amount of all Attributable Debt resulting from all
Sale and Leaseback Transactions does not exceed the greater of $50.0
million or 15% of Consolidated Tangible Assets, determined in accordance
with the Company's most recent published consolidated balance sheet in
accordance with GAAP; or
(2) the Company applies, within twelve months after the sale or
transfer, an amount equal to the net proceeds of the assets sold pursuant
to the Sale and Leaseback Transaction to the voluntary covenant defeasance
or retirement of Indebtedness (other than Indebtedness that is held by the
Company or Indebtedness of the Company that is subordinate in right of
payment to the Notes), which amount will not be less than the fair value
(in the opinion of an executive officer of the Company) of such assets less
an amount equal to the principal amount of such Indebtedness voluntarily
defeased or retired by the Company within such twelve-month period.
Notwithstanding the foregoing, no retirement referred to in clause (2)
above of the preceding sentence may be effected by the payment at maturity or
pursuant to any mandatory sinking fund payment or mandatory payment provision.
LIMITATIONS ON STOCK REDEMPTIONS AND STOCK REPURCHASES
The Company will not, and will not permit any Subsidiary to, directly or
indirectly, make any payments to redeem or repurchase any shares of the
Company's or a Subsidiary's Capital Stock (a "Redemption Payment"), if at the
time the Company or the Subsidiary makes such Redemption Payment:
(1) a Default shall have occurred and be continuing (or would result
from such Redemption Payment); and
(2) the aggregate amount of such Redemption Payment and all other
Redemption Payments since the date of the Indenture would exceed the sum of
(i) $75.0 million, plus (ii) 50% of the Company's Consolidated Net Income
from November 16, 1998 through the date of determination, plus (iii) any
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proceeds from the sale or issuance of shares of the Company's Capital Stock
or securities convertible into shares of the Company's Capital Stock (other
than an issuance or sale to a Subsidiary) and, without duplication,
proceeds received upon the exercise of options, warrants and other rights
to acquire shares of the Company's Capital Stock.
This "Limitations on Stock Redemptions and Stock Repurchases" covenant will
not prohibit (i) any Redemption Payment if, pro forma for such Redemption
Payment, the Funded Debt to EBITDA Ratio would have been equal to or less than
1.0; (ii) the repurchase or other acquisition of shares of, or options or
warrants to purchase shares of, the Company's Capital Stock or any Subsidiary's
Capital Stock from employees, former employees, directors or former directors of
the Company or any Subsidiary (or permitted transferees of such employees,
former employees, directors or former directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments thereto) or
other arrangements approved by the board of directors of the Company or the
Subsidiary under which such individuals purchase or sell or are granted the
option to purchase or sell shares of Capital Stock; provided, however, that the
aggregate amount of such repurchases and other acquisitions described in this
clause (ii) shall not exceed $5,000,000 in any calendar year; provided further,
however, that such repurchases and other acquisitions described in this clause
(ii) shall be excluded in the calculation of the amount of Redemption Payments;
(iii) the repurchase or acquisition of shares of the Company's Capital Stock
solely in exchange for other shares of the Company's Capital Stock; provided,
however, that such issuance of shares of the Company's Capital Stock shall not
be included in the calculation of proceeds from the issuance of shares of the
Company's Capital Stock in clause (2)(iii) above; provided further, however,
that such repurchases and other acquisitions described in this clause (iii)
shall be excluded in the calculation of the amount of Redemption Payments; or
(iv) the repurchase or acquisition solely of odd lots of the Company's Capital
Stock.
BOOK-ENTRY, DELIVERY AND FORM
Except as set forth in the next paragraph, the Exchange Notes to be resold
as set forth herein will initially be issued in the form of one or more Global
Notes (the "Global Notes"). The Global Notes will be deposited on the date of
the closing of the exchange of the Old Notes for the Exchange Notes (the
"Closing Date") with, or on behalf of the Depositary and registered in the name
of Cede & Co., as nominee of the Depositary (such nominee being referred to
herein as the "Global Note Holder").
Notes that are issued as described below under "-- Certificated Notes" will
be issued in the form of registered definitive certificates (the "Certificated
Notes"). Upon the transfer of Certificated Notes, such Certificated Notes may,
unless all Global Notes have previously been exchanged for Certificated Notes,
be exchanged for an interest in the Global Note representing the principal
amount of Notes being transferred, subject to the transfer restrictions set
forth in the Indenture.
The Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the "Participants"
or the "Depositary's Participants") and to facilitate the clearance and
settlement of transactions in such securities between Participants through
electronic book-entry changes in accounts of its Participants. The Depositary's
Participants include securities brokers and dealers (including the Initial
Purchasers), banks and trust companies, clearing corporations and certain other
organizations. Access to the Depositary's system is also available to other
entities such as banks, brokers, dealers and trust companies (collectively, the
"Indirect Participants" or the "Depositary's Indirect Participants") that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly. Persons who are not Participants may beneficially own securities
held by or on behalf of the Depositary only through the Depositary's
Participants or the Depositary's Indirect Participants.
The Company expects that pursuant to procedures established by the
Depositary (i) upon deposit of the Global Notes, the Depositary will credit the
accounts of Participants designated by the Initial Purchasers with portions of
the principal amount of the Global Notes and (ii) ownership of the Notes
evidenced by the Global Notes will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by the Depositary
(with respect to the interests of the Depositary's Participants), the
Depositary's Participants and the Depositary's Indirect Participants.
Prospective purchasers are advised that the laws of
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some states require that certain persons take physical delivery in definitive
form of securities that they own. Consequently, the ability to transfer Exchange
Notes evidenced by the Global Note will be limited to such extent.
So long as the Global Note Holder is the registered owner of any Notes, the
Global Note Holder will be considered the sole Holder under the Indenture of any
Notes evidenced by the Global Notes. Beneficial owners of Notes evidenced by the
Global Notes will not be considered the owners or Holders thereof under the
Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither the
Company nor the Trustee will have any responsibility or liability for any aspect
of the records of the Depositary or for maintaining, supervising or reviewing
any records of the Depositary relating to the Notes.
Payments in respect of the principal of, premium, if any, and interest on
any Notes registered in the name of the Global Note Holder on the applicable
record date will be payable by the Trustee to or at the direction of the Global
Note Holder in its capacity as the registered Holder under the Indenture. Under
the terms of the Indenture, the Company and the Trustee may treat the persons in
whose names Notes, including the Global Notes, are registered as the owners
thereof for the purpose of receiving such payments. Consequently, neither the
Company nor the Trustee has or will have any responsibility or liability for the
payment of such amounts to beneficial owners of Notes. The Company believes,
however, that it is currently the policy of the Depositary to immediately credit
the accounts of the relevant Participants with such payments, in amounts
proportionate to their respective holdings of beneficial interests in the
relevant security as shown on the records of the Depositary. Payments by the
Depositary's Participants and the Depositary's Indirect Participants to the
beneficial owners of Notes will be governed by standing instructions and
customary practice and will be the responsibility of the Depositary's
Participants or the Depositary's Indirect Participants.
CERTIFICATED NOTES
Subject to certain conditions, any person having a beneficial interest in a
Global Note may, upon request to the Trustee, exchange such beneficial interest
for Notes in the form of Certificated Notes. Upon any such issuance, the Trustee
is required to register such Certificated Notes in the name of, and cause the
same to be delivered to, such person or persons (or the nominee of any thereof).
In addition, if (i) the Company notifies the Trustee in writing that the
Depositary is no longer willing or able to act as a depositary and the Company
is unable to locate a qualified successor within 90 days or (ii) the Company, at
its option, notifies the Trustee in writing that it elects to cause the issuance
of Notes in the form of Certificated Notes under the Indenture, then, upon
surrender by the Global Note Holder of its Global Note, Notes in such form will
be issued to each person that the Global Note Holder and the Depositary identify
as being the beneficial owner of the related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
SAME DAY SETTLEMENT AND PAYMENT
The Indenture requires that payments in respect of the Notes represented by
the Global Note (including principal, premium, if any, and interest) be made by
wire transfer of immediately available next day funds to the accounts specified
by the Global Note Holder. With respect to Certificated Notes, the Company will
make all payments of principal, premium, if any, and interest by wire transfer
of immediately available funds to the accounts specified by the Holders thereof
or, if no such account is specified, by mailing a check to each such Holder's
registered address. The Company expects that secondary trading in the
Certificated Notes will also be settled in immediately available funds.
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EVENTS OF DEFAULT AND REMEDIES
Each of the following is an "Event of Default":
(1) default for 30 days in the payment when due of interest on the
Notes;
(2) default in payment when due at maturity of the principal of any
Notes, upon declaration or otherwise;
(3) failure by the Company for 30 days after notice to comply with any
of its obligations described under the heading "Certain Covenants" above;
(4) failure by the Company for 60 days after notice to comply with any
of the other agreements in the Indenture;
(5) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company (or the payment of which is
guaranteed by the Company) whether such Indebtedness or guarantee now
exists, or is created after the date of the Indenture, if that default
results in the acceleration of such Indebtedness prior to its express
maturity, and, the principal amount of all such Indebtedness which has been
so accelerated aggregates in excess of $25.0 million or its foreign
currency equivalent, without such indebtedness having been discharged or
such acceleration having been rescinded or annulled within 30 days after
notice;
(6) failure by the Company to pay final judgments aggregating in
excess of $25.0 million, which judgments are not paid, discharged or stayed
for a period of 60 days;
(7) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or
any other Federal or state bankruptcy, insolvency or other similar law, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Company or of any
substantial part of the property of the Company, or ordering the winding up
or liquidation of the affairs of the Company, and the continuance of any
such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(8) the commencement by the Company of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law, or
the consent by it to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of the property of the Company, or
the making by the Company of an assignment for the benefit of creditors, or
the admission by the Company in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.
However, a default under clauses (3), (4) or (6) above will not constitute
an Event of Default until the Trustee or the holders of at least 25% in
principal amount of the outstanding Notes notify the Company of the default and
the Company does not cure such default within the time specified in clauses (3),
(4) or (6) hereof after receipt of such notice.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company all outstanding Notes will
become due and payable immediately without further action or notice. If any
other Event of Default occurs and is continuing, the Trustee or the Holders of
at least 25% in principal amount of the then outstanding Notes may declare all
the Notes to be due and payable immediately.
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Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest.
The Holders of a majority in aggregate principal amount of the Notes then
outstanding by notice to the Trustee may on behalf of the Holders of all of the
Notes waive any existing Default or Event of Default and its consequences under
the Indenture, except a continuing Default or Event of Default in the payment of
interest on, or the principal of, the Notes, and, under certain circumstances,
may rescind any acceleration with respect to the Notes and its consequences.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the Company is required to deliver to the Trustee a statement
specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator or stockholder of the Company
shall have any liability for any obligations of the Company under the Notes or
the Indenture, or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. The waiver may not be effective to
waive liabilities under the federal securities laws.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of its
obligations discharged with respect to the outstanding Notes ("Legal
Defeasance") except for:
(1) the rights of Holders of outstanding Notes to receive payments in
respect of the principal of, premium, if any, and interest on such Notes
when such payments are due from the trust referred to below;
(2) the Company's obligations with respect to the Notes concerning
issuing temporary Notes, registration of Notes, mutilated, destroyed, lost
or stolen Notes and the maintenance of an office or agency for payment and
money for security payments held in trust;
(3) the rights, powers, trusts, duties and immunities of the Trustee,
and the Company's obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have
the obligations of the Company released with respect to certain covenants that
are described in the Indenture ("Covenant Defeasance") and thereafter any
omission to comply with those covenants shall not constitute a Default or Event
of Default with respect to the Notes. In the event Covenant Defeasance occurs,
certain events (not including non-payment, bankruptcy, receivership,
rehabilitation and insolvency events) described under "Events of Default" will
no longer constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, to pay the principal of, premium, if any,
and interest on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date; and
(2) the Company shall have delivered to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee confirming that the Holders of
the outstanding Notes will not recognize income, gain or
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loss for federal income tax purposes as a result of such defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such defeasance
had not occurred.
AMENDMENT, SUPPLEMENT AND WAIVER
The Company and the Trustee may modify, by adding, changing or eliminating
any provision of, the Indenture with the consent of the Holders of not less than
a majority in principal amount of outstanding Notes. However, without the
consent of each Holder affected, an amendment or waiver may not (with respect to
any Notes held by a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity of any Note;
(3) reduce the rate of or change the time for payment of interest on
any Note;
(4) waive a Default or Event of Default in the payment of principal of
or premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default
that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the
Notes;
(6) make any change in the provisions of the Indenture relating to
waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or premium, if any, or interest on the Notes; or
(7) make any change in the preceding amendment and waiver provisions.
Notwithstanding the preceding, without the consent of any Holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(3) to provide for the assumption of the Company's obligations to
Holders of Notes in the case of a merger or consolidation or sale of all or
substantially all of the Company's assets;
(4) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder; or
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act.
CONCERNING THE TRUSTEE
The Trustee is The Bank of New York. If the Trustee becomes a creditor of
the Company, the Indenture limits its right to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim as security or otherwise. The Trustee will be permitted to engage in other
transactions; however, if it acquires any conflicting interest it must eliminate
such conflict within 90 days, apply to the SEC for permission to continue or
resign.
The Holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur and be continuing, the Trustee will be required, in the exercise of
its power, to use the degree of care of a prudent man in the conduct of his own
affairs. Subject to such provisions, the Trustee will be under no obligation to
exercise
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any of its rights or powers under the Indenture at the request of any Holder of
Notes, unless such Holder shall have offered to the Trustee security and
indemnity satisfactory to it against any loss, liability or expense.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as any
other capitalized terms used herein for which no definition is provided.
"Asset Sale" means, with respect to any Person, any sale, transfer or other
disposition (including, without limitation, dispositions pursuant to any merger,
consolidation or Sale and Leaseback Transaction) by such Person or any of its
subsidiaries to any Person other than such Person or one of its subsidiaries in
any single transaction or series of transactions of (i) any or all of the
Capital Stock in any of the subsidiaries of such Person or (ii) any other
property of such Person or any other Property of its subsidiaries outside the
ordinary course of business of such Person or such subsidiary.
"Attributable Debt" in respect of a Sale and Leaseback Transaction means,
at the time of determination, the present value of the obligation of the lessee
for net rental payments during the remaining term of the lease included in such
Sale and Leaseback Transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights, warrants or options to acquire an equity interest
in such Person.
"Closing Date" means the date of original issuance of the Notes.
"Consolidated Interest Expense" of any Person means, for any period, the
aggregate interest expense of such Person and its subsidiaries for such period
on a consolidated basis, determined in accordance with GAAP, plus, to the extent
not included in such interest expense, and to the extent incurred by such Person
and such subsidiaries, without duplication, (i) interest expense attributable to
capital leases and the interest expense attributable to leases constituting part
of a Sale and Leaseback Transaction, (ii) amortization of debt discount and debt
issuance costs, (iii) capitalized interest, (iv) non-cash interest expenses, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financings, (vi) net costs associated with
Hedging Obligations (including amortization of fees), (vii) dividends payable on
shares of preferred stock issued by such Person or its subsidiaries, other than
shares of such preferred stock held by such Person or its subsidiaries, (viii)
interest accruing on the Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by such Person or such subsidiaries, and (ix) cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or fees
to any other Person in connection with Indebtedness incurred by such plan or
trust.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or net loss, as the case may be) of such Person and its
subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, provided that there shall be excluded therefrom (i) gains and losses
from Asset Sales or reserves relating thereto, (ii) items classified as
extraordinary or nonrecurring (other than the tax benefit of the utilization of
net operating loss carryforwards) and gains from discontinued operations, (iii)
except to the extent of the amount of dividends or distributions paid to such
Person by any other Person during such period, the net income (or loss) of (a)
such other Person other than a subsidiary of such Person and (b) any subsidiary
of such Person to the extent that the payment of the net income of such other
Person as a dividend or other distribution to such Person is restricted by
contract or otherwise and (iv) except to the extent includable pursuant to
clause (iii) hereof, the income (or loss) of any other Person accrued or
attributable to any period prior to the date it becomes a subsidiary of such
Person or is merged into or consolidated with such
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Person or any of such Person's subsidiaries or all or substantially all of such
other Person's property is acquired by such Person or any of its subsidiaries.
"Consolidated Tangible Assets" means, as of any date, the sum of the
property and assets of the Company and its Subsidiaries on a consolidated basis
at such date, after eliminating intercompany items, after deducting from such
total all property and assets that would be classified as intangibles under GAAP
(including, without limitation, goodwill, organizational expenses, trademarks,
trade names, copyrights, patents, licenses and any rights in any thereof), all
reserves and prepaid expenses, deferred charges or authorized debt discount and
expense, each such item determining in accordance with GAAP.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Depositary" means, with respect to any Notes issuable or issued in the
form of one or more Global Notes, the Person designated as Depositary by the
Company pursuant to the Indenture until a successor Depositary shall have become
such pursuant to the applicable provisions of the Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
thereunder.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
Consolidated Interest Expense plus the following to the extent deducted in
calculating such Consolidated Net Income: (i) all income tax expense of the
Company and its consolidated Subsidiaries, (ii) depreciation expense of the
Company and its consolidated Subsidiaries, (iii) amortization expense of the
Company and its consolidated Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period), and (iv)
all other non-cash charges of the Company and its consolidated Subsidiaries
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash expenditures in any future period), in each case for such
period.
"Funded Debt" of any Person means, as at any date as of which any
determination thereof is being or is to be made, any Indebtedness of such person
that by its terms (i) will mature more than one year after the date it was
issued, incurred, assumed or Guaranteed by such Person, or (ii) will mature one
year or less after the date it was issued, incurred, assumed or guaranteed by
such Person which Indebtedness, at such date of determination, may be renewed or
extended at the election or option of such Person so as to mature more than one
year after such date of determination.
"Funded Debt to EBITDA Ratio" as of any date of determination means the
ratio of (i) Funded Debt to (ii) the aggregate amount of EBITDA for the period
of the most recent four consecutive fiscal quarters prior to the date of
determination for which internal financial statements are available; provided,
however, that if the Company or any Subsidiary shall have made an acquisition of
assets which constitutes all or substantially all of the assets of a business,
EBITDA for such period shall be calculated after giving pro forma effect to such
acquisition as if such acquisition occurred on the first day of such period.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Government Securities" means securities that are (i) direct obligations of
the United States of America for the payment of which its full faith and credit
is pledged or (ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case under clauses
(i) or (ii), are not callable or redeemable at the option of the issuer thereof.
"Guarantee" means any direct or indirect obligation, contingent or
otherwise, of a Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner.
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"Hedging Obligations" means, with respect to any Person, the Obligations of
such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"Holder" means any Person in whose name a Note is registered on the records
of the Registrar.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(1) borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) banker's acceptances;
(4) representing Capital Lease Obligations;
(5) the balance deferred and unpaid of the purchase price of any
property under conditional sales or other similar agreements which provide
for the deferral of the payment of the purchase price for a period in
excess of one year following the date of such Person's receipt and
acceptance of complete delivery of such property; and
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by such Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding (other than Capital Lease
Obligations) as of any date shall be:
(1) the accreted value thereof, in the case of any Indebtedness issued
with original issue discount; and
(2) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Permitted Liens" means:
(1) Liens in favor of the Company or any Subsidiary;
(2) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with the Company or any Subsidiary;
provided that such Liens were in existence prior to the contemplation of
such merger or consolidation and do not extend to any assets other than
those of the Person merged into or consolidated with the Company or any
Subsidiary;
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(3) Liens on property existing immediately prior to the time of
acquisition thereof by the Company or any Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of
such acquisition;
(4) Liens to secure the performance of statutory obligations, surety
or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(5) Liens arising out of judgements or awards against the Company or
any Subsidiary with respect to which the Company or Subsidiary shall in
good faith be prosecuting an appeal or proceedings for review or Liens
incurred by the Company or any Subsidiary for the purpose of obtaining a
stay or discharge in the course of any legal proceeding to which the
Company or any Subsidiary is a party;
(6) Liens to secure Capital Lease Obligations;
(7) Liens existing on the date of the Indenture;
(8) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(9) mechanics', materialmen's, carrier's, warehousemen's and similar
Liens arising in the ordinary course of business and securing Obligations
of the Company or any Subsidiary that are not overdue for a period of more
than 60 days or are being contested in good faith by appropriate legal
proceedings diligently pursued; provided that in the case of any such
contest (i) any levy, execution or other enforcement of such Liens shall
have been duly suspended; and (ii) such provision for the payment of such
Liens has been made on the books of the Company or the Subsidiary as may be
required by GAAP;
(10) Liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security benefits and
other forms of governmental insurance or similar benefits which are not
overdue or are being contested in good faith by appropriate proceedings
diligently pursued; provided that in the case of any such contest (i) any
levy, execution or other enforcement of such Liens shall have been duly
suspended; and (ii) such provision for the payment of such Liens has been
made on the books of the Company or the Subsidiary as may be required by
GAAP;
(11) Liens in the nature of any minor imperfections of title,
including, but not limited to, easements, covenants, rights-of-way or other
similar restrictions, which, either individually or in the aggregate would
not (i) materially adversely affect the present or future use of the
property to which they relate, (ii) have a material adverse effect on the
sale or lease of such property, or (iii) render title thereto unmarketable;
(12) any interest or title of a lessor under any lease of property to,
or of any consignor of goods consigned to, or of any creditor of any
consignee in goods consigned to such consignee by, the Company or any
Subsidiary;
(13) Liens incurred in the ordinary course of business of the Company,
other than in connection with Indebtedness for borrowed money;
(14) any Lien extending, renewing or replacing any Permitted Lien;
(15) Liens securing only the Notes;
(16) Liens on assets of the Company's Subsidiaries to secure
Obligations of such Subsidiaries to the Company; and
(17) Liens attributable to Sale and Leaseback Transactions.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, joint stock company, unincorporated organization or
government or any agency or political subdivision thereof.
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"SEC" means the Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, as amended, or,
if at any time after the issuance of the Notes such commission is not existing
and performing the duties now assigned to it under the TIA, the body performing
such duties at such time.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary" means a Person (other than an individual or a government or
any agency or political subdivision thereof) more than 50% of the outstanding
interest of which, is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or which the Company, in accordance with GAAP,
otherwise consolidates as a Subsidiary of the Company.
"Treasury Rate" means, as of any Redemption Date, the yield to maturity as
of such Redemption Date of the Untied States Treasury securities with constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H. 15 (519) that has become publicly available at least two
business days prior to the Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Redemption Date to January 15, 2009;
provided, however, that if the period from the Redemption Date to January 15,
2009 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors of such Person.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the principal U.S. federal income tax
consequences of the Exchange Offer to a holder of Old Notes that purchased the
Old Notes pursuant to their original issue and that holds the Old Notes and will
hold the Exchange Notes as capital assets. It does not address beneficial owners
that may be subject to special tax rules, such as banks, insurance companies,
dealers in securities or currencies, holders that hold the Old Notes or Exchange
Notes as a hedge against currency risks or as part of a straddle with other
investments or as part of a "synthetic security" or other integrated investment
(including a "conversion transaction") comprised of a Note and one or more
investments, or holders that have a "functional currency" other than the U.S.
dollar. This summary is based upon the U.S. federal tax laws and regulations as
now in effect and as currently interpreted and does not take into account
possible changes in such tax laws or such interpretations, any of which may be
applied retroactively. It does not include any description of the tax laws of
any state, local or foreign government that may be applicable to the Exchange
Offer, the Old Notes, the Exchange Notes or the holders thereof.
The exchange of Exchange Notes for the Old Notes pursuant to the Exchange
Offer should not be treated as an "exchange" for federal income tax purposes
because the Exchange Notes will not be considered to differ materially in kind
or extent from the Old Notes. As a result, there should be no federal income tax
consequences to holders of the Old Notes exchanging the Old Notes for the
Exchange Notes pursuant to the Exchange Offer, and therefore: (i) no gain or
loss should be realized by a holder upon receipt of an Exchange Note, (ii) the
holding period of the Exchange Note should include the holding period of the Old
Note exchanged therefor, and (iii) the adjusted tax basis of the Exchange Note
should be the same as the adjusted basis of the Old Note exchanged therefor
immediately before the exchange.
THIS SUMMARY DOES NOT PURPORT TO DEAL WITH ALL ASPECTS OF U.S. FEDERAL
INCOME TAXATION THAT MAY BE RELEVANT TO A HOLDER'S DECISION TO EXCHANGE OLD
NOTES FOR EXCHANGE NOTES. EACH HOLDER SHOULD CONSULT WITH ITS OWN TAX ADVISOR
CONCERNING THE APPLICATION OF THE FEDERAL INCOME TAX LAWS OR OTHER TAX LAWS TO
ITS PARTICULAR SITUATION BEFORE DETERMINING WHETHER TO EXCHANGE OLD NOTES FOR
EXCHANGE NOTES.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account in
exchange for Old Notes pursuant to the Exchange Offer, where such Old Notes were
acquired by such broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Notes. This Prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of Exchange Notes received in exchange for Old Notes
where such Old Notes were acquired as a result of market-making activities or
other trading activities. The Company has agreed that, for a period of 180 days
after the consummation of the Exchange Offer or the date on which all
broker-dealers and Initial Purchasers have sold all of the Exchange Notes held
by them, whichever is earlier, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any such
resale. In addition, until , all dealers effecting transactions
in the Exchange Notes may be required to deliver a Prospectus.
The Company will not receive any proceeds from any sale of Exchange Notes
by broker-dealers. Exchange Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at prices
related to such prevailing market prices or negotiated prices. Any such resale
may be made directly to purchasers or to or through brokers or dealers who may
receive compensation in the form of commissions or concessions from any such
broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer
that resells Exchange Notes that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that participates in a
distribution of]such Exchange Notes may be deemed to be an "underwriter" within
the meaning of the Securities Act, and any
43
<PAGE> 48
profit on any such resale of Exchange Notes and any commissions or concessions
received by any such persons may be deemed to be underwriting compensation under
the Securities Act. The Letter of Transmittal states that by acknowledging that
it will deliver and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act.
For a period of 180 days after the consummation of the Exchange Offer or
the date on which all broker-dealers and Initial Purchasers have sold all of the
Exchange Notes held by them, whichever is earlier, the Company will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter
of Transmittal or otherwise. The Company has agreed to pay all expenses incident
to the Exchange Offer (including the expenses of one counsel for the holders of
the Notes not to exceed $25,000) and will indemnify holders of the Old Notes
(including any broker-dealers) against certain liabilities, including certain
liabilities under the Securities Act.
LEGAL MATTERS
Certain matters with respect to the legality of the Exchange Notes will be
passed upon for the Company by McDermott, Will & Emery, New York, New York.
EXPERTS
The consolidated financial statements and related financial statement
schedule for the years ended December 31, 1998 and 1997 incorporated in this
prospectus by reference from the Company's Annual Report on Form 10-K for the
year ended December 31, 1998 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
The consolidated financial statements and related financial statement
schedule for the year ended December 31, 1996 (prior to restatement for the
change in accounting for inventory costs and the presentation of segment
information) incorporated in this prospectus by reference from the Company's
Annual Report on Form 10-K for the year ended December 31, 1998 have been
audited by Ernst & Young LLP, independent auditors, as stated in their report,
which is incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
44
<PAGE> 49
- ------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION OR REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT
RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT OFFER TO SELL OR
BUY ANY SECURITIES IN ANY JURISDICTION WHERE IT IS UNLAWFUL. THE INFORMATION IN
THIS PROSPECTUS IS CURRENT AS OF , 1999.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. i
Incorporation of Certain Documents by
Reference........................... i
Prospectus Summary.................... 1
Risk Factors.......................... 6
Use of Proceeds....................... 8
Selected Consolidated Financial
Data................................ 9
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 11
Business.............................. 16
The Exchange Offer.................... 20
Description of Other Indebtedness..... 27
Description of the Notes.............. 30
Certain Federal Income Tax
Considerations...................... 43
Plan of Distribution.................. 43
Legal Matters......................... 44
Experts............................... 44
</TABLE>
UNTIL , 1999, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS EXCHANGE OFFER, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
------------------------------------------------------
- ------------------------------------------------------
VALASSIS COMMUNICATIONS, INC.
$100,000,000
OFFER TO EXCHANGE ALL OF OUR OUTSTANDING AND UNREGISTERED
6 5/8% SENIOR NOTES DUE 2009
FOR OUR REGISTERED
6 5/8% SENIOR NOTES DUE 2009
------------------
PROSPECTUS
------------------
, 1999
- ------------------------------------------------------
<PAGE> 50
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the corporation's best interests, and, for criminal proceedings,
had no reasonable cause to believe his conduct was illegal. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation in the performance of his duty. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.
In accordance with the Delaware Law, the Restated Certificate of
Incorporation of the Company contains a provision to limit the personal
liability of the directors for violations of their fiduciary duty. This
provision eliminates each director's liability to the Company or its respective
stockholders for monetary damages except (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the Delaware Law or any amendment thereto or
successor provision thereto, or (iv) for any transaction from which a director
derived an improper personal benefit. The effect of this provision is to
eliminate the personal liability of directors for monetary damages for actions
involving a breach of their fiduciary duty of care, including any such actions
involving gross negligence.
The Company's Restated Certificate of Incorporation and the Amended and
Restated By-Laws provides for indemnification to its directors and such of its
officers, employees and agents as the Board of Directors may determine, from
time to time, to the fullest extent permitted by Section 145 of the General
Corporation Law of the State of Delaware.
The Company has obtained directors and officers liability insurance
coverage. The policy insures directors and officers of the Company against
losses arising from claims made against such directors or officers by reason of
certain wrongful acts (as defined), such as errors, misstatements, misleading
statements, acts, omissions, negligence or breaches of duty, but does not insure
such persons against losses arising from claims made against such directors or
officers for the return of certain unauthorized remunerations, for violations of
Section 16(b) of the Securities Exchange Act of 1934, as amended, and for
violations of similar laws and certain other matters.
ITEM 21. EXHIBITS.
The File Number of Valassis Communications, Inc., the Registrant (the
"Company"), and for all Exhibits incorporated by reference is 1-10991.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
1.1* -- Purchase Agreement dated January 7, 1999 among Valassis
Communications, Inc., Bear Stearns & Co., Inc. and
Wasserstein Perella Securities, Inc.
3.1 -- Restated Certificate of Incorporation of Valassis
Communications, Inc. (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement No. 33-45189)
</TABLE>
II-1
<PAGE> 51
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
3.2 -- Amended and Restated By-laws of Valassis Communications,
Inc. (incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement No. 33-45189)
4.1* -- Indenture between Valassis Communications, Inc. and The Bank
of New York, as trustee, dated January 12, 1999 relating to
the 6 5/8% Senior Notes due 2009
4.1(a)* -- First Supplemental Indenture between Valassis
Communications, Inc. and The Bank of New York, as trustee,
dated March 9, 1999, relating to the 6 5/8% Senior Notes due
2009
4.2 -- Form of Valassis Communications, Inc. 6 5/8% Senior Note due
2009 (contained in Indenture filed as Exhibit 4.1 hereto)
4.3 -- Indenture between Valassis Communications, Inc. and The Bank
of New York, as trustee, relating to the 9.55% Senior Notes
due 2003 (incorporated by reference to Exhibit 4.1 to the
Company's Form 10-K for the transition period July 1, 1994
to December 31, 1994)
4.4 -- Form of Indenture between Valassis Communications, Inc. and
The Bank of New York, as trustee, relating to the 8 7/8%
Senior Notes due 1999 (incorporated by reference to Exhibit
4.2 to the Company's Registration Statement No. 33-45285)
4.4(a) -- First Supplemental Indenture dated as of March 31, 1993
(incorporated by reference to Exhibit 10.2(a) to the
Company's 1993 Form 10-K)
4.5 -- Form of Indenture between Valassis Communications, Inc. and
The Bank of New York, as trustee, relating to the 9 3/8%
Senior Subordinated Notes due 1999 (incorporated by
reference to Exhibit 4.2 to the Company's Registration
Statement No. 33-45285)
4.5(a) -- First Supplemental Indenture dated as of March 31, 1993
(incorporated by reference to Exhibit 3 to the Company's
Form 8-K dated as of March 31, 1993)
5.1* -- Opinion of McDermott, Will & Emery regarding the legality of
the securities being registered
10.1 -- Employment Agreement, dated January 20, 1992, among David A.
Brandon, Valassis Communications, Inc. and Valassis Inserts,
Inc. (incorporated by reference to Exhibit 10.4 to the
Company's Registration Statement No. 33-45189)
10.1(a) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of David A. Brandon dated as of June 18,
1993 (incorporated by reference to Exhibit 10.4(a) to the
Company's 1993 Form 10-K)
10.1(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of David A. Brandon dated as of July 9,
1995 (incorporated by reference to Exhibit 10.5(b) to the
Company's 1995 Form 10-K)
10.1(c) -- Amendment to Employment Agreement of David A. Brandon dated
as of December 22, 1995 (incorporated by reference to
Exhibit 10.5(c) to the Company's 1995 Form 10-K)
10.1(d) -- Amendment to Employment Agreement of David A. Brandon dated
as of June 3, 1998 (incorporated by reference to Exhibit
10.5(d) to the Company's Form 10-Q for the period ended June
30, 1998)
10.2 -- Employment Agreement, dated January 20, 1992 among Robert L.
Recchia, Valassis and Valassis Inserts, Inc., including
amendment dated February 11, 1992 (incorporated by reference
to Exhibit 10.5 to the Company's Registration Statement No.
33-45189)
</TABLE>
II-2
<PAGE> 52
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
10.2(a) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Robert Recchia dated January 2, 1996
(incorporated by reference to Exhibit 10.6(a) to the
Company's 1995 Form 10-K)
10.2(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Robert Recchia dated January 3, 1997
(incorporated by reference to Exhibit 10.6(b) of the
Company's 1996 Form 10-K)
10.2(c) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Robert L. Recchia dated December 9, 1998
(incorporated by reference to Exhibit 10.3(c) to the
Company's 1998 Form 10-K)
10.3 -- Employment Agreement, dated January 20, 1992, among Barry P.
Hoffman, Valassis Communications, Inc. and Valassis Inserts,
Inc., including amendment dated February 11, 1992
(incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement No. 33-45189)
10.3(a) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Barry P. Hoffman dated December 19, 1995
(incorporated by reference to Exhibit 10.7(a) to the
Company's 1995 Form 10-K)
10.3(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Barry P. Hoffman dated December 12, 1997
(incorporated by reference to Exhibit 10.7(b) to the
Company's 1997 Form 10-K)
10.3(c) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Barry P. Hoffman dated December 9, 1998
(incorporated by reference to Exhibit 10.4(c) to the
Company's 1998 Form 10-K)
10.4 -- 1992 Long-Term Incentive Plan, as amended (incorporated by
reference to Exhibits 4.1 and to the Company's Form S-8
filed on February 17, 1993, No. 33-59670)
10.4(a) -- Third Amendment of 1992 Long-Term Incentive Plan
(incorporated by reference to Exhibit D to the Company's
Proxy Statement dated as of April 26, 1996)
10.5 -- Valassis Inserts, Inc. Employees' 401(k) Retirement Savings
Plan (incorporated by reference to Exhibit 10.8 to the
Company's Registration Statement No. 33-45189)
10.5(a) -- First Amendment of the Valassis Communications, Inc.
Employees 401(k) Retirement Savings Plan (incorporated by
reference to Exhibit 10.9(a) of the Company's 1995 Form
10-K)
10.6 -- Valassis Inserts, Inc. Employees' Profit Sharing Plan
(incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement No. 33-45189)
10.6(a) -- First Amendment of the Valassis Communications, Inc.
Employees' Profit Sharing Plan (incorporated by reference to
Exhibit 10.10(a) to the Company's 1995 Form 10-K)
10.7 -- Valassis Inserts, Inc. Plant Employees Pension Plan
(incorporated by reference to Exhibit 10.14 to the Company's
Registration Statement No. 33-45189)
10.8 -- Employment Agreement among Richard N. Anderson, Valassis
Communications, Inc. and Valassis Inserts, Inc.
(incorporated by reference to Exhibit 10.16 to the Company's
Registration No. 33-45189)
10.8(a) -- Amendment to Employment Agreement among Richard N. Anderson,
Valassis Communications, Inc. and Valassis Inserts Inc.
(incorporated by reference to Exhibit 10.15(a) to the
Company's Form 10-K for the transition period of July 1,
1994 to December 31, 1994)
</TABLE>
II-3
<PAGE> 53
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
10.8(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Richard N. Anderson dated December 15,
1995 (incorporated by reference to Exhibit 10.15(b) to the
Company's 1995 Form 10-K)
10.8(c) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Richard N. Anderson dated December 11,
1998 (incorporated by reference to Exhibit 10.10(c) to the
Company's 1998 Form 10-K)
10.9 -- Employment Agreement among Alan F. Schultz, Valassis
Communications, Inc. and Valassis Inserts, Inc.
(incorporated by reference to Exhibit 10.17 to the Company's
Registration Statement No. 33-45189)
10.9(a) -- Amendment to Employment Agreement among Alan F. Schultz,
Valassis Communications, Inc. and Valassis Inserts, Inc.
(incorporated by reference to Exhibit 10.16(a) to the Form
10-K for the transition period of July 1, l994 to December
31, 1994)
10.9(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option of Alan F. Schultz dated December 19, 1995
(incorporated by reference to Exhibit 10.16(b) to the
Company's 1995 Form 10-K)
10.9(c) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreements of Alan F. Schultz dated September 15,
1998 (incorporated by reference to Exhibit 10.16(c) to the
Company's Form 10-Q for the period ended September 30, 1998)
10.10 -- Senior Executive Annual Bonus Plan (incorporated by
reference to Exhibit A to the Company's Proxy Statement
dated October 24, 1994)
10.10(a) -- First Amendment to Senior Executive Annual Bonus Plan
(incorporated by reference to Exhibit E to the Company's
Proxy Statement dated April 15, 1996)
10.11 -- Conpress Stock Option Agreement incorporated by reference to
Exhibit 10.20 to the Company's Form 10-Q for the period
ended June 30, 1996)
10.12 -- Lease for New Headquarters Building (incorporated by
reference to Exhibit 10.21 to the Company's Form 10-Q for
the period ended June 30, 1996)
10.13 -- Executive Restricted Stock Plan (incorporated by reference
to Exhibit A to the Company's Proxy Statement dated April
25, 1996)
10.13(a) -- First Amendment of Executive Restricted Stock Plan
(incorporated by reference to Exhibit A to the Company's
Proxy Statement dated April 25, 1996)
10.14 -- Employee and Director Restricted Stock Award Plan
(incorporated by reference to Exhibit B to the Company's
Proxy Statement dated April 25, 1996)
10.15 -- Employee Stock Purchase Plan (incorporated by reference to
Exhibit C to the Company's Proxy Statement dated April 25,
1996)
10.16 -- Form of Registration Rights Agreement between the Company
and the Selling Stockholder (incorporated by reference to
Exhibit 10.18 to the Company's Registration Statement No.
333-28685)
10.17 -- Assignment of Stock Option Agreement dated June 5, 1997
among Conpress Cayman, LDC, Consolidated Press International
(Netherlands Antille) N.V. and the Company (incorporated by
reference Exhibit 10.19 to the Company's Registration
Statement No. 333-28685)
10.18 -- Employment Agreement of Richard P. Herpich dated as of
January 17, 1994 (incorporated by reference to Exhibit 10.5
to the Company's 1998 Form 10-K)
10.18(a) -- Amendment to Employment Agreement of Richard P. Herpich
dated June 30, 1994 (incorporated by reference to Exhibit
10.5(a) to the Company's 1998 Form 10-K)
</TABLE>
II-4
<PAGE> 54
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
10.18(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreements of Richard P. Herpich dated December 19,
1995 (incorporated by reference to Exhibit 10.5(b) to the
Company's 1998 Form 10-K)
10.18(c) -- Amendment to Employment Agreement of Richard P. Herpich
dated February 18, 1997 (incorporated by reference to
Exhibit 10.5(c) to the Company's 1998 Form 10-K)
10.18(d) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreements of Richard P. Herpich dated December 30,
1997 (incorporated by reference to Exhibit 10.5(d) to the
Company's 1998 Form 10-K)
10.18(e) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreements of Richard P. Herpich dated December 15,
1998 (incorporated by reference to Exhibit 10.5(e) to the
Company's 1998 Form 10-K)
10.19 -- Fourth Amendment of the Valassis Communications, Inc. 1992
Long-Term Incentive Plan (incorporated by reference to
Exhibit A to the Company's Proxy Statement dated April 10,
1998)
10.20 -- Valassis Communications, Inc. Amended and Restated 1992
Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.22 to the Company's 1998 Form 10-K)
10.21* -- Registration Rights Agreement dated January 12, 1999 between
Valassis Communications, Inc., Bear Stearns & Co., Inc. and
Wasserstein Perella Securities, Inc.
10.22 -- Credit Agreement dated as of November 16, 1998 (the "Credit
Facility"), among Valassis Communications, Inc., the
institutions named therein, the institutions named therein
as issuing banks, and Comerica Bank, as agent (incorporated
by reference to Exhibit 10.1 to the Company's 1998 Form
10-K)
10.22(a) -- Amendment No. 1 to the Credit Facility, dated as of November
25, 1998 (incorporated by reference to Exhibit 10.1(a) to
the Company's 1998 Form 10-K)
12.1* -- Statement re computation of ratios
16.1 -- Letter re change in certifying accountant (incorporated by
reference to Exhibit 16.1 to the Company's October 1, 1997
Form 8-K)
18.1 -- Letter from independent auditor regarding change in
accounting principles (incorporated by reference to Exhibit
18.1 to the Company's Form 10-Q for the period ended March
30, 1998)
23.1* -- Consent of Deloitte & Touche LLP
23.2* -- Consent of Ernst & Young LLP
23.3 -- Consent of McDermott, Will & Emery, included in the opinion
of McDermott, Will & Emery, filed as Exhibit 5.1
24.1 -- Powers of Attorney for Valassis Communications, Inc.
(included on signature page)
25.1* -- Statement of Eligibility of Trustee on Form T-1
99.1* -- Letter of Transmittal
</TABLE>
II-5
<PAGE> 55
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <C> <S>
99.2* -- Notice of Guaranteed Delivery
99.3* -- Form of Exchange Agent Agreement
</TABLE>
- -------------------------
* Filed herewith
ITEM 22. UNDERTAKINGS.
(A) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(B) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(C) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(D) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other Items of the applicable form.
II-6
<PAGE> 56
(E) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (C) immediately preceding, or (ii) that purports to meet
the requirements of section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(F) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form S-4, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(G) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-7
<PAGE> 57
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Livonia, State of Michigan, on March 2, 1999.
VALASSIS COMMUNICATIONS, INC.
By: /s/ ALAN F. SCHULTZ
------------------------------------
Alan F. Schultz
President and Chief Executive
Officer
POWER OF ATTORNEY
Valassis Communications, Inc., a Delaware corporation, and each person
whose signature appears below, constitutes and appoints Alan F. Schultz, Barry
P. Hoffman and Robert L. Recchia, and any of them, with full power to act
without the others, such person's true and lawful attorneys-in-fact, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign this Registration Statement,
and any and all amendments thereto (including, without limitation,
post-effective amendments and any subsequent registration statements filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended), and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact, and each of them, full power and authority
to do and perform each and every act and thing necessary or desirably to be done
in and about the premises, as fully to all intents and purposes as he or she
might or could do in person, thereby ratifying and confirming all that said
attorneys-in-fact, or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RICHARD N. ANDERSON Director March 2, 1999
- ------------------------------------------------
Richard N. Anderson
/s/ PATRICK F. BRENNAN Director March 2, 1999
- ------------------------------------------------
Patrick F. Brennan
/s/ BRIAN J. HUSSELBEE Director March 2, 1999
- ------------------------------------------------
Brian J. Husselbee
Director March 2, 1999
- ------------------------------------------------
Larry L. Johnson
Director March 2, 1999
- ------------------------------------------------
Brian M. Powers
/s/ ROBERT L. RECCHIA Chief Financial Officer and Director March 2, 1999
- ------------------------------------------------ (Principal Financial and Accounting
Robert L. Recchia Officer)
/s/ MARCELLA A. SAMPSON Director March 2, 1999
- ------------------------------------------------
Marcella A. Sampson
/s/ ALAN F. SCHULTZ President and Chief Executive March 2, 1999
- ------------------------------------------------ Officer, Director
Alan F. Schultz (Principal Executive Officer)
/s/ FAITH WITTLESEY Director March 2, 1999
- ------------------------------------------------
Faith Whittlesey
</TABLE>
II-8
<PAGE> 58
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S> <C>
1.1* -- Purchase Agreement dated January 7, 1999 among Valassis
Communications, Inc., Bear Stearns & Co., Inc. and
Wasserstein Perella Securities, Inc.
3.1 -- Restated Certificate of Incorporation of Valassis
Communications, Inc. (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement No. 33-45189)
3.2 -- Amended and Restated By-laws of Valassis Communications,
Inc. (incorporated by reference to Exhibit 3.2 to the
Company's Registration Statement No. 33-45189)
4.1* -- Indenture between Valassis Communications, Inc. and The Bank
of New York, as trustee, dated January 12, 1999 relating to
the 6 5/8% Senior Notes due 2009
4.1(a)* -- First Supplemental Indenture between Valassis
Communications, Inc. and The Bank of New York, as trustee,
dated March 9, 1999,relating to the 6 5/8% Senior Notes due
2009
4.2* -- Form of Valassis Communications, Inc. 6 5/8% Senior Note due
2009 (contained in Indenture filed as Exhibit 4.1 hereto)
4.3 -- Indenture between Valassis Communications, Inc. and The Bank
of New York, as trustee, relating to the 9.55% Senior Notes
due 2003 (incorporated by reference to Exhibit 4.1 to the
Company's Form 10-K for the transition period July 1, 1994
to December 31, 1994)
4.4 -- Form of Indenture between Valassis Communications, Inc. and
The Bank of New York, as trustee, relating to the 8 7/8%
Senior Notes due 1999 (incorporated by reference to Exhibit
4.2 to the Company's Registration Statement No. 33-45285)
4.4(a) -- First Supplemental Indenture dated as of March 31, 1993
(incorporated by reference to Exhibit 10.2(a) to the
Company's 1993 Form 10-K)
4.5 -- Form of Indenture between Valassis Communications, Inc. and
The Bank of New York, as trustee, relating to the 9 3/8%
Senior Subordinated Notes due 1999 (incorporated by
reference to Exhibit 4.2 to the Company's Registration
Statement No. 33-45285)
4.5(a) -- First Supplemental Indenture dated as of March 31, 1993
(incorporated by reference to Exhibit 3 to the Company's
Form 8-K dated as of March 31, 1993)
5.1* -- Opinion of McDermott, Will & Emery regarding the legality of
the securities being registered
10.1 -- Employment Agreement, dated January 20, 1992, among David A.
Brandon, Valassis Communications, Inc. and Valassis Inserts,
Inc. (incorporated by reference to Exhibit 10.4 to the
Company's Registration Statement No. 33-45189)
10.1(a) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of David A. Brandon dated as of June 18,
1993 (incorporated by reference to Exhibit 10.4(a) to the
Company's 1993 Form 10-K)
10.1(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of David A. Brandon dated as of July 9,
1995 (incorporated by reference to Exhibit 10.5(b) to the
Company's 1995 Form 10-K)
10.1(c) -- Amendment to Employment Agreement of David A. Brandon dated
as of December 22, 1995 (incorporated by reference to
Exhibit 10.5(c) to the Company's 1995 Form 10-K)
10.1(d) -- Amendment to Employment Agreement of David A. Brandon dated
as of June 3, 1998 (incorporated by reference to Exhibit
10.5(d) to the Company's Form 10-Q for the period ended June
30, 1998)
10.2 -- Employment Agreement, dated January 20, 1992 among Robert L.
Recchia, Valassis and Valassis Inserts, Inc., including
amendment dated February 11, 1992 (incorporated by reference
to Exhibit 10.5 to the Company's Registration Statement No.
33-45189)
</TABLE>
<PAGE> 59
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S> <C>
10.2(a) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Robert Recchia dated January 2, 1996
(incorporated by reference to Exhibit 10.6(a) to the
Company's 1995 Form 10-K)
10.2(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Robert Recchia dated January 3, 1997
(incorporated by reference to Exhibit 10.6(b) of the
Company's 1996 Form 10-K)
10.2(c) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Robert L. Recchia dated December 9, 1998
(incorporated by reference to Exhibit 10.3(c) to the
Company's 1998 Form 10-K)
10.3 -- Employment Agreement, dated January 20, 1992, among Barry P.
Hoffman, Valassis Communications, Inc. and Valassis Inserts,
Inc., including amendment dated February 11, 1992
(incorporated by reference to Exhibit 10.6 to the Company's
Registration Statement No. 33-45189)
10.3(a) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Barry P. Hoffman dated December 19, 1995
(incorporated by reference to Exhibit 10.7(a) to the
Company's 1995 Form 10-K)
10.3(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Barry P. Hoffman dated December 12, 1997
(incorporated by reference to Exhibit 10.7(b) to the
Company's 1997 Form 10-K)
10.3(c) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Barry P. Hoffman dated December 9, 1998
(incorporated by reference to Exhibit 10.4(c) to the
Company's 1998 Form 10-K)
10.4 -- 1992 Long-Term Incentive Plan, as amended (incorporated by
reference to Exhibits 4.1 and to the Company's Form S-8
filed on February 17, 1993, No. 33-59670)
10.4(a) -- Third Amendment of 1992 Long-Term Incentive Plan
(incorporated by reference to Exhibit D to the Company's
Proxy Statement dated as of April 26, 1996)
10.5 -- Valassis Inserts, Inc. Employees' 401(k) Retirement Savings
Plan (incorporated by reference to Exhibit 10.8 to the
Company's Registration Statement No. 33-45189)
10.5(a) -- First Amendment of the Valassis Communications, Inc.
Employees 401(k) Retirement Savings Plan (incorporated by
reference to Exhibit 10.9(a) of the Company's 1995 Form
10-K)
10.6 -- Valassis Inserts, Inc. Employees' Profit Sharing Plan
(incorporated by reference to Exhibit 10.9 to the Company's
Registration Statement No. 33-45189)
10.6(a) -- First Amendment of the Valassis Communications, Inc.
Employees' Profit Sharing Plan (incorporated by reference to
Exhibit 10.10(a) to the Company's 1995 Form 10-K)
10.7 -- Valassis Inserts, Inc. Plant Employees Pension Plan
(incorporated by reference to Exhibit 10.14 to the Company's
Registration Statement No. 33-45189)
10.8 -- Employment Agreement among Richard N. Anderson, Valassis
Communications, Inc. and Valassis Inserts, Inc.
(incorporated by reference to Exhibit 10.16 to the Company's
Registration No. 33-45189)
10.8(a) -- Amendment to Employment Agreement among Richard N. Anderson,
Valassis Communications, Inc. and Valassis Inserts Inc.
(incorporated by reference to Exhibit 10.15(a) to the
Company's Form 10-K for the transition period of July 1,
1994 to December 31, 1994)
10.8(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Richard N. Anderson dated December 15,
1995 (incorporated by reference to Exhibit 10.15(b) to the
Company's 1995 Form 10-K)
</TABLE>
<PAGE> 60
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S> <C>
10.8(c) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreement of Richard N. Anderson dated December 11,
1998 (incorporated by reference to Exhibit 10.10(c) to the
Company's 1998 Form 10-K)
10.9 -- Employment Agreement among Alan F. Schultz, Valassis
Communications, Inc. and Valassis Inserts, Inc.
(incorporated by reference to Exhibit 10.17 to the Company's
Registration Statement No. 33-45189)
10.9(a) -- Amendment to Employment Agreement among Alan F. Schultz,
Valassis Communications, Inc. and Valassis Inserts, Inc.
(incorporated by reference to Exhibit 10.16(a) to the Form
10-K for the transition period of July 1, l994 to December
31, 1994)
10.9(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option of Alan F. Schultz dated December 19, 1995
(incorporated by reference to Exhibit 10.16(b) to the
Company's 1995 Form 10-K)
10.9(c) -- Amendment to Employment Agreement and Non-Qualified Stock
Option of Alan F. Schultz dated September 15, 1998
(incorporated by reference to Exhibit 10.16(c) to the
Company's Form 10-Q for the period ended September 30, 1998)
10.10 -- Senior Executive Annual Bonus Plan (incorporated by
reference to Exhibit A to the Company's Proxy Statement
dated October 24, 1994)
10.10(a) -- First Amendment to Senior Executive Annual Bonus Plan
(incorporated by reference to Exhibit E to the Company's
Proxy Statement dated April 15, 1996)
10.11 -- Conpress Stock Option Agreement incorporated by reference to
Exhibit 10.20 to the Company's Form 10-Q for the period
ended June 30, 1996)
10.12 -- Lease for New Headquarters Building (incorporated by
reference to Exhibit 10.21 to the Company's Form 10-Q for
the period ended June 30, 1996)
10.13 -- Executive Restricted Stock Plan (incorporated by reference
to Exhibit A to the Company's Proxy Statement dated April
25, 1996)
10.13(a) -- First Amendment of Executive Restricted Stock Plan
(incorporated by reference to Exhibit A to the Company's
Proxy Statement dated April 25, 1996)
10.14 -- Employee and Director Restricted Stock Award Plan
(incorporated by reference to Exhibit B to the Company's
Proxy Statement dated April 25, 1996)
10.15 -- Employee Stock Purchase Plan (incorporated by reference to
Exhibit C to the Company's Proxy Statement dated April 25,
1996)
10.16 -- Form of Registration Rights Agreement between the Company
and the Selling Stockholder (incorporated by reference to
Exhibit 10.18 to the Company's Registration Statement No.
333-28685)
10.17 -- Assignment of Stock Option Agreement dated June 5, 1997
among Conpress Cayman, LDC, Consolidated Press International
(Netherlands Antilles) N.V. and the Company (incorporated by
reference Exhibit 10.19 to the Company's Registration
Statement No. 333-28685)
10.18 -- Employment Agreement of Richard P. Herpich dated as of
January 17, 1994 (incorporated by reference to Exhibit 10.5
to the Company's 1998 Form 10-K)
10.18(a) -- Amendment to Employment Agreement of Richard P. Herpich
dated June 30, 1994 (incorporated by reference to Exhibit
10.5(a) to the Company's 1998 Form 10-K)
10.18(b) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreements of Richard P. Herpich dated December 19,
1995 (incorporated by reference to Exhibit 10.5(b) to the
Company's 1998 Form 10-K)
10.18(c) -- Amendment to Employment Agreement of Richard P. Herpich
dated February 18, 1997 (incorporated by reference to
Exhibit 10.5(c) to the Company's 1998 Form 10-K)
</TABLE>
<PAGE> 61
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------- -----------------------
<C> <S> <C>
10.18(d) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreements of Richard P. Herpich dated December 30,
1997 (incorporated by reference to Exhibit 10.5(d) to the
Company's 1998 Form 10-K)
10.18(e) -- Amendment to Employment Agreement and Non-Qualified Stock
Option Agreements of Richard P. Herpich dated December 15,
1998 (incorporated by reference to Exhibit 10.5(e) to the
Company's 1998 Form 10-K)
10.19 -- Fourth Amendment of the Valassis Communications, Inc. 1992
Long-Term Incentive Plan (incorporated by reference to
Exhibit A to the Company's Proxy Statement dated April 10,
1998)
10.20 -- Valassis Communications, Inc. Amended and Restated 1992
Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.22 to the Company's 1998 Form 10-K)
10.21* -- Registration Rights Agreement dated January 12, 1999 between
Valassis Communications, Inc., Bear Stearns & Co., Inc. and
Wasserstein Perella Securities, Inc.
10.22 -- Credit Agreement dated as of November 16, 1998 (the "Credit
Facility"), among Valassis Communications, Inc., the
institutions named therein, the institutions named therein
as issuing banks, and Comerica Bank, as agent (incorporated
by reference to Exhibit 10.1 to the Company's 1998 Form
10-K)
10.22(a) -- Amendment No. 1 to the Credit Facility, dated as of November
25, 1998 (incorporated by reference to Exhibit 10.1(a) to
the Company's 1998 Form 10-K)
12.1* -- Statement re computation of ratios
16.1 -- Letter re change in certifying accountant (incorporated by
reference to Exhibit 16.1 to the Company's October 1, 1997
Form 8-K)
18.1 -- Letter from independent auditor regarding change in
accounting principle (incorporated by reference to Exhibit
18.1 to the Company's Form 10-Q for the period ended March
30, 1998)
23.1* -- Consent of Deloitte & Touche LLP
23.2* -- Consent of Ernst & Young LLP
23.3 -- Consent of McDermott, Will & Emery, included in the opinion
of McDermott, Will & Emery, filed as Exhibit 5.l
24.1 -- Powers of Attorney for Valassis Communications, Inc.
(included on signature page)
25.1* -- Statement of Eligibility of Trustee on Form T-1
99.1* -- Letter of Transmittal
99.2* -- Notice of Guaranteed Delivery
99.3* -- Form of Exchange Agent Agreement
</TABLE>
- -------------------------
* Filed herewith
<PAGE> 1
EXHIBIT 1.1
EXECUTION COPY
================================================================================
VALASSIS COMMUNICATIONS, INC.
$100,000,000
6 5/8% Senior Notes due 2009
Purchase Agreement
January 7, 1999
BEAR, STEARNS & CO. INC.
WASSERSTEIN PERELLA SECURITIES, INC.
================================================================================
<PAGE> 2
VALASSIS COMMUNICATIONS, INC.
$100,000,000
6 5/8% Senior Notes due 2009
PURCHASE AGREEMENT
January 7, 1999
New York, New York
BEAR, STEARNS & CO. INC.
WASSERSTEIN PERELLA SECURITIES, INC.
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies & Gentlemen:
Valassis Communications, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to Bear, Stearns & Co. Inc. and Wasserstein Perella
Securities, Inc. (each, an "INITIAL PURCHASER" and, collectively, the "INITIAL
PURCHASERS") $100,000,000 in aggregate principal amount of its 6 5/8% Senior
Notes due 2009 (the "SERIES A NOTES"), subject to the terms and conditions set
forth herein. The Series A Notes will be issued pursuant to an indenture (the
"INDENTURE"), to be dated the Closing Date (as defined herein), between the
Company and The Bank of New York, as trustee (the "TRUSTEE"). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned to such
terms in the Indenture.
1. Issuance of Securities. The Company proposes, upon the terms and subject to
the conditions set forth herein, to issue and sell to the Initial Purchasers an
aggregate of $100,000,000 in principal amount of Series A Notes. The Series A
Notes and the Exchange Notes (as defined herein) issuable in exchange therefor
are collectively referred to herein as the "NOTES."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "ACT"), the Series A Notes shall bear the following legend:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
<PAGE> 3
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH
IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER: REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (A)(1), (2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")),
AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (i) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
(ii) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (iii) IN
AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR 904 OF REGULATION S OF THE SECURITIES ACT (iv) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (v) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE)
AND AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (vi) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY), OR (vii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST
HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE. AS USED
2
<PAGE> 4
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS."
2. Offering. The Series A Notes will be offered and sold to the Initial
Purchasers pursuant to an exemption from the registration requirements under the
Act. The Company has prepared a preliminary offering memorandum, dated December
30, 1998 (the "PRELIMINARY OFFERING MEMORANDUM"), and a final offering
memorandum, dated January 7, 1999 (the "OFFERING MEMORANDUM"), relating to the
Company and the Series A Notes.
The Initial Purchasers have advised the Company, that the Initial
Purchasers will make offers (the "EXEMPT RESALES") of the Series A Notes on the
terms set forth in the Offering Memorandum, as amended or supplemented, solely
to persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers," as defined in Rule 144A under the Act ("QIBS"). The QIBs
are referred to herein as the "ELIGIBLE PURCHASERS." The Initial Purchasers will
offer the Series A Notes to such Eligible Purchasers initially at a price equal
to 99.652% of the principal amount thereof. Such price may be changed at any
time without notice.
Holders (including subsequent transferees) of the Series A Notes will
have the registration rights set forth in the registration rights agreement
relating thereto (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing
Date, for so long as such Series A Notes constitute "TRANSFER RESTRICTED
SECURITIES" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "COMMISSION"), under the circumstances
set forth therein, (i) a registration statement under the Act (the "EXCHANGE
OFFER REGISTRATION STATEMENT") relating to the Company's 6 5/8% Senior Notes due
2009 (the "EXCHANGE NOTES") to be offered in exchange for the Series A Notes
(the "EXCHANGE OFFER") and (ii) a shelf registration statement pursuant to Rule
415 under the Act (the "SHELF REGISTRATION STATEMENT" and, together with the
Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS") relating
to the resale by certain holders of the Series A Notes, and to use its
reasonable efforts to cause such Registration Statements to be declared
effective and to consummate the Exchange Offer. This Agreement, the Notes, the
Indenture and the Registration Rights Agreement are hereinafter referred to
collectively as the "OPERATIVE DOCUMENTS."
3. Purchase, Sale and Delivery. (a) On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to the
Initial Purchasers, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, the principal amounts of Series A Notes
set forth opposite the name of such Initial Purchaser on Exhibit A. The purchase
price for the Series A Notes will be $990.02 per $1,000 principal amount. The
Company shall not be obligated to deliver any of the Series A Notes, except upon
payment for all of the Series A Notes to be purchased as provided herein.
3
<PAGE> 5
(b) Delivery of the Series A Notes shall be made, against payment of
the purchase price therefor, at the offices of Latham & Watkins, New York, New
York or such other location as may be mutually acceptable. Such delivery and
payment shall be made at 9:00 a.m., New York City time, on January 12, 1999 or
at such other time as shall be agreed upon by the Initial Purchasers and the
Company. The time and date of such delivery and payment are herein called the
"CLOSING DATE."
(c) On the Closing Date, one or more Series A Notes in definitive
global form, registered in the name of Cede & Co., as nominee of The Depository
Trust Company, ("DTC"), having an aggregate amount corresponding to the
aggregate principal amount of the Series A Notes (the "GLOBAL NOTE") sold
pursuant to Exempt Resales to Eligible Purchasers shall be delivered by the
Company to the Initial Purchasers (or as the Initial Purchasers direct), against
payment by the Initial Purchasers of the purchase price therefor, by wire
transfer of same day funds, to an account designated by the Company, provided
that the Company shall give at least two business days' prior written notice to
the Initial Purchasers of the information required to effect such wire transfer.
The Global Note shall be made available to the Initial Purchasers for inspection
not later than 9:30 a.m. on the business day immediately preceding the Closing
Date.
4. Agreements of the Company. The Company covenants and agrees with the
Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, confirm such advice in writing, (i) of the issuance by any
state securities commission of any stop order suspending the qualification or
exemption from qualification of any Notes for offering or sale in any
jurisdiction, or the initiation of any proceeding for such purpose by any state
securities commission or other regulators authority and (ii) of the happening of
any event that makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires the
making of any additions to or changes in the Preliminary Offering Memorandum or
the Offering Memorandum in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading. The Company shall
use its best efforts to prevent the issuance of any stop order or order
suspending the qualification or exemption of any Notes under any state
securities or Blue Sky laws and, if at any time any state securities commission
or other regulatory authority shall issue an order suspending the qualification
or exemption of any Notes under any state securities or Blue Sky laws, the
Company shall use its best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, including all
documents incorporated therein by reference, and any amendments or supplements
thereto, as the Initial Purchasers may reasonably request. The Company consents
to the use of the Preliminary Offering Memorandum and the Offering Memorandum,
and any amendments and supplements thereto required pursuant hereto, by the
Initial Purchasers in connection with Exempt Resales.
(c) Prior to making any amendment or supplement to the Preliminary
Offering Memorandum or the Offering Memorandum, the Company shall furnish a copy
thereof to the
4
<PAGE> 6
Initial Purchasers and counsel to the Initial Purchasers and will not effect any
such amendment or supplement to which the Initial Purchasers shall reasonably
object by reasonable notice to the Company after a reasonable period of review,
which shall not in Tany case be longer than five business days after receipt of
such copy.
(d) If, at any time prior to the completion of the distribution of the
Series A Notes by the Initial Purchasers, any event shall occur as a result of
which, in the judgment of the Company or in the reasonable opinion of counsel
for the Company or counsel for the Initial Purchasers, it becomes necessary or
advisable to amend or supplement the Preliminary Offering Memorandum or the
Offering Memorandum in order to make the statements therein, in the light of the
circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser, not misleading, or if it is necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or the Offering Memorandum to
comply with applicable law, (i) to notify the Initial Purchasers and (ii)
forthwith to prepare an appropriate amendment or supplement to such Preliminary
Offering Memorandum or the Offering Memorandum so that the statements therein as
so amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that such Preliminary Offering Memorandum
or the Offering Memorandum will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel for the
Initial Purchasers in connection with the qualification or registration of the
Series A Notes under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may reasonably request and to continue such qualification
in effect so long as required for the Exempt Resales; provided, however, that
the Company shall not be required in connection therewith to register or qualify
as a foreign corporation where it is not now so qualified or to take any action
that would subject it to service of process in suits or taxation, in each case,
other than as to matters and transactions relating to the Preliminary Offering
Memorandum, the Offering Memorandum or Exempt Resales, in any jurisdiction where
it is not now so subject.
(f) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees and taxes incident to the performance of the obligations
of the Company hereunder, including in connection with: (i) the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum (including, without limitation, financial statements) and
all amendments and supplements thereto required pursuant hereto, (ii) the
preparation (including, without limitation, duplication costs) and delivery of
all agreements, correspondence and all other documents prepared and delivered in
connection herewith and with the Exempt Resales, (iii) the issuance, transfer
and delivery of the Series A Notes to the Initial Purchasers, (iv) the
qualification or registration of the Series A Notes for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the cost of printing and mailing a preliminary and final Blue Sky
Memorandum and the reasonable fees and disbursements of counsel for the Initial
Purchasers relating thereto), (v) furnishing such copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and all amendments and
supplements thereto, as may be requested for use in connection with Exempt
Resales, (vi) the preparation of certificates for the Notes (including, without
limitation, printing and engraving thereof), (vii) the fees, disbursements and
expenses of the Company's counsel and
5
<PAGE> 7
accountants, (viii) all fees and expenses (including fees and expenses of
counsel) of the Company in connection with the approval of the Series A Notes by
DTC for "book-entry" transfer, (ix) rating the Series A Notes by rating
agencies, (x) the reasonable fees and expenses of the Trustee and its counsel,
(xi) the performance by the Company of its other obligations under this
Agreement and the other Operative Documents and (xii) "roadshow" travel and
other expenses incurred in connection with the marketing and sale of the Notes.
(g) To use the proceeds from the sale of the Series A Notes in the
manner described in the Offering Memorandum under the caption "Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts to
claim the benefit of any usury laws against the holders of any Notes.
(i) To do and perform all things required to be done and performed
under this Agreement by them prior to or after the Closing Date and to use its
reasonable efforts to satisfy all conditions precedent on their part to the
delivery of the Series A Notes.
(j) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Notes in a manner that would require
the registration under the Act of the sale to the Initial Purchasers or the
Eligible Purchasers of the Series A Notes or to take any other action that would
result in the Exempt Resales not being exempt from registration under the Act.
(k) For so long as any of the Series A Notes remain outstanding and
during any period in which the Company is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), to make
available to any holder or beneficial owner of Series A Notes in connection with
any sale thereof and any prospective purchaser of such Series A Notes from such
holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act.
(l) To use its reasonable efforts to obtain approval of the Series A
Notes by DTC for "book-entry" transfer.
(m) During a period of five years following the Closing Date, to
deliver without charge to the Initial Purchasers, as they may reasonably
request, promptly upon their becoming available, copies of (i) all reports or
other publicly available information that the Company shall mail or otherwise
make available to its securityholders and (ii) all reports, financial statements
and proxy or information statements filed by the Company with the Commission or
any national securities exchange and such other publicly available information
concerning the Company or any of its subsidiaries, including without limitation,
press releases.
(n) Prior to the Closing Date, to furnish to the Initial Purchasers, as
soon as they have been prepared in the ordinary course by the Company, copies of
any unaudited interim financial statements for any period subsequent to the
periods covered by the financial statements appearing or incorporated by
reference in the Offering Memorandum.
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<PAGE> 8
(o) Not to take, directly or indirectly, any action designed to, or
that might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Notes. Except as permitted by the Act, the Company will not
distribute any (i) preliminary offering memorandum, including, without
limitation, the Preliminary Offering Memorandum, (ii) offering memorandum,
including, without limitation, the Offering Memorandum, or (iii) other offering
material in connection with the offering and sale of the Notes.
5. Representations and Warranties. (a) The Company represents and
warrants to the Initial Purchasers that:
(i) The Preliminary Offering Memorandum as of its date
does not, and the Offering Memorandum as of its date and as of
the Closing Date does not and will not, and any supplement or
amendment to them will not, contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and
warranties contained in this paragraph shall not apply to
statements in or omissions from the Preliminary Offering
Memorandum and the Offering Memorandum (or any supplement or
amendment thereto) made in reliance upon and in conformity
with information relating to the Initial Purchasers furnished
to the Company in writing by the Initial Purchasers expressly
for use therein. No stop order preventing the use of the
Preliminary Offering Memorandum or the Offering Memorandum, or
any amendment or supplement thereto, or any order asserting
that any of the transactions contemplated by this Agreement
are subject to the registration requirements of the Act, has
been issued.
(ii) (A) The documents incorporated by reference in the
Offering Memorandum, when they became effective or were filed
with the Commission, as the case may be, did not contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; (B) the documents
incorporated by reference in the Offering Memorandum when they
became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the
requirements of the Exchange Act; and (C) any further
documents so filed and incorporated by reference in the
Offering Memorandum or any further amendment or supplement
hereto, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all
material respects to the requirements of the Exchange Act.
(iii) The Company (A) has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, (B) has all requisite corporate
power and authority to carry on its business as it is
currently being conducted and as described in the Offering
Memorandum and to own, lease and operate its properties, and
(C) is duly qualified and is in good standing as a foreign
corporation, authorized to do business in each jurisdiction in
which the nature of its business or its ownership or
7
<PAGE> 9
leasing of property requires such qualification, except, in
each such case, where the failure to be so qualified could not
reasonably be expected to (x) result, individually or in the
aggregate, in a material adverse effect on the properties,
business, results of operations, condition (financial or
otherwise), or affairs of the Company, taken as a whole, (y)
materially interfere with or adversely affect the issuance or
marketability of the Notes or (z) in any material manner draw
into question the validity of this Agreement or any other
Operative Document or the transactions described in the
Offering Memorandum under the caption "Use of Proceeds" (any
of the events set forth in clauses (x), (y) or (z), a
"MATERIAL ADVERSE EFFECT").
(iv) The subsidiaries of the Company, considered in the
aggregate as a single subsidiary, do not constitute a
"significant subsidiary" as defined in rule 1-02 of Regulation
S-X under the Act.
(v) When the Series A Notes are issued and delivered
pursuant to this Agreement, no Series A Note will be of the
same class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national
securities exchange, registered under Section 6 of the
Exchange Act or that are quoted in a United States automated
inter-dealer quotation system.
(vi) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations
under this Agreement and each of the other Operative Documents
to which it is a party and to consummate the transactions
contemplated hereby and thereby, including, without
limitation, the corporate power and authority to issue, sell
and deliver the Notes.
(vii) This Agreement has been duly and validly
authorized, executed and delivered by the Company and,
assuming the due authorization, execution and delivery of this
Agreement by the Initial Purchasers, is the legal, valid and
binding agreement of the Company, enforceable against it in
accordance with its terms, (a) subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization
or similar laws affecting the rights of creditors generally
and subject to general principles of equity and (b) the
enforceability of indemnification and contribution provisions
may be limited by federal and state securities laws and the
policies underlying such laws.
(viii) The Indenture has been duly and validly
authorized by the Company and, assuming the due authorization,
execution and delivery of the Indenture by the Trustee, when
duly executed and delivered by the Company, will be the legal,
valid and binding agreement of the Company, enforceable
against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization
or similar laws affecting the rights of creditors generally
and subject to general principles of equity. On the Closing
Date, the Indenture will conform in all material respects to
the requirements of the Trust Indenture Act of 1939, as
amended (the "TRUST INDENTURE ACT"), and the
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<PAGE> 10
rules and regulations of the Commission applicable to an
indenture which is qualified thereunder.
(ix) The Registration Rights Agreement has been duly
and validly authorized by the Company and, when duly executed
and delivered by the Company, will be the legal, valid and
binding obligation of the Company, enforceable against it in
accordance with its terms (assuming the due authorization,
execution and delivery of the Registration Rights Agreement by
the Initial Purchasers), (a) subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar
laws affecting the rights of creditors generally and subject
to general principles of equity and (b) the enforceability of
indemnification and contribution provisions may be limited by
Federal and state securities laws and the policies underlying
such laws.
(x) The Series A Notes have been duly and validly
authorized by the Company for issuance and sale to the Initial
Purchasers pursuant to this Agreement and, when issued and
authenticated in accordance with the terms of the Indenture
and delivered against payment therefor in accordance with the
terms hereof and thereof, will be the legal, valid and binding
obligations of the Company, enforceable against it in
accordance with their terms and entitled to the benefits of
the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee), (a) subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of
equity and (b) the waiver contained in Section 515 of the
Indenture may be deemed unenforceable.
(xi) The Exchange Notes have been duly and validly
authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Registration
Rights Agreement and the Indenture, will be the legal, valid
and binding obligations of the Company, enforceable against it
in accordance with their terms and entitled to the benefits of
the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee), (a) subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of
equity and (b) the waiver contained in Section 515 of the
Indenture may be deemed unenforceable.
(xii) Each of the Company and its subsidiaries is not
and, after giving effect to the Offering, will not be, (A) in
violation of its charter or bylaws, (B) in default in the
performance of any bond, debenture, note, indenture, mortgage,
deed of trust or other agreement or instrument to which it is
a party or by which it is bound or to which any of its
properties is subject, which singly or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or
(C) in violation of any local, state, federal or foreign law,
statute, ordinance, rule, regulation, requirement, judgment or
court decree (including, without limitation, environmental
laws, statutes, ordinances, rules, regulations, judgments or
court decrees) applicable to it or any of its assets or
properties (whether owned or
9
<PAGE> 11
leased), which, singly or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. To the best
knowledge of the Company, there exists no condition that, with
notice, the passage of time or otherwise, would constitute a
default under any such document or instrument, except, in the
cases of clauses (B) and (C) above, for such defaults that
individually or in the aggregate could not be reasonably
expected to result in a Material Adverse Effect.
(xiii) None of (A) the execution, delivery or
performance by the Company of this Agreement or any of the
other Operative Documents to which it is a party, (B) the
issuance and sale of the Notes and (C) consummation by the
Company of the transactions described in the Offering
Memorandum under the caption "Use of Proceeds," violates,
conflicts with or constitutes a breach of any of the terms or
provisions of, or will violate, conflict with or constitute a
breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or
both, would constitute a default under), or require consent
under, or result in the imposition of a lien or encumbrance on
any properties of the Company or any of its subsidiaries, or
an acceleration of any indebtedness of the Company or any of
its subsidiaries pursuant to, (1) the charter or bylaws of the
Company or any of its subsidiaries, (2) any bond, debenture,
note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which any of them or their property is or may be
bound, (3) any statute, rule or regulation applicable to the
Company or any of its subsidiaries or any of their assets or
properties or (4) any judgment, order or decree of any court
or governmental agency or authority having jurisdiction over
the Company or any of its subsidiaries or any of their assets
or properties, except, in the case of clauses (2), (3) and
(4), such breaches, violations or defaults that individually
or in the aggregate could not be reasonably expected to result
in a Material Adverse Effect. No consent, approval,
authorization or order of, or filing, registration,
qualification, license or permit of or with, (A) any court or
governmental agency, body or administrative agency or (B) any
other person is required for (1) the execution, delivery and
performance by the Company of this Agreement or any of the
other Operative Documents to which it is a party or (2) the
issuance and sale of the Notes and the transactions
contemplated hereby and thereby, except such as have been or
will be obtained and made on or prior to the Closing Date (or,
in the case of the Registration Rights Agreement, will be
obtained and made under the Act, the Trust Indenture Act, and
state securities or Blue Sky laws and regulations).
(xiv) There is (A) no action, suit, investigation or
proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending or,
to the best knowledge of the Company, threatened or
contemplated to which the Company or any of its subsidiaries
is or may be a party or to which the business or property of
the Company or any of its subsidiaries, is or may be subject,
(B) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that
has been proposed by any governmental body and (C) no
injunction, restraining order or order of any nature
10
<PAGE> 12
by a federal or state court or foreign court of competent
jurisdiction to which the Company or any of its subsidiaries
is or may be subject or to which the business, assets or
property of the Company or any of its subsidiaries is or may
be subject, that, in the case of clauses (A), (B) and (C)
above, could reasonably be expected to have a Material Adverse
Effect.
(xv) No action has been taken and no statute, rule,
regulation or order has been enacted, adopted or issued by any
governmental agency that prevents the issuance of the Notes or
prevents or suspends the use of the Offering Memorandum; no
Injunction, restraining order or order of any nature by a
federal or state court of competent jurisdiction has been
issued that prevents the issuance of the Notes or prevents or
suspends the sale of the Notes in any jurisdiction referred to
in Section 4(e) hereof; and every request of any securities
authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
(xvi) None of the Company or any of its subsidiaries
has violated any foreign, federal, state or local law or
regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (collectively,
"ENVIRONMENTAL LAWS"), which violation could reasonably be
expected to have a Material Adverse Effect.
(xvii) Each of the Company and its subsidiaries has
such permits, licenses, franchises and authorizations of
governmental or regulatory authorities ("PERMITS"), including,
without limitation, under any applicable Environmental Laws,
as are necessary to own, lease and operate its respective
properties and to conduct its businesses, except where the
failure to have such permits could not reasonably be expected
to have a Material Adverse Effect; each of the Company and its
subsidiaries has fulfilled and performed all of its
obligations with respect to such permits and no event has
occurred which allows, or after notice or lapse of time would
allow, revocation or termination thereof or results in any
other material impairment of the rights of the holder of any
such permit; and, except as described in the Offering
Memorandum, such permits contain no restrictions that are
materially burdensome to the Company or such subsidiary, as
the case may be.
(xviii) The Company has (A) initiated a review and
assessment of all areas within its and each of its
subsidiaries' business and operations (including those
affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Problem" (that is, the
risk that computer applications used by the Company or any of
its subsidiaries (or suppliers, vendors and customers) may be
unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after
January 1, 2000), (B) developed a plan and timeline for
addressing the Year 2000 Problem on a timely basis and (C) to
date, has implemented that plan in accordance with that
timetable. Based on the foregoing, the Company believes that
all computer applications (including those of the Company's
suppliers, vendors and customers)
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<PAGE> 13
that are material to its or any of its subsidiaries' business
and operations are reasonably expected on a timely basis to be
able to perform properly date-sensitive functions for all
dates before and after January 1, 2000, except to the extent
that a failure to do so could not reasonably be expected to
have Material Adverse Effect.
(xix) None of the Company or any of its subsidiaries is
an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "INVESTMENT COMPANY
ACT").
(xx) There are no holders of securities of the Company
or any of its subsidiaries who, by reason of the execution by
the Company of this Agreement or any other Operative Document
to which it is a party or the consummation by the Company of
the transactions contemplated hereby and thereby, have the
right to request or demand that the Company or any of its
subsidiaries register under the Act or analogous foreign laws
and regulations securities held by them other than pursuant to
the Registration Right Agreement.
(xxi) None of the Company or any of its subsidiaries
has (A) taken, directly or indirectly, any action designed to,
or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of
the Company or any of its subsidiaries to facilitate the sale
or resale of the Notes or (B) since the date of the
Preliminary Offering Memorandum (1) sold, bid for, purchased
or paid any person any compensation for soliciting purchases
of the Notes or (2) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other
securities of the Company or any of its subsidiaries.
(xxii) To the Company's knowledge, the accountants who
have certified or will certify the financial statements
included or to be included as part of, or incorporated by
reference into, the Offering Memorandum are independent
accountants as required by the Act. The historical financial
statements, together with related schedules and notes thereto,
comply as to form in all material respects with the
requirements applicable to registration statements on Form S-3
under the Act and present fairly in all material respects the
financial position and results of operations of the Company
and its subsidiaries at the dates and for the periods
indicated. Such financial statements have been prepared in
accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods
presented.
(xxiii) No registration under the Act of the Series A
Notes is required for the sale of the Series A Notes to the
Initial Purchasers as contemplated hereby or for the Exempt
Resales assuming (A) that the purchasers who buy the Series A
Notes in the Exempt Resales are Eligible Purchasers and (B)
the accuracy of the Initial Purchasers' representations
regarding the absence of general solicitation in connection
with the sale of Series A Notes to the Initial Purchasers and
the Exempt Resales contained herein. No form of general
solicitation or general
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<PAGE> 14
advertising (as defined in Regulation D under the Act) was
used by the Company or any of its representatives (other than
the Initial Purchasers, as to which the Company makes no
representation or warranty) in connection with the offer and
sale of any of the Series A Notes or in connection with Exempt
Resales, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any
general solicitation or general advertising. No securities of
the same class as the Notes have been issued and sold by the
Company or any of its subsidiaries within the six-month period
immediately prior to the date hereof.
(xxiv) The execution and delivery of this Agreement,
the other Operative Documents and the sale of the Series A
Notes to be purchased by Eligible Purchasers will not involve
any prohibited transaction within the meaning of Section 406
of ERISA or Section 4975 of the Internal Revenue Code of 1986.
The representation made by the Company in the preceding
sentence is made in reliance upon and subject to the accuracy
of, and compliance with, the representations and covenants
made or deemed made by Eligible Purchasers as set forth in the
Offering Memorandum under the caption "Notice to Investors."
(xxv) Since the respective dates as of which
information is given in the Offering Memorandum, (i) there has
not been any material adverse change, or any development that
is reasonably likely to result in a material adverse change,
in the capital stock or the long-term debt, or material
increase in the short-term debt, of the Company or any of its
subsidiaries from that set forth in the Offering Memorandum,
and (ii) none of the Company or any of its subsidiaries shall
have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the
aggregate, to the Company, and its subsidiaries, taken as a
whole, and that are required to be disclosed on a balance
sheet or notes thereto in accordance with generally accepted
accounting principles and are not disclosed on the latest
balance sheet or notes thereto included in the Offering
Memorandum. Since the date hereof and since the dates as of
which information is given in the Offering Memorandum, there
shall not have occurred any material adverse change, or any
development that is reasonably likely to result in a material
adverse change, in the business, financial condition or
results of operation of the Company and its subsidiaries,
taken as a whole.
(xxvi) Each of the Preliminary Offering Memorandum and
the Offering Memorandum, as of its date, and each amendment or
supplement thereto, as of its date, contains the information
specified in, and meets the requirements of, Rule 144A(d)(4)
under the Act.
(xxvii) Prior to the effectiveness of any Registration
Statement, the Indenture is not required to be qualified under
the Trust Indenture Act.
(xxviii) None of the execution, delivery and
performance of this Agreement, the issuance and sale of the
Notes, the application of the proceeds
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<PAGE> 15
from the issuance and sale of the Notes and the consummation
of the transactions contemplated thereby as set forth in the
Offering Memorandum, will violate Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve
System or analogous foreign laws and regulations.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 8
hereof, counsel for the Company and counsel for the Initial Purchasers, will
rely upon the accuracy and truth of the foregoing representations and hereby
consent to such reliance.
(b) Each of the Initial Purchasers, severally and not Jointly,
represents, warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such
knowledge and experience in financial and business matters as
are necessary in order to evaluate the merits and risks of an
investment in the Series A Notes.
(ii) Such Initial Purchaser (A) is not acquiring the
Series A Notes with a view to any distribution thereof that
would violate the Act or the securities laws of any state of
the United States or any other applicable jurisdiction and (B)
will be reoffering and reselling the Series A Notes only to
QIBs in reliance on the exemption from the registration
requirements of the Act provided by Rule 144A.
(iii) No form of general solicitation or general
advertising (within the meaning of Regulation D under the Act)
has been or will be used by such Initial Purchaser or any of
its representatives in connection with the offer and sale of
any of the Series A Notes, including, but not limited to,
articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general
advertising.
(iv) Such Initial Purchaser agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the
Series A Notes only from, and will offer to sell the Series A
Notes only to, Eligible Purchasers. Such Initial Purchaser
further acknowledges and agrees that such Eligible Purchasers
shall acknowledge and agree that (A) such Series A Notes will
not have been registered under the Act and may be resold,
pledged or otherwise transferred only (x)(I) to a person whom
the seller reasonably believes is a QIB purchasing for its own
account or for the account of a QIB in a transaction meeting
the requirements of Rule 144A, (II) in an offshore transaction
(as defined in Rule 902 under the Act) meeting the
requirements of Rule 904 under the Act, (III) in a transaction
meeting the requirements of Rule 144 under the Act, (IV) to an
Accredited Investor that, prior to such transfer, furnishes
the Trustee a signed letter containing certain representations
and agreements relating to the registration of transfer of
such Series A Notes and an opinion of counsel acceptable to
the Company that such transfer is in compliance with the Act
or (V) in accordance with another exemption from the
registration requirements of the Act (and based upon an
14
<PAGE> 16
opinion of counsel if the Company so requests), (y) to the
Company or any of its subsidiaries or (z) pursuant to an
effective registration statement under the Act and, in each
case, in accordance with any applicable securities laws of any
state of the United States or any other applicable
jurisdiction and (B) it will, and each subsequent holder is
required to, notify any purchaser of the security evidenced
thereby of the resale restrictions set forth in (A) above.
The Initial Purchasers acknowledge that the Company and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section 8
hereof, counsel for the Company and counsel for the Initial Purchasers will rely
upon the accuracy and truth of the foregoing representations and hereby consents
to such reliance.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless (i) the Initial
Purchasers, (ii) each person, if any, who controls the Initial Purchasers within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, (iii)
each affiliate of the Initial Purchasers, and (iv) the respective officers,
directors, partners, employees, representatives and agents of the Initial
Purchasers or any controlling person or affiliate to the fullest extent lawful,
from and against any and all losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum (in each case, including the documents incorporated by reference
therein), or in any supplement thereto or amendment thereof, or arise out of or
are based upon the omission or alleged omission to state therein 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;
provided, however, that the Company will not be liable in any such case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with information furnished to the Company in writing by or on
behalf of the Initial Purchasers expressly for use therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have, including under this Agreement; provided further, however, that with
respect to any such untrue statement or omission made in the Preliminary
Offering Memorandum, the indemnity agreement in this Section 6(a) shall not
inure to the benefit of the Initial Purchaser from whom the person asserting any
such loss, liability, claim, damage or expense purchased the Notes concerned if,
to the extent that such sale was an initial sale by such Initial Purchaser and
any such loss, liability, claim, damage or expense of such Initial Purchaser is
a result of the fact that both (A) a copy of the Offering, Memorandum was not
sent or given to such person, and (B) the untrue statement or omission in the
Preliminary Offering Memorandum was corrected in the Offering Memorandum
15
<PAGE> 17
unless, in either case, such failure to deliver the Offering Memorandum was a
result of noncompliance by the Company with Section 4(b).
(b) The Initial Purchasers agree to indemnify and hold harmless (i) the
Company, (ii) each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act, and (iii) the
officers, directors, partners, employees, representatives and agents of the
Company, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to reasonable attorneys' fees and any and
all expenses whatsoever incurred in investigating, preparing or defending
against any investigation or litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein 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, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with information furnished to the Company in
writing by or on behalf of the Initial Purchasers expressly for use therein;
provided, however, that (i) in no case shall the Initial Purchasers be liable or
responsible for any amount in excess of the amount by which the total price at
which the Series A Notes purchased by them and sold in Exempt Resales, as set
forth on the cover page of the Offering Memorandum, exceeds the amount of any
damages which the Initial Purchasers have otherwise been required to pay
pursuant to this Section 6 and (ii) each Initial Purchaser shall indemnify the
Company only with respect to the information such Initial Purchaser provides to
the Company. This indemnity will be in addition to any liability which the
Initial Purchasers may otherwise have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the
16
<PAGE> 18
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to those available to one or all of the indemnifying parties
(in which case the indemnifying party or parties shall not have the right to
direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses of counsel shall be
borne by the indemnifying parties; provided, however, that the indemnifying
party under subsection (a) or (b) above shall only be liable for the legal
expenses of one counsel (in addition to any necessary local counsel) for all
indemnified parties in each jurisdiction in which any claim or action is
brought. Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim or action
effected without its prior written consent, but if settled with such written
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify any indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are subject matter of such proceeding.
7. Contribution. In order to provide for contribution in circumstances
in which the indemnification provided for in Section 6 hereof is for any reason
held to be unavailable from an indemnifying party or is insufficient to hold
harmless a party indemnified thereunder, the Company, on the one hand, and the
Initial Purchasers, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnification provision (including any investigation, legal and other expenses
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting in the case of
losses, liabilities, claims, damages and expenses suffered by the Company, any
contribution received by the Company from persons, other than the Initial
Purchasers, who may also be liable for contribution, including persons who
control the Company within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act) to which the Company and the Initial Purchasers may be
subject, in such proportion as is appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Initial Purchasers, on the
other hand, from the offering of the Series A Notes or, if such allocation is
not permitted by applicable law or indemnification is not available as a result
of the indemnifying party not having received notice as provided in Section 6
hereof, in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of the Company, on the
one hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the Initial
Purchasers, on the other hand, shall be deemed to be in the same proportion as
(i) the total proceeds from the offering of Series A Notes (net of discounts but
before deducting expenses) received by the Company and (ii) the discounts and
commissions received by the Initial Purchasers, respectively, in each case as
set forth in the Offering Memorandum. The relative fault of the Company, on the
one hand,
17
<PAGE> 19
and of the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Initial Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of this Section
7, (i) in no case shall the Initial Purchasers be required to contribute any
amount in excess of the amount by which the discounts and commissions applicable
to the Series A Notes purchased by the Initial Purchasers pursuant to this
Agreement exceeds the amount of any damages which the Initial Purchasers have
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, (A) each person,
if any, who controls the Initial Purchasers within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, (B) each affiliate of the Initial
Purchasers and (C) the respective officers, directors, partners, employees,
representatives and agents of the Initial Purchasers or any controlling person
or affiliate shall have the same rights to contribution as the Initial
Purchasers, and (A) each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of the Company shall have the same rights to contribution as the Company,
subject in each case to clauses (i) and (ii) of this Section 7. Any party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this Section
7, notify such party or parties from whom contribution may be sought, but the
failure to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent, provided that such written consent was not unreasonably
withheld. The Initial Purchasers' obligations to contribute pursuant to this
Section 7 are several in proportion to the respective principal amount of Series
A Notes purchased by each of the Initial Purchasers hereunder and not joint.
8. Conditions of Initial Purchasers' Obligations. The obligations of
the Initial Purchasers to purchase and pay for the Series A Notes, as provided
herein, shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Company contained
in this Agreement shall be true and correct in all material respects on the date
hereof and on the Closing Date with the same force and effect as if made on and
as of the date hereof and the Closing Date, respectively. The Company shall have
performed or complied with all of the agreements herein contained and required
to be performed or complied with by it at or prior to the Closing Date.
18
<PAGE> 20
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York City
time, on the day following the date of this Agreement or at such later date and
time as to which the Initial Purchasers may agree, and no stop order suspending
the qualification or exemption from qualification of the Series A Notes in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency
which would, as of the Closing Date, prevent the issuance of the Series A Notes;
except as set forth in the Offering Memorandum, no action, suit or proceeding
shall have been commenced and be pending against or affecting or, to the best
knowledge of the Company, threatened against, the Company or any of its
subsidiaries before any court or arbitrator or any governmental body, agency or
official that, if adversely determined, could reasonably be expected to result
in a Material Adverse Effect; and no stop order shall have been issued
preventing the use of the Offering Memorandum, or any amendment or supplement
thereto, or which could reasonably be expected to have a Material Adverse
Effect.
(d) Since the dates as of which information is given in the Offering
Memorandum, (i) there shall not have been any material adverse change, or any
development that is reasonably likely to result in a material adverse change, in
the capital stock or the long-term debt, or material increase in the short-term
debt, of the Company or any of its subsidiaries from that set forth in the
Offering Memorandum, and (ii) none of the Company or any of its subsidiaries
shall have incurred any liabilities or obligations, direct or contingent, that
are material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, and that are required to be disclosed on a
balance sheet or notes thereto in accordance with generally accepted accounting
principles and are not disclosed on the latest balance sheet or notes thereto
included in the Offering Memorandum. Since the date hereof and since the dates
as of which information is given in the Offering Memorandum, there shall not
have occurred any material adverse change, or any development that is reasonably
likely to result in a material adverse change, in the business, financial
condition or results of operation of the Company and its subsidiaries, taken as
a whole.
(e) The Initial Purchasers shall have received a certificate, dated the
Closing Date, signed on behalf of the Company by (i) the chief executive officer
and (ii) the chief financial officer of the Company, in form and substance
reasonably satisfactory to the Initial Purchasers, confirming, as of the Closing
Date, the matters set forth in paragraphs (a), (b), (c) and (d) of this Section
8 and that, as of the Closing Date, the obligations of the Company to be
performed hereunder on or prior thereto have been duly performed.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers and counsel for the Initial Purchasers, of McDermott,
Will & Emery, counsel for the Company, to the effect set forth in Exhibit B
hereto.
(g) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance reasonably satisfactory
to the Initial Purchasers
19
<PAGE> 21
and counsel for the Initial Purchasers, of Barry P. Hoffman, general counsel for
the Company, to the effect set forth in Exhibit C hereto.
(h) At the time this Agreement is executed and at the Closing Date, the
Initial Purchasers shall have received from Deloitte & Touche LLP, independent
public accountants, dated as of the date of this Agreement and as of the Closing
Date, a customary comfort letter addressed to the Initial Purchasers and in form
and substance reasonably satisfactory to the Initial Purchasers and counsel for
the Initial Purchasers with respect to the financial statements and certain
financial information of the Company and its subsidiaries contained in the
Offering Memorandum and/or incorporated therein by reference.
(i) The Initial Purchasers shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, of Latham & Watkins, counsel for the Initial Purchasers, covering
such matters as are customarily covered in such opinions.
(j) Latham & Watkins shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in this
Section 8 and in order to evidence the accuracy, completeness or satisfaction in
all material respects of any of the representations, warranties or conditions
herein contained.
(k) Prior to the Closing Date, the Company shall have furnished to the
Initial Purchasers such further information, certificates and documents as the
Initial Purchasers may reasonably request.
(l) The Company and the Trustee shall have entered into the Indenture
and the Initial Purchasers shall have received counterparts, conformed as
executed, thereof.
(m) The Company and the Initial Purchasers shall have entered into the
Registration Rights Agreement and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(n) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any securities of the Company (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any securities of the Company by any
such rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Notes than that on which the Notes were marketed.
20
<PAGE> 22
(o) All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Company will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to the Initial Purchasers. The Company shall furnish the Initial Purchasers with
such conformed copies of such opinions, certificates, letters and other
documents as it shall reasonably request.
9. Initial Purchasers' Information. Each of the Company and the Initial
Purchasers acknowledge that the statements with respect to the offering of the
Series A Notes set forth in the Offering Memorandum in the information in the
"Plan of Distribution" and the "Notice to Investors" stating that the Initial
Purchasers have advised the Company (a) as to whom resales will be made and (b)
as to market making activities constitutes the only information furnished to the
Company in writing by or on behalf of the Initial Purchasers expressly for use
in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations and
warranties, covenants and agreements of the Initial Purchasers and the Company
contained in this Agreement, including the agreements contained in Sections 4(f)
and 11(d), the indemnity agreements contained in Section 6 and the contribution
agreements contained in Section 7, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Initial
Purchasers, any controlling person thereof, or by or on behalf of the Company,
or any controlling person thereof, and shall survive delivery of and payment for
the Series A Notes to and by the Initial Purchasers. The representations
contained in Section 5 and the agreements contained in Sections 4(f), 6, 7 and
11(d) shall survive the termination of this Agreement, including any termination
pursuant to Section 11.
11. Effective Date of Agreement; Termination.
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company from
the Initial Purchasers, without liability (other than with respect to Sections 6
and 7) on the Initial Purchasers' part to the Company if, on or prior to such
date, (i) the Company shall have failed, refused or been unable to perform in
any material respect any agreement on its part to be performed hereunder, (ii)
any other condition to the obligations of the Initial Purchasers hereunder as
provided in Section 8 is not fulfilled when and as required in any material
respect, (iii) in the reasonable judgment of the Initial Purchasers, any
material adverse change shall have occurred since the respective dates as of
which information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities, net worth,
results of operations or cash flows of the Company and its subsidiaries, taken
as a whole, other than as set forth in the Offering Memorandum, or (iv)(A) any
domestic or international event, act or occurrence has materially disrupted, or
in the opinion of the Initial Purchasers will in the immediate future materially
disrupt, the market for the Company's securities or for securities in general;
or (B) trading in securities generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market shall have been suspended
or materially limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for
21
<PAGE> 23
securities shall have been required, on such exchange or the Nasdaq National
Market, or by such exchange or other regulatory body or governmental authority
having jurisdiction; or (C) a banking moratorium shall have been declared by
federal or state authorities, or a moratorium in foreign exchange trading by
major international banks or persons shall have been declared; or (D) there is
an outbreak or escalation of armed hostilities involving the United States
(other than an outbreak or escalation of armed hostilities with Iraq) on or
after the date hereof, or if there has been a declaration by the United States
of a national emergency or war, the effect of which shall be, in the Initial
Purchasers' judgment, to make it inadvisable or impracticable to proceed with
the offering or delivery of the Series A Notes on the terms and in the manner
contemplated in the Offering Memorandum; or (E) there shall have been such a
material adverse change in general economic or financial conditions or if the
effect of international conditions on the financial markets in the United States
shall be such as, in the Initial Purchasers' judgment, makes it inadvisable or
impracticable to proceed with the delivery of the Series A Notes as contemplated
hereby.
(c) Any notice of termination pursuant to this Section 11 shall be
by telephone or facsimile and, in either case, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to clause (iv) of Section 11(b), in
which case each party will be responsible for its own expenses), or if the sale
of the Series A Notes provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company shall reimburse the Initial Purchasers for all out-of-pocket expenses
(including the reasonable fees and expenses of the Initial Purchasers' counsel),
incurred by the Initial Purchasers in connection herewith.
(e) If on the Closing Date any one or more of the Initial
Purchasers shall fail or refuse to purchase the Series A Notes which it or they
have agreed to purchase hereunder on such date and the aggregate principal
amount of the Series A Notes which such defaulting Initial Purchaser or Initial
Purchasers, as the case may be, agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of the Series A Notes to
be purchased on such date by all Initial Purchasers, each non-defaulting Initial
Purchaser shall be obligated severally, in the proportion which the principal
amount of the Series A Notes set forth opposite its name in Exhibit A bears to
the aggregate principal amount of the Series A Notes which all the
non-defaulting Initial Purchasers, as the case may be, have agreed to purchase,
or in such other proportion as Bear, Stearns & Co. Inc. ("BEAR STEARNS") may
specify, to purchase the Series A Notes which such defaulting Initial Purchaser
or Initial Purchasers, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the aggregate principal
amount of the Series A Notes which any Initial Purchaser has agreed to purchase
pursuant to Section 3 hereof be increased pursuant to this Section 11 by an
amount in excess of one-ninth of such principal amount of the Series A Notes
without the written consent of such Initial Purchaser. If on the Closing Date
any Initial Purchaser or Initial Purchasers shall fail or refuse to purchase the
Series A Notes and the aggregate principal amount of the Series A Notes with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of the Series A Notes to be purchased by all Initial Purchasers
and arrangements
22
<PAGE> 24
satisfactory to the Initial Purchasers and the Company for purchase of such the
Series A Notes are not made within 48 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Initial
Purchaser and the Company. In any such case which does not result in termination
of this Agreement, either Bear Stearns or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Offering Memorandum or any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Initial Purchaser from liability in respect of
any default of any such Initial Purchaser under this Agreement.
12. Notice. All communications hereunder, except as may be
otherwise specifically provided herein, shall be in writing and, if sent to the
Initial Purchasers shall be mailed, delivered, telecopied and confirmed in
writing or sent by a nationally recognized overnight courier service
guaranteeing delivery on the next business day to Bear, Stearns & Co. Inc., 245
Park Avenue, New York, New York 10167, Attention: Corporate Finance Department,
telecopy number: (212) 272-8296, with a copy to Latham & Watkins, 885 Third
Avenue, Suite 1000, New York, New York 10022, Attention: Marc D. Jaffe, telecopy
number: (212) 751-4864, and if sent to the Company, shall be mailed, delivered,
telecopied and confirmed in writing or sent by a nationally recognized overnight
courier service guaranteeing delivery on the next business day to Valassis
Communications, Inc., 19975 Victor Parkway, Livonia, Michigan 48152, Attention:
Chief Financial Officer, telecopy number: (734) 462-2513, with a copy to
McDermott, Will & Emery, 50 Rockefeller Plaza, New York, New York 10020-1605,
Attention: Amy Leder, telecopy number: (212) 547-5444.
13. Parties. This Agreement shall inure solely to the benefit of,
and shall be binding upon, the Initial Purchasers and the Company and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Series A Notes from the Initial Purchasers.
14. Construction. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
[Signature page to follow]
23
<PAGE> 25
If the foregoing correctly sets forth the understanding among the
Initial Purchasers and the Company please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among us.
Very truly yours,
VALASSIS COMMUNICATIONS, INC.
By: /s/ Barry P. Hoffman
-------------------------------
Name: Barry P. Hoffman, Esq.
Title: Secretary
Accepted and agreed to as of
the date first above written:
BEAR, STEARNS & CO. INC.
By: /s/ Robert Bicknese
- -------------------------------
Name: Robert Bicknese
Title: Senior Managing Director
WASSERSTEIN PERELLA SECURITIES, INC.
By: /s/ James C. Kingsbery
- -------------------------------
Name: James C. Kingsbery
Title: Treasurer
24
<PAGE> 26
EXHIBIT A
Initial Purchasers
<TABLE>
<CAPTION>
Initial Purchaser Principal Amount of Notes
- ------------------------------------------------------------------------------- --------------------------
<S> <C>
Bear, Stearns & Co. Inc......................................................... $80,000,000
Wasserstein Perella Securities, Inc............................................. $20,000,000
--------------------------
Total.................................................................. $100,000,000
- --------------------------------------------------------------------------------
</TABLE>
<PAGE> 27
EXHIBIT B
Form of Opinion of McDermott, Will & Emery
[MCDERMOTT, WILL & EMERY LETTERHEAD]
January _____, 1999
Bear, Stearns & Co. Inc.
Wasserstein Perella Securities, Inc.
c/o Bear, Stearns & Co., Inc.
245 Park Avenue
New York, New York 10167
Re: Valassis Communications, Inc.
6 5/8 % Senior Notes due 2009
Dear Ladies and Gentlemen:
We have acted as special counsel to Valassis Communications, Inc., a
Delaware corporation (the "Company"), in- connection with the (i) offer and sale
of $100,000,000 in aggregate principal amount of 6 5/8% Senior Notes due 2009
(the "Notes") pursuant to the Purchase Agreement, dated January 7, 1999 (the
"Purchase Agreement"), among the Company and Bear, Stearns & Co. Inc. and
Wasserstein Perella Securities, Inc. (the "Initial Purchasers"), (ii) the
execution and delivery by the Company of the Indenture, dated January _, 1999
(the "Indenture"), between the Company and The Bank of New York, as trustee (the
"Trustee"), relating to the Notes; and (iii) the execution and delivery by the
Company of the Registration Rights Agreement, dated January __, 1999, between
the Company and the Initial Purchasers (the "Registration Rights Agreement" and,
together with the Purchase Agreement and the Indenture, the "Transaction
Documents").
This opinion is being delivered to you pursuant to Section 8(f) of the
Purchase Agreement. All capitalized terms used and not defined herein have the
same respective meanings herein as set forth in the Purchase Agreement.
In rendering the opinions set forth herein, we have examined and relied
on originals or copies of the following:
i. the Preliminary Offering Memorandum, dated December 30, 1998,
relating to the Notes (the "Preliminary Offering Memorandum");
<PAGE> 28
ii. the Final Offering Memorandum, dated January _, 1999, relating
to the Notes (the "Final Offering Memorandum" and together with the Preliminary
Offering Memorandum, the "Offering Memorandum");
iii. the Purchase Agreement;
iv. the Indenture;
v. the Registration Rights Agreement;
vi. a certified copy of the resolutions of the Board of Directors
of the Company adopted in connection with the transactions contemplated by the
Transaction Documents;
vii. a certificate of the Secretary of the Company;
viii. a certificate of the Secretary of State of Delaware as to the
good standing of the Company in such jurisdiction;
ix. a certified copy of the Restated Certificate of Incorporation
of the Company, as amended through the date hereof;
x. a certified copy of the By-laws of the Company;
xi. a certificate of the Secretaries of State of Michigan,
California, Connecticut, Georgia, Illinois, Kansas, Minnesota and North Carolina
as to the qualification and good standing of the Company in such jurisdictions;
xii. the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, the Company's Quarterly Report on Form 10-Q for the period
ended September 30, 1998 and the Company's current report on Form 8-K dated June
4, 1998 (the "Incorporated by Reference Documents"); and
xiii. such other documents as we have deemed necessary or
appropriate as a basis for the opinion set forth below.
In our examination we have assumed the genuineness of all signatures
including indorsements, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such copies. Our opinion with
respect to the validity, binding effect and enforceability of any document or
agreement is subject to the effect of any applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and general
principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity). In addition, we express no opinion as to the
enforceability of indemnification and contribution provisions which may be
limited by Federal and state securities laws and the policies underlying such
laws (including any
B-3
<PAGE> 29
rule or regulation promulgated thereunder) or the waiver contained in Section
515 of the Indenture which may be deemed unenforceable.
As to any facts material to this opinion which we did not independently
establish or verify, we have relied upon statements and representations and
certificates of the Company and its officers and other representatives and of
public officials, including the facts set forth in the certificates mentioned
above.
Members of our firm are admitted to the Bar of the State of New York.
We express no opinion as to the laws of any jurisdiction other than the laws of
the State of New York, the General Corporation Law of the State of Delaware and
the Federal laws of the United States of America.
Based upon the foregoing, and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
17. The Company (a) is duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, (b) has all requisite
corporate power and authority to carry on its business as described in the
Offering Memorandum and to own, lease and operate its properties, and (c) based
solely on the certificates described in clause (xi) above, is duly qualified as
a foreign corporation to transact business and is in good standing in each
jurisdiction set forth on Exhibit A hereto.
18. The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Purchase Agreement, the
Indenture and the Registration Rights Agreement and to consummate the
transactions contemplated thereby, including, without limitation, the corporate
power and authority to issue, sell and deliver the Notes.
19. The Purchase Agreement has been duly and validly authorized,
executed and delivered by the Company.
20. The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Company, and is the valid and binding
agreement of the Company, enforceable against it in accordance with its terms.
21. The Indenture has been duly and validly authorized, executed and
delivered by the Company, and is the valid and binding agreement of the Company,
enforceable against it in accordance with its terms.
22. The Series A Notes have been duly and validly authorized and
executed by the Company for issuance and sale to the Initial Purchasers pursuant
to the Purchase Agreement, and, when authenticated in accordance with the terms
of the Indenture and delivered against payment therefor in accordance with the
terms of the Purchase Agreement, the Series A Notes will be the valid and
binding obligations of the Company, enforceable against it in accordance with
their terms and entitled to the benefits of the Indenture.
B-3
<PAGE> 30
23. The Exchange Notes have been duly and validly authorized for
issuance by the Company, and, when issued and authenticated in accordance with
the terms of the Registration Rights Agreement and the Indenture, the Exchange
Notes will be the valid and binding obligations of the Company, enforceable
against it in accordance with their terms and entitled to the benefits of the
Indenture.
24. The statements under the captions "Description of Notes," "Notice
to Investors" and "Plan of Distribution" in the Offering Memorandum, insofar as
such statements relate to statements of law or summaries of documents referred
to therein or of legal conclusions, have been reviewed by us and such statements
of law and summaries of documents are accurate in all material respects.
25. To the best of our knowledge, the Company is not (a) in violation
of its charter or bylaws or (b) in default in the performance of any material
agreement filed as an exhibit to any filing made by the Company to the
Securities Exchange Commission, which, in the case of clause (b), singly or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
26. None of (a) the execution, delivery or performance by the Company
of the Transaction Documents, (b) the issuance and sale of the Notes and (c) the
consummation by the Company of the transactions described in the Offering
Memorandum under the caption "Use of Proceeds," violates, conflicts with or
constitutes a breach of any of the terms or provisions of, or a default under
(or an event that with notice or the lapse of time, or both, would constitute a
default under), or requires consent under, or results in the imposition of a
lien or encumbrance on any properties of the Company, or an acceleration of any
indebtedness of the Company pursuant to, (i) the charter or bylaws of the
Company, (ii) any material agreement filed as an exhibit to any filing made by
the Company to the Securities Exchange Commission (iii) any statute, rule or
regulation applicable to the Company or any of its assets or properties which in
our experience is normally applicable to the Transaction Documents, other than
federal and state securities laws as to which we express no opinion other than
as specifically set forth below, or (iv) to the best of our knowledge, any
judgment, order or decree of any court or governmental agency or authority
having jurisdiction over the Company or any of its assets or properties. With
respect to the opinion set forth in this paragraph, we express no opinion as to
whether any statements or representations of the Company made in connection with
the transactions contemplated by the Transaction Documents contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements made, in light of the circumstances under which they were
made, not misleading, nor do we otherwise pass on the accuracy or adequacy of
any disclosure or representations, written or oral, made in connection with such
transactions.
27. Assuming compliance with applicable state securities and Blue Sky
laws, as to which we express no opinion, and except for the filing of a
registration statement under the Act and qualification of the Indenture under
the Trust Indenture Act, or otherwise in connection with the Registration Rights
Agreement, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any governmental
agency or body or any court, which has not been obtained or taken and is not in
full force and effect and which is, in our opinion, normally applicable to
transactions of the type contemplated by the Transaction Documents, is required
for the consummation of the transactions contemplated by the
B-4
<PAGE> 31
Transaction Documents or in connection with the issuance and the sale of the
Notes by the Company.
28. Assuming neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf (i) has, within the six-month period prior
to the date hereof, offered or sold in the United States or to any U.S. person
(as such terms are defined in Regulation S under the Securities Act) the Series
A Notes or any security of the same class or series as the Series A Notes or
(ii) has offered or will offer or sell the Series A Notes (A) in the United
States by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) under the Securities Act or (B) with respect
to any such securities sold in reliance on Rule 903 of Regulation S under the
Securities Act, by means of any directed selling efforts within the meaning of
Rule 902(b) of Regulation S, and assuming compliance by the Initial Purchasers
with their obligations under the Purchase Agreement, the issuance and sale of
the Series A Notes to the Initial Purchasers, and the offering, resale and
delivery by the Initial Purchasers of the Series A Notes, in each case in the
manner contemplated by the Purchase Agreement, will be exempt from the
registration requirements of the Act.
29. The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act.
30. The Indenture complies as to form in all material respects with the
requirements of the Trust Indenture Act and the rules and regulations of the
Commission applicable to an indenture which is qualified thereunder. Prior to
the Exchange Offer or the effectiveness of the Shelf Registration Statement, the
Indenture is not required to be qualified under the Trust Indenture Act.
31. The Incorporated by Reference Documents, when they were filed with
the Commission, conformed in all material respects to the requirements of the
Exchange Act (except as to financial statements and schedules and other
financial and statistical data included therein or omitted therefrom as to which
we express no opinion). With respect to the opinion set forth in this paragraph
and without limiting the following paragraph, we express no opinion as to
whether any statements or representations of the Company made in the
Incorporated by Reference Documents contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading,
nor do we otherwise pass on the accuracy or adequacy of any disclosure made in
such documents.
In addition, we have participated in conferences with officers and
other representatives of the Company, representatives of the independent
certified public accountants of the Company and the Initial Purchasers and their
representatives at which the contents of the Offering Memorandum 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 Memorandum and have not made any independent check or
verification thereof, during the course of such participation, no facts have
come to our attention which led us to believe that the Offering Memorandum (in
each case, including the Incorporated by Reference Documents), as of its date or
the date hereof, contained an untrue statement of a material fact or omitted to
state any fact required to be stated therein or necessary to make the
B-5
<PAGE> 32
statements therein, in the light of the circumstances under which they were
made, not misleading (except as to financial statements and schedules and other
financial and statistical data included therein or omitted therefrom).
Whenever a statement is qualified by "to the best of our knowledge" or
a similar phrase, it is intended to indicate that solely those particular
McDermott, Will & Emery attorneys who have rendered legal services in connection
with the transactions described above do not have current actual knowledge of
the inaccuracy of such statement. Insofar as any statement relates to litigation
matters, our opinion is only as to matters handled by this firm. Except as
expressly set forth herein, we have not undertaken any independent investigation
to determine the accuracy of such statements and no inference as to our
knowledge concerning such statement should be drawn from the fact of our
representation of the Company in other matters in which such attorneys are not
involved.
This opinion is being furnished to you solely in connection with the
transactions described above and may not be relied upon by anyone other than you
and by you only in connection with such transactions. The opinions set forth
herein are given as of the date hereof and we do not undertake any liability or
responsibility to inform you of any change in circumstances occurring, or
additional information becoming available to us, after the date hereof which
might alter the opinions contained herein.
Very truly yours,
B-6
<PAGE> 33
EXHIBIT C
Form of Opinion of Barry P. Hoffman
1. To the best of such counsel's knowledge, there is (a) no action,
suit, investigation or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending or
threatened or contemplated to which the Company or any of its subsidiaries is or
may be a party or to which the business or property of the Company or any of its
subsidiaries, is or may be subject, (b) no statute, rule, regulation or order
that has been enacted, adopted or issued by any governmental agency or that has
been proposed by any governmental body and (c) no injunction, restraining order
or order of any nature by a federal or state court or foreign court of competent
Jurisdiction to which the Company or any of its subsidiaries is or may be
subject or to which the business, assets, or property of the Company or any of
its subsidiaries is or may be subject, that, in the case of clauses (a), (b) and
(c) above, could reasonably be expected to have a Material Adverse Effect (as
defined in the Purchase Agreement).
<PAGE> 1
EXHIBIT 4.1
================================================================================
VALASSIS COMMUNICATIONS, INC.
ISSUER
THE BANK OF NEW YORK,
TRUSTEE
----------------------
INDENTURE
DATED AS OF JANUARY 12, 1999
----------------------
6 5/8% SENIOR NOTES DUE 2009
================================================================================
<PAGE> 2
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<TABLE>
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SECTION 101. Definitions ............................................................................... 1
"144A Global Note" ................................................................................. 1
"Act" .............................................................................................. 1
"Additional Interest" .............................................................................. 2
"Affiliate" ........................................................................................ 2
"Applicable Procedures" ............................................................................ 2
"Asset Sale" ....................................................................................... 2
"Attributable Debt" ................................................................................ 2
"Authenticating Agent" ............................................................................. 2
"Bankruptcy Code" .................................................................................. 2
"Board of Directors" ............................................................................... 2
"Board Resolution" ................................................................................. 2
"Business Day" ..................................................................................... 3
"Capital Lease Obligation" ......................................................................... 3
"Capital Stock" .................................................................................... 3
"Cedel" ............................................................................................ 3
"Commission" ....................................................................................... 3
"Company" .......................................................................................... 3
"Company Request" .................................................................................. 3
"Consolidated Interest Expense" .................................................................... 3
"Consolidated Net Income" .......................................................................... 3
"Consolidated Tangible Assets" ..................................................................... 4
"Corporate Trust Office" ........................................................................... 4
"Corporation" ...................................................................................... 4
"Covenant Defeasance" .............................................................................. 4
"Custodian" ........................................................................................ 4
"Default" .......................................................................................... 4
"Definitive Note" .................................................................................. 4
"Depositary" ....................................................................................... 4
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TABLE OF CONTENTS
(CONTINUED)
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"Dollar" ........................................................................................... 5
"EBITDA" ........................................................................................... 5
"Euroclear" ........................................................................................ 5
"Event of Default" ................................................................................. 5
"Exchange Act" ..................................................................................... 5
"Exchange Offer" ................................................................................... 5
"Exchange Offer Registration Statement" ............................................................ 5
"Fair Market Value" ................................................................................ 5
"Funded Debt" ...................................................................................... 5
"Funded Debt to EBITDA Ratio" ...................................................................... 5
"GAAP" ............................................................................................. 5
"Global Notes" ..................................................................................... 6
"Global Note Legend" ............................................................................... 6
"Guarantee" ........................................................................................ 6
"Hedging Obligations" .............................................................................. 6
"Holder" ........................................................................................... 6
"IAI Global Note" .................................................................................. 6
"Indebtedness" ..................................................................................... 6
"Indenture" ........................................................................................ 7
"Indirect Participant" ............................................................................. 7
"Institutional Accredited Investor" ................................................................ 7
"Interest Payment Date" ............................................................................ 7
"Legal Defeasance" ................................................................................. 7
"Letter of Transmittal" ............................................................................ 7
"Lien" ............................................................................................. 7
"Maturity" ......................................................................................... 7
"Non-U.S. Person" .................................................................................. 7
"Obligations" ...................................................................................... 7
"Officers' Certificate" ............................................................................ 7
"Opinion of Counsel" ............................................................................... 7
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TABLE OF CONTENTS
(CONTINUED)
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"Outstanding," ..................................................................................... 7
"Participant" ...................................................................................... 8
"Paying Agent" ..................................................................................... 8
"Place of Payment" ................................................................................. 8
"Permitted Liens" .................................................................................. 8
"Person" ........................................................................................... 9
"Private Placement Legend" ......................................................................... 9
"Property" ......................................................................................... 10
"QIB" .............................................................................................. 10
"Redemption Date," ................................................................................. 10
"Redemption Payment" ............................................................................... 10
"Redemption Price," ................................................................................ 10
"Registrar" ........................................................................................ 10
"Registration Rights Agreement" .................................................................... 10
"Regular Record Date" .............................................................................. 10
"Regulation S Global Note" ......................................................................... 10
"Responsible Officer," ............................................................................. 10
"Restricted Definitive Note" ....................................................................... 10
"Restricted Global Note" ........................................................................... 10
"Rule 144" ......................................................................................... 10
"Rule 144A" ........................................................................................ 11
"Rule 903" ......................................................................................... 11
"Rule 904" ......................................................................................... 11
"Sale and Leaseback Transaction" ................................................................... 11
"Securities Act" ................................................................................... 11
"Security Register" ................................................................................ 11
"Stated Maturity," ................................................................................. 11
"Subsidiary" ....................................................................................... 11
"Trust Indenture Act" .............................................................................. 11
"Trustee" .......................................................................................... 11
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(CONTINUED)
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"U.S. Government Obligations" ...................................................................... 11
"Unrestricted Definitive Note" ..................................................................... 11
"Unrestricted Global Note" ......................................................................... 11
SECTION 102. Incorporation by Reference to Trust Indenture Act ......................................... 12
SECTION 103. Compliance Certificate and Opinions ....................................................... 12
SECTION 104. Form of Documents Delivered to Trustee .................................................... 13
SECTION 105. Acts of Holders ........................................................................... 13
SECTION 106. Notices, etc., to Trustee and Company ..................................................... 14
SECTION 107. Notice to Holders; Waiver ................................................................. 14
SECTION 108. Conflict with Trust Indenture Act ......................................................... 15
SECTION 109. Effect of Headings and Table of Contents .................................................. 15
SECTION 110. Successors and Assigns .................................................................... 15
SECTION 111. Severability Clause ....................................................................... 15
SECTION 112. Benefits of Indenture ..................................................................... 15
SECTION 113. GOVERNING LAW ............................................................................. 15
SECTION 114. Legal Holidays ............................................................................ 15
ARTICLE TWO
THE NOTES
SECTION 201. Forms and Dating .......................................................................... 16
SECTION 202. Execution and Authentication .............................................................. 16
SECTION 203. Regulation, Registration of Transfer and Exchange ......................................... 17
SECTION 204. Paying Agent to Hold Money in Trust ....................................................... 17
SECTION 205. Transfer and Exchange ..................................................................... 18
SECTION 206. Replacement Notes ......................................................................... 30
SECTION 207. Outstanding Notes ......................................................................... 31
SECTION 208. Treasury Notes ............................................................................ 31
SECTION 209. Temporary Notes ........................................................................... 31
SECTION 210. Cancellation .............................................................................. 32
SECTION 211. Defaulted Interest ........................................................................ 32
SECTION 212. CUSIP Numbers ............................................................................. 32
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(CONTINUED)
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ARTICLE THREE
SATISFACTION AND DISCHARGE
SECTION 301. Satisfaction and Discharge ................................................................ 32
SECTION 302. Application of Trust Money ................................................................ 33
SECTION 303. Repayment of Trust Money .................................................................. 34
ARTICLE FOUR
REDEMPTION OF NOTES
SECTION 401. Notice to Trustee ......................................................................... 34
SECTION 402. Notice of Redemption ...................................................................... 34
SECTION 403. Selection of Notes on Partial Redemption .................................................. 35
SECTION 404. Deposit of Redemption Price ............................................................... 35
SECTION 405. Notes Payable on Redemption Date .......................................................... 35
SECTION 406. Notes Redeemed in Part .................................................................... 36
SECTION 407. Optional Redemption ....................................................................... 36
SECTION 408. Mandatory Redemption ...................................................................... 36
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default ......................................................................... 36
SECTION 502. Acceleration of Maturity; Rescission and Annulment ........................................ 38
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee ........................... 38
SECTION 504. Trustee May File Proofs of Claim .......................................................... 39
SECTION 505. Trustee May Enforce Claims without Possession of the Notes ................................ 40
SECTION 506. Application of Money Collected ............................................................ 40
SECTION 507. Limitation on Suits ....................................................................... 40
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest ................. 41
SECTION 509. Restoration of Rights and Remedies ........................................................ 41
SECTION 510. Rights and Remedies Cumulative ............................................................ 41
SECTION 511. Delay or Omission Not Waiver .............................................................. 42
SECTION 512. Control by Holders ........................................................................ 42
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(CONTINUED)
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SECTION 513. Waiver of Past Defaults ................................................................... 42
SECTION 514. Undertaking for Costs ..................................................................... 42
SECTION 515. Waiver of Stay or Extension Laws .......................................................... 43
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities ....................................................... 43
SECTION 602. Notice of Defaults ........................................................................ 44
SECTION 603. Certain Rights of Trustee ................................................................. 44
SECTION 604. Not Responsible for Recitals or Issuance of Notes ......................................... 46
SECTION 605. May Hold Notes ............................................................................ 46
SECTION 606. Money Held in Trust ....................................................................... 46
SECTION 607. Compensation and Reimbursement ............................................................ 46
SECTION 608. Disqualification; Conflicting Interests ................................................... 47
SECTION 609. Corporate Trustee Required; Eligibility ................................................... 47
SECTION 610. Resignation and Removal; Appointment of Successor ......................................... 47
SECTION 611. Acceptance of Appointment by Successor .................................................... 49
SECTION 612. Merger, Conversion, Consolidation or Succession to Business ............................... 49
SECTION 613. Preferential Collection of Claims Against Company ......................................... 50
SECTION 614. Appointment of Authenticating Agent ....................................................... 50
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders ................................. 52
SECTION 702. Preservation of Information; Communications to Holders .................................... 52
SECTION 703. Reports by the Trustee .................................................................... 52
SECTION 704. Reports by the Company .................................................................... 53
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 801. Company May Consolidate, etc., Only on Certain Terms ...................................... 53
SECTION 802. Successor corporation Substituted ......................................................... 54
ARTICLE NINE
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(CONTINUED)
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SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders ........................................ 54
SECTION 902. Supplemental Indentures with Consent of Holders ........................................... 55
SECTION 903. Execution of Supplemental Indentures ...................................................... 55
SECTION 904. Effect of Supplemental Indentures ......................................................... 56
SECTION 905. Conformity with Trust Indenture Act ....................................................... 56
SECTION 906. Reference in Notes to Supplemental Indentures ............................................. 56
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest ................................................ 56
SECTION 1002. Maintenance of Office or Agency ........................................................... 56
SECTION 1003. Money for Note Payments to Be Held in Trust ............................................... 57
SECTION 1004. Corporate Existence ....................................................................... 57
SECTION 1005. Maintenance of Property ................................................................... 57
SECTION 1006. Payment of Taxes and Other Claims ......................................................... 58
SECTION 1007. Limitation on Sale and Leaseback Transactions ............................................. 58
SECTION 1008. Limitation on Liens ....................................................................... 58
SECTION 1009. Limitation on Stock Redemptions and Stock Repurchases ..................................... 59
SECTION 1010. Certificate as to Default ................................................................. 59
ARTICLE ELEVEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1101. Option to Effect Defeasance or Covenant Defeasance ........................................ 60
SECTION 1102. Defeasance and Discharge .................................................................. 60
SECTION 1103. Covenant Defeasance ....................................................................... 60
SECTION 1104. Conditions to Defeasance or Covenant Defeasance ........................................... 61
SECTION 1105. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous
Provisions ................................................................................ 62
SECTION 1106. Repayment to Company ...................................................................... 62
SECTION 1107. Reinstatement ............................................................................. 63
ARTICLE TWELVE
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(CONTINUED)
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IMMUNITY OF SHAREHOLDERS, OFFICERS AND DIRECTORS
SECTION 1201. Exemption from Individual Liability ...................................................... 63
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<PAGE> 10
INDENTURE dated as of January 12, 1999 between VALASSIS
COMMUNICATIONS, INC., a Delaware corporation (hereinafter called the "Company")
having its principal office at 19975 Victor Parkway, Livonia, Michigan 48152,
and THE BANK OF NEW YORK, a New York banking corporation (hereinafter called the
"Trustee") having its Corporate Trust Office at 101 Barclay Street, New York,
New York 10286.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of its 6 5/8%
Senior Notes due 2009 (herein called the "Notes") of substantially the tenor and
amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
The parties hereto, intending to be legally bound, agree that,
in consideration of the acceptance and purchase of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee, for the equal
benefit of all the holders from time to time of the Notes, without preference,
priority or distinction of any thereof over any other thereof by reason of
priority in time of issuance or negotiation, or otherwise, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (as defined below); and (c)
the words "herein," "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision.
(c) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"144A Global Note" means a global note substantially in the
form of Exhibit A hereto bearing the Global Note Legend (as defined below) and
the Private Placement Legend (as defined below) and deposited with or on behalf
of, and registered in the name of, the Depositary (as defined below) or its
nominee that will be issued, together with all other Global Notes, in a
denomination equal to the outstanding principal amount of the Notes sold from
time to time in reliance on Rule 144A (as defined below).
"Act" when used with respect to any Holder (as defined below)
has the meaning specified in Section 105.
<PAGE> 11
"Additional Interest" means all additional interest then owing
pursuant to Section 6 of the Registration Rights Agreement (as defined below).
All references in this Indenture to "interest" shall be deemed to include
Additional Interest.
"Affiliate" of any specified Person (as defined below) means
any other Person (i) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
such specified Person, (ii) which beneficially owns or holds 10% or more of any
class of the Voting Stock (as defined below) of such specified Person or (iii)
of which 10% or more of the Voting Stock is beneficially owned or held by such
specified Person or a subsidiary of such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person directly or
indirectly, whether through the ownership of Voting Stock, by contract or
otherwise, and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note (as defined below),
the rules and procedures of the Depositary, Euroclear (as defined below) and
Cedel (as defined below) that apply to such transfer or exchange.
"Asset Sale" means, with respect to any Person, any sale,
transfer or other disposition (including, without limitation, dispositions
pursuant to any merger, consolidation or Sale and Leaseback Transaction (as
defined below)) by such Person or any of its subsidiaries to any Person other
than such Person or one of its subsidiaries in any single transaction or series
of transactions of (i) any or all of the Capital Stock in any of the
subsidiaries of such Person or (ii) any other Property (as defined below) of
such Person or any other Property of its subsidiaries outside the ordinary
course of business of such Person or such subsidiary.
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at the time of determination, the present value of the
obligation of the lessee for net rental payments during the remaining term of
the lease included in such Sale and Leaseback Transaction including any period
for which such lease has been extended or may, at the option of the lessor, be
extended; such present value shall be calculated using a discount rate equal to
the rate of interest implicit in such transaction, determined in accordance with
GAAP.
"Authenticating Agent" means any Person authorized by the
Trustee to act on behalf of the Trustee to authenticate Notes.
"Bankruptcy Code" means the Federal Bankruptcy Act or Title 11
of the United States Code or any similar Federal or state law for the relief of
debtors.
"Board of Directors" means either the board of directors of
the Company, or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by
the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
2
<PAGE> 12
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in the Borough of
Manhattan, The City of New York are authorized or obligated by law, executive
order or regulation to remain closed.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at that time be required to be capitalized on a balance
sheet prepared in accordance with GAAP.
"Capital Stock" in any Person means any and all shares,
interests, participation's or other equivalents in the equity interest (however
designated) in such Person and any rights, warrants or options to acquire an
equity interest in such Person.
"Cedel" means Cedel Bank, SA, or its successor.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act (as defined
below), or, if at any time after the execution of this instrument such
commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act (as defined below), the body performing such duties at
such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
President, its Chief Financial Officer, a Vice Chairman, a Vice President or its
Treasurer.
"Consolidated Interest Expense" of any Person means, for any
period, the aggregate interest expense of such Person and its subsidiaries for
such period on a consolidated basis, determined in accordance with GAAP, plus,
to the extent not included in such interest expense, and to the extent incurred
by such Person and such subsidiaries, without duplication, (i) interest expense
attributable to capital leases and the interest expense attributable to leases
constituting part of a Sale and Leaseback Transaction, (ii) amortization of debt
discount and debt issuance costs, (iii) capitalized interest, (iv) non-cash
interest expenses, (v) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financings, (vi) net
costs associated with Hedging Obligations (including amortization of fees),
(vii) dividends payable on shares of preferred stock issued by such Person or
its subsidiaries, other than shares of such preferred stock held by such Person
or its subsidiaries, (viii) interest accruing on the Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed by such Person or such
subsidiaries, and (ix) cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any other Person in connection with Indebtedness
incurred by such plan or trust.
"Consolidated Net Income" of any Person means, for any period,
the aggregate net income (or net loss, as the case may be) of such Person and
its subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP, provided that there shall be
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<PAGE> 13
excluded therefrom (i) gains and losses from Asset Sales or reserves relating
thereto, (ii) items classified as extraordinary or nonrecurring (other than the
tax benefit of the utilization of net operating loss carryforwards) and gains
from discontinued operations, (iii) except to the extent of the amount of
dividends or distributions paid to such Person by any other Person during such
period, the net income (or loss) of (a) such other Person other than a
subsidiary of such Person and (b) any subsidiary of such Person to the extent
that the payment of the net income of such other Person as a dividend or other
distribution to such Person is restricted by contract or otherwise and (iv)
except to the extent includable pursuant to clause (iii) hereof, the income (or
loss) of any other Person accrued or attributable to any period prior to the
date it becomes a subsidiary of such Person or is merged into or consolidated
with such Person or any of such Person's subsidiaries or all or substantially
all of such other Person's Property is acquired by such Person or any of its
subsidiaries.
"Consolidated Tangible Assets" means, as of any date, the sum
of the Property and assets of the Company and its Subsidiaries on a consolidated
basis at such date, after eliminating intercompany items, after deducting from
such total all Property and assets that would be classified as intangibles under
GAAP (including, without limitation, goodwill, organizational expenses,
trademarks, trade names, copyrights, patents, licenses and any rights in any
thereof), all reserves and prepaid expenses, deferred charges or authorized debt
discount and expense, each such item determining in accordance with the
Company's most recently published consolidated balance sheet prepared in
accordance with GAAP.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which office is, at the date of execution of this
instrument, located at 101 Barclay Street, Floor 21 West, New York, New York
10286.
"Corporation" includes corporations, associations, companies,
limited liability companies and business trusts.
"Covenant Defeasance" has the meaning specified in Section
1103.
"Custodian" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"Default" means any event, act or condition that is, or with
the passage of time or the giving of notice or both would be, an Event of
Default (as defined below).
"Definitive Note" means a certificated Note registered in the
name of the Holder thereof and issued in accordance with Section 205 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to any Notes issuable or
issued in the form of one or more Global Notes, the Person designated as
Depositary by the Company pursuant to Section 203 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder.
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"Dollar" or "$" means such coin or currency of the United
States as at the time of payment is legal tender for the payment of public and
private debts.
"EBITDA" for any period means the sum of Consolidated Net
Income, plus Consolidated Interest Expense plus the following to the extent
deducted in calculating such Consolidated Net Income: (i) all income tax expense
of the Company and its consolidated Subsidiaries, (ii) depreciation expense of
the Company and its consolidated Subsidiaries, (iii) amortization expense of the
Company and its consolidated Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period), and (iv)
all other non-cash charges of the Company and its consolidated Subsidiaries
(excluding any such non-cash charge to the extent that it represents an accrual
of or reserve for cash expenditures in any future period), in each case for such
period.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder.
"Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Fair Market Value" means, with respect to the total
consideration received pursuant to any Asset Sale or any non-cash consideration
received by any Person, the fair market value of such consideration as
determined in good faith by the Board of Directors.
"Funded Debt" of any Person means, as at any date as of which
any determination thereof is being or is to be made, any Indebtedness of such
person that by its terms (i) will mature more than one year after the date it
was issued, incurred, assumed or guaranteed by such Person, or (ii) will mature
one year or less after the date it was issued, incurred, assumed or guaranteed
by such Person which at such date of determination may be renewed or extended at
the election or option of such Person so as to mature more than one year after
such date of determination.
"Funded Debt to EBITDA Ratio" as of any date of determination
means the ratio of (i) Funded Debt to (ii) the aggregate amount of EBITDA for
the period of the most recent four consecutive fiscal quarters prior to the date
of determination for which internal financial statements are available;
provided, however, that if the Company or any Subsidiary shall have made an
acquisition of assets which constitutes all or substantially all of the assets
of a business, EBITDA for such period shall be calculated after giving pro forma
effect thereto as if such acquisition occurred on the first day of such period.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified
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Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as have been
approved by a significant segment of the accounting profession, which are in
effect from time to time.
"Global Notes" means, individually and collectively, each of
the Restricted Global Notes and the Unrestricted Global Notes, substantially in
the form of Exhibit A hereto issued in accordance with Section 201, 205(b)(iv),
205(d)(ii) or 205(f) hereof.
"Global Note Legend" means the legend set forth in Section
205(g)(ii), which is required to be placed on all Global Notes issued under this
Indenture.
"Guarantee" means any direct or indirect obligation,
contingent or otherwise, of a Person guaranteeing or having the economic effect
of guaranteeing any Indebtedness of any other Person in any manner.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements; and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered in
the Security Register.
"IAI Global Note" means a global note substantially in the
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the name
of, the Depositary or its nominee that will be issued in a denomination equal to
the outstanding principal amount of the Notes sold to an Institutional
Accredited Investor (as defined below).
"Indebtedness" means, with respect to any specified Person,
any indebtedness of such Person, whether or not contingent, in respect of (i)
borrowed money; (ii) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof); (iii) banker's acceptances; (iv) representing Capital Lease
Obligations; (v) the balance deferred and unpaid of the purchase price of any
property under conditional sales or other similar agreements which provide for
the deferral of the payment of the purchase price for a period in excess of one
year following the date of such Person's receipt and acceptance of complete
delivery of such property; and (vi) representing any Hedging Obligations, if and
to the extent any of the preceding items (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by such Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding (other than Capital
Lease Obligations) as of any date shall be (i) the accreted value thereof, in
the case of any Indebtedness issued with original issue discount; and (ii) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness.
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<PAGE> 16
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented, amended or restated by or pursuant to
one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant (as defined below).
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act (as defined below), who are not also QIBs (as defined below).
"Interest Payment Date" means the Stated Maturity (as defined
below) of an installment of interest on the Notes.
"Legal Defeasance" has the meaning specified in Section 1102.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction.
"Maturity" means the date on which the principal of a Note or
any installment thereof becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call or
redemption or otherwise.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the President, a Vice Chairman or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee, which shall comply with
Section 103.
"Opinion of Counsel" means a written opinion of legal counsel,
who may, at the Company's sole discretion, be an employee of or counsel to the
Company.
"Outstanding," when used as of any particular time with
reference to Notes, means all Notes outstanding in accordance with Section 207
hereof; provided, however, that in determining whether the Holders of the
requisite principal amount of Outstanding Notes have
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<PAGE> 17
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon such request, demand,
authorization, direction, notice, consent or waiver, only Notes which a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded.
"Participant" means, with respect to the Depositary, Euroclear
or Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively (and, with respect to The Depository Trust Company, shall include
Euroclear and Cedel).
"Paying Agent" means any Person authorized by the Company
(including the Company) to pay the principal of or interest or Additional
Interest, if any, on any Notes on behalf of the Company.
"Place of Payment" means, when used with respect to the Notes
the place or places where the principal, premium, if any, and interest on such
Notes are payable as specified as contemplated by Article Two.
"Permitted Liens" means:
(1) Liens in favor of the Company or any Subsidiary;
(2) Liens on property of a Person existing at the time
such Person is merged with or into or consolidated with the Company or any
Subsidiary; provided that such Liens were in existence prior to the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Company or
any Subsidiary;
(3) Liens on property existing immediately prior to the
time of acquisition thereof by the Company or any Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of such
acquisition;
(4) Liens to secure the performance of statutory
obligations, surety or appeal bonds, performance bonds or other obligations of a
like nature incurred in the ordinary course of business;
(5) Liens arising out of judgements or awards against the
Company or any Subsidiary with respect to which the Company or Subsidiary shall
in good faith be prosecuting an appeal or proceedings for review or Liens
incurred by the Company or any Subsidiary for the purpose of obtaining a stay or
discharge in the course of any legal proceeding to which the Company or any
Subsidiary is a party;
(6) Liens to secure Capital Lease Obligations;
(7) Liens existing on the date of the Indenture;
(8) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being contested in good faith
by appropriate proceedings promptly
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<PAGE> 18
instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall have
been made therefor;
(9) mechanics', materialmen's, carrier's, warehousemen's
and similar Liens arising in the ordinary course of business and securing
Obligations of the Company or any Subsidiary that are not overdue for a period
of more than 60 days or are being contested in good faith by appropriate legal
proceedings diligently pursued; provided that in the case of any such contest
(i) any levy, execution or other enforcement of such Liens shall have been duly
suspended; and (ii) such provision for the payment of such Liens has been made
on the books of the Company or the Subsidiary as may be required by GAAP;
(10) Liens arising in connection with worker's
compensation, unemployment insurance, old age pensions and social security
benefits and other forms of governmental insurance or similar benefits which are
not overdue or are being contested in good faith by appropriate proceedings
diligently pursued; provided that in the case of any such contest (i) any levy,
execution or other enforcement of such Liens shall have been duly suspended; and
(ii) such provision for the payment of such Liens has been made on the books of
the Company or the Subsidiary as may be required by GAAP;
(11) Liens in the nature of any minor imperfections of
title, including, but not limited to, easements, covenants, rights-of-way or
other similar restrictions, which, either individually or in the aggregate would
not (i) materially adversely affect the present or future use of the property to
which they relate, (ii) have a material adverse effect on the sale or lease of
such property, or (iii) render title thereto unmarketable;
(12) any interest or title of a lessor under any lease of
property to, or of any consignor of goods consigned to, or of any creditor of
any consignee in goods consigned to such consignee by, the Company or any
Subsidiary;
(13) Liens incurred in the ordinary course of business of
the Company, other than in connection with Indebtedness for borrowed money;
(14) any Lien extending, renewing or replacing any
Permitted Lien;
(15) Liens securing only the Notes;
(16) Liens on assets of the Company's Subsidiaries to
secure Obligations of such Subsidiaries to the Company; and
(17) Liens attributable to Sale and Leaseback
Transactions.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, joint-stock company, unincorporated
organization or government or any agency or political subdivision thereof.
"Private Placement Legend" means the legend set forth in
Section 205(g)(i) to be placed on all Notes issued under this Indenture except
where otherwise permitted by the provisions of this Indenture.
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"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including, without limitation, Capital Stock in any
other Person.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A (as defined below).
"Redemption Date," when used with respect to any Note to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture and the terms of such Note.
"Redemption Payment" means any payments to repurchase or
redeem shares of the Company's or a Subsidiary's Capital Stock.
"Redemption Price," when used with respect to any Note to be
redeemed, means the price (exclusive of accrued interest) at which it is to be
redeemed pursuant to this Indenture and the terms of such Note.
"Registrar" has the meaning specified in Section 203.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of January 12, 1999, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Notes of any series means the date specified for that
purpose as contemplated by Section 301.
"Regulation S Global Note" means a global note substantially
in the form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of, and registered in the name
of, the Depositary or its nominee that will be issued in a denomination equal to
the outstanding principal amount of the Notes sold in reliance on Regulation S
(as defined below).
"Responsible Officer," when used with respect to the Trustee,
means, within the corporate trust department of the Trustee, any Vice President,
any Assistant Vice President, any Assistant Secretary, any Assistant Treasurer,
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing
the Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the
Private Placement Legend.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
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"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"Rule 903" means Rule 903 promulgated under the Securities
Act.
"Rule 904" means Rule 904 promulgated under the Securities
Act.
"Sale and Leaseback Transaction" means any arrangement with
any Person providing for the leasing by the Company of any Property now owned or
hereafter acquired which has been or is to be sold or transferred by the Company
to such Person with the intention of taking back a lease of such Property.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning specified in Section 305.
"Stated Maturity" means the date specified in the Notes as the
fixed date on which the principal of the Notes or such installment of interest
is due and payable.
"Subsidiary" means a Person (other than an individual or a
government or any agency or political subdivision thereof) more than 50% of the
outstanding interest of which is owned, directly or indirectly, by the Company
or by one or more other Subsidiaries, or which the Company, in accordance with
GAAP, otherwise consolidates as a Subsidiary of the Company.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, as in force at the date as
of which this instrument was executed, except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is such a successor Trustee.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof.
"Unrestricted Definitive Note" means one or more Definitive
Notes that do not bear and are not required to bear the Private Placement
Legend.
"Unrestricted Global Note" means a permanent Global Note
substantially in the form of Exhibit A attached hereto that bears the Global
Note Legend and that has the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing a series of Notes that do
not bear the Private Placement Legend.
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SECTION 102. Incorporation by Reference to Trust Indenture
Act.
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a part of
this Indenture. The following Trust Indenture Act terms incorporated by
reference in this Indenture have the following meanings:
"Bankruptcy Act" means the Bankruptcy Code.
"indenture securities" means the Notes.
"indenture security holder" means a Holder of a Note.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"Obligor" on the Notes means the Company and any successor
obligor on the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
SECTION 103. Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of the Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all of the
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the certificate
provided for in Section 1010) shall include:
(a) A statement that each individual signing such certificate
or opinion has read such covenant or condition and the definition herein
relating thereto;
(b) A brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinions contained in
such certificate or opinions are based;
(c) A statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been compiled with; and
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(d) A statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 104. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 105. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing, and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than such signer's
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of the
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<PAGE> 23
signer's authority. The fact and date of the execution of any such instrument or
writing, or the authority of the person executing the same, may also be proved
in any manner which the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of any Note issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, suffered or omitted to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
(e) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to take any
action under this Indenture by vote or consent. If a record date is fixed, those
persons who were Holders of Notes at such record date (or their duly designated
proxies), and only those persons, shall be entitled to take such action by vote
or consent or to revoke any vote or consent previously given, whether or not
such persons continue to be Holders after such record date.
SECTION 106. Notices, etc., to Trustee and Company.
Except as otherwise provided in Article Five, any request,
demand, authorization, direction, notice, consent, waiver or other Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Trustee Administration, or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company, Attention: Secretary.
SECTION 107. Notice to Holders; Waiver.
Where this Indenture provides for the giving of notice to
Holders of any event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at such address as appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but
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such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In the event of suspension of regular mail service or for any
other reason it shall be impracticable to give such notice by mail, then such a
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
the duties imposed by any of Sections 310 through 317, inclusive, of the Trust
Indenture Act through the operation of Section 318(c) thereof, such imposed
duties shall control.
SECTION 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience of reference only and shall not affect the
construction hereof.
SECTION 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 111. Severability Clause.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 112. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 113. GOVERNING LAW.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Stated Maturity
or other payment date of the Notes shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Notes) payment
of interest on or principal of (and premium, if any, on) the Notes need not be
made on such payment date, but may be made on the next succeeding
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Business Day with the same force and effect as if made on such payment date,
and no interest shall accrue for the period from and after such payment date.
ARTICLE TWO
THE NOTES
SECTION 201. Forms and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the of its authentication. The Notes shall be
in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form shall be
substantially in the form of Exhibit A attached hereto (including the Global
Note Legend thereon and the "Schedule of Exchanges of Interests in the Global
Note" attached thereto). Notes issued in definitive form shall be substantially
in the form of Exhibit A attached hereto (but without the Global Note Legend
thereon and without the "Schedule of Exchanges of Interests in the Global Note"
attached thereto). Each Global Note shall represent such of the Outstanding
Notes as shall be specified therein and each shall provide that it shall
represent the aggregate principal amount of Outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of Outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of Outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 205 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel shall be applicable to transfers of beneficial
interests in Global Notes that are held by Participants through Euroclear or
Cedel. SECTION 202. Execution and Authentication.
Any Officer shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note shall nevertheless be
valid.
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A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
The Trustee shall, upon a Company Order, authenticate Notes
for original issue up to the aggregate principal amount stated in paragraph 4 of
the Notes. The aggregate principal amount of Notes outstanding at any time may
not exceed such amount except as provided in Section 206 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an agent to deal with
Holders or an Affiliate of the Company.
The Trustee shall have the right to decline to authenticate
and deliver any Notes under this Section 202 if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if the Trustee
in good faith shall determine that such action would expose the Trustee to
personal liability to existing Holders.
SECTION 203. Regulation, Registration of Transfer and
Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register for the Notes (the registers maintained in the
Corporate Trust Office of the Trustee and in any other office or agency of the
Company in a Place of Payment being herein sometimes collectively referred to as
the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of the Notes, of
transfers of Notes, for payment of Notes. The Security Register shall be in
written form or any other form capable of being converted into written form
within a reasonable time. At all reasonable times, the Security Register shall
be open to inspection by the Trustee. The Trustee is hereby initially appointed
as security registrar (the "Registrar") for the purpose of registering the Notes
and transfers of the Notes as herein provided.
The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Custodian with respect to the Global
Notes.
SECTION 204. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Trustee all money held by the Paying Agent for the
payment of principal of (and premium, if any) or Additional Interest, if any, or
interest on the Notes, and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the Trustee. The Company
at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to
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the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
SECTION 205. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
will be exchanged by the Company for Definitive Notes if (i) the Company
delivers to the Trustee notice from the Depositary that it is unwilling or
unable to continue to act as Depositary or that it is no longer a clearing
agency registered under the Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the date of
such notice from the Depositary or (ii) the Company in its sole discretion
determines that the Global Notes (in whole but not in part) should be exchanged
for Definitive Notes and delivers a written notice to such effect to the
Trustee. Upon the occurrence of either of the preceding events in (i) or (ii)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 207 and 210 hereof. Every Note authenticated
and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to this Section 205 or Section 207 or 210 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 205(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 205(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Notes. The transfer and exchange of beneficial interests in the Global
Notes shall be effected through the Depositary, in accordance with the
provisions of this Indenture and the Applicable Procedures. Beneficial interests
in the Restricted Global Notes shall be subject to restrictions on transfer
comparable to those set forth herein to the extent required by the Securities
Act. Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global
Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in
accordance with the transfer restrictions set forth in the Private
Placement Legend. Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in
the form of a beneficial interest in an Unrestricted Global Note.
No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in
this Section 205(b)(i).
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(ii) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
205(b)(i) above, the transferor of such beneficial interest must
deliver to the Registrar either:
(A) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global
Note in an amount equal to the beneficial interest to be
transferred or exchanged and (2) instructions given in
accordance with the Applicable Procedures containing
information regarding the Participant account to be credited
with such increase; or
(B) (1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to cause to be
issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive
Note shall be registered to effect the transfer or exchange
referred to in (1) above.
Upon consummation of an Exchange Offer by the Company in
accordance with Section 205(f) hereof, the requirements of
this Section 205(b)(ii)(A) shall be deemed to have been
satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder
of such beneficial interests in the Restricted Global Notes.
Upon satisfaction of all of the requirements for transfer or
exchange of beneficial interests in Global Notes contained in
this Indenture and the Notes or otherwise applicable under the
Securities Act, the Trustee shall adjust the principal amount
of the relevant Global Note(s) pursuant to Section 205(h)
hereof.
(iii) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any Restricted
Global Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another Restricted
Global Note if the transfer complies with the requirements of
Section 205(b)(ii) above and the Registrar receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a
beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of
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Exhibit B hereto, including the certifications and
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in the
Unrestricted Global Note. A beneficial interest in any Restricted
Global Note may be exchanged by any holder thereof for a
beneficial interest in an Unrestricted Global Note or transferred
to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 205(b)(ii)
above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3)
a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration (as defined in the Registration Rights Agreement)
in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a broker-dealer pursuant
to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global Note,
a certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require,
an Opinion of Counsel in form reasonably acceptable to the
Registrar to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are
no longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
or (D) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and,
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upon receipt of a Company Order in accordance with Section 202 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the aggregate principal amount of beneficial interests
transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for
Definitive Notes.
(i) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial
interest in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note or to
transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon
receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with
Rule 903 or Rule 904 under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption
from the registration requirements of the Securities Act other
than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to
the Company or any of its Subsidiaries, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
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(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section
205(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive
Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 205(c) shall be registered in such
name or names and in such authorized denomination or denominations as
the holder of such beneficial interest shall instruct the Registrar
through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes
to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest in a
Restricted Global Note pursuant to this Section 205(c)(i) shall bear
the Private Placement Legend and shall be subject to all restrictions
on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest
in a Restricted Global Note may exchange such beneficial interest
for an Unrestricted Definitive Note or may transfer such
beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating
in the distribution of the Exchange Notes or (3) a Person who
is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights
Agreement;
(C) such transfer is effected by a broker-dealer pursuant
to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in item (1)(b)
thereof; or
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a Definitive Note that does not bear the Private Placement
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<PAGE> 32
Legend, a certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes
to Unrestricted Definitive Notes. If any holder of a beneficial
interest in an Unrestricted Global Note proposes to exchange such
beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 205(b)(ii) hereof, the Trustee shall cause the
aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 205(h) hereof, and the Company shall
execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 205(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 205(c)(iii) shall not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for
Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial
Interests in Restricted Global Notes. If any Holder of a Restricted
Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted
Definitive Notes to a Person who takes delivery thereof in the form of
a beneficial interest in a Restricted Global Note, then, upon receipt
by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the form of
Exhibit C hereto, including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904 under
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the Securities Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration requirements
of the Securities Act in accordance with Rule 144 under the Securities
Act, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities Act
other than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item
(3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the certifications
in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(c) thereof;
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the Regulation S Global Note,
and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and
the Holder, in the case of an exchange, or the transferee, in the case
of a transfer, certifies in the applicable Letter of Transmittal that
it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a broker-dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
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(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit
C hereto, including the certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in
the form of a beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 205(d)(ii), the Trustee shall cancel the
Definitive Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial
Interests in Unrestricted Global Notes. A Holder of an Unrestricted
Definitive Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee shall cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to
a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of a Company Order in accordance with
Section 202 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 205(e), the Registrar shall register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional
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certifications, documents and information, as applicable, required pursuant to
the following provisions of this Section 205(e).
(i) Restricted Definitive Notes to Restricted
Definitive Notes. Any Restricted Definitive Note may be transferred to
and registered in the name of Persons who take delivery thereof in the
form of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A
under the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or
Rule 904, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transfer will be made pursuant to any other
exemption from the registration requirements of the Securities Act,
then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted
Definitive Notes. Any Restricted Definitive Note may be exchanged by
the Holder thereof for an Unrestricted Definitive Note or transferred
to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a broker-dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take delivery
thereof in the form of an Unrestricted
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Definitive Note, a certificate from such Holder in the form of Exhibit
B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar
so requests, an Opinion of Counsel in form reasonably acceptable to the
Company to the effect that such exchange or transfer is in compliance with
the Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of a Company Order in accordance with Section 202, the Trustee
shall authenticate (i) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial interests in
the Restricted Global Notes tendered for acceptance by Persons that certify in
the applicable Letters of Transmittal that (x) they are not broker-dealers, (y)
they are not participating in a distribution of the Exchange Notes and (z) they
are not affiliates (as defined in Rule 144) of the Company, and accepted for
exchange in the Exchange Offer, and (ii) Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer. Concurrently with the
issuance of such Notes, the Trustee shall cause the aggregate principal amount
of the applicable Restricted Global Notes to be reduced accordingly, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER: REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
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(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT
HAS ACQUIRED THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT (AN "IAI")), AGREES THAT IT WILL
NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (i) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (ii) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (iii) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE
903 OR 904 OF REGULATION S OF THE SECURITIES ACT, (iv) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (v) TO
AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (vi) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (vii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND,
IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY
INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING
TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902
OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS."
(B) Notwithstanding the foregoing, any Global Note or Definitive
Note issued pursuant to subparagraphs (b)(iv), (c)(ii), (c)(iii),
(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 205 (and
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend
in substantially the following form:
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"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN
THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY
PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (A) THE TRUSTEE MAY MAKE
SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 207 OF THE
INDENTURE, (B) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN
PART PURSUANT TO SECTION 205(a) OF THE INDENTURE, (C) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
210 OF THE INDENTURE, AND (D) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 210 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction, and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes
and Definitive Notes upon the Company's order or at the Registrar's
request.
(ii) No service charge shall be made to a Holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith, other than
exchanges not involving a transfer.
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this
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Indenture, as the Global Notes or Definitive Notes surrendered upon
such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period
beginning at the opening of business 15 days before the day of mailing
of a notice of redemption of Notes under Section 403 hereof and ending
at the close of business on the day of such mailing, (B) to register
the transfer of or to exchange any Note so selected for redemption in
whole or in part, except the unredeemed portion of any Note being
redeemed in part or (C) to register the transfer of or to exchange a
Note between a record date and the next succeeding interest payment
date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any agent or the Company shall be affected by
notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 202 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 205
to effect a registration of transfer or exchange may be submitted by
facsimile.
Each Holder of a Note agrees to indemnify the Company and the Trustee
against any liability that may result from the transfer, exchange or assignment
of such Holder's Note in violation of any provision of this Indenture and/or
applicable United States Federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Depositary participants or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 206. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, the Company shall issue and the Trustee, upon receipt of a
Company Order, shall authenticate a replacement Note if the Trustee's
requirements are met. An indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
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Company, the Trustee, any agent and any Authenticating Agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 207. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 208 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 206 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid, it ceases to be
outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 208. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee actually knows are so owned
shall be so disregarded.
SECTION 209. Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of a Company Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
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Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 210. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall dispose of
and destroy canceled Notes in accordance with its customary practices (subject
to the record retention requirement of the Exchange Act). The Company may not
issue new Notes to replace Notes that it has paid or that have been delivered to
the Trustee for cancellation.
SECTION 211. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes.
The Company shall notify the Trustee in writing of the amount of defaulted
interest proposed to be paid on each Note and the date of the proposed payment.
The Company shall fix or cause to be fixed each such special record date and
payment date, provided that no such special record date shall be less than 10
days prior to the related payment date for such defaulted interest. At least 15
days before the special record date, the Company (or, upon the written request
of the Company, the Trustee in the name and at the expense of the Company) shall
mail or cause to be mailed to Holders a notice that states the special record
date, the related payment date and the amount of such interest to be paid.
SECTION 212. CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company will promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE THREE
SATISFACTION AND DISCHARGE
SECTION 301. Satisfaction and Discharge.
This Indenture shall upon Company Request cease to be of
further effect with respect to any Notes (except as to any surviving rights of
registration of transfer or exchange of Notes herein expressly provided for) and
the Trustee shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture as to such Notes when
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(a) either
(i) all Notes theretofore authenticated and delivered
(other than (i) Notes which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 206, and
(ii) Notes for whose payment money has theretofore been deposited in
trust with the Trustee or any Paying Agent or segregated and held in
trust by the Company and thereafter repaid to the Company, as
provided in Section 1003), have been delivered to the Trustee for
cancellation; or
(ii) all Notes not theretofore delivered to the Trustee
for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity
within one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company in the case of (a)(i) or (a)(ii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount, in U.S. dollars or
in U.S. Government Obligations, sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any), and
interest to the date of such deposit (in the case of Notes which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 607, the obligations
of the Company to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section 301, the obligations of the Trustee under Section 302 and the last
paragraph of Section 1003 shall survive.
SECTION 302. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money deposited with the Trustee pursuant to Section 301 shall be held
in trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal, premium, if any,
and
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interest for whose payment such money has been deposited with the Trustee,
but such money need not be segregated from other funds except to the extent
required by law.
SECTION 303. Repayment of Trust Money.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest that
remains unclaimed for two years. After payment to the Company, Holders entitled
to the money must look to the Company for payment as unsecured general creditors
unless an abandoned property law designates another person.
ARTICLE FOUR
REDEMPTION OF NOTES
SECTION 401. Notice to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 407 hereof, such election to be set forth in a
Board Resolution, it shall furnish to the Trustee, at least 30 days but not more
than 60 days before a redemption date, an Officer's Certificate setting forth
(i) the clause of this Indenture pursuant to which the redemption shall occur,
(ii) the redemption date, (iii) the principal amount of Notes to be redeemed,
and (iv) the Redemption Price.
SECTION 402. Notice of Redemption.
If the Company shall elect to redeem the Notes in whole or in part
as aforesaid, it shall fix a date for redemption and give notice of its election
so to redeem by mailing written notice, postage prepaid, at least 30 days but
not more than 60 days before the Redemption Date, to each Holder of Notes to be
redeemed in whole or in part. Any notice which shall be mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder shall receive such notice. Failure to mail such notice, or any
defect in the notice mailed, to the Holder of any Note designated for redemption
in whole or in part shall not affect the validity of the proceedings for the
redemption of any other Note.
Each notice of redemption shall state such election to redeem on the
part of the Company, the Redemption Date, the place or places of payment for the
Notes to be redeemed and the Redemption Price and shall state further that the
Notes designated in such notice for redemption are required to be presented on
or after such Redemption Date and at such place or places of payment and that
interest to the Redemption Date on the Notes called for redemption will be paid
as specified in said notice and shall cease to accrue thereon on such date. The
notice shall also identify (including CUSIP number) (and, in the case of partial
redemption, state the principal amounts of) the particular Notes that are to be
redeemed. In case of partial redemption, the notice shall state the portion of
the principal amount thereof to be redeemed and shall state that on and after
the date fixed for redemption, upon surrender of such Note, a new Note of the
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same series in aggregate principal amount equal to the unredeemed portion
thereof will be issued.
Any notice of redemption of Notes at the option of the Company shall
be given by the Company or, at the Company's request, by the Trustee in the name
and at the expense of the Company.
SECTION 403. Selection of Notes on Partial Redemption.
If the Company shall at any time elect to redeem less than all the
Outstanding Notes, the Trustee shall select the Notes to be redeemed on a pro
rata basis, by lot or, in such manner as the Trustee shall deem appropriate and
fair. Notes and portions of Notes selected shall be in amounts of $1,000 or
whole multiples of $1,000, except that if all of the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder even if not
a multiple of $1,000, shall be redeemed. In the event of a partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 nor more than 60 days prior to the Redemption
Date by the Trustee from the Outstanding Notes not previously called for
redemption.
The Trustee shall promptly notify the company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Note redeemed or to be redeemed only in part, to the portion of
the principal amount of such Note that has been or is to be redeemed.
SECTION 404. Deposit of Redemption Price.
On or prior to 10:00 a.m., New York City time, on any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Notes or portions thereof which are to be redeemed on that date.
SECTION 405. Notes Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date specified in such notice, become due
and payable at the applicable Redemption Price, together with interest accrued
thereon to such Redemption Date, and from and after such Redemption Date (unless
the Company shall default in the payment of such Redemption Price or any such
accrued interest), interest on such Notes shall cease to accrue. Upon surrender
of such Notes for redemption in accordance with said notice, such Notes shall be
paid by the Company at the applicable Redemption Price, together with interest
accrued to the Redemption Date; provided, however, that installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Notes, registered as such on the relevant Record Dates
according to their terms.
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If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal thereof (and premium, if any,
thereon) shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in such Note.
SECTION 406. Notes Redeemed in Part.
Any Note which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company, the Security Registrar or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company, the Security Registrar and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Note without service charge, a new Note or Notes, in any
authorized denomination as requested by such Holder, in an aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Note so surrendered, except that if a Global Note is so surrendered, the
Company shall execute, and the Trustee shall authenticate and deliver to the
Depositary for such Global Note, without service charge, a new Global Note in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the Global Note so surrendered.
SECTION 407. Optional Redemption.
(a) The Company has the option to redeem the Notes, in whole or in
part, at the Redemption Price equal to the greater of (i) 100% of the principal
amount of the Notes to be redeemed or (ii) the sum of the present values of the
remaining scheduled payments discounted to the Redemption Date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 50 basis points, plus, in each case, accrued and unpaid
interest and Additional Interest, if any, on the Notes to be redeemed to the
Redemption Date.
(b) Any redemption pursuant to this Section 407 shall be made
pursuant to the provisions of Section 401 through 406 hereof.
SECTION 408. Mandatory Redemption.
The Company shall not be required to make mandatory redemption
payments with respect to the Notes.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
Except where otherwise indicated by the context or where the term is
otherwise defined for a specific purpose, the term "Event of Default," wherever
used herein with respect to the Notes, shall mean any one of the following
events (whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law, pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or
governmental body):
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(a) default in the payment of any installment of interest or
Additional Interest, if any, on the Notes when such payment becomes due and
payable, and the continuance of such Default for a period of 30 days; or
(b) default in the payment of the principal of (or premium, if any,
on) the Notes at Maturity, upon redemption, declaration, acceleration or
otherwise; or
(c) default in the performance, or breach, of any covenant or
warranty of the Company in Article Ten of this Indenture, and continuance of
such Default or breach for a period of 30 days after there has been given a
Notice of Default; or
(d) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture, including any indenture supplemental
hereto, (other than a covenant or warranty, a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with) and
continuance of such Default or breach for a period of 60 days after there has
been given a Notice of Default; or
(e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company (or the payment of which is
Guaranteed by the Company) whether such Indebtedness or Guarantee now exists, or
is created after the date of the Indenture, if that default results in the
acceleration of such Indebtedness prior to its express maturity, and the
principal amount of any such Indebtedness, which has been so accelerated
aggregates in excess of $25,000,000 or its foreign currency equivalent, without
such indebtedness having been discharged or such acceleration having been
rescinded or annulled within 30 days after notice; or
(f) failure by the Company to pay final judgments aggregating in
excess of $25,000,000 which judgements are not paid, discharged or stayed for a
period of 60 days; or
(g) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary case
under the Bankruptcy Code, or any other Federal or state bankruptcy, insolvency
or other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Company or of any
substantial part of the property of the Company, or ordering the winding up or
liquidation of the affairs of the Company, and the continuance of any such
decree or order unstayed and in effect for a period of 60 consecutive days; or
(h) the commencement by the Company of a voluntary case under the
Bankruptcy Code, or any other applicable Federal or state bankruptcy, insolvency
or other similar law, or the consent by it to the entry of an order for relief
in an involuntary case under any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of the property of the
Company, or the making by the Company of an assignment for the benefit of
creditors, or the admission by the Company in writing of its inability to pay
its debts generally as they become due, or the taking of corporate action by the
Company in furtherance of any such action.
Notwithstanding anything to the contrary contained herein, the
events specified in clauses (c), (d) or (f) above shall not constitute an Event
of Default unless there has been given,
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by registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by Holders of at least 25% in principal amount of the
Outstanding Notes, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is an "Notice of
Default" hereunder.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to the Notes (other than an
Event of Default specified in Sections 501(g) and 501(h)) occurs and is
continuing, then, and in every such case, the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Notes may declare the principal
of (and premium, if any) and accrued and unpaid interest and Additional
Interest, if any, on all the Outstanding Notes to be immediately due and
payable, by a notice in writing to the Company (and to the Trustee if given by
Holders), and, upon any such declaration, such principal amount (and premium, if
any) and accrued interest shall become and shall be immediately due and payable,
notwithstanding anything contained in this Indenture or the Notes to the
contrary.
If an Event of Default specified in Section 501(g) or 501(h) occurs,
all unpaid principal of (and premium, if any) and accrued interest and
Additional Interest, if any, on any Outstanding Notes shall ipso facto become
due and payable without any declaration or other act on the part of the Trustee
or any Holder. Upon payment of such principal amount with respect to all
Outstanding Notes (and premium, if any) and interest, any interest payable on
overdue payments of principal or interest (to the extent legally permissible)
and all other obligations of the Company under this Indenture and all of the
Outstanding Notes (including obligations under Section 607), all of the
Company's obligations under this Indenture and the Notes shall terminate.
At any time after a declaration of acceleration with respect to a
series of Notes has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the Notes of such
series then outstanding, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if all Events of Default
with respect to the Notes, other than the non-payment of the principal of such
Notes which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if an Event of Default specified in
Section 501(a) occurs and continues for a period of 60 days or more or Section
501(b) occurs and continues for a period of five days or more with respect to
any Notes, the Company shall, upon demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of such Notes, the whole amount then due and
payable on such Notes for principal (and premium, if any) and interest and, to
the extent that payment of such interest shall be legally enforceable, interest
upon the overdue principal (and premium, if any) and upon overdue installments
of interest, and Additional Interest, if any,
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at the rate or rates prescribed therefor in such Notes, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Notes and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Notes, wherever situated.
If an Event of Default with respect to the Notes occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce its
rights and the rights of the Holders by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceedings, or any voluntary or involuntary case under the
Bankruptcy Code, relative to the Company or any other obligor upon the Notes or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of such series of Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Notes and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
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Nothing contained herein shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote respect of
the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims without Possession of the
Notes.
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
such Notes or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name, as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article Five
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(and premium, if any) or interest, upon presentation of any series of Notes and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid
for principal (and premium, if any) and interest and Additional
Interest, if any, on the Notes in respect of which or for the
interest of which such money his been collected, ratably, without
preference or priority of any kind or according to the amounts due
and payable on such Notes for principal of (or premium, if any) and
interest, respectively; and
THIRD: The balance, if any, to the Person or Persons
entitled thereto including, without limitation, the Company.
SECTION 507. Limitation on Suits.
No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to such Notes;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Notes shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;
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(c) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other such
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Subject to the provisions of Section 502, and notwithstanding any
other provision in this Indenture, the Holder of any Note shall have the right,
which is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 211) interest and Additional Interest,
if any, on any Note at the Stated Maturity and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided in Section 206, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. Control by Holders.
The Holders of a majority in the principal amount of the Outstanding
Notes shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or unduly prejudicial to the rights of other Holders; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in the principal amount of
Outstanding Notes may on behalf of the Holders of all of such Notes waive any
past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of (and premium, if any) or
interest on any Note; or
(b) in respect of a covenant or provision hereof which under Article
Ten cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture, but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by
such Holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section shall not apply to any suit
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instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in the principal amount of the
Outstanding Notes, or to any suit instituted by any Holder for the enforcement
of the payment of the principal of (or premium, if any) or interest on any Note
on or after its Stated Maturity.
SECTION 515. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent or that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture, but in the case of any such certificates or opinions
which by any provisions hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(i) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section 601;
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(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it with respect to any
Notes in good faith in accordance with the direction of the Holders of a
majority in the principal amount of the Outstanding Notes relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any Default hereunder with
respect to the Notes, the Trustee shall transmit by mail to all Holders of such
Notes, notice of such Default hereunder known to the Trustee, unless such
Default shall have been cured or waived; provided, however, that, except in the
case of a Default in the payment of the principal of (and premium, if any) or
interest and Additional Interest, if any, on any Note, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders; and provided, further, that in the
case of any Default of the character specified in Section 601(c) and 501(d), no
notice of such Default to Holders as described therein shall be given until at
least 30 and 60 days after the occurrence thereof, respectively.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness, or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
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(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of Indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit; if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry of investigation;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys reasonably acceptable to the Company and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Notes and this Indenture; and
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
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SECTION 604. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and neither the Trustee nor any Authenticating Agent assumes no responsibility
for their correctness. Neither the Trustee nor any Authenticating Agent makes
any representations as to the validity or sufficiency of this Indenture or of
any Notes. Neither the Trustee nor any Authenticating Agent shall be accountable
for the use or application by the Company of any Notes or the proceeds thereof.
SECTION 605. May Hold Notes.
The Trustee, any Authenticating Agent, any Paying Agent, the
Registrar or any other agent of the company, in its individual or any other
capacity, may become the owner or pledgee of Notes, and, subject to Sections 608
and 613, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Authenticating Agent, Paying Agent, Registrar or such
other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation, as
the Company and the Trustee shall from time to time agree in writing, for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the reasonable expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(c) to indemnify each of the Trustee and any predecessor Trustee
for, and to hold it harmless against, any and all loss, damage, claim, liability
or expense, including taxes (other than taxes based upon, or measured or
determined by, the income of the Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of this trust or performance of its duties hereunder, including
the costs and expenses of defending itself against any claim (whether asserted
by the Company or any Holder or any Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
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As security for the performance of the obligations of the Company
under this Section 607, the Trustee shall have a lien prior to the Notes upon
all Property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (and premium, if any) or interest
on the Notes.
If the Trustee incurs expenses or renders services in connection
with an Event of Default under Section 501(g) or 501(h), the Trustee's expenses
(including reasonable attorneys' fees and expenses) and its compensation for
such services, are intended to constitute expenses of administration under
applicable Federal or state bankruptcy, insolvency or other similar law.
The provisions of this Section 607 shall survive the termination of
this Indenture.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
the Company shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be:
(a) a corporation organized and doing business under the laws of the
United States of America, any state or territory thereof or the District of
Columbia, authorized under such laws to exercise corporate trust powers, and
subject to supervision or examination by Federal, state, territorial or District
of Columbia authority, or
(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee pursuant to
a rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees,
in either case having a combined capital and surplus of at least $150,000,000.
If such Person publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 609, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Company nor any
Affiliate of the Company shall serve as Trustee hereunder. If at any time the
Trustee shall cease to be eligible to serve as Trustee hereunder pursuant to the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
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(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Notes, delivered to the
Trustee and to the Company. If any instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of notice of such removal, the Trustee being removed may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor Trustee.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 310(b)
of the Trust Indenture Act pursuant to Section 608 hereof after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of any Note for at least six months, unless the Trustee's duty to
resign is stayed in accordance with the provisions of Section 310(b) of
the Trust Indenture Act; or
(ii) the Trustee shall cease to be eligible under Section
609 hereof and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(iii) the Trustee shall become incapable of acting or a
decree or order for relief by a court having jurisdiction in the premises
shall have been entered in respect of the Trustee in an involuntary case
under the Bankruptcy Code, or any other applicable Federal or state
bankruptcy, insolvency or similar law, or a decree or order by a court
having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee or of its
property or affairs, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation, winding up or liquidation; or
(iv) the Trustee shall commence a voluntary case under
Bankruptcy Code, or any other applicable Federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or
taking possession by a receiver, custodian, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trustee or its
property or affairs, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or shall take corporate action in
furtherance of any such action,
then, in any such case, (A) the company by a Board Resolution may remove the
Trustee with respect to the Notes, or (B) subject to Section 514, any Holder who
has been a bona fide Holder of any Note for at least six months may, on behalf
of such Holder and all others similarly
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situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee for the Notes.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of all the
Outstanding Notes delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with Section 611, become the successor Trustee and to
that extent replace the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders and
shall have accepted appointment in the manner hereinafter provided, any Holder
that has been a bona fide Holder of a Note for at least six months may, subject
to Section 514, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such resignation, removal and appointment by first-class mail,
postage prepaid, to the Holders as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Notes and the address of its Corporate Trust office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In the event of an appointment hereunder of a successor Trustee,
each such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such former
Trustee hereunder, subject to its lien, if any, provided for in Section 607.
(b) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) of this Section.
(c) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article and under the Trust Indenture Act.
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or
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consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be otherwise qualified and eligible under this Article and
under the Trust Indenture Act, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any Notes
shall have been authenticated, but not delivered by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Notes so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Notes. In the event that any Notes shall not have been authenticated by such
predecessor Trustee, any such successor Trustee may authenticate and deliver
such Notes, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, excluding any creditor relationship described in Section 311(b) of the
Trust Indenture Act. A Trustee who has resigned or been removed shall be subject
to Section 311(a) of the Trust Indenture Act to the extent indicated therein.
SECTION 614. Appointment of Authenticating Agent.
At any time when any of the Notes remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Notes which shall be authorized to act on behalf of the Trustee to
authenticate Notes and the Trustee shall give written notice of such appointment
to all Holders of Notes with respect to which such Authenticating Agent will
serve. Notes so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Any such appointment shall be evidenced by an
instrument in writing signed by a Responsible Officer of the Trustee, and a copy
of such instrument shall be promptly furnished to the Company. Wherever
reference is made in this Indenture to the authentication and delivery of Notes
by the Trustee or the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent
shall be acceptable to the Company and shall at all times be a corporation
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or state
authority. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section 614, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time an Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section 614, it shall resign immediately in the manner
and with the effect specified in this Section 614.
Any corporation into which an Authenticating Agent may be merged or
converted
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or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to all or substantially all the corporate
agency or corporate trust business of an Authenticating Agent, shall continue to
be an Authenticating Agent, provided such corporation shall be otherwise
eligible under this Section 614, without the execution or filing of any paper or
any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 614, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
written notice of such appointment to all Holders of Notes with respect to which
such Authenticating Agent will serve, in the manner provided for in Section 107.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.14.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 614.
If an appointment with respect to any Notes is made pursuant to this
Section 614, such Notes may have endorsed thereon, in addition to the Trustee's
certificate of authentication, an alternate certificate of authentication in the
following form:
This is one of the Notes referred to in the within-mentioned
Indenture.
Dated: _______________
The Bank of New York
By: _________________
as Authenticating Agent
By: _________________
Authorized Signatory
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company shall furnish or cause to be furnished to the Trustee:
(a) not less than ten days prior to any Interest Payment Date on the
Notes, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of any Notes for which an Interest Payment Date
applies, as of the Record Date immediately preceding such Interest Payment Date,
and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;
provided, however, that if and so long as the Trustee may be the Registrar for
any series of Notes, no such list need be furnished with respect to such Notes.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Registrar,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) Holders may communicate as provided in Section 312(b) of the
Trust Indenture Act with other Holders with respect to their rights under this
Indenture or under any Notes.
(c) Each Holder of any Notes, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
shall be held accountable by reason of the disclosure of any such information as
to the names and addresses of the Holders in accordance with Section 702(b),
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 702(b).
SECTION 703. Reports by the Trustee.
(a) Within 60 days after May 15 of each year commencing with the
year 1999, the Trustee shall transmit by mail to all Holders of Notes, as
provided in Subsection (c) of this Section 703, a brief report dated as of such
May 15 if and to the extent required under Section 313(a) of the Trust Indenture
Act.
(b) The Trustee shall comply with Sections 313(b) and 313(c) of the
Trust Indenture Act.
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(c) A copy of each such report shall, at the time of its
transmission to Holders, be filed by the Trustee with each stock exchange, if
any, upon which the Notes are then listed, with the Commission and also with the
Company. The Company shall promptly notify the Trustee of any stock exchange
upon which any Notes are listed and of any delisting thereof. SECTION 704.
Reports by the Company.
The Company shall file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file with
the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act. The
Company and any other obligor on any Notes shall also comply with the other
provisions of Section 314(a) of the Trust Indenture Act.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 801. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not, directly or indirectly, consolidate with or
merge into any other corporation or convey or transfer substantially all of its
Property to any Person, unless:
(a) Either: (1) the Company is the surviving corporation; or (2) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia:
(b) The Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all of
the obligations of the Company under the Notes and the Indenture pursuant to
agreements reasonably satisfactory to the Trustee; and
(c) Immediately after such transaction no Default or Event of
Default exist.
In addition, the Company shall not, directly or indirectly, lease
all or substantially all of its properties or assets, in one or more related
transactions, to any other Person. The provisions of this Section 801 shall not
apply to a sale, assignment, transfer, conveyance or other disposition of assets
between or among the Company and any of its wholly owned Subsidiaries.
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SECTION 802. Successor corporation Substituted.
Upon any consolidation with or merger by the Company into any other
corporation, or any conveyance or transfer of the Property of the Company
substantially as an entirety in accordance with Section 801, the successor
corporation formed by such consolidation or into which the Company is merged or
the successor Person to which such conveyance or transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor had been
named as the Company herein, and thereafter the Company shall be relieved of all
obligations and covenants under this Indenture and the Notes.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any of the Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by such successor of the covenants of the Company herein and
contained in any Notes; or
(b) to add to the covenants and agreements of the Company for the
protection or benefit of the Holders of the Notes; or
(c) to add any additional Events of Default; or
(d) to provide for uncertificated Notes in addition to or in place
of certificated Notes; or
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611(b); or
(f) to secure the Notes; or
(g) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or to make any
other provisions with respect to matters or questions arising under this
Indenture; provided such actions shall not adversely affect the interests of the
Holders in any material respect; or
(h) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust Indenture
Act.
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SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes which are affected by such
indenture supplemental hereto (voting as a single class), by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected:
(a) reduce the percentage in principal amount of any Outstanding
Note, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture, or certain Defaults
hereunder and their consequences, provided for in this Indenture; or
(b) reduce the principal or change the stated maturity of any Note;
or
(c) reduce the rate of or change the time for payment of interest on
any Note; or
(d) waive a Default or Event of Default in the payment of (and
premium, if any) or interest on the Notes (except a recission of acceleration of
the Notes by the Holders of at least a majority in aggregate principal amount of
the Notes and a waiver of the payment default that resulted from such
acceleration); or
(e) make any Note payable in money other than that stated in the
Notes; or
(f) make any change in the provisions of the Indenture relating to
waiver of past defaults or the rights of holders of Notes to receive payments of
(and premium, if any) or interest on the Notes.
It shall not be necessary for any Act of Holders under this Section
902 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
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SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes, and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Nine may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the Board
of Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for the
Outstanding Notes.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the Holders that
it shall duly and punctually pay the principal of (and premium, if any) and
interest on the Notes in accordance with the terms of this Indenture and the
Notes. The Company shall pay all Additional Interest, if any, in the same manner
on the dates and in the amounts set forth in the Registration Rights Agreement.
SECTION 1002. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The City of
New York, an office or agency where Notes may be presented or surrendered for
payment, where Notes may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served. The Company shall give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee its agent to receive all presentations, surrenders, notices and demands.
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The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all of such purposes, and may from time
to time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in The City of New York, for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
and any change in the location of any such other office or agency.
SECTION 1003. Money for Note Payments to Be Held in Trust.
If the Company, any Subsidiary or any of their respective Affiliates
shall at any time act as Paying Agent with respect to any series of Notes, such
Paying Agent shall, on or before each due date of the principal of (and premium,
if any) or interest or Additional Interest, if any, on any of the Notes,
segregate and hold in trust for the benefit of the Persons entitled thereto
money sufficient to pay the principal (and premium, if any) or interest or
Additional Interest, if any, so becoming due until such money shall be paid to
such Persons or otherwise disposed of as herein provided, and shall promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with
respect to the Notes, it shall, prior to or on each due date of the principal of
(and premium, if any) or interest or Additional Interest, if any, on any of the
Notes, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest or
Additional Interest, if any, and (unless such Paying Agent is the Trustee) the
Company shall promptly notify the Trustee of its action or failure so to act.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Maintenance of Property.
The Company shall cause all Property used or useful in the conduct
of its business or the business of any Subsidiary to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 1005 shall prevent the Company from
discontinuing the operation or maintenance of any of such Property if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
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SECTION 1006. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a Lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1007. Limitation on Sale and Leaseback Transactions.
The Company will not, nor will it permit any Subsidiary to, enter
into any Sale and Leaseback Transaction; provided that the Company may enter
into a Sale and Leaseback Transaction if
(a) after giving effect to such Sale and Leaseback Transaction, the
aggregate outstanding amount of all Attributable Debt resulting from all Sale
and Leaseback Transactions does not exceed the greater of $50.0 million or 15%
of Consolidated Tangible Assets, determined in accordance with the Company's
most recent published consolidated balance sheet in accordance with GAAP; or
(b) the Company applies, within twelve months after the sale or
transfer, an amount equal to the net proceeds of the assets sold pursuant to the
Sale and Leaseback Transaction to the voluntary covenant defeasance or
retirement of Indebtedness (other than Indebtedness that is held by the Company
or Indebtedness of the Company that is subordinate in right of payment to the
Notes), which amount will not be less than the fair value (in the opinion of an
executive officer of the Company) of such assets less an amount equal to the
principal amount of such Indebtedness voluntarily defeased or retired by the
Company within such twelve-month period.
Notwithstanding the foregoing, no retirement referred to in clause
(b) above may be effected by the payment at maturity or pursuant to any
mandatory sinking fund payment or mandatory payment provision.
SECTION 1008. Limitation on Liens.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind on or with respect to any asset owned or hereafter acquired securing
Indebtedness without making effective provision to secure all the Notes then
outstanding by such Lien, equally and ratably with or, in the event that such
other Indebtedness is subordinated in right of payment to the Notes, prior to
any and all other such Indebtedness thereby secured, so long as such other
Indebtedness is so secured, except that the foregoing restrictions shall not
apply to (i) Permitted Liens, or (ii) other Liens, if after giving effect
thereto, the aggregate outstanding amount of all such Indebtedness secured by
Liens (other than Permitted Liens) shall not exceed the greater of $50,000,000
or 15% of
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Consolidated Tangible Assets determined in accordance with the Company's most
recent published consolidated balance sheet prepared in accordance with GAAP.
SECTION 1009. Limitation on Stock Redemptions and Stock Repurchases.
The Company shall not, and shall not permit any Subsidiary to,
directly or indirectly, make any payments to redeem or repurchase any of the
Company's or a Subsidiary's Capital Stock (a "Redemption Payment"), if at the
time the Company or the Subsidiary makes such Redemption Payment:
(a) a Default shall have occurred and be continuing (or would result
from such Redemption Payment); and
(b) the aggregate amount of such Redemption Payment and all other
Redemption Payments since the date of the Indenture would exceed the sum of (i)
$75.0 million, plus (ii) 50% of the Company's Consolidated Net Income from
November 16, 1998 through the date of determination, plus (iii) any proceeds
from the sale or issuance of shares of the Company's Capital Stock or securities
convertible into shares of the Company's Capital Stock (other than an issuance
or sale to a Subsidiary) and, without duplication, proceeds received upon the
exercise of options, warrants and other rights to acquire shares of the
Company's Capital Stock.
Notwithstanding anything to the contrary contained in this Section
1009, the Company and its Subsidiaries may (i) make any Redemption Payment if,
pro forma for such Redemption Payment, the Funded Debt to EBITDA Ratio would
have been equal to or less than 1.0; (ii) repurchase or otherwise acquire shares
of, or options or warrants to purchase shares of, the Company's Capital Stock or
any Subsidiary's Capital Stock from employees, former employees, directors or
former directors of the Company or any Subsidiary (or permitted transferees of
such employees, former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements) or plans (or
amendments thereto) or other arrangements approved by the Board of Directors or
the board of directors of any Subsidiary under which such individuals purchase
or sell or are granted the option to purchase or sell shares of Capital Stock;
provided, however, that the aggregate amount of such repurchases and other
acquisitions described in this clause (ii) shall not exceed $5,000,000 in any
calendar year; provided further, however, that such repurchases and other
acquisitions described in this clause (ii) shall be excluded in the calculation
of the amount of Redemption Payments; (iii) repurchase or otherwise acquire
shares of the Company's Capital Stock solely in exchange for other shares of the
Company's Capital Stock; provided, however, that such issuance of shares of the
Company's Capital Stock shall not be included in the calculation of proceeds
from the issuance of shares of the Company's Capital Stock in clause (b)(iii)
above; provided further, however, that such repurchases and other acquisitions
described in this clause (iii) shall be excluded in the calculation of the
amount of Redemption Payments; or (iv) repurchase or otherwise acquire solely of
odd lots of the Company's Capital Stock.
SECTION 1010. Certificate as to Default.
The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company (which on the date hereof is December 31)
ending after the date
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hereof, a certificate from the principal executive officer, principal financial
officer or principal accounting officer of the Company, stating whether or not,
to the best knowledge of such officer, the Company has complied with all
conditions and covenants under this Indenture, and, if the Company shall be in
Default, specifying all such Defaults and the nature thereof of which such
officer may have knowledge.
For the purposes of this Section 1010, compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
The Company shall deliver written notice to the Trustee five days
after any officer of the Company has knowledge of the occurrence of any event
which with the giving of notice or the lapse of time or both would become an
Event of Default under subsection (e) of Section 501.
ARTICLE ELEVEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1101. Option to Effect Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 1102 or 1103 hereof be applied to all Outstanding Notes upon
compliance with the conditions set forth below in this Article Eleven.
SECTION 1102. Defeasance and Discharge.
Upon the Company's exercise under Section 1101 hereof of the option
applicable to this Section 1102, the Company shall, subject to the satisfaction
of the conditions set forth in Section 1104 hereof, be deemed to have been
discharged from its obligations with respect to all Outstanding Notes on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
Outstanding Notes, which shall thereafter be deemed to be Outstanding only for
the purposes of Section 1105 hereof and the other Sections of this Indenture
referred to in (i) and (ii) below, and to have satisfied all its other
obligations under such Notes and this Indenture (and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders of
such Outstanding Notes to receive, solely from the trust fund described in
Section 1104 hereof, and as more fully set forth in such Section, payments in
respect of the principal of (and premium, if any,) and interest on such Notes
when such payments are due, (ii) the Company's obligations with respect to such
Notes under Article Two and Section 1002 hereof, (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and the Company's
obligations in connection therewith, and (iv) this Article Eleven.
SECTION 1103. Covenant Defeasance.
Upon the Company's exercise under Section 1101 hereof of the option
applicable to this Section 1103, the Company shall, subject to the satisfaction
of the conditions set forth in
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Section 1104 hereof, be released from their respective obligations under the
covenants contained in Sections 1003, 1007, 1008 and 1009 hereof with respect to
the Outstanding Notes on and after the date the conditions set forth in Section
1104 are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not Outstanding for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any thereof)
in connection with such covenants, but shall continue to be deemed Outstanding
for all other purposes hereunder (it being understood that such Notes shall not
be deemed Outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the Outstanding Notes, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute a Default
or an Event of Default under Section 501 hereof, but, except as specified above,
the remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 1101 hereof of the option
applicable to this Section 1103, subject to the satisfaction of the conditions
set forth in Section 1104 hereof, Sections 501(c), (d) and (f) hereof shall not
constitute Events of Default.
SECTION 1104. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either
Section 1102 or 1103 hereof to the outstanding Notes:
In order to exercise either defeasance or covenant defeasance:
(a) the Company shall irrevocably deposit or cause to be deposited
with the Trustee, in trust, for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Notes, (i) money in an amount (in such currency in which
such Notes are then specified as payable at Stated Maturity), or (ii)
non-callable U.S. Government Obligations applicable to such Notes which through
the scheduled payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due date of any
payment of principal of (and premium, if any) and interest on such Notes, money
in an amount or (iii) a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants to pay and
discharge the principal of (and premium, if any) and interest and Additional
Interest, if any, on the outstanding Notes on the Stated Maturity (or any
Redemption Date selected by the Company, if applicable) of such principal (and
premium, if any) or installment or interest; provided, however, that the Trustee
shall have been irrevocably instructed to apply such money or the proceeds of
such U.S. Government Obligations to said payments with respect to such Notes.
Before such a deposit, the Company may give to the Trustee, in accordance with
the redemption provisions in the Indenture, a notice of its election to redeem
all or any portion of such outstanding Notes at a future date in accordance with
the terms of the Notes and the redemption provisions of the Indenture, which
notice shall be irrevocable. Such irrevocable redemption notice, if given, shall
be given effect in applying the foregoing;
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(b) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound;
(c) in the case of a Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders of
the outstanding Notes will not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such covenant defeasance had not occurred;
(d) such Legal Defeasance or Covenant Defeasance shall be effected
in compliance with any additional or substitute terms, conditions or limitations
in connection therewith pursuant to this Indenture; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent under this Indenture to either Legal Defeasance or Covenant
Defeasance, as the case may be, have been satisfied.
SECTION 1105. Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions.
Subject to Section 1106 hereof, all money and non-callable U.S.
Government Obligations (including the proceeds thereof) deposited with the
Trustee pursuant to Section 1104 hereof in respect of the Outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal (and premium, if any) and interest
and Additional Interest, if any, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable U.S.
Government Obligations deposited pursuant to Section 1104 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
Outstanding Notes.
Anything in this Article Eleven to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable U.S. Government Obligations held by it
as provided in Section 1104 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 1104(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 1106. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and premium,
if any) or interest on any
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Note and remaining unclaimed for two years after such principal (and premium, if
any) or interest or Additional Interest, if any, has become due and payable
shall be paid to the Company on its request or (if then held by the Company
shall be discharged from such trust) and the Holder of such Note shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1107. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
non-callable U.S. Government Obligations in accordance with Section 1102 or 1103
hereof, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1102 or 1103 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 1102 or 1103
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of (and premium, if any) or interest or Additional
Interest, if any, on any Note following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE TWELVE
IMMUNITY OF SHAREHOLDERS, OFFICERS AND DIRECTORS
SECTION 1201. Exemption from Individual Liability.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Note, or for any claim based thereon or otherwise in
respect thereof, shall be had against any shareholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or indirectly or through the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations of the Company,
that no such liability whatever shall attach to, or is or shall be incurred by,
the shareholders, officer or directors, as such, of the Company or of any
successor corporation, or any of them, because of the creation of the
Indebtedness hereby authorized or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Notes or
implied therefrom, and that any and all such liability, either at common law or
in equity or by constitution or statute is hereby expressly waived and released
as a condition of, and as a consideration for, the execution of this Indenture
and the issuance of the Notes.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
VALASSIS COMMUNICATIONS, INC.
By: /s/ Barry P. Hoffman
----------------------------------------
Name: Barry P. Hoffman, Esq.
Title: Secretary
THE BANK OF NEW YORK
By: /s/ T.C. Knight
----------------------------------------
Name: Thomas C. Knight
Title: Assistant Vice President
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STATE OF MICHIGAN )
COUNTY OF WAYNE ) SS.:
On the 11th day of January, 1999, before me personally came Barry P.
Hoffman to me known, who, being by me duly sworn, did depose and say that he is
Secretary of Valassis Communications , Inc., one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Judi L. Czyzewski
----------------------------------------
Notary Public
Judi L. Czyzewski
Notary Public, Wayne County, MI
My Commission Expires Oct. 14, 2002
State of Michigan
My commission expires 10/14/02
STATE OF NEW YORK )
COUNTY OF NEW YORK ) SS.:
On the 12th day of January, 1999, before me personally came Thomas
C. Knight to me known, who, being by me duly sworn, did depose and say that he
is Assistant Vice Pres. of The Bank of New York, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the board of directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Sara R. Bucholtz
----------------------------------------
Notary Public
Sara R. Bucholtz
Notary Public, State of New York
No. 02BU6006200
Qualified in New York County
Commission Expires April 27, 2000
State of New York
My commission expires 4/27/2000
[Seal]
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EXHIBIT A
[Face of Note]
================================================================================
CUSIP NO. _______________
6 5/8% Senior Notes due 2009
No. ___ $____________
VALASSIS COMMUNICATIONS, INC.
promises to pay to _____________________________________________________________
or registered assigns, the principal sum of ____________________________________
Dollars on_________ __, 2009.
Interest Payment Dates: _________ __ and _________ __
Record Dates: _________ __ and _________ __
VALASSIS COMMUNICATIONS, INC.
By:__________________________
Name:
Title:
This is one of the [Global] Notes referred to
in the within-mentioned Indenture:
Dated: _______________, ____
THE BANK OF NEW YORK
as Trustee
By: __________________________________
Authorized Signatory
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================================================================================
[Back of Note]
6 5/8% Senior Notes due 2009
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER: REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT HAS ACQUIRED THIS NOTE
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")),
AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (i) TO
THE COMPANY OR ANY OF ITS SUBSIDIARIES, (ii) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (iii) IN AN
OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S
OF THE SECURITIES ACT, (iv) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (v) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (vi) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (vii)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE
TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING RESTRICTIONS.
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Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST. Valassis Communications, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 8 5/8% per annum from January 15, 1999 until maturity and shall pay
the Additional Interest payable pursuant to Section 6 of the Registration Rights
Agreement referred to below. The Company will pay interest and Additional
Interest semi-annually in arrears on January 15 and July 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance; provided that if there is no existing Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be July 15, 1999. The Company shall pay
interest (including post-petition interest in any proceeding under the
Bankruptcy Code) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under the
Bankruptcy Code) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Additional Interest to the Persons who are
registered Holders of Notes at the close of business on January 1 or July 1 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in
Section 211 of the Indenture with respect to defaulted interest. The Notes will
be payable as to principal, premium and Additional Interest, if any, and
interest at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, or, at the option of the
Company, payment of interest and Additional Interest may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Additional
Interest, if any, on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an Indenture
dated as of January 12, 1999 (the "Indenture") between the Company and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb). The
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Notes are subject to all such terms, and Holders are referred to the Indenture
and such Act for a statement of such terms. To the extent any provision of this
Note conflicts with the express provisions of the Indenture, the provisions of
the indenture shall govern and be controlling. The Notes issuable under this
Indenture are obligations of the Company limited to $350,000,000 in aggregate
principal amount, $[___________] of which is represented by this Note.
5. OPTIONAL REDEMPTION. The Company has the option to redeem the
Notes, in whole or in part, at a redemption price equal to the greater of (i)
100% of the principal amount of the Notes to be redeemed or (ii) the sum of the
present values of the remaining scheduled payments on the Notes to be redeemed
discounted to the redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points,
plus, in each case, accrued and unpaid interest on the Notes to be redeemed to
the date of redemption.
6. MANDATORY REDEMPTION. The Company shall not be required to
make mandatory redemption payments with respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before the mailing of a notice of redemption of Notes to be redeemed or during
the period between a record date and the corresponding Interest Payment Date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
10. SUPPLEMENTAL INDENTURES. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding Notes
voting as a single class, and any existing default or compliance with any
provision of the Indenture or the Notes may be waived with the consent of the
Holders of a majority in principal amount of the then outstanding Notes voting
as a single class. Without the consent of any Holder of a Note, the Indenture or
the Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to provide for the
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assumption of the Company's obligations to Holders of the Notes in case of a
merger or consolidation, to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely affect
the legal rights under the Indenture of any such Holder, or to comply with the
requirements of the SEC in order to effect or maintain the qualification of the
Indenture under the Trust Indenture Act.
11. DEFAULTS AND REMEDIES. Events of Default include: (i) default
in the payment of any installment of interest or Additional Interest, if any, on
the Notes when such payment becomes due and payable, and the continuance of such
Default for a period of 30 days; or (ii) default in the payment of the principal
of (or premium, if any, on) the Notes at Maturity, upon call, redemption,
declaration, acceleration or otherwise; or (iii) default in the performance, or
breach, of any covenant or warranty of the Company in Article Ten of the
Indenture, and continuance of such Default or breach for a period of 30 days
after there has been given a Notice of Default; or (iv) default in the
performance, or breach, of any covenant or warranty of the Company in the
Indenture, including any indenture supplemental hereto (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in Section
501 of the Indenture specifically dealt with), and continuance of such Default
or breach for a period of 60 days after there has been given a Notice of
Default; or (v) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company (or the payment of which is
Guaranteed by the Company) whether such Indebtedness or Guarantee now exists, or
is created after the date of the Indenture, if that default results in the
acceleration of such Indebtedness prior to its express maturity, and, the
principal amount of all such Indebtedness which has been so accelerated
aggregates in excess of $25,000,000 or its foreign currency equivalent, without
such Indebtedness having been discharged or such acceleration having been
rescinded or annulled within 30 days after notice; or (vi) failure by the
Company to pay final judgements aggregating in excess of $25,000,000 which
judgements are not paid, discharged or stayed for a period of 60 days; or (vii)
the entry of a decree or order for relief in respect of the Company by a court
having jurisdiction in the premises in an involuntary case under the Bankruptcy
Code, or any other Federal or state bankruptcy, insolvency or other similar law,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of the
property of the Company, or ordering the winding up or liquidation of the
affairs of the Company, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or (viii) the commencement by
the Company of a voluntary case under the Bankruptcy Code, or any other
applicable Federal or state bankruptcy, insolvency or other similar law, or the
consent by it to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Company or
of any substantial part of the property of the Company, or the making by the
Company of an assignment for the benefit of creditors, or the admission by the
Company in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company in furtherance of any such
action.
Subject to certain limitations, Holders of a majority in principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. The Holders of a majority in aggregate
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principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing Default or
Event of Default in the payment of interest on, or the principal of, the Notes.
The Company is required to deliver to the Trustee annually a statement regarding
compliance with the Indenture and the Company is required upon becoming aware of
any Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
12. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
13. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
14. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
16. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement dated as of January 12, 1999 among the Company and the parties named
on the signature pages thereof.
17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL
GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
A-6
<PAGE> 81
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Valassis Communications, Inc.
19975 Victor Parkway
Livonia, Michigan 48152
A-7
<PAGE> 82
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: ________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________________________________________ to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
Date: ___________________
Your Signature: _____________________________
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
A-8
<PAGE> 83
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an
interest in another Global Note or for a Definitive Note, or exchanges of a part
of another Global Note or Definitive Note for an interest in this Global Note,
have been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of Amount of at maturity of this
decrease in increase in Global Note Signature of
Principal Amount Principal Amount following such authorized officer
at maturity of this at maturity of this decrease of Trustee or Note
Date of Exchange Global Note Global Note (or increase) Custodian
- ---------------- ----------- ----------- ------------- ---------
<S> <C> <C> <C> <C>
</TABLE>
A-9
<PAGE> 84
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Valassis Communications, Inc.
19975 Victor Parkway
Livonia, Michigan 48150
[Registrar address block]
Re: _____% Senior Notes due 2009
Reference is hereby made to the Indenture, dated as of January __,
1999 (the "Indenture"), between Valassis Communications, Inc., as issuer (the
"Company"), and The Bank of New York, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to
transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in
the principal amount of $___________ in such Note[s] or interests (the
"Transfer"), to ____________________ (the "Transferee"), as further specified in
Annex A hereto. In connection with the Transfer, the Transferor hereby certifies
that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the United States Securities Act of 1933, as amended (the "Securities Act"),
and, accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its own account, or for one or more accounts with respect to
which such Person exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A and such Transfer is
in compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in
B-1
<PAGE> 85
accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly,
the Transferor hereby further certifies that (i) the Transfer is not being made
to a person in the United States and (x) at the time the buy order was
originated, the Transferee was outside the United States or such Transferor and
any Person acting on its behalf reasonably believed and believes that the
Transferee was outside the United States or (y) the transaction was executed in,
on or through the facilities of a designated offshore securities market and
neither such Transferor nor any Person acting on its behalf knows that the
transaction was prearranged with a buyer in the United States, (ii) no directed
selling efforts have been made in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S under the Securities Act, and (iii) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will be subject to the restrictions on Transfer
enumerated in the Private Placement Legend printed on the Regulation S Global
Note and/or the Definitive Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to
and in accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the Securities
Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or Rule
904, and the Transferor hereby further certifies that it has not engaged
in any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Note or
Restricted
B-2
<PAGE> 86
Definitive Notes and the requirements of the exemption claimed, which
certification is supported by (1) a certificate executed by the Transferee in
the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the IAI Global Note and/or the Definitive Notes and
in the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED
DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The
Transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of
any state of the United States and (ii) the restrictions on transfer
contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no
longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on
Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i)
The Transfer is being effected pursuant to and in accordance with Rule
903 or Rule 904 under the Securities Act and in compliance with the
transfer restrictions contained in the Indenture and any applicable blue
sky securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions
on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION.
(i) The Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act other
than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer
restrictions contained in the Indenture and any applicable blue sky
securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in
accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions
B-3
<PAGE> 87
on transfer enumerated in the Private Placement Legend printed on the
Restricted Global Notes or Restricted Definitive Notes and in the
Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
_______________________________
[Insert Name of Transferor]
By: ___________________________
Name:
Title:
Dated: _________________________
B-4
<PAGE> 88
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ___________), or
(ii) [ ] Regulation S Global Note (CUSIP ___________), or
(iii) [ ] IAI Global Note (CUSIP ___________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP ___________), or
(ii) [ ] Regulation S Global Note (CUSIP ___________), or
(iii) [ ] IAI Global Note (CUSIP ___________); or
(iv) [ ] Unrestricted Global Note (CUSIP ___________); or
(b) [ ] a Restricted Definitive Note.
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-5
<PAGE> 89
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Valassis Communications, Inc.
19975 Victor Parkway
Livonia, Michigan 48150
[Registrar address block]
Re: ___% Senior Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of January __,
1999 (the "Indenture"), between Valassis Communications, Inc., as issuer (the
"Company"), and The Bank of New York, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount of $____________ in such Note[s] or interests (the "Exchange").
In connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST
IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED
GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Note for a beneficial interest in an
Unrestricted Global Note in an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Global Notes
and pursuant to and in accordance with the United States Securities Act
of 1933, as amended (the "Securities Act"), (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act, and
(iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST
IN
C-1
<PAGE> 90
A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Notes and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance
with the Securities Act, and (iv) the Definitive Note is being acquired
in compliance with any applicable blue sky securities laws of any state
of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED
DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In
connection with the Owner's Exchange of a Restricted Definitive Note for
a beneficial interest in an Unrestricted Global Note, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted
Definitive Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and
the Private Placement Legend are not required in order to maintain
compliance with the Securities Act, and (iv) the beneficial interest is
being acquired in compliance with any applicable blue sky securities laws
of any state of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED
DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Unrestricted
Definitive Note is being acquired for the Owner's own account without
transfer, (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the
restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with
the Securities Act, and (iv) the Unrestricted Definitive Note is being
acquired in compliance with any applicable blue sky securities laws of
any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST
IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted
Global Note for a Restricted Definitive Note with an equal principal
amount, the Owner hereby certifies that the Restricted Definitive Note is
being acquired for the Owner's own account without transfer. Upon
consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be
C-2
<PAGE> 91
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the
Indenture and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED
DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In
connection with the Exchange of the Owner's Restricted Definitive Note
for a beneficial interest in the [CHECK ONE] |_|"144A Global Note,"
|_|"Regulation S Global Note," |_|"IAI Global Note" with an equal
principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, and (ii)
such Exchange has been effected in compliance with the transfer
restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any
applicable blue sky securities laws of any state of the United States.
Upon consummation of the proposed Exchange in accordance with the terms
of the Indenture, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Note and in the Indenture and
the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
________________________________
[Insert Name of Transferor]
By: ___________________________
Name:
Title:
Dated: _________________________
C-3
<PAGE> 92
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Valassis Communications, Inc.
19975 Victor Parkway
Livonia, Michigan 48150
[Registrar address block]
Re: 6 5/8% Senior Notes due 2009
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of January __,
1999 (the "Indenture"), between Valassis Communications, Inc., as issuer (the
"Company"), and The Bank of New York, as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the
D-1
<PAGE> 93
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act, or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
_____________________________________
[Insert Name of Accredited Investor]
By: _________________________________
Name:
Title:
Dated: _________________________
D-2
<PAGE> 1
EXHIBIT 4.1(A)
FIRST SUPPLEMENTAL INDENTURE (the "Supplement"), dated as of
March 9, 1999, between Valassis Communications, Inc., a Delaware corporation
(the "Company"), and The Bank of New York, as trustee (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company and the Trustee have executed and
delivered the Indenture, dated as of January 12, 1999 (the "Indenture"),
providing for the issuance thereunder by the Company, and the authentication and
delivery by the Trustee, of the Company's 6 5/8% Senior Notes due 2009 (the
"Notes");
WHEREAS, Section 901(g) of the Indenture authorizes the
Company and the Trustee, without the consent of any holder of the Notes, to
amend, from time-to-time, the Indenture by supplemental indenture for the
purposes therein set forth;
WHEREAS, the Company, by appropriate corporate action, has
determined to supplement the Indenture in the manner described below, and all
acts or proceedings necessary to authorize and constitute this Supplement a
valid and binding agreement in accordance with the terms hereof, have been done
and taken.
NOW, THEREFORE, in consideration of the premises herein, the
Company covenants and agrees with the Trustee, for the equal and proportionate
benefit of the respective holders of the Notes from time-to-time, as follows:
Section 1. Indenture Supplement. Section 101 of the Indenture
shall be amending by adding the following defined terms:
"Treasury Rate" shall mean, as of any Redemption Date, the
yield to maturity as of such Redemption Date of the United
States Treasury securities with constant maturity (as compiled
and published in the most recent Federal Reserve Statistical
Release H. 15 (519) that has become publicly available at
least two business days prior to the Redemption Date (or, if
such Statistical Release is no longer published, any publicly
available source of similar market data)) most nearly equal to
the period from the Redemption Date to January 15, 2009;
provided, however, that if the period from the Redemption Date
to January 15, 2009 is less than one year, the weekly average
yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used."
"Voting Stock" shall mean, with respect to any Person,
securities of any class or classes of Capital Stock in such
Person entitling the holders thereof (whether at all times or
only so long as no senior class of stock has voting power by
reason of any contingency) to vote in the election of members
of the board of directors of such Person."
Section 2. Indenture to Remain in Effect. The Indenture, as
amended and supplemented by this Supplement, shall remain in full force and
effect.
<PAGE> 2
Section 3. GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 4. Counterparts. This Supplement may be executed in
one or more counterparts, each of which shall be an original, but such
counterparts together shall construe one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
VALASSIS COMMUNICATIONS, INC.
By: /s/ Alan F. Schultz
------------------------------------
Name: Alan F. Schultz
Title: Chairman of the Board, President
and Chief Executive Officer
THE BANK OF NEW YORK
By: /s/ T.C. Knight
------------------------------------
Name: Thomas C. Knight
Title: Assistant Vice President
<PAGE> 1
EXHIBIT 5.1
[Letterhead of McDermott, Will & Emery]
March 25, 1999
Valassis Communications, Inc.
19975 Victor Parkway
Livonia, Michigan 48152
Gentlemen:
We have acted as your special counsel in connection with the proposed
offering and issuance of $100 million of 6-5/8% Senior Notes Due 2009 (the
"Exchange Notes") of Valassis Communications, Inc. (the "Company") in exchange
for a like amount of 6-5/8% Senior Notes Due 2009 (the "Old Notes") of the
Company, as contemplated by the Prospectus (the "Prospectus") included as part
of the Registration Statement on Form S-4 (the "Registration Statement") with
respect to the Exchange Notes, which is being filed herewith with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"). Capitalized terms defined in the Registration Statement and
not otherwise defined herein are used herein as so defined.
For the purposes of this opinion, we have examined the Registration
Statement and the Prospectus contained therein, the indenture dated as of
January 12, 1999 governing the Exchange Notes, as amended, between the Company
and The Bank of New York, as Trustee (the "Indenture"), the form of the Exchange
Notes, the resolution of the Board of Directors of the Company dated January 4,
1999, and have also examined and relied upon the representations and warranties
as to factual matters contained in such documents and upon originals or copies
of such corporate records and other documents and have reviewed such questions
of law as we considered necessary or appropriate for the purposes of this
opinion. In our examination, we have assumed the authenticity of all documents
submitted to us as originals, the conformity to the original documents of all
documents submitted to us as copies, the genuineness of all signatures on
documents reviewed by us and the legal capacity of natural persons.
Members of this firm are admitted to the Bar of the State of New York
and we express no opinion as to the applicability of, compliance with or effect
of the law of any jurisdiction other than United States federal law, the General
Corporation Law of the State of Delaware and the laws of the State of New York.
<PAGE> 2
March 25, 1999
Page 2
Based on such examination and review, we are of the opinion that:
1. The Exchange Notes have been duly authorized by the
Company; and
2. When (i) the Registration Statement, as amended,
shall become effective under the Securities Act, (ii)
authenticated by The Bank of New York, the trustee
therefor (the "Trustee") in accordance with the
provisions of the Indenture governing the Exchange
Notes, (iii) duly executed by the Company and (iv)
issued and delivered in exchange for Old Notes in
accordance with the terms of the Exchange Offer (as
defined in the Registration Statement), the Exchange
Notes will be duly issued and will constitute valid
and legally binding obligations of the Company,
enforceable against the Company in accordance with
their terms, subject to the following qualifications:
A. enforcement may be limited by applicable
bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other
similar laws now or hereafter existing
affecting creditors' rights generally and by
general principles of equity (regardless of
whether enforcement is sought in equity or
at law); and
B. we express no opinion as to the
enforceability of any rights to contribution
or indemnification provided for in the
Exchange Notes which are violative of the
public policy underlying any law, rule or
regulation (including any federal or state
securities law, rule or regulation).
To the extent that the obligations of the Company under the Indenture
governing the Exchange Notes may be dependent upon such matters, we have assumed
for purposes of this opinion that (i) the Trustee is duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and is duly qualified to engage in the activities contemplated by the Indenture
governing the Exchange Notes, (ii) the Indenture governing the Exchange Notes
has been duly authorized, executed and delivered by and constitutes the legal,
valid and binding obligation of the Trustee, (iii) the Trustee is in compliance,
generally and with respect to acting as Trustee under the Indenture governing
the Exchange Notes, with all applicable laws and regulations and (iv) the
Trustee has the requisite organizational and legal power and authority to
perform its obligations under the Indenture governing the Exchange Notes.
This opinion is limited to the matters expressly set forth herein and
no opinion is implied or may be inferred beyond the matters expressly so stated.
This opinion is given as of the date hereof and we do not undertake any
liability or responsibility to inform you of any change in circumstances
occurring, or additional information becoming available to us, after the date
hereof which might alter the opinions contained herein.
<PAGE> 3
March 25, 1999
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving this consent, we do not thereby admit that we are within the category of
persons whose consent is required under Section 7 of the Securities Act and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
/s/ McDermott, Will & Emery
<PAGE> 1
EXHIBIT 10.21
EXECUTION COPY
VALASSIS COMMUNICATIONS, INC.
$100,000,000
6 5/8 % Senior Notes Due 2009
REGISTRATION RIGHTS AGREEMENT
January 12, 1999
Bear, Stearns & Co. Inc.
Wasserstein Perella Securities, Inc.
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies and Gentlemen:
Valassis Communications, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Initial Purchasers"), upon the terms set
forth in a purchase agreement dated of even date herewith (the "Purchase
Agreement") between the Company and the Initial Purchasers, $100,000,000 in
aggregate principal amount of its 6 5/8 % Senior Notes due 2009 (the "Notes").
The Notes will be issued pursuant to an indenture (the "Indenture") between the
Company and The Bank of New York, as trustee (the "Trustee") dated January 12,
1999, substantially in the form previously furnished to the Initial Purchasers.
As an inducement to the Initial Purchasers to purchase the Notes, the Company
agrees with the Initial Purchasers, for the benefit of the holders of the Notes
(including, without limitation, the Initial Purchasers, herein referred to as
the "Holders"), as follows:
1. Registered Exchange Offer. The Company shall prepare and, by 90 days
(or if the 90th day is not a business day, the first business day thereafter)
after the date of original issuance of the Notes (the "Issue Date"), use
reasonable efforts to file with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to a proposed offer (the "Registered
Exchange Offer") to the Holders of the Notes to issue and deliver to such
Holders, in exchange for the Notes, a like principal amount of debt securities
of the Company identical in all material respects to the Notes (the "Exchange
Notes"), except for the transfer restrictions relating to the Notes, that are
registered under the Securities Act. The Company shall use reasonable efforts to
cause such Exchange Offer Registration
<PAGE> 2
Statement to become effective under the Securities Act within 150 days (or if
the 150th day is not a business day, the first business day thereafter) after
the Issue Date.
Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of the Notes electing to exchange the Notes for Exchange
Notes and (assuming that such Holder is not an affiliate of the Company within
the meaning of the Securities Act, acquires the Exchange Notes in the ordinary
course of such Holder's business and has no arrangements with any person to
participate in the distribution of the Exchange Notes) to trade such Exchange
Notes from and after their receipt without any limitations or restrictions under
the Securities Act and without material restrictions under the securities laws
of the several states of the United States. In connection with such Registered
Exchange Offer, the Company shall take such further action, including, without
limitation, appropriate filings under state securities laws, as may be necessary
to realize the foregoing objective subject to the proviso of Section 3(h).
The Company shall include within the prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution",
reasonably acceptable to the Initial Purchasers, which shall contain a summary
statement of the positions taken or policies made by the staff of the Commission
with respect to the potential "underwriter" status of any broker-dealer that is
the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) of Exchange Notes received by such
broker-dealer in the Registered Exchange Offer (a "Participating
Broker-Dealer"), whether such positions or policies have been publicly
disseminated by the staff of the Commission or such positions or policies
represent the prevailing views of the staff of the Commission. Such "Plan of
Distribution" section shall also allow the use of the prospectus by all persons
subject to the prospectus delivery requirements of the Securities Act, including
Participating Broker-Dealers, and include a statement describing the means by
which Participating Broker-Dealers may resell the Exchange Notes.
The Company shall use reasonable efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Notes; provided, however, that in the case of
where such prospectus and any amendment or supplement thereto must be delivered
by a Participating Broker-Dealer or an Initial Purchaser, such period shall be
the lesser of 180 days after the consummation of the Registered Exchange Offer
and the date on which all the Participating Broker-Dealers and Initial
Purchasers have sold all of the Exchange Notes held by them.
If, upon consummation of the Registered Exchange Offer, an Initial
Purchaser holds Notes acquired by it as part of its initial distribution, the
Company upon the request of such Initial Purchaser shall simultaneously with the
delivery of the Exchange Notes pursuant to the Registered Exchange Offer issue
and deliver to such Initial Purchaser, in
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<PAGE> 3
exchange (the "Private Exchange") for the Notes held by such Initial Purchaser,
a like principal amount of debt securities of the Company identical in all
material respects to the Notes, including the transfer restrictions (the
"Private Exchange Notes").
In connection with the Registered Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(b) keep the Registered Exchange Offer open for not less than 30
calendar days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law);
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New
York;
(d) permit Holders to withdraw tendered Notes at any time prior to the
close of business, New York time, on the last business day on which the
Registered Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all applicable laws.
As soon as practicable after the close of the Registered Exchange Offer
or the Private Exchange, as the case may be, the Company shall:
(i) accept for exchange all the Notes validly tendered and not
withdrawn pursuant to the Registered Exchange Offer and the
Private Exchange;
(ii) deliver to the Trustee for cancellation all the Notes so
accepted for exchange; and
(iii) cause the Trustee to authenticate and deliver promptly
to each Holder of the Notes, Exchange Notes or Private
Exchange Notes, as the case may be, equal in principal amount
to the Notes of such Holder so accepted for exchange.
The Exchange Notes and the Private Exchange Notes may be issued under
(i) the Indenture or (ii) an indenture substantially similar to the Indenture,
which in either event will provide that the Exchange Notes will not be subject
to the transfer restrictions set forth in the Indenture and that the Exchange
Notes, the Private Exchange Notes and the Notes will vote and consent together
on all matters as one class and that none of the Exchange Notes, the Private
Exchange Notes or the Notes will have the right to vote or consent as a separate
class on any matter.
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<PAGE> 4
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Notes received by such Holder will be
acquired in the ordinary course of business, (ii) such Holder will have no
arrangements or understanding with any person to participate in the distribution
of the Notes or the Exchange Notes within the meaning of the Securities Act,
(iii) such Holder is not an "affiliate", as defined in Rule 405 of the
Securities Act, of the Company, or, if it is an affiliate, such Holder will
comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Notes, and (v) if such Holder is a broker-dealer,
that it will receive Exchange Notes for its own account in exchange for Notes
that were acquired as a result of market-making activities or other trading
activities and that it will deliver a prospectus in connection with any resale
of such Exchange Notes.
2. Shelf Registration. If, (i) because of any change in law or in
currently prevailing interpretations of the staff of the Commission, the Company
is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (ii) for any reason the Registered Exchange Offer is not
completed within 180 days (or if the 180th day is not a business day, the first
business day thereafter) after the Issue Date (the "Completion Deadline"), (iii)
the Initial Purchasers so request with respect to the Notes or the Private
Exchange Notes held by them following consummation of the Registered Exchange
Offer or (iv) any Holder is not eligible to participate in the Registered
Exchange Offer and so informs the Company prior to the consummation of the
Registered Exchange Offer or, in the case of any Holder that participates in the
Registered Exchange Offer or the Private Exchange, such Holder does not receive
freely tradeable Exchange Notes on the date of the exchange, the Company shall,
at its cost, take the following actions:
(a) as promptly as reasonably practicable (but in no event more than 90
calendar days after so required or requested pursuant to this Section
2) file with the Commission and thereafter shall use reasonable efforts
to cause to be declared effective a registration statement (the "Shelf
Registration Statement" and, together with the Exchange Offer
Registration Statement, a "Registration Statement") on an appropriate
form under the Securities Act relating to the offer and sale of the
Notes or, if applicable, the Private Exchange Notes by the Holders
thereof from time to time in accordance with the methods of
distribution set forth in the Shelf Registration Statement and Rule 415
under the Securities Act (hereafter, the "Shelf Registration");
provided, however, that no Holder (other than an Initial Purchaser)
shall be entitled to have the Notes held by it covered by such Shelf
Registration Statement unless such Holder agrees in writing to be bound
by all of the provisions of this Agreement applicable to such Holder.
(b) use reasonable efforts to keep the Shelf Registration Statement
continuously effective in order to permit the prospectus included
therein to be lawfully delivered by the Holders of the Notes or, if
applicable, the Private Exchange Notes until the earlier of (i) such
time as all the Notes and Private Exchange Notes covered by the Shelf
Registration Statement are sold pursuant to Rule 144 under the
Securities Act
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<PAGE> 5
without any limitations under clauses (c), (e), (f) and (h) of Rule 144
and (ii) two years from the Issue Date or such shorter period that will
terminate when all the Notes or, if applicable, the Private Exchange
Notes covered by the Shelf Registration Statement have been sold
pursuant thereto; provided, that the Company shall be deemed not to
have used reasonable efforts to keep the Shelf Registration Statement
effective during the requisite period if it voluntarily takes any
action that would result in Holders of the Notes or, if applicable, the
Private Exchange Notes covered thereby not being able to offer and sell
the Notes or, if applicable, the Private Exchange Notes during that
period, unless such action is required by applicable law.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall cause the Shelf Registration Statement and
the related prospectus and any amendment or supplement thereto, as of
the effective date of the Shelf Registration Statement, amendment or
supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Registered
Exchange Offer contemplated by Section 1 hereof, the following provisions shall
apply:
(a) The Company shall furnish to the Initial Purchasers, prior to the
filing thereof with the Commission, a copy of the Registration
Statement and each amendment thereof and each supplement, if any, to
the prospectus included therein.
(b) The Company shall give written notice to the Initial Purchasers,
the Holders of the Notes and any Participating Broker-Dealer from whom
the Company has received prior written notice that it will be a
Participating Broker-Dealer in the Registered Exchange Offer:
(i) when the Registration Statement or any amendment thereto
has been filed with the Commission and when the Registration
Statement or any posteffective amendment thereto has become
effective;
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the prospectus
included therein or for additional information, provided that
the request and the contents of the request need only be
disclosed to the Initial Purchasers and one counsel appointed
by and on behalf of the Holders of the Notes as described in
Section 4;
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<PAGE> 6
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the
qualification of the Notes or, if applicable, the Private
Exchange Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Registration Statement or the prospectus
in order to make the statements therein not misleading (which
notice shall be accompanied by an instruction to suspend the
use of the prospectus until the requisite changes have been
made).
(c) The Company shall use reasonable efforts to prevent the issuance or
obtain the withdrawal of any order suspending the effectiveness of the
Registration Statement at the earliest possible time.
(d) The Company shall furnish to each Holder of the Notes or, if
applicable, the Private Exchange Notes included within the coverage of
the Shelf Registration, without charge, at least one copy of the
Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and, if the Holder so
requests in writing, all exhibits (including those, if any,
incorporated by reference).
(e) The Company shall deliver to the Initial Purchasers and to any
other Holder who so requests, without charge, at least one copy of the
Exchange Offer Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the
Initial Purchasers or any such Holder requests, all exhibits (including
those incorporated by reference).
(f) The Company shall deliver to each Holder of the Notes or, if
applicable, the Private Exchange Notes included within the coverage of
the Shelf Registration, without charge, as many copies of the
prospectus (including each preliminary prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as
such person may reasonably request. The Company consents, subject to
the provisions of this Agreement, to the use of the prospectus or any
amendment or supplement thereto by each of the selling Holders of the
Notes or, if applicable, the Private Exchange Notes in connection with
the offering and sale of the Notes or, if applicable, the Private
Exchange Notes covered by the prospectus, or any amendment or
supplement thereto, included in the Shelf Registration Statement.
(g) The Company shall deliver to the Initial Purchasers, any
Participating Broker-Dealer and such other persons required to deliver
a prospectus following
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<PAGE> 7
the Registered Exchange Offer, without charge, as many copies of the
final prospectus included in the Exchange Offer Registration Statement
and any amendment or supplement thereto as such persons may reasonably
request. The Company consents, subject to the provisions of this
Agreement, to the use of the prospectus or any amendment or supplement
thereto by the Initial Purchasers, if necessary, any Participating
Broker-Dealer and such other persons required to deliver a prospectus
following the Registered Exchange Offer in connection with the offering
and sale of the Exchange Notes covered by the prospectus, or any
amendment or supplement thereto, included in such Exchange Offer
Registration Statement.
(h) Prior to any public offering of the Notes or, if applicable, the
Private Exchange Notes, pursuant to the Shelf Registration, the Company
shall register or qualify or cooperate with the Holders of the Notes
or, if applicable, the Private Exchange Notes, included therein and
their respective counsel in connection with the registration or
qualification of the Notes or, if applicable, the Private Exchange
Notes, for offer and sale under the securities or blue sky laws of such
jurisdictions as any Holder of the Notes or the Private Exchange Notes
reasonably requests in writing and do any and all other acts or things
necessary or advisable to enable the offer and sale in such
jurisdictions of the Notes covered by the Shelf Registration; provided
that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified or (ii)
take any action which would subject it to general service of process or
to taxation in any jurisdiction where it is not then so subject.
(i) The Company shall cooperate with the Holders of the Notes or, if
applicable, the Private Exchange Notes to facilitate the timely
preparation and delivery of certificates representing the Notes or, if
applicable, the Private Exchange Notes to be sold in the Shelf
Registration free of any restrictive legends and in such denominations
and registered in such names as the Holders may request a reasonable
period of time prior to sales of the Notes or, if applicable, the
Private Exchange Notes pursuant to the Shelf Registration.
(j) Upon the occurrence of any event contemplated by Section 3(b)(v)
above, the Company shall promptly prepare a post-effective amendment to
the Registration Statement or a supplement to the related prospectus or
file any other required document so that, as thereafter delivered to
Holders of the Notes, the Exchange Notes or, if applicable, the Private
Exchange Notes, as the case may be, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. If the Company notifies the
Initial Purchasers, the Holders of the Notes and any known
Participating Broker-Dealer in accordance with Section 3(b)(v) above to
suspend the use of the prospectus until the requisite changes to the
prospectus have been made, then the Initial Purchasers, the Holders of
the Notes and any such Participating Broker-Dealers shall suspend use
of such prospectus, and the period
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<PAGE> 8
of effectiveness of the Shelf Registration Statement provided for in
Section 2(b) above and the Exchange Offer Registration Statement
provided for in Section 1 above shall each be extended by the number of
days from and including the date of the giving of such notice to
Holders of the Notes and any known Participating Broker-Dealer shall
have received such amended or supplemented prospectus pursuant to this
Section 3(j).
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Notes,
Private Exchange Notes or Exchange Notes, as the case may be, and
provide the applicable trustee with certificates for the Notes, Private
Exchange Notes or Exchange Notes, as the case may be, in a form
eligible for deposit with The Depository Trust Company.
(l) The Company will comply with all rules and regulations of the
Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make
generally available to its securities holders (or otherwise provide in
accordance with Section 11(a) of the Securities Act) an earnings
statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90
days, if such period is a fiscal year) beginning with the first month
of the Company's first fiscal quarter commencing after the effective
date of the Shelf Registration, which statement shall cover such
12-month period.
(m) The Company shall cause the Indenture (or an indenture
substantially identical to the Indenture in the case of a Registered
Exchange Offer) to be qualified under the Trust Indenture Act of 1939,
as amended.
(n) The Company may require each Holder of the Notes to be sold
pursuant to the Shelf Registration Statement to furnish to the Company
such information regarding the Holder and the distribution of the Notes
as the Company may from time to time reasonably require for inclusion
in the Shelf Registration Statement, and the Company may exclude from
such registration the Notes, Private Exchange Notes or Exchange Notes
of any Holder that unreasonably fails to furnish such information
within a reasonable time after receiving such request.
(o) The Company shall enter into such customary agreements (including
if requested an underwriting agreement in customary form) and take all
such other action, if any, as any Holder of the Notes shall reasonably
request in order to facilitate the disposition of the Notes pursuant to
any Shelf Registration.
(p) In the case of any Shelf Registration, the Company shall (i) make
reasonably available for inspection by the Holders of the Notes, any
underwriter participating in any disposition pursuant to the Shelf
Registration Statement and any attorney, accountant or other agent
retained by the Holders of the Notes or any such underwriter all
relevant financial and other records, pertinent corporate documents and
properties of the Company and (ii) cause the Company's officers,
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<PAGE> 9
directors and employees to supply all relevant information reasonably
requested by the Holders of the Notes or any such underwriter,
attorney, accountant or agent in connection with the Shelf Registration
Statement; provided that the foregoing inspection and information
gathering shall be coordinated on behalf of the Initial Purchasers by
the Initial Purchasers and on behalf of the other parties, by one
counsel designated by and on behalf of such other parties as described
in Section 4.
(q) In the case of the Registered Exchange Offer, the Company shall (i)
make reasonably available for inspection by the Initial Purchasers, any
known Participating Broker-Dealer and any attorney, accountant or other
agent retained by the Initial Purchasers or such Participating
Broker-Dealer all relevant financial and other records, pertinent
corporate documents and properties of the Company and (ii) cause the
Company's officers, directors and employees to supply all relevant
information reasonably requested by the Initial Purchasers, such
Participating Broker-Dealer or any such attorney, accountant or agent
in connection with the Exchange Offer Registration Statement; provided
that the foregoing inspection and information gathering shall be
coordinated on behalf of the Initial Purchasers by the Initial
Purchasers and on behalf of the other parties, by one counsel
designated by and on behalf of such other parties as described in
Section 4.
(r) In the case of any Shelf Registration, the Company, if requested by
any Holder of the Notes or, if applicable, the Private Exchange Notes,
shall use reasonable efforts to cause its counsel to deliver an opinion
relating to the Notes or, if applicable, the Private Exchange Notes in
customary form, cause its officers to execute and deliver all customary
documents and certificates requested by any underwriters of the Notes
or, if applicable, the Private Exchange Notes and cause its independent
public accountants to provide to the selling Holders of the Notes or,
if applicable, the Private Exchange Notes and any underwriter therefor
a comfort letter in customary form.
(s) In the case of the Registered Exchange Offer, if requested by the
Initial Purchasers or any known Participating Broker-Dealer, the
Company shall use reasonable efforts to cause its outside counsel and
general counsel to deliver to the Initial Purchasers or such
Participating Broker-Dealer signed opinions in the forms set forth in
Sections 8 (f) and (g) of the Purchase Agreement with such changes as
are customary in connection with the preparation of a Registration
Statement and shall use reasonable efforts to cause its independent
public accountants to deliver to the Initial Purchasers or such
Participating Broker-Dealer a comfort letter, in customary form,
meeting the requirements as to the substance thereof as set forth in
Section 8 (h) of the Purchase Agreement, with appropriate date changes.
4. Registration Expenses. The Company shall bear all expenses incurred
in connection with the performance of its obligations under Sections 1 through 3
hereof (including the reasonable fees and expenses of Latham & Watkins, counsel
to the Initial Purchasers, which fees and expenses shall not exceed $25,000,
incurred in connection with the Registered Exchange Offer) and, in the event of
a Shelf Registration, shall bear or
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<PAGE> 10
reimburse the Holders of the Notes or, if applicable, the Private Exchange
Notes for the reasonable fees and disbursements of one firm of counsel,
which fees and expenses shall not exceed $25,000, designated by the Holders of a
majority in principal amount of the Notes and, if applicable, the Private
Exchange Notes to act as counsel for the Holders of the Notes, and, if
applicable, the Private Exchange Notes in connection therewith, which counsel
shall be reasonably satisfactory to the Company.
5. Indemnification. (a) The Company agrees to indemnify and hold
harmless each Holder of the Notes or, if applicable, the Private Exchange Notes
and each person, if any, who controls such Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act and each director,
officer, employee or agent of such Holder and each director, officer, employee
or agent of each such controlling person (each Holder, such controlling persons
and each such director, officer, employee and agent are referred to collectively
as the "Indemnified Parties") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof, to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or prospectus or in any
amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and shall reimburse,
as incurred, the Indemnified Parties for any legal or other expenses reason-ably
incurred by them in connection with investigating or defending or preparing to
defend against or appearing as a third-party witness in connection with any such
loss, claim, damage, liability or action in respect thereof; provided, however,
that the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Holder specifically for inclusion therein; provided, further,
that (A) the Company shall not be obligated to indemnify or hold harmless any
Indemnified Party in respect of any loss, claim, damage, liability or action to
the extent that any such loss, claim, damage, liability or action arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in a preliminary Registration Statement or preliminary
prospectus if the applicable Holder or Initial Purchaser failed to deliver a
copy of a final prospectus or an amended or supplemented Registration Statement
or prospectus that was made available by the Company to such Indemnified Party
prior to the applicable sale to the person or persons asserting the claim which
is the basis of indemnification and such final prospectus or amended or
supplemented Registration Statement or prospectus cured such defect and (B) this
indemnity agreement will be in addition to any liability which the Company may
otherwise have to such Indemnified Party. The Company will not settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in
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<PAGE> 11
respect of which indemnification may be sought hereunder (whether or not such
Indemnified Party or any person who controls such Indemnified Party within
the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act is a party to such claim, action, suit or proceeding) without the
prior written consent of such Indemnified Party, which consent shall not be
unreasonably withheld, unless such settlement, compromise or consent includes an
unconditional release of such Indemnified Party and each such controlling person
from all liability arising out of such claim, action, suit or proceeding. No
Indemnified Party will 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 without the prior written consent
of the Company (which consent will not be unreasonably withheld). The Company
shall also indemnify underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution (as
described in such Registration Statement), their officers and directors and each
person who controls such persons (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) to the same extent as provided
above with respect to the indemnification of the Holders of the Notes if
requested by such Holders.
(b) The Company agrees to indemnify and hold harmless each Initial
Purchaser, any Participating Broker-Dealer and each person, if any, who controls
an Initial Purchaser or a Participating Broker-Dealer within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act and each
director, officer, employee or agent of an Initial Purchaser or a Participating
Broker-Dealer and each director, officer, employee or agent of each such
controlling person (the Initial Purchasers, any Participating Broker-Dealer,
such controlling persons and each such director, officer, employee and agent of
the Initial Purchasers, such Participating Broker-Dealer or such controlling
person are referred to collectively as the "Exchange Offer Indemnified Parties")
from and against any losses, claims, damages or liabilities, joint or several,
or any actions in respect thereof, to which each Exchange Offer Indemnified
Party may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Exchange Offer Registration Statement or
prospectus contained therein or in any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and shall reimburse, as incurred, the Exchange Offer Indemnified
Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending or preparing to defend against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action in respect thereof; provided, however, that the
Company shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or alleged untrue statement or omission or alleged omission made in any Exchange
Offer Registration Statement or prospectus contained therein or in any amendment
or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Initial Purchaser
or
-11-
<PAGE> 12
Participating Broker-Dealer specifically for inclusion therein; provided,
further, that (A) the Company shall not be obligated to indemnify or hold
harmless any Exchange Offer Indemnified Party in respect of any loss, claim,
damage, liability or action to the extent that any such loss, claim, damages,
liability or action arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in a preliminary
Registration Statement or preliminary prospectus if the applicable Initial
Purchaser or Participating Broker-Dealer failed to deliver a copy of a final
prospectus or an amended or supplemented Registration Statement or prospectus
that was made available by the Company to such Exchange Offer Indemnified Party
prior to the applicable sale to the person or persons asserting the claim which
is the basis of indemnification and such final prospectus or amended or
supplemented Registration Statement or prospectus cured such defect and (B) this
indemnity agreement will be in addition to any liability which the Company may
otherwise have to such Exchange Offer Indemnified Party. The Company will not
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 hereunder (whether or not such Exchange Offer Indemnified Party or
any person who controls such Exchange Offer Indemnified Party within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act is a party
to such claim, action, suit or proceeding) without the prior written consent of
such Exchange Offer Indemnified Party, which consent shall not be unreasonably
withheld, unless such settlement, compromise or consent includes an
unconditional release of such Exchange Offer Indemnified Party and each such
controlling person from all liability arising out of such claim, action, suit or
proceeding. No Exchange Offer Indemnified Party will 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 without the
prior written consent of the Company (which consent will not be unreasonably
withheld).
(c) Each Holder of the Notes or, if applicable, the Private Exchange
Notes, severally and not jointly, will indemnify and hold harmless the Company,
each director, officer, employee or agent of the Company and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act and each director, officer, employee or
agent of such controlling person from and against any losses, claims, damages or
liabilities or any actions in respect thereof, to which the Company or any such
director, officer, employee, agent or controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder specifically for inclusion therein, and, subject to the limitation
set forth immediately preceding this clause, shall reimburse, as incurred, such
indemnified persons
-12-
<PAGE> 13
for any legal or other expenses reasonably incurred by the Company or any
such director, officer, employee, agent or controlling person in connection
with the investigating or defending or preparing to defend against or appearing
as a third-party witness in connection with any loss, claim, damage, liability
or action in respect thereof. This indemnity agreement will be in addition to
any liability which such Holder may otherwise have to the Company or any such
directors, officers, employees, agents or controlling persons.
(d) Promptly after receipt by an indemnified party under this Section 5
of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 5,
notify the indemnifying party of the commencement thereof- but the omission so
to notify the indemnifying party (i) will not relieve it from any liability
under paragraph (a), (b) or (c) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights or defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a), (b)
or (c) above. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent
that it may wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be one or more
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall not have the right to direct the defense of such action
on behalf of such indemnified party or parties and such indemnified party or
parties shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the defense thereof
and approval by such indemnified party of counsel appointed to defend such
action, which approval shall not be unreasonably withheld, the indemnifying
party will not be liable to such indemnified party under this Section 5 for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel
in accordance with the proviso to the next preceding sentence (it being
understood, however, that in connection with such action the indemnifying party
shall not be liable for the expenses of more than one separate counsel (in
addition to local counsel) in any one action or separate but substantially
similar actions in the same jurisdiction arising out of the same general
allegation or circumstances) or (ii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party.
(e) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 5 is unavailable or insufficient to
hold harmless an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in
-13-
<PAGE> 14
respect thereof) (other than by reason of exceptions provided in such
Section 5), each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in
respect thereof), in such proportion as is appropriate to reflect (i) the
relative benefits received by the indemnifying party or parties on the one hand
and the indemnified party on the other from the offering of the Notes or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the indemnifying party or parties on the one hand and the indemnified party on
the other in connection with the statements or omissions or alleged statements
or omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Holder or such other indemnified person, as the case may be, on the
other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances. The Company and each
indemnified party agrees that it would not be equitable if the amount of such
contribution were determined by pro rata or per capita allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the first sentence of this paragraph (e).
Notwithstanding any other provision of this Section 5(e), the Holders of the
Notes or, if applicable, the Private Exchange Notes shall not be required to
contribute any amount in excess of the amount by which the net proceeds received
by such Holders from the sale of the Notes or, if applicable, the Private
Exchange Notes pursuant to a Registration Statement exceeds the amount of
damages which such Holders have otherwise been required to pay in respect of the
same or a similar claim, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (e), each director, officer,
employee and agent of any indemnified party and each person, if any, who
controls such indemnified party within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as such indemnified party and each director and officer of the
Company, and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company.
(f) The agreements contained in this Section 5 shall survive the sale
of the Notes, the Exchange Notes or, if applicable, the Private Exchange Notes
pursuant to a Registration Statement and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
6. Additional Interest Under Certain Circumstances.
(a) Additional interest at a rate of 0.5 % per annum of the principal
amount of the Notes (the "Additional Interest") shall be assessed as follows:
-14-
<PAGE> 15
(i) if the Exchange Offer Registration Statement is not filed
with the Commission by 90 days after the Issue Date then,
commencing from and including the earlier of such dates,
Additional Interest shall be assessed on the Notes;
(ii) if the Registered Exchange Offer is not completed and a
Shelf Registration is not declared effective by the Commission
by the Completion Deadline, then, commencing on the Completion
Deadline, Additional Interest shall be assessed on the Notes;
and
(iii) if (A) the Company has not exchanged Exchange Notes for
all the Notes validly tendered in accordance with the terms of
the Registered Exchange Offer on or prior to 30 business days
after the date on which the Exchange Offer Registration
Statement was declared effective, or (B) if applicable, the
Shelf Registration Statement has been declared effective and
it ceases to be effective prior to two years (or such later
date if such two-year period is extended pursuant to Section
30) above or such shorter period as is provided in Section
2(b)) from the Issue Date, then, Additional Interest shall be
assessed on the Notes, commencing on (x) the 31st business day
after such effective date in the case of (A) above, or (y) the
day such Shelf Registration Statement ceases to be effective
in the case of (B) above;
provided, however, that (1) upon the filing of the Exchange Offer Registration
Statement or the Completion Deadline in the case of (i) above, (2) upon
completion of the Registered Exchange Offer or the effectiveness of the Shelf
Registration Statement in the case of (ii) above, or (3) upon the exchange of
Exchange Notes for all the Notes validly tendered in accordance with the terms
of the Registered Exchange Offer, or upon the effectiveness of the Shelf
Registration Statement which has ceased to remain effective prior to two years
(or such later date if extended pursuant to Section 30) above or such shorter
period as is provided in Section 2(b)) from the date of original issuance of the
Notes in the case of (iii) above, Additional Interest on the Notes as a result
of such clause (i), (ii) or (iii) shall immediately cease to accrue.
(b) Any amount of Additional Interest due pursuant to clauses (i), (ii)
or (iii) of Section 6(a) above will be payable in cash semiannually in arrears
on each Interest Payment Date (as defined in the Notes), commencing with the
first such Interest Payment Date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be determined by
multiplying the Additional Interest by a fraction, the numerator of which is the
number of days such Additional Interest rate was applicable during such period,
determined on the basis of a 360-day year comprised of twelve 30-day months, and
the denominator of which is 360.
(c) If the Company effects the Registered Exchange Offer, the Company
will be entitled to close the Registered Exchange Offer provided that the
Company has accepted all the Notes theretofore validly tendered in accordance
with the terms of the Registered Exchange Offer.
-15-
<PAGE> 16
7. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of Holders of a majority in aggregate principal amount of the Notes,
determined in accordance with the terms of the Indenture.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
telex, telecopy, or air courier which guarantees overnight delivery:
(1) if to a Holder of the Notes, in accordance with Section 107 of the
Indenture, with a copy to the Initial Purchasers as follows:
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Attention: Kris Salovaara
with a copy to:
Latham & Watkins
885 Third Avenue
New York, New York 10022
Attention: Marc D. Jaffe, Esq.
(2) if to the Initial Purchasers, at the addresses specified in Section
7(b)(1);
(3) if to the Company, at its address as follows:
Valassis Communications, Inc.
19975 Victor Parkway
Livonia, Michigan 48152
Attention: General Counsel
with a copy to:
McDermott, Will & Emery
50 Rockefeller Plaza
New York, New York 10020
Attention: Mark Thoman, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when
-16-
<PAGE> 17
receipt is acknowledged by recipient's telecopy operator, if telecopied; and on
the day delivered, if sent by overnight air courier guaranteeing next day
delivery. All such notices and communications to the Holders shall be deemed to
have been duly given if given as provided in Section 107 of the Indenture.
(c) Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
Counterparts and by the parties hereto in separate counterparts, each of which
so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAWS.
(g) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
-17-
<PAGE> 18
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
VALASSIS COMMUNICATIONS, INC,
By: /s/Barry P. Hoffman
-----------------------------
Name: Barry P. Hoffman, Esq.
Title: Secretary
Confirmed and accepted as of the
date first above written:
BEAR, STEARNS & CO. INC.
By: /s/ Robert J. Bicknese
---------------------------------
Name: Robert J. Bicknese
Title: Senior Managing Director
WASSERSTEIN PERELLA
SECURITIES, INC.
By:/s/ James C. Kingsbery
---------------------------------
Name: James C. Kingsbery
Title: Treasurer
-18-
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIOS
<TABLE>
<CAPTION>
Year ended December 31, six months year ended
----------------------- ended June 30,
1998 1997 1996 1995 12/31/94 1994
---- ---- ---- ---- -------- ----
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges:
Interest expense $ 34,450 $ 38,312 $ 39,625 $ 40,451 $ 19,623 $ 38,217
Portion of rent expense
representive of interest 1,200 1,108 1,166 1,054 523 972
---------------------------------------------------------------------------------------------
Total Fixed Charges $ 35,650 $ 39,420 $ 40,791 $ 41,505 $ 20,146 $ 39,189
=============================================================================================
Earnings:
Income from continuing
operations before tax $ 136,509 $ 115,030 $ 65,873 $ 27,793 $ 4,072 $ (1,627)
fixed charges per above 35,650 39,420 40,791 41,505 20,146 39,189
---------------------------------------------------------------------------------------------
Total Earnings $ 172,159 $ 154,450 $ 106,664 $ 69,298 $ 24,218 $ 37,562
=============================================================================================
---------------------------------------------------------------------------------------------
Ratio of Earnings to Fixed Charges 4.83 3.92 2.61 1.67 1.20 0.96
=============================================================================================
EBITDA:
income before tax $ 136,509 $ 115,030 $ 65,873 $ 27,793 $ 4,072 $ (1,627)
interest expense 34,450 38,312 39,625 40,451 19,623 38,217
depreciation and amortization 15,719 15,372 15,045 35,747 9,722 23,700
---------------------------------------------------------------------------------------------
EBITDA: $ 186,678 $ 168,714 $ 120,543 $ 103,991 $ 33,417 $ 60,290
=============================================================================================
Ratio of EBITDA to interest expense 5.42 4.40 3.04 2.57 1.70 1.58
=============================================================================================
Debt $ 340,461 $ 367,075 $ 403,155 $ 416,034 $ 417,927 $ 419,000
=============================================================================================
Total debt to EBITDA 1.82 2.18 3.34 4.00 6.25 6.95
=============================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Valassis Communications, Inc. on Form S-4 of our report dated February 9, 1999,
appearing in the Annual Report on Form 10-K of Valassis Communications, Inc. for
the year ended December 31, 1998 and to the reference to us under the headings
"Selected Financial Data" and "Experts" in the Prospectus, which is part of
this Registration Statement.
DELOITTE & TOUCHE LLP
Detroit, Michigan
March 25, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 10, 1997, in the Registration Statement (Form
S-4) and related Prospectus of Valassis Communications Inc. for the
registration of its 6 5/8% Senior Notes due 2009 in the amount of $100,000,000.
We also consent to the incorporation by reference therein, of our report dated
February 10, 1997, with respect to the 1996 consolidated financial statements
and schedule (prior to restatement for the change in accounting for inventory
costs, as described in Note 2: and the segment information in Note 13) of
Valassis Communications, Inc. included in its Annual Report (Form 10-K) for the
year ended December 31, 1998.
ERNST & YOUNG LLP
Detroit, Michigan
March 23, 1999
<PAGE> 1
EXHIBIT 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------------
VALASSIS COMMUNICATIONS, INC.
(Exact name of obligor as specified in its charter)
I. DELAWARE 38-2760940
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
19975 Victor Parkway
Livonia, Michigan 48152
(Address of principal executive offices) (Zip code)
----------------------
6-5/8% Senior Notes due 2009
(Title of the indenture securities)
================================================================================
1
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215, Exhibits
1a and 1b to Form T-1 filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
2
<PAGE> 3
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 9th day of February, 1999.
THE BANK OF NEW YORK
By: /s/JAMES W.P. HALL
-----------------------------
Name: JAMES W.P. HALL
Title: VICE PRESIDENT
4
<PAGE> 5
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1998, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $7,654,174
Interest-bearing balances........................... 2,182,604
Securities:
Held-to-maturity securities......................... 965,979
Available-for-sale securities....................... 3,894,193
Federal funds sold and Securities purchased under
agreements to resell................................ 1,001,780
Loans and lease financing receivables:
Loans and leases, net of unearned
income..................38,117,615
LESS: Allowance for loan and
lease losses............625,317
LESS: Allocated transfer risk
reserve........................0
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,492,298
Assets held in trading accounts........................ 2,240,241
Premises and fixed assets (including capitalized
leases)............................................. 678,458
Other real estate owned................................ 13,628
Investments in unconsolidated subsidiaries and
associated companies................................ 195,594
Customers' liability to this bank on acceptances
outstanding......................................... 1,077,122
Intangible assets...................................... 1,114,091
Other assets........................................... 1,955,491
-----------
Total assets........................................... $60,465,653
===========
LIABILITIES
Deposits:
In domestic offices................................. $26,473,392
Noninterest-bearing.......................11,052,078
Interest-bearing..........................15,421,314
In foreign offices, Edge and Agreement 17,657,483
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
subsidiaries, and IBFs..............................
Noninterest-bearing..........................118,775
Interest-bearing..........................17,538,708
Federal funds purchased and Securities sold under
agreements to repurchase............................ 2,102,186
Demand notes issued to the U.S.Treasury................ 245,825
Trading liabilities.................................... 1,641,447
Other borrowed money:
With remaining maturity of one year or less......... 2,063,359
With remaining maturity of more than one year
through three years............................... 0
With remaining maturity of more than three years.... 31,639
Bank's liability on acceptances executed and
outstanding......................................... 1,088,142
Subordinated notes and debentures...................... 1,314,000
Other liabilities...................................... 2,468,849
-----------
Total liabilities...................................... 55,086,322
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 731,319
Undivided profits and capital reserves................. 3,448,813
Net unrealized holding gains (losses) on
available-for-sale securities....................... 100,784
Cumulative foreign currency translation adjustments.... (36,869)
-----------
Total equity capital................................... 5,379,331
-----------
Total liabilities and equity capital................... $60,465,653
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by us and to the
best of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true and correct.
Gerald L. Hassell )
Deno D. Papageorge ) Directors
Thomas A. Renyi )
6
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
FOR TENDERS OF
$100,000,000 AGGREGATE PRINCIPAL AMOUNT OF
6 5/8% SENIOR NOTES DUE 2009
OF
VALASSIS COMMUNICATIONS, INC.
PURSUANT TO THE PROSPECTUS
DATED _________________, 1999, OF VALASSIS COMMUNICATIONS, INC.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER WILL EXPIRE AT _________________, NEW YORK
CITY TIME, ON ________________, 1999, UNLESS EXTENDED. TENDERED
SECURITIES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE
EXPIRATION DATE OF THE EXCHANGE OFFER.
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
By Hand or Overnight Delivery (before ________ p.m.):
The Bank of New York
101 Barclay Street
Corporate Trust Services
Ground Level
New York, New York 10286
Attention: Reorganization Section
Jacqueline Warren
(212) 815-5924
By Registered or Certified Mail:
The Bank of New York
101 Barclay Street
Floor 7-E
New York, New York 10286
Attention: Reorganization Section
Jacqueline Warren
(212) 815-5924
By facsimile (for Eligible Institutions):
(212) 815-6339
Confirm by Telephone to: (212) 815-5920
(originals of all documents sent by facsimile should be sent promptly by
registered or certified mail, by hand delivery or by overnight delivery
services)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE> 2
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same
meaning given to them in the Prospectus, as defined below.
The undersigned acknowledges that he or she has received and reviewed
the Prospectus dated ______________, 1999 (the "Prospectus"), of Valassis
Communications, Inc. (the "Issuer"), and this Letter of Transmittal (the "Letter
of Transmittal"), which together constitute the Issuer's offer (the "Exchange
Offer") to exchange an aggregate principal amount of up to $100,000,000 6 5/8%
Senior Notes Due 2009 (the "Exchange Notes"), for a like principal amount of the
Issuer's issued and outstanding 6 5/8% Senior Notes Due 2009 (the "Old Notes").
The term "Expiration Date" shall mean ________, New York City time, on
_________, 1999, unless the Issuer, in its sole discretion, extends the Exchange
Offer. The Issuer reserves the right, at any time or from time to time, to
extend the period of time during which the Exchange Offer is open at its
discretion, in which event the term "Expiration Date" shall mean the time and
date when the Exchange Offer as so extended shall expire. During any such
extension, all Old Notes previously tendered will remain subject to the Exchange
Offer and may be accepted for exchange by the Issuer. Any Old Notes not accepted
for exchange for any reason will be returned without expense to the tendering
holder thereof as promptly as practicable after the expiration or termination of
the Exchange Offer.
The Issuer expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Notes not theretofore
accepted for exchange, upon the occurrence of any of the conditions to the
Exchange Offer specified in the Prospectus under the section entitled "The
Exchange Offer--Conditions to the Exchange Offer."
The Issuer shall notify the holders of the Old Notes of any extension
by oral or written notice (which may be by means of a press release or other
public announcement) no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. The Issuer reserves
the right, in its sole discretion, (i) to delay accepting any Old Notes, or, if
any of the conditions set forth under "--Conditions to Exchange Offer" shall not
have been satisfied, to terminate the Exchange Offer, by giving oral or written
notice of such delay or termination to the Exchange Agent, or (ii) to amend the
terms of the Exchange Offer in any manner.
The Exchange Notes will bear interest from the last interest payment
date on which interest was paid on the Old Notes surrendered in exchange
therefor or, if no interest has been paid on such Old Notes, from the date of
original issue of the Old Notes (January 12, 1999) at the same rate and upon the
same terms as the Old Notes. Holders whose Old Notes are accepted for exchange
will not receive interest on such Old Notes for any period subsequent to the
last interest payment date, if any, of the Old Notes to occur prior to the issue
date of the Exchange Notes and will be deemed to have waived the right to
receive any payment in respect of interest on the Old Notes accrued from and
after such interest payment date, if any.
The Exchange Offer is not conditioned upon any minimum principal amount
of Old Notes being tendered for exchange. However, the Exchange Offer is subject
to certain conditions. Please see the Prospectus under the section entitled "The
Exchange Offer--Conditions to the Exchange Offer".
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<PAGE> 3
The Exchange Offer is not being made to, nor will tenders be accepted
from or on behalf of, holders of Old Notes in any jurisdiction in which the
making or acceptance of the Exchange Offer would not be in compliance with the
laws of such jurisdiction.
This Letter of Transmittal is to be completed by a holder of Old Notes
either if certificates are to be forwarded herewith or if a tender of
certificates for Old Notes, if available, is to be made by book-entry transfer
to the account maintained by the Exchange Agent at The Depository Trust Company
(the "Book-Entry Transfer Facility") pursuant to the procedures set forth in
"The Exchange Offer--Procedures for Tendering" section of the Prospectus.
Holders of Old Notes whose certificates are not immediately available, or who
are unable to deliver their certificates or confirmation of the book-entry
tender of their Old Notes into the Exchange Agent's account at the Book-Entry
Transfer Facility (a "Book-Entry Confirmation") and deliver all other documents
required by this Letter of Transmittal to the Exchange Agent on or prior to the
Expiration Date, may tender their Old Notes according to the guaranteed delivery
procedures set forth in the Prospectus under the section entitled "The Exchange
Offer--Guaranteed Delivery Procedures".
Holders who wish to tender their Old Notes must complete this Letter of
Transmittal in its entirety.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOX ENTITLED
"DESCRIPTION OF OLD NOTES" BELOW
List below the Old Notes to which this Letter of Transmittal relates.
If the space provided below is inadequate, the certificate numbers and principal
amount of Old Notes should be listed on a separate signed schedule affixed
hereto.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES
(See instructions 2, 3 and 8)
- --------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF OLD NOTE(S) TENDERED
REGISTERED HOLDER(S) (PLEASE (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
FILL IN IF BLANK)
- -------------------------------- -------------------------- ------------------------------- --------------------------------
CERTIFICATE NUMBER(S)(1) AGGREGATE PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF OLD NOTES
OLD NOTES REPRESENTED BY TENDERED(2) (MUST BE IN
CERTIFICATE(S) DENOMINATIONS OF $1,000 OR
INTEGRAL MULTIPLES THEREOF)
<S> <C> <C> <C>
-------------------------- ------------------------------- --------------------------------
-------------------------- ------------------------------- --------------------------------
-------------------------- ------------------------------- --------------------------------
-------------------------- ------------------------------- --------------------------------
TOTAL
- ----------------------------------------------------------- ------------------------------- --------------------------------
</TABLE>
(1)Certificate numbers not required if Old Notes are being tendered by
book-entry transfer.
(2)Unless otherwise indicated, a holder will be deemed to have tendered
all of the Old Notes represented in the Aggregate Principal Amount of Old Notes
Represented by Certificate(s) column.
4
<PAGE> 4
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
----------------------------------------
Account Number:
----------------------------------------
Transaction Code Number:
----------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):
--------------------------------------
Window Ticket Number (if any):
--------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
--------------------
Name of Institution which Guaranteed Delivery:
-------------------------
If Guaranteed Delivery is to be made by Book-Entry Transfer:
Name of Tendering Institution:
----------------------------------------
Account Number:
----------------------------------------
Transaction Code Number:
----------------------------------------
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES
ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY TRANSFER FACILITY ACCOUNT
NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES AND
WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
-----------------------------------------------------------
Address:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
5
<PAGE> 5
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE
ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Issuer the aggregate principal amount of Old
Notes indicated above. The undersigned has completed, executed and delivered
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
Subject to, and effective upon, the acceptance for exchange of the Old
Notes tendered hereby, the undersigned hereby sells, assigns and transfers to or
upon the order of the Issuer all right, title and interest in and to such Old
Notes as are being tendered hereby. The undersigned hereby irrevocably
constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with
full knowledge that the Exchange Agent also acts as the agent of the Issuer in
connection with the Exchange Offer) with respect to the tendered Old Notes with
full power of substitution to (i) deliver certificates for such Old Notes to the
Issuer and deliver all accompanying evidences of transfer and authenticity to or
upon the order of the Issuer, (ii) present such Old Notes for transfer on the
books of the Issuer and (iii) receive for the account of the Issuer all benefits
and otherwise exercise all rights of the beneficial ownership of such Old Notes,
all in accordance with the terms of the Exchange Offer. The power of attorney
granted in this paragraph shall be deemed to be irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, sell, assign and transfer the Old
Notes tendered hereby and that the Issuer will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim when the same are accepted by
the Issuer. The undersigned hereby further represents that (i) any Exchange
Notes acquired in exchange for Old Notes tendered hereby will have been acquired
in the ordinary course of business of the person receiving such Exchange Notes,
whether or not such person is the undersigned, (ii) neither the holder nor any
such other person has an arrangement or understanding with any person to
participate in the distribution of such Exchange Notes and (iii) neither the
holder nor any such other person is an "affiliate," as described in Rule 405
under the Securities Act of 1933, as amended (the "Securities Act"), of the
Issuer.
If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
the Exchange Notes. If the undersigned is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Old Notes, it represents that
the Old Notes to be exchanged for Exchange Notes were acquired by it as a result
of market-making activities or other trading activities and acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes pursuant to the Exchange
Offer; however, by so acknowledging and by delivering a prospectus, the
undersigned will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Issuer to be necessary or
desirable to complete the exchange, assignment, transfer and sale of the Old
Notes tendered hereby. All authority conferred or agreed to be conferred in this
Letter of Transmittal and every obligation of the undersigned hereunder shall be
binding upon the
6
<PAGE> 6
successors, assigns, heirs, executors, administrators, trustees in bankruptcy
and legal representatives of the undersigned and shall not be affected by,
and shall survive, the death or incapacity of the undersigned. This tender
may be withdrawn only in accordance with the procedures set forth in the
instructions contained in this Letter of Transmittal.
For the purposes of the Exchange Offer, the Issuer shall be deemed to
have accepted validly tendered Old Notes when, as and if the Issuer has given
oral or written notice thereof to the Exchange Agent.
If any tendered Old Notes are not accepted for exchange pursuant to the
Exchange Offer for any reason, certificates for any such unaccepted Old Notes
will be returned (or, in the case of Old Notes tendered by book-entry transfer
through the Book-Entry Transfer Facility, will be credited to an account
maintained at the Book-Entry Transfer Facility), without expense, to the
undersigned at the address shown below or at a different address as may be
indicated herein under the "Special Delivery Instructions" as promptly as
practicable after the Expiration Date.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the section entitled "The Exchange Offer--Procedures
for Tendering" in the Prospectus and in the instructions hereto will constitute
a binding agreement between the undersigned and the Issuer upon the terms and
subject to the conditions of the Exchange Offer.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the Exchange Notes (and, if applicable,
substitute certificates representing Old Notes for any Old Notes not exchanged)
in the name(s) of the undersigned or, in the case of a book-entry delivery of
Old Notes, please credit the account indicated above maintained at the
Book-Entry Transfer Facility. Similarly, unless otherwise indicated under the
box entitled "Special Delivery Instructions" below, please send the Exchange
Notes (and, if applicable, substitute certificates representing Old Notes for
any Old Notes not exchanged) to the undersigned at the address shown above in
the box entitled "Description of Old Notes." In the event that both "Special
Issuance Instructions" and "Special Delivery Instructions" are completed, please
issue the certificates representing the Exchange Notes issued in exchange for
the Old Notes accepted for exchange in the name(s) of, and return any
certificates for Old Notes not tendered or not exchanged to, the person(s)
indicated in such boxes. The undersigned understands that the Issuer has no
obligation pursuant to the "Special Issuance Instructions" and "Special Delivery
Instructions" to transfer any Old Notes from the name of the registered
holder(s) thereof if the Issuer does not accept for exchange any of the Old
Notes so tendered.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY
BEFORE COMPLETING ANY BOX ABOVE.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD
NOTES" ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED TO HAVE
TENDERED THE OLD NOTES AS SET FORTH IN SUCH BOX ABOVE.
7
<PAGE> 7
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS) (COMPLETE ACCOMPANYING SUBSTITUTE
FORM W-9)
I hereby tender the Old Notes described above in the box entitled
"Description of Old Notes" pursuant to the terms of the Exchange Offer.
________________________________ ________________________, 199_
________________________________ ________________________, 199_
________________________________ ________________________, 199_
Signature(s) of Owner(s) Date
If a holder is tendering any Old Notes, this Letter of Transmittal must
be signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for the Old Notes or on a security position listing or by any
person(s) authorized to become registered holder(s) by endorsements and
documents transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, officer or other person acting in a fiduciary or
representative capacity, please set forth full title. See Instruction 4.
Name(s):
--------------------------------------------------
(please type or print)
Capacity:
--------------------------------------------------
Address:
--------------------------------------------------
(include zip code)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTIONS 1 AND 4)
Signature(s) guaranteed by an Eligible Institution:
---------------------------------------
(authorized signature)
---------------------------------------
(title)
---------------------------------------
(name of firm)
---------------------------------------
(area code and telephone number)
Dated: __________________, 199_
8
<PAGE> 8
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4 AND 5)
To be completed ONLY if certificates for the Old Notes that are not
exchanged and/or the Exchange Notes are to be issued in the name of and sent to
someone other than the person(s) whose signature(s) appear(s) on this Letter of
Transmittal above, or if Old Notes delivered by book-entry transfer which are
not accepted for exchange are to be returned by credit to an account maintained
at the Book-Entry Transfer Facility other than the account indicated above.
Issue Exchange Notes and/or Old Notes to:
Name:
------------------------------------------------------
(please type or print)
------------------------------------------------------
(please type or print)
Address:
------------------------------------------------------
------------------------------------------------------
(include zip code)
------------------------------------------------------
Employer Identification or Social Security Number
(Complete Substitute Form W-9)
Credit unexchanged Old Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
------------------------------------------------------------
(Book-Entry Transfer Facility account number, if applicable)
- --------------------------------------------------------------------------------
9
<PAGE> 9
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4 AND 5)
To be completed ONLY if certificates for the Old Notes that are not
exchanged and/or the Exchange Notes are to be sent to someone other than the
person(s) whose signature(s) appear(s) on this Letter of Transmittal above or to
such person or persons at an address other than shown in the box entitled
"Description of Old Notes" on this Letter of Transmittal above.
Mail Exchange Notes and/or Old Notes to:
Name:
------------------------------------------------------
(please type or print)
Address:
------------------------------------------------------
(include zip code)
- --------------------------------------------------------------------------------
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY
BEFORE COMPLETING ANY BOX ABOVE.
THIS LETTER OF TRANSMITTAL MUST BE USED TO FORWARD, AND MUST
ACCOMPANY, ALL CERTIFICATES FOR OLD NOTES TENDERED PURSUANT TO
THE EXCHANGE OFFER.
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<PAGE> 10
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by holders of Old Notes if certificates are to be
forwarded herewith or if tenders are to be made pursuant to the procedures for
delivery by book-entry transfer set forth in "The Exchange Offer--Procedures for
Tendering" section of the Prospectus. Certificates for all physically tendered
Old Notes, or Book-Entry Confirmation, as the case may be, as well as a properly
completed and duly executed Letter of Transmittal (or a copy hereof) and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent at the address set forth herein on or prior to the Expiration
Date, or the tendering holder must comply with the guaranteed delivery
procedures set forth below. Old Notes tendered hereby must be in denominations
of $1,000 or integral multiples thereof.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OLD NOTES AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDERS,
BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY
THE EXCHANGE AGENT. IF OLD NOTES ARE SENT BY MAIL, IT IS SUGGESTED THAT THE
MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT
DELIVERY TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. NO LETTER OF
TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE ISSUER.
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available, (ii) cannot deliver their Old Notes, this Letter of
Transmittal or any other documents required hereby to the Exchange Agent prior
to the Expiration Date or (iii) who cannot comply with the procedures for
book-entry tender on a timely basis must tender their Old Notes according to the
guaranteed delivery procedures set forth in the Prospectus. Pursuant to such
procedures: (x) such tender must be made through an Eligible Institution (as
defined below); (y) prior to the Expiration Date, the Exchange Agent must have
received from the Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by telegram, telex, fax transmission, or mail or
hand delivery) setting forth the name and address of the holder, the certificate
number(s) of the Old Notes to be tendered (except in the case of book-entry
tenders) and the principal amount of Old Notes to be tendered, stating that the
tender is being made thereby and guaranteeing that, within three New York Stock
Exchange ("NYSE") trading days after the Expiration Date, this Letter of
Transmittal (or a copy hereof) together with the certificate(s) representing the
Old Notes (except in the case of book-entry tender(s)) and any other required
documents will be deposited by the Eligible Institution with the Exchange Agent;
and (z) such properly completed and executed Letter of Transmittal (or a copy
thereof), as well as all other documents required by this Letter of Transmittal
and the certificate(s) representing all tendered Old Notes in proper form for
transfer or a Book-Entry Confirmation with respect to such Old Notes, must be
received by the Exchange Agent within three NYSE trading days after the
Expiration Date, all as provided in the Prospectus under the section entitled
"The Exchange Offer--Guaranteed Delivery Procedures." Any holder who wishes to
tender its Old Notes pursuant to the guaranteed delivery procedures described
above must ensure that the Exchange Agent receives the Notice of Guaranteed
Delivery prior to the Expiration Date. As used in this Letter of Transmittal,
"Eligible Institution" shall mean a firm which is a member of a registered
11
<PAGE> 11
national securities exchange or a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.
All questions as to the validity, eligibility (including time of receipt),
acceptance and withdrawal of tendered Old Notes will be determined by the Issuer
in its sole discretion, which determination will be final and binding. The
Issuer reserves the absolute right to reject any and all Old Notes not properly
tendered or any Old Notes, the Issuer's acceptance of which would, in the
opinion of counsel for the Issuer, be unlawful. The Issuer also reserves the
right to waive any defects, irregularities or conditions of tender as to
particular Old Notes. The Issuer's interpretation of the terms and conditions of
the Exchange Offer (including the instructions contained in this Letter of
Transmittal) shall be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Issuer shall determine. Neither the Issuer, the Exchange
Agent nor any other person shall be under any duty to give notification of
defects or irregularities with respect to tenders of Old Notes, nor shall any of
them incur any liability for failure to give such notification. Tenders of Old
Notes will not be deemed to have been made until such defects or irregularities
have been cured or waived. Any Old Notes received by the Exchange Agent that are
not properly tendered and as to which the defects or irregularities have not
been cured or waived will be returned by the Exchange Agent to the tendering
holders, unless otherwise provided in this Letter of Transmittal, as soon as
practicable following the Expiration Date.
See the section entitled "The Exchange Offer" in the Prospectus.
2. TENDER BY HOLDER. Only a registered holder of Old Notes may tender such Old
Notes in the Exchange Offer. Any beneficial owner whose Old Notes are registered
in the name of a broker, dealer, commercial bank, trust company or other nominee
and who wishes to tender should contact the registered holder promptly and
instruct such registered holder to tender on behalf of such beneficial owner. If
such beneficial owner wishes to tender on such owner's own behalf, such owner
must, prior to completing and executing this Letter of Transmittal and
delivering such owner's Old Notes, either make appropriate arrangements to
register ownership of the Old Notes in such owner's name or obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.
3. PARTIAL TENDERS AND WITHDRAWALS. Tenders of Old Notes will be accepted only
in denominations of $1,000 and integral multiples thereof. If less than all of
the Old Notes represented by a certificate or owned by a holder are to be
tendered, the tendering holder(s) should fill in the aggregate principal amount
of Old Notes to be tendered in the box entitled "Description of Old Notes." A
reissued certificate representing the balance of non-tendered Old Notes will be
sent to such tendering holder (except in the case of book-entry tenders), unless
otherwise provided in the appropriate box on this Letter of Transmittal,
promptly after the Expiration Date. ALL OF THE OLD NOTES DELIVERED TO THE
EXCHANGE AGENT WILL BE DEEMED TO HAVE BEEN TENDERED UNLESS OTHERWISE INDICATED.
Any holder who has tendered Old Notes may withdraw the tender by delivering
written notice of withdrawal to the Exchange Agent prior to the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at its address
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<PAGE> 12
set forth on the first page of this Letter of Transmittal. Any such notice of
withdrawal must (i) specify the name of the person having deposited the Old
Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be
withdrawn (including the certificate number or numbers and principal amount of
such Old Notes (except in the case of book-entry tenders)), (iii) be signed by
the holder in the same manner as the original signature on this Letter of
Transmittal by which such Old Notes were tendered (including any required
signature guarantees) or be accompanied by documents of transfer sufficient to
have the Trustee (as defined in the Prospectus) register the transfer of such
Old Notes into the name of the person withdrawing the tender, and (iv) specify
the name in which any such Old Notes are to be registered, if different from
that of the Depositor. If Old Notes have been delivered or otherwise identified
to the Exchange Agent, the name of the registered holder and the certificate
numbers of the particular Old Notes withdrawn must also be furnished to the
Exchange Agent as aforesaid prior to the physical release of the withdrawn Old
Notes. If the Old Notes have been tendered pursuant to the procedures for
book-entry tender set forth in the Prospectus, a notice of withdrawal must
specify, in lieu of certificate numbers, the name and account number at the
Book-Entry Transfer Facility to be credited with the withdrawn Old Notes. Old
Notes properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Exchange Offer; provided, however, that withdrawn Old Notes may
be tendered by again following one of the procedures herein at any time prior to
the Expiration Date. All questions as to the validity, form and eligibility
(including time of receipt) of notice of withdrawal will be determined by the
Issuer, whose determinations will be final and binding on all parties. Neither
the Issuer, the Exchange Agent nor any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification. See the
section entitled "The Exchange Offer--Withdrawal Rights" in the Prospectus.
4. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURE. If this Letter of Transmittal is signed by the
registered holder of the Old Notes tendered hereby, the signature must
correspond exactly with the name as written on the face of the certificates (if
applicable) without any change whatsoever.
If any tendered Old Notes are owned of record by two or more joint owners,
all such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal as there are different registrations of
certificates.
When this Letter of Transmittal is signed by the registered holder or
holders of the Old Notes specified herein and tendered hereby, no endorsements
of certificates or separate bond powers are required. If, however, the Exchange
Notes are to be issued, or any untendered Old Notes are to be reissued, to a
person other than the registered holder, then endorsements of any certificates
transmitted hereby or separate bond powers are required.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of any certificate(s) specified herein, such certificate(s)
must be endorsed or accompanied by
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<PAGE> 13
appropriate bond powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the certificate(s).
If this Letter of Transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Issuer,
proper evidence satisfactory to the Issuer of their authority to so act must be
submitted.
Endorsements on certificates for Old Notes or signatures on bond powers
required by this Instruction 4 must be guaranteed by an Eligible Institution.
Signatures on this Letter of Transmittal need not be guaranteed by an
Eligible Institution, provided the Old Notes are tendered: (i) by a registered
holder of such Old Notes (which term, for purposes of the Exchange Offer,
includes any participant in the Book-Entry Transfer Facility system whose name
appears on a security position listing as the holder of such Old Notes) who has
not completed the box entitled "Special Issuance Instructions" on this Letter of
Transmittal; or (ii) for the account of an Eligible Institution.
5. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of Old
Notes should indicate in the applicable box the name and address in and to which
Exchange Notes issued pursuant to the Exchange Offer and/or substitute
certificates evidencing Old Notes not exchanged are to be issued or sent, if
different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. Holders tendering Old Notes by book-entry transfer may request that
Old Notes not exchanged be credited to such account maintained at the Book-Entry
Transfer Facility as such holder may designate hereon. If no such instructions
are given, such Old Notes not exchanged will be returned to the name or address
of the person signing this Letter of Transmittal.
6. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the transfer of Old Notes to it or its order pursuant to the
Exchange Offer. If, however, Exchange Notes and/or substitute Old Notes not
exchanged 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 Old Notes tendered
hereby, or if tendered Old Notes are registered in the name of any person other
than the person signing this Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the transfer of Old Notes to the Issuer or its
order pursuant to the Exchange Offer, the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted herewith, the amount of such transfer taxes
will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes specified in this Letter of
Transmittal.
14
<PAGE> 14
7. WAIVER OF CONDITIONS. Subject to the terms and conditions set forth in
the Prospectus, the Issuer reserves the absolute right to waive satisfaction of
any or all conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Old Notes, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of their Old Notes for exchange.
Neither the Issuer nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES. Any holder whose Old
Notes have been mutilated, lost, stolen or destroyed should contact the Exchange
Agent at the address indicated above for further instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange
Agent, at the address indicated on the first page of this Letter of Transmittal
or by telephone at (212) 815-5920.
15
<PAGE> 15
IMPORTANT TAX INFORMATION
Under U.S. federal income tax laws, a registered holder of Old Notes or
Exchange Notes is required to provide the Trustee (as payor) with such holder's
correct Taxpayer Identification Number ("TIN") on Substitute Form W-9 below or
otherwise establish a basis for exemption from backup withholding. If such
holder is an individual, the TIN is his or her social security number. If the
Trustee is not provided with the correct TIN, a $50 penalty may be imposed by
the Internal Revenue Service, and payments made to such holder with respect to
Old Notes or Exchange Notes may be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. A foreign person may qualify as an exempt recipient by submitting to
the Trustee a properly completed Internal Revenue Service Form W-8, signed under
penalties of perjury, attesting to that holder's exempt status. A Form W-8 can
be obtained from the Trustee.
If backup withholding applies, the Trustee is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional U.S. federal income tax. Rather, the U.S. federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Old Notes or
Exchange Notes, the holder is required to provide the Trustee with: (i) the
holder's correct TIN by completing the form below, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such holder is awaiting a
TIN) and that (A) such holder is exempt from backup withholding, (B) the holder
has not been notified by the Internal Revenue Service that the holder is subject
to backup withholding as a result of failure to report all interest or dividends
or (C) the Internal Revenue Service has notified the holder that the holder is
no longer subject to backup withholding and (ii) if applicable, an adequate
basis for exemption.
16
<PAGE> 16
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE "IMPORTANT TAX INFORMATION" ABOVE)
<TABLE>
<S><C>
PAYER'S NAME: THE BANK OF NEW YORK
- ------------------------------------------ ---------------------------------------- ----------------------------------------
SUBSTITUTE FORM W-9 Part I - PLEASE PROVIDE YOUR TIN IN Social Security Number OR Employer
THE BOX AT RIGHT AND CERTIFY BY Identification Number
Department of the Treasury SIGNING AND DATING BELOW
Internal Revenue Service ______________________________
SOCIAL SECURITY NUMBER
Payer's Request for Taxpayer
Identification Number (TIN) or____________________________
EMPLOYER IDENTIFICATION NUMBER
(if awaiting TIN write "Applied For")
---------------------------------------- ----------------------------------------
Part II - For Payees exempt from
backup withholding, see the enclosed
Guidelines for Certification of
Taxpayer Identification Number on
Substitute Form W-9 and complete as
instructed therein.
- ----------------------------------------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or a Taxpayer Identification Number has not been issued to me)
and either (a) I have mailed or delivered an application to receive a
Taxpayer Identification Number to the appropriate Internal Revenue
Service ("IRS") or Social Security Administration office or (b) I intend
to mail or deliver an application in the near future. (I understand that
if I do not provide a Taxpayer Identification Number within sixty (60)
days, 31% of all reportable payments made to me thereafter will be
withheld until I provide a number); and
(2) I am not subject to backup withholding because (i) I am exempt from
backup withholding, (ii) I have not been notified by the IRS that I am
subject to backup withholding as a result of failure to report all
interest or dividends, or (iii) the IRS has notified me that I am no
longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS: You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
under-reporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS stating that you are no longer
subject to backup withholding, do not cross out item (2).
SIGNATURE: DATE:
------------------------------------------- -------------------------
NAME:
-------------------------------------------
(Please Print)
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31%
OF ANY PAYMENTS MADE TO YOU UNDER THE OLD NOTES OR THE EXCHANGE NOTES.
<PAGE> 17
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
WROTE "APPLIED FOR" IN PART I OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
31% of all reportable payments made to me prior to the time I provide a properly
certified taxpayer identification number to the Exchange Agent will be withheld
until I provide such a number.
SIGNATURE: DATE:
----------------------------------- ------------------------
- --------------------------------------------------------------------------------
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A COPY HEREOF (TOGETHER WITH
THE CERTIFICATES FOR OLD NOTES (IF APPLICABLE)) AND ALL
OTHER REQUIRED DOCUMENT(S) MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
$100,000,000 AGGREGATE PRINCIPAL AMOUNT OF
6 5/8% SENIOR NOTES DUE 2009
OF
VALASSIS COMMUNICATIONS, INC.
This Notice of Guaranteed Delivery, or a form substantially equivalent
to this form, must be used to accept the Exchange Offer (as defined below) if
the certificates representing Old Notes are not immediately available or if the
procedure for book-entry transfer cannot be completed on a timely basis or if
time will not permit all required documents to reach The Bank of New York (the
"Exchange Agent") at or prior to the Expiration Date (as defined in the
Prospectus (as defined below)). Such form may be delivered by hand, transmitted
by facsimile transmission, sent by overnight courier or mailed to the Exchange
Agent. (See the section entitled "The Exchange Offer" in the Prospectus.) In
addition, in order to utilize the guaranteed delivery procedure to tender Old
Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of
Transmittal relating to the Old Notes (or facsimile thereof) must also be
received by the Exchange Agent prior to the Expiration Date. Capitalized terms
not defined herein have the meanings assigned to them in the Prospectus.
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
<TABLE>
<S><C>
By Registered or Certified Mail: By Facsimile By Hand or Overnight Delivery
The Bank of New York (For Eligible Institutions): (before_____ p.m.):
101 Barclay Street (212) 815-6339 The Bank of New York
Floor 7-E Confirm by Telephone to: 101 Barclay Street
New York, New York 10286 (212) 815-5924 Corporate Trust Services
Attn: Reorganization Section Ground Level
Jacqueline Warren New York, New York 10286
(212) 815-5924 Attn: Reorganization Section
Jacqueline Warren
(212) 815-5924
</TABLE>
Confirm Receipt of Notice of Guaranteed Delivery by Telephone:
(212) 815-5924
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS
OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a 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 Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Valassis Communications, Inc., a
Delaware corporation, upon terms and subject to the conditions set forth in the
Prospectus dated _____________, 1999 (the "Prospectus") and the related Letter
of Transmittal (which together with the Prospectus, each as amended or
supplemented from time to time, constitute the "Exchange Offer"), receipt of
which is hereby acknowledged, the aggregate principal amount of Old Notes
indicated below pursuant to the guaranteed delivery procedure set forth in the
section of the Prospectus entitled "The Exchange Offer." All authority herein
conferred or agreed to be conferred shall not be affected by and shall survive
the death or incapacity of the undersigned and every obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives of
the undersigned.
<TABLE>
<S><C>
Principal Amount of Old Notes Tendered: Name(s) of Registered Holder(s):
- -------------------------------------------- -------------------------------------------
-------------------------------------------
Certificate Number(s) (if available): Please Type or Print
- --------------------------------------------
Address(es):
- -------------------------------------------- -------------------------------
- -------------------------------------------- -------------------------------------------
-------------------------------------------
If Old Notes will be delivered by book-entry Zip Code
transfer, check the following box: [_] Area Code and
Telephone Number:
--------------------------
Account Number at
The Depository Trust Company:
-------------------------------------------
-------------------------------------- -------------------------------------------
-------------------------------------------
Signature(s)*
Dated: , 1999
-------------------------
</TABLE>
* If a holder is tendering any Old Notes, this Notice of Guaranteed Delivery
must be signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for the Old Notes or on a security position listing or by
any person(s) authorized to become registered holder(s) by endorsements and
documents transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, officer or other person acting in a fiduciary or
representative capacity, please set forth full title.
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of the registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or by a commercial bank or trust company having an office or
correspondent in the United States (each of the foregoing being referred to as
an "Eligible Institution"), hereby guarantees that either the certificates
representing the Old Notes tendered hereby in proper form for transfer, or
timely confirmation of a book-entry transfer of such Old Notes into the Exchange
Agent's account at The Depository Trust Company pursuant to the procedures set
forth in the section entitled "The Exchange Offer" in the Prospectus, in either
case together with a properly completed and duly executed Letter of Transmittal
(or manually signed facsimile thereof), any required signature guarantees and
any other documents required by the Letter of Transmittal, will be received by
the Exchange Agent at one of its addresses set forth above within three (3) New
York Stock Exchange trading days after the date of execution hereof.
THE ELIGIBLE INSTITUTION THAT COMPLETES THIS FORM ACKNOWLEDGES THAT IT
MUST COMMUNICATE THE GUARANTEE TO THE EXCHANGE AGENT AND MUST DELIVER THE LETTER
OF TRANSMITTAL, CERTIFICATES FOR OLD NOTES AND ANY OTHER REQUIRED DOCUMENTS TO
THE EXCHANGE AGENT WITHIN THE TIME PERIOD SHOWN HEREIN. FAILURE TO DO SO
5
<PAGE> 3
COULD RESULT IN A FINANCIAL LOSS TO SUCH ELIGIBLE INSTITUTION.
<TABLE>
<S><C>
Name of Firm:
----------------------- --------------------------------------------
Authorized Signature
Address: Name:
----------------------------------- --------------------------------------
Please Type or Print
Title:
----------------------------------- --------------------------------------
Zip Code
Area Code and Dated: , 1999
Telephone Number: -------------------------
--------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR OLD NOTES ARE TO BE DELIVERED WITH THE
LETTER OF TRANSMITTAL.
6
<PAGE> 1
EXHIBIT 99.3
___________________, 1999
EXCHANGE AGENT AGREEMENT
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street - 21st Floor
New York, New York 10286
Ladies and Gentlemen:
Valassis Communications, Inc. (the "Company") proposes to make an offer
(the "Exchange Offer") to exchange an aggregate principal amount of up to
$100,000,000 6 5/8% Senior Notes Due 2009 (the "Exchange Notes") for a like
principal amount of the Company's issued and outstanding 6 5/8% Senior Notes Due
2009 (the "Old Notes"). The terms and conditions of the Exchange Offer as
currently contemplated are set forth in a prospectus dated ____________, 1999
(the "Prospectus") proposed to be distributed to all record holders of the Old
Notes. Capitalized terms used but not defined herein shall have the same meaning
given to them in the Prospectus.
The Company hereby appoints The Bank of New York to act as exchange
agent (the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Company on or
about _____________, 1999. The Letter of Transmittal accompanying the Prospectus
(or in the case of book-entry securities, the ATOP system) is to be used by the
holders of the Old Notes to accept the Exchange Offer and contains instructions
with respect to the delivery of certificates for Old Notes tendered in
connection therewith.
The Exchange Offer shall expire at _____, New York City time, on
_______________, 1999 or on such later date or time to which the Company may
extend the Exchange Offer (the "Expiration Date"). Subject to the terms and
conditions set forth in the Prospectus, the Company expressly reserves the right
to extend the Exchange Offer from time to time and may extend the Exchange Offer
by giving oral (confirmed in writing) or written notice to you before 9:00 A.M.,
New York City time, on the business day following the previously scheduled
Expiration Date. You shall follow and act upon any further instructions in
connection with the Exchange Offer, any of which may be given to you by the
Company or such other persons as it may authorize, which are consistent with
this Agreement.
The Company expressly reserves the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Notes not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified in the Prospectus under the caption "The Exchange
Offer-Conditions to the Exchange Offer."
<PAGE> 2
The Company will give oral (confirmed in writing) or written notice of any
amendment, termination or nonacceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following instructions:
1. You will perform such duties and only such duties as are
specifically set forth in the section of the Prospectus captioned "The Exchange
Offer" or as specifically set forth herein; provided, however, that in no way
will your general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Old Notes at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Exchange Offer within two (2) business days after the date of the
Prospectus, and any financial institution that is a participant in the
Book-Entry Transfer Facility's systems may make book-entry delivery of Old Notes
by causing the Book-Entry Transfer Facility to transfer such Old Notes into your
account in accordance with the Book-Entry Transfer Facility's procedure for such
transfer.
3. You are to examine each of the Letters of Transmittal and
certificates for Old Notes (or confirmations of book-entry transfer into your
account at the Book-Entry Transfer Facility) and any other documents delivered
or mailed to you by or for holders of the Old Notes to ascertain whether: (i)
Letters of Transmittal are duly executed and properly completed in accordance
with instructions set forth therein, (ii) the Old Notes have otherwise been
properly tendered or whether any stop transfer orders are in effect with respect
to the Old Notes, and (iii) any other documents submitted to you are duly
executed and properly completed. In each case where the Letter of Transmittal or
any other document has been improperly completed or executed or any of the
certificates for Old Notes are not in proper form for transfer (as required by
the instructions stated in the Letter of Transmittal) or some other irregularity
in connection with the acceptance of the Exchange Offer exists, you will
endeavor to inform the presenters of the need for fulfillment of all
requirements and to take any other action as may be necessary or advisable to
cause such irregularity to be corrected.
4. With the approval of the President or any Executive Vice President
of the Company (such approval, if given orally, to be confirmed in writing) or
any other party designated by such an officer in writing, you are authorized to
waive any irregularities in connection with any tender of Old Notes pursuant to
the Exchange Offer.
5. Tenders of Old Notes may be made only as set forth in the Letter of
Transmittal and in the section of the Prospectus captioned "The Exchange
Offer-Procedures for Tendering," and Old Notes shall be considered properly
tendered to you only when tendered in accordance with the procedures set forth
therein.
Notwithstanding the provisions of this paragraph 5, Old Notes which the
President or any Executive Vice President of the Company shall approve as having
been properly tendered shall be considered to be properly tendered (such
approval, if given orally, shall be confirmed in writing).
2
<PAGE> 3
6. You shall advise the Company with respect to any Old Notes received
subsequent to the Expiration Date and accept its instructions with respect to
disposition of such Old Notes.
7. You shall accept tenders:
(a) in cases where the Old Notes are registered in two (2) or more
names only if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity only when
proper evidence of his or her authority so to act is submitted; and
(c) from persons other than the registered holder of Old Notes,
provided that customary transfer requirements, including transfer taxes, if
applicable, are fulfilled.
You shall accept partial tenders of Old Notes where so indicated and as
permitted in the Letter of Transmittal and deliver certificates for Old Notes to
the transfer agent for split-up and return any untendered Old Notes to the
holder (or such other person as may be designated in the Letter of Transmittal)
as set forth in paragraph 10 hereof.
8. (a) Except as otherwise provided herein, delivery shall be deemed
made at the time the Old Notes (or a Book Entry Confirmation relating to such
Old Notes), the Letter(s) of Transmittal relating thereto and all other required
documents have been received by you.
(b) A delivery by Notice of Guaranteed Delivery shall be deemed made on
the date such Notice of Guaranteed Delivery is received by you, provided that
all other conditions, including timely compliance with the procedures for
guaranteed delivery set forth in the Prospectus, are met.
(c) Defective deliveries shall be deemed validly made at the time the
irregularities have been cured to the satisfaction of, or waived by, the
Company.
9. You shall notify the Company as promptly as practicable after the
Expiration Date of the aggregate principal amount of Old Notes received by you
along with the specific information requested with respect to each category of
Old Notes pursuant to paragraph 21 hereof.
10. Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will notify you (such notice if given orally, to be
confirmed in writing) of its acceptance, within two days of receipt of your
notice pursuant to paragraph 9 hereof, of all Old Notes properly tendered and
you, on behalf of the Company, will exchange such Old Notes for Exchange Notes
and cause such Old Notes to be cancelled. Delivery of Exchange Notes will be
made on behalf of the Company by you at the rate of $1,000 principal amount of
Exchange Notes for each $1,000 principal amount of the corresponding series of
Old Notes tendered promptly after notice (such notice if given orally, to be
confirmed in writing) of acceptance of said Old Notes by the Company, as set
forth above; provided, however, that in all cases, Old Notes tendered pursuant
to the
3
<PAGE> 4
Exchange Offer will be exchanged only after timely receipt by you of
certificates for such Old Notes (or confirmation of book-entry transfer into
your account at the Book-Entry Transfer Facility), a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees and any other required documents. You shall issue Exchange
Notes only in denominations of $1,000 or any integral multiple thereof. Delivery
of Old Notes will be made on behalf of the Company by you for the principal
amount of the Old Notes not tendered, if tendered in part only, or not exchanged
promptly after notice of acceptance of Old Notes by the Company, as set forth
above.
11. You are authorized to cause to be registered in the name of, and
deliver to the transferee in accordance with such instructions, Exchange Notes
if Old Notes are surrendered to you for exchange with instructions to deliver
Exchange Notes in a name other than that of the registered holder of the Old
Notes; provided, however, that it shall be a condition of such exchange that the
Old Notes so surrendered shall be properly endorsed or accompanied by
appropriate powers of attorney or other written instruments of transfer or
exchange satisfactory to the Company, with the signatures guaranteed by an
Eligible Institution, and that the person requesting such exchange shall pay any
transfer or other taxes required by reason of the issuance of such Exchange
Notes in the name of a party other than the registered holder of the Old Notes
surrendered, or establish to you satisfaction that such tax has been paid or is
not applicable.
12. If a holder of Old Notes shall advise you that Old Notes owned by
the holder have been lost or destroyed and not replaced, you are hereby
authorized, in the absence of notice to you that such Old Notes have been
acquired by a bona fide purchaser, to deliver to such holder the Exchange Notes
to which that holder would be entitled, but only if you shall first have
received (i) an affidavit of loss of an Old Note which is in form and substance
satisfactory to the Company and the trustee under the indenture relating to the
Old Note, in their sole discretion, and (ii) such security or indemnity as may
be required by the Company or you to save and hold harmless to you, the Company,
the trustee under the indenture relating to the Old Notes and any other persons
with respect to the Old Notes alleged to have been lost or destroyed against
liability from such delivery in the absence of such Old Notes.
13. Tenders pursuant to the Exchange Offer are irrevocable, except
that, subject to the terms and upon the conditions set forth in the Prospectus
and the Letter of Transmittal, Old Notes tendered pursuant to the Exchange Offer
may be withdrawn at any time prior to the Expiration Date.
14. The Company shall not be required to exchange any Old Notes
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Old Notes tendered
shall be given (if orally, to be confirmed in writing) by the Company to you.
15. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Old Notes tendered because of an invalid tender, the
occurrence of certain other events set forth in the Prospectus under the caption
"The Exchange Offer-Conditions to the Exchange Offer" or otherwise, you shall,
as soon as practicable after the
4
<PAGE> 5
expiration or termination of the Exchange Offer, return those certificates for
unaccepted Old Notes (or effect appropriate book-entry transfer), together with
any related required documents and the Letters of Transmittal relating thereto
that are in your possession, with a letter or notice, in form satisfactory to
the Company, explaining why the Old Notes are being returned to the persons who
deposited them.
16. All certificates for reissued Old Notes, unaccepted Old Notes or
for Exchange Notes shall be forwarded by first-class mail.
17. You are authorized to cooperate with and furnish information to
McDermott, Will & Emery or any of its representatives, or any other organization
(and its representatives) designated in writing to you from time to time by the
Company, in any manner reasonably requested by it in connection with the
Exchange Offer and the surrender of Old Notes thereunder.
18. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any person to solicit tenders.
19. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically
set forth herein or as may be subsequently agreed to in writing by you and the
Company;
(b) will be regarded as making no representation and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates or the Old Notes represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange Offer,
except where failure to recognize such invalidity or lack of genuineness would
constitute gross negligence;
(c) shall not be obligated to take any legal action hereunder which
might in your reasonable judgment involve any expense or liability unless you
shall have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in reliance
upon any certificate, instrument, opinion, notice, letter, telegram or other
document or security delivered to you and reasonably believed by you in good
faith to be genuine and to have been signed by the proper party or parties, and
you need not pass on the legal sufficiency of any signature or verify any
signature guarantee, although you are to ascertain whether each signature or
signature guarantee required to appear on the Letters of Transmittal and any
other required documents does so appear;
(e) shall not accept any defective, alternative, conditional or
contingent delivery, except as provided in the Prospectus, instructions to the
Letter of Transmittal or this Agreement;
5
<PAGE> 6
(f) shall comply with the reasonable written instructions of the
Company if any dispute should arise between us or any other party with respect
hereto, or if you, in good faith, are in doubt as to what action should be taken
hereunder;
(g) may rely on and shall be protected in acting upon written or oral
instructions, with respect to any matter relating to your actions as Exchange
Agent specifically covered by this Agreement, or supplementing or qualifying any
such actions, from the President or any Executive Vice President of the Company;
(h) may consult with your counsel with respect to any questions
relating to your duties and responsibilities and the advice or opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted to be taken by you hereunder in good faith
and in accordance with the advice or opinion of such counsel; and
(i) shall not advise any person tendering Old Notes pursuant to the
Exchange Offer as to the wisdom of making such tender or as to the market value
or decline or appreciation in market value of any Old Notes or take any other
action that may be deemed to be a solicitation of the exchange of the Old Notes.
20. You shall take such action as may from time to time be requested by
the Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms
as may be approved from time to time by the Company, to all persons requesting
such documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate only
to the procedures for accepting (or withdrawing from) the Exchange Offer. The
Company will furnish you with copies of such documents at your request. All
other requests for information relating to the Exchange Offer shall be directed
to the Company, Attention: Barry P. Hoffman, Esq.
21. You shall advise by facsimile transmission or telephone, and
promptly thereafter confirm in writing to Barry P. Hoffman, Esq., Executive Vice
President of the Company, and such other person or persons as the Company may
request, daily (and more frequently during the week immediately preceding the
Expiration Date and if otherwise requested) up to and including the Expiration
Date, as to the number of Old Notes which have been tendered pursuant to the
Exchange Offer and the items received by you pursuant to this Agreement,
separately reporting and giving cumulative totals as to items properly received,
items improperly received and items received but which have not yet been
verified to be in proper form. In addition, you will also inform, and cooperate
in making available to, the Company or any such other person or persons upon
oral request made from time to time prior to the Expiration Date of such other
information as it, he or she reasonably requests. Such cooperation shall
include, without limitation, the granting by you to the Company and such person
as the Company may request access to those persons on your staff who are
responsible for receiving tenders, in order to ensure that at all times
including immediately prior to the Expiration Date the Company shall have
received information in sufficient detail to enable it to decide whether to
extend the Exchange Offer. You shall prepare a final list of all persons whose
tenders were accepted,
6
<PAGE> 7
the aggregate principal amount of Old Notes tendered, the aggregate principal
amount of Old Notes accepted and deliver said list to the Company.
22. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities, but in no event
less than three months. You shall dispose of unused Letters of Transmittal and
other surplus materials by returning them to the Company.
23. You hereby expressly waive any lien, encumbrance or right of
set-off whatsoever that you may have with respect to the Old Notes surrendered
to you or funds deposited with you for the payment of transfer taxes by reasons
of amounts, if any, borrowed by the Company, or any of its subsidiaries or
affiliates, pursuant to any loan or credit agreement with you or for
compensation owed to you hereunder.
24. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto. Your
compensation shall be paid and reimbursed to you by the Company promptly upon
submission of one or more invoices therefore.
25. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement.
26. The Company covenants and agrees to indemnify and hold you harmless
in your capacity as Exchange Agent hereunder against any claims, loss,
liability, cost or expense, including attorneys' fees and expenses, arising out
of or in connection with any act, omission, delay or refusal made by you in
reliance upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document reasonably believed
by you to be valid, genuine and sufficient and in accepting any tender or
effecting any transfer of Old Notes reasonably believed by you in good faith to
be authorized, and in delaying or refusing in good faith to accept any tenders
or effect any transfer of Old Notes; provided, however, that the Company shall
not be liable for indemnification or otherwise for any claims, loss, liability,
cost or expense to the extent arising out of your gross negligence, willful
misconduct, bad faith or breach of this Agreement. In no case shall the Company
be liable under this indemnity with respect to any claim against you unless the
Company shall be notified by you, by letter or by facsimile confirmed by letter,
of the written assertion of a claim against you or of any other action commenced
against you, promptly after you shall have received any such written assertion
or notice of commencement of action. The Company shall be entitled to
participate at its own expense in the defense of any such claim or other action,
and, if the Company so elects, the Company shall assume the defense of any suit
brought to enforce any such claim. In the event that the Company shall assume
the defense of any such suit,
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<PAGE> 8
the Company shall not be liable for the fees and expenses of any additional
counsel thereafter retained by you so long as the Company shall retain counsel
reasonably satisfactory to you to defend such suit, and so long as you have not
determined, in your reasonable judgment, that a conflict of interest exists
between you and the Company. You shall not enter into a settlement or other
compromise with respect to any fully indemnified loss, liability, cost or
expense without the prior written consent of the Company. If you shall obtain a
repayment of any loss, liability, cost or expense paid by the Company pursuant
hereto, you shall promptly pay to the Company the amount of such repayment,
together with the amount of any interest received by you on account of such
repayment.
27. You shall comply with all requirements under the tax laws of the
United States, including those relating to missing Tax Identification Numbers
and obtaining and retaining substitute forms W-9, and shall file and mail any
appropriate reports which you are required to file pursuant to the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder
with the Internal Revenue Service. The Company understands that you are required
to deduct 31% on payments to holders who have not supplied their correct
Taxpayer Identification Number or required certification. You shall remit such
funds to the Internal Revenue Service in accordance with applicable regulations
and remit to each tendering holder of Old Notes any requisite federal income tax
information return or other similar document.
28. You shall deliver or cause to be delivered, in a timely manner, to
each governmental authority to which any transfer taxes are payable in respect
of the exchange of Old Notes, your check in the amount of all transfer taxes so
payable, and the Company shall reimburse you for the amount of any and all
transfer taxes payable in respect of the exchange of Old Notes and, where
appropriate, advise the holders of any such taxes for which they may be liable
and obtain payment from such holders prior to delivery of any Exchange Notes;
provided, however, that you shall take all steps reasonably necessary to secure
any rebate or refund allowable to connection with such transfer taxes for the
account of the Company and that you shall reimburse the Company for amounts
refunded to you in respect of your payment of any such transfer taxes, at such
time as such refund is received by you.
29. THIS AGREEMENT AND YOUR APPOINTMENT AS EXCHANGE AGENT HEREUNDER
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, AND WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. This Agreement shall
inure to the benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of each of the parties hereto.
30. This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
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<PAGE> 9
31. In case any provision of this Agreement shall be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
32. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
33. Unless otherwise provided herein, all notices, requests and
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Company:
19975 Victor Parkway
Livonia, Michigan 48152
Facsimile: 734-591-4460
Attention: Barry P. Hoffman, Esq.
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee
Administration
34. Unless terminated earlier by the parties hereto, this Agreement
shall terminate ninety (90) days following the Expiration Date. Notwithstanding
the foregoing, Paragraphs 24, 26 and 28 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any certificates for securities, funds or property then held by you
as Exchange Agent under this Agreement.
35. This Agreement shall be binding and effective as of the date
hereof.
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
VALASSIS COMMUNICATIONS, INC.
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<PAGE> 10
By: _________________________________
Name: Barry P. Hoffman, Esq.
Title: Executive Vice President,
General Counsel and Secretary
Accepted as of the date first above written:
THE BANK OF NEW YORK, as Exchange Agent
By: ____________________________
Name:
Title:
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SCHEDULE I
FEES
<TABLE>
<S> <C>
Basic Exchange Agent Fee................................$5,000
Extension of Exchange Offer...............................$500
Expiration of Exchange Offer..............................$500
after 5:00 p.m. New York time
</TABLE>
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