Exhibit 4.2




 





 


 


VERTIS, INC.,


 


as Issuer,


 


the Guarantors

named herein


 


and


 


The Bank of New York,


 


as Trustee


 












 


INDENTURE


 


Dated as of June 6, 2003


 












 


9 3/4% Senior Secured Second Lien Notes
due 2009




 


 





 

















 


CROSS-REFERENCE
TABLE


 


	
  TIA Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  	
   

  
	
  § 310

  	
  (a)(1)

  	
   

  	
  7.10

  
	
   

  	
  (a)(2)

  	
   

  	
  7.10

  
	
   

  	
  (a)(3)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
  (a)(5)

  	
   

  	
  7.10

  
	
   

  	
  (b)

  	
   

  	
  7.8; 7.10; 11.2

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  § 311

  	
  (a)

  	
   

  	
  7.11

  
	
   

  	
  (b)

  	
   

  	
  7.11

  
	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  § 312

  	
  (a)

  	
   

  	
  2.5

  
	
   

  	
  (b)

  	
   

  	
  11.3

  
	
   

  	
  (c)

  	
   

  	
  11.3

  
	
  § 313

  	
  (a)

  	
   

  	
  7.6

  
	
   

  	
  (b)(1)

  	
   

  	
  7.6

  
	
   

  	
  (b)(2)

  	
   

  	
  7.6

  
	
   

  	
  (c)

  	
   

  	
  7.6; 11.2(b)

  
	
   

  	
  (d)

  	
   

  	
  7.6

  
	
  § 314

  	
  (a)

  	
   

  	
  4.6; 4.7; 13.2

  
	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
  (c)(1)

  	
   

  	
  11.4

  
	
   

  	
  (c)(2)

  	
   

  	
  11.4

  
	
   

  	
  (c)(3)

  	
   

  	
  11.4

  
	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
  (e)

  	
   

  	
  11.5

  
	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  § 315

  	
  (a)

  	
   

  	
  7.1(b)

  
	
   

  	
  (b)

  	
   

  	
  7.5; 11.2

  
	
   

  	
  (c)

  	
   

  	
  7.1(a)

  
	
   

  	
  (d)

  	
   

  	
  7.1(c)

  
	
   

  	
  (e)

  	
   

  	
  6.11

  
	
  § 316

  	
  (a)(last sentence)

  	
   

  	
  2.9

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  6.5

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  6.4

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.7

  
	
   

  	
  (c)

  	
   

  	
  9.4

  
	
  § 317

  	
  (a)(1)

  	
   

  	
  6.8

  
	
   

  	
  (a)(2)

  	
   

  	
  6.9

  
	
   

  	
  (b)

  	
   

  	
  2.4

  
	
  § 318

  	
  (a)

  	
   

  	
  11.1

  
	
   

  	
  (c)

  	
   

  	
  11.1

  
	
   

  	
   

  	
   

  	
   

  
						



 












N.A. means Not Applicable.


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I.

  
	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  
	
  SECTION
  1.1.

  	
  Definitions

  
	
  SECTION
  1.2.

  	
  Incorporation
  by Reference of Trust Indenture Act

  
	
  SECTION
  1.3.

  	
  Rules
  of Construction

  
	
   

  
	
  ARTICLE II.

  
	
   

  	
   

  
	
  THE SECURITIES

  
	
   

  
	
  SECTION
  2.1.

  	
  Form
  and Dating

  
	
  SECTION
  2.2.

  	
  Execution
  and Authentication

  
	
  SECTION
  2.3.

  	
  Registrar
  and Paying Agent

  
	
  SECTION
  2.4.

  	
  Paying
  Agent To Hold Money in Trust

  
	
  SECTION
  2.5.

  	
  Securityholder
  Lists

  
	
  SECTION
  2.6.

  	
  Transfer
  and Exchange

  
	
  SECTION
  2.7.

  	
  Replacement
  Notes

  
	
  SECTION
  2.8.

  	
  Outstanding
  Notes

  
	
  SECTION
  2.9.

  	
  Treasury
  Notes

  
	
  SECTION
  2.10.

  	
  Temporary
  Notes

  
	
  SECTION
  2.11.

  	
  Cancellation

  
	
  SECTION
  2.12.

  	
  Defaulted
  Interest

  
	
  SECTION
  2.13.

  	
  CUSIP
  Number

  
	
  SECTION
  2.14.

  	
  Book-Entry
  Provisions for Global Securities

  
	
  SECTION
  2.15.

  	
  Special
  Transfer Provisions

  
	
   

  	
   

  
	
  ARTICLE III.

  
	
   

  	
   

  
	
  REDEMPTION

  
	
  SECTION
  3.1.

  	
  Notices
  to Trustee

  
	
  SECTION 3.2.

  	
  Selection of Notes To Be Redeemed

  
	
  SECTION 3.3.

  	
  Notice of Redemption

  
	
  SECTION 3.4.

  	
  Effect of Notice of Redemption

  
	
  SECTION 3.5.

  	
  Deposit of Redemption Price

  
	
  SECTION 3.6.

  	
  Notes Redeemed in Part

  
				



 


i

















 


	
  ARTICLE IV.

  
	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  
	
  SECTION 4.1.

  	
  Payment of Notes

  
	
  SECTION 4.2.

  	
  Maintenance of Office or Agency

  
	
  SECTION 4.3.

  	
  Corporate Existence

  
	
  SECTION 4.4.

  	
  Payment of Taxes and Other Claims

  
	
  SECTION 4.5.

  	
  Maintenance of Properties; Books and
  Records; Compliance with Law

  
	
  SECTION 4.6.

  	
  Compliance Certificates; Notice of Default

  
	
  SECTION 4.7.

  	
  Reports

  
	
  SECTION 4.8.

  	
  Limitation on Restricted Payments

  
	
  SECTION 4.9.

  	
  Limitation on Incurrence of Additional
  Indebtedness

  
	
  SECTION 4.10.

  	
  Limitation on Dividend and Other Payment
  Restrictions Affecting Subsidiaries

  
	
  SECTION 4.11.

  	
  Limitation on Liens

  
	
  SECTION 4.12.

  	
  Limitation on Asset Sales

  
	
  SECTION 4.13.

  	
  Limitations on Transactions with Affiliates

  
	
  SECTION 4.14.

  	
  Change of Control

  
	
  SECTION 4.15.

  	
  Waiver of Stay; Extension of Usury Laws

  
	
  SECTION 4.16.

  	
  Limitation on Guarantees by Restricted
  Subsidiaries

  
	
  SECTION 4.17.

  	
  Limitation on Preferred Stock of
  Subsidiaries

  
	
  SECTION 4.18.

  	
  Conduct of Business

  
	
  SECTION 4.19.

  	
  Impairment of Security Interest

  
	
  SECTION 4.20.

  	
  Post Closing Action Related to Collateral

  
	
   

  	
   

  
	
  ARTICLE V.

  
	
   

  	
   

  
	
  SUCCESSOR CORPORATION

  
	
   

  	
   

  
	
  SECTION 5.1.

  	
  Limitation on Mergers, Consolidations or Sales of Assets

  
	
  SECTION 5.2.

  	
  Successor Entity Substituted

  
	
   

  	
   

  
	
  ARTICLE VI.

  
	
   

  	
   

  
	
  DEFAULT AND REMEDIES

  
	
   

  	
   

  
	
  SECTION 6.1.

  	
  Events of Default

  
	
  SECTION 6.2.

  	
  Acceleration

  
	
  SECTION 6.3.

  	
  Other Remedies

  
	
  SECTION 6.4.

  	
  Waiver of Past Default

  
	
  SECTION 6.5.

  	
  Control by Majority

  
	
  SECTION 6.6.

  	
  Limitation on Suits

  
	
  SECTION 6.7.

  	
  Rights of Holders To Receive Payment

  
			



 


ii

















 


	
  SECTION 6.8.

  	
  Collection Suit by Trustee

  
	
  SECTION 6.9.

  	
  Trustee May File Proofs of Claim

  
	
  SECTION 6.10.

  	
  Priorities

  
	
  SECTION 6.11.

  	
  Undertaking for Costs

  
	
  SECTION 6.12.

  	
  Rights and Remedies Cumulative

  
	
  SECTION 6.13.

  	
  Delay or Omission Not Waiver

  
	
   

  	
   

  
	
  ARTICLE VII.

  
	
   

  	
   

  
	
  TRUSTEE

  
	
   

  	
   

  
	
  SECTION 7.1.

  	
  Duties of Trustee

  
	
  SECTION 7.2.

  	
  Rights of Trustee

  
	
  SECTION 7.3.

  	
  Individual Rights of Trustee

  
	
  SECTION 7.4.

  	
  Trustee’s Disclaimer

  
	
  SECTION 7.5.

  	
  Notice of Defaults

  
	
  SECTION 7.6.

  	
  Reports by Trustee to Holders

  
	
  SECTION 7.7.

  	
  Compensation and Indemnity

  
	
  SECTION 7.8.

  	
  Replacement of Trustee

  
	
  SECTION 7.9.

  	
  Successor Trustee by Merger, Etc.

  
	
  SECTION 7.10.

  	
  Eligibility; Disqualification

  
	
  SECTION 7.11.

  	
  Preferential Collection of Claims Against
  Company

  
	
   

  	
   

  
	
  ARTICLE VIII.

  
	
   

  	
   

  
	
  DISCHARGE OF INDENTURE; DEFEASANCE

  
	
   

  	
   

  
	
  SECTION 8.1.

  	
  Termination of the Company’s Obligations

  
	
  SECTION 8.2.

  	
  Legal Defeasance and Covenant Defeasance

  
	
  SECTION 8.3.

  	
  Conditions to Legal Defeasance or Covenant
  Defeasance

  
	
  SECTION 8.4.

  	
  Application of Trust Money

  
	
  SECTION 8.5.

  	
  Repayment to the Company

  
	
  SECTION 8.6.

  	
  Reinstatement

  
	
   

  	
   

  
	
  ARTICLE IX.

  
	
   

  	
   

  
	
  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  
	
   

  	
   

  
	
  SECTION 9.1.

  	
  Without Consent of Holders

  
	
  SECTION 9.2.

  	
  With Consent of Holders

  
	
  SECTION 9.3.

  	
  Compliance with Trust Indenture Act

  
	
  SECTION 9.4.

  	
  Revocation and Effect of Consents

  
	
  SECTION 9.5.

  	
  Notation on or Exchange of Notes

  
	
  SECTION 9.6.

  	
  Trustee To Sign Amendments, Etc.

  
			



 


iii

















 


	
  ARTICLE X.

  
	
   

  	
   

  
	
  GUARANTEE

  
	
   

  	
   

  
	
  SECTION 10.1.

  	
  Unconditional Guarantee

  
	
  SECTION 10.2.

  	
  Severability

  
	
  SECTION 10.3.

  	
  Release of a Guarantor

  
	
  SECTION 10.4.

  	
  Limitation of Guarantor’s Liability

  
	
  SECTION 10.5.

  	
  Consolidation, Merger and Sale of Assets

  
	
  SECTION 10.6.

  	
  Contribution

  
	
  SECTION 10.7.

  	
  Waiver of Subrogation

  
	
  SECTION 10.8.

  	
  Evidence of Guarantee

  
	
  SECTION 10.9.

  	
  Waiver of Stay, Extension or Usury Laws

  
	
   

  	
   

  
	
  ARTICLE XI.

  
	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  SECTION 11.1.

  	
  Trust Indenture Act Controls

  
	
  SECTION 11.2.

  	
  Notices

  
	
  SECTION 11.3.

  	
  Communications by Holders with Other
  Holders

  
	
  SECTION 11.4.

  	
  Certificate and Opinion of Counsel as to
  Conditions Precedent

  
	
  SECTION 11.5.

  	
  Statements Required in Certificate and
  Opinion of Counsel

  
	
  SECTION 11.6.

  	
  Rules by Trustee, Paying Agent, Registrar

  
	
  SECTION 11.7.

  	
  Legal Holidays

  
	
  SECTION 11.8.

  	
  Governing Law

  
	
  SECTION 11.9.

  	
  No Recourse Against Others

  
	
  SECTION 11.10.

  	
  Successors

  
	
  SECTION 11.11.

  	
  Counterparts

  
	
  SECTION 11.12.

  	
  Severability

  
	
  SECTION 11.13.

  	
  Table of Contents, Headings, Etc.

  
	
  SECTION 11.14.

  	
  No Adverse Interpretation of Other
  Agreements

  
	
  SECTION 11.15.

  	
  Benefits of Indenture

  
	
  SECTION 11.16.

  	
  Independence of Covenants

  
	
   

  	
   

  
	
  ARTICLE XII.

  
	
   

  	
   

  
	
  COLLATERAL AND SECURITY DOCUMENTS

  
	
   

  	
   

  
	
  SECTION 12.1.

  	
  Security Documents; Additional Collateral

  
	
  SECTION 12.2.

  	
  Recording, Etc.

  
	
  SECTION 12.3.

  	
  Release of Collateral

  
	
  SECTION 12.4.

  	
  Taking and Destruction

  
	
  SECTION 12.5.

  	
  Trust Indenture Act Requirements

  
			



 


iv

















 


	
  SECTION 12.6.

  	
  Suits To Protect the Collateral

  
	
  SECTION 12.7.

  	
  Purchaser Protected

  
	
  SECTION 12.8.

  	
  Powers Exercisable by Receiver or Trustee

  
	
  SECTION 12.9.

  	
  Determinations Relating to Collateral

  
	
  SECTION 12.10.

  	
  Release upon Termination of the Company’s
  Obligations

  
	
  SECTION 12.11.

  	
  Limitation on Duty of Trustee in Respect of
  Collateral

  
	
   

  	
   

  
	
  ARTICLE XIII.

  
	
   

  	
   

  
	
  APPLICATION OF TRUST MONIES

  
	
   

  	
   

  
	
  SECTION 13.1.

  	
  Trust Monies

  
	
  SECTION 13.2.

  	
  Retirement of Notes

  
	
  SECTION 13.3.

  	
  Withdrawal of Trust Monies for Reinvestment

  
	
  SECTION 13.4.

  	
  Powers Exercisable by Trustee or Receiver

  
	
  SECTION 13.5.

  	
  Disposition of Notes Retired

  
	
  SECTION 13.6.

  	
  Investment of Trust Monies

  
	
  SECTION 13.7.

  	
  Return of Applicable Trust Monies

  
			



 


	
  Exhibit
  A-1

  	
  —

  	
  Form
  of Series A Note

  
	
  Exhibit
  A-2

  	
  —

  	
  Form
  of Series B Note

  
	
  Exhibit
  B

  	
  —

  	
  Form of Legend for
  Global Securities

  
	
  Exhibit
  C

  	
  —

  	
  Transferee Certificate for Non-QIB
  Accredited Investors

  
	
  Exhibit
  D

  	
  —

  	
  Transferee Certificate for Transfers
  Pursuant to Regulation S

  
	
  Exhibit
  E

  	
  —

  	
  Form
  of Guarantee

  
	
  Exhibit F

  	
  —

  	
  Form of Amended and Restated Mortgage

  



 


Note:                         This Table of Contents shall
not, for any purpose, be deemed to be part of the Indenture.


 


v

















 


INDENTURE dated as of June 6, 2003, among VERTIS, INC., a corporation
duly organized and existing under the laws of the State of Delaware, as issuer
(the “Company”),
the Guarantors (as defined herein) and The Bank of New York, a New York banking
corporation, as Trustee (the “Trustee”).


 


The parties hereto agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders:


 


ARTICLE I.


 


DEFINITIONS AND INCORPORATION BY REFERENCE


 


SECTION 1.1.        Definitions.


 


“Acceleration
Notice” shall have the meaning ascribed to such term in Section 6.2.


 


“Accrued
Bankruptcy Interest” means all interest accruing subsequent to the occurrence
of any events specified in Section 6.1(f) or (g) or which would have
accrued but for any such event.


 


“Acquired
Indebtedness” means Indebtedness (1) of a Person or any of its Subsidiaries
existing at the time such Person becomes a Restricted Subsidiary of the Company
or (2) assumed in connection with the acquisition of assets from such Person,
in each case not incurred by such Person in connection with, or in anticipation
or contemplation of, such Person becoming a Restricted Subsidiary of the
Company or such acquisition.  Acquired
Indebtedness shall be deemed to have been incurred, with respect to
clause (1) of the preceding sentence, on the date such Person becomes a
Restricted Subsidiary of the Company and, with respect to clause (2) of
the preceding sentence, on the date of consummation of such acquisition of assets.


 


“Additional
Notes” means the 9 3/4% Senior Secured Second Lien Notes due
2009 of the Company (other than the Initial Notes and Series B Notes
issued in exchange for the Initial Notes) issued under this Indenture in accordance
with Sections 2.2 and 4.9.


 


“Adjusted
Net Assets” shall have the meaning provided in Section 10.6.


 


“Affiliate”
means, with respect to any specified Person, any other Person who directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, such specified Person.  The term “control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative of the
foregoing.  Notwithstanding the
foregoing, no Person (other than the Company or any Subsidiary of the Company)
in whom a Receivables Entity makes an Investment in connection with a Qualified


 

















 


Receivables Transaction shall be deemed to be an Affiliate of the
Company or any of its Subsidiaries solely by reason of such Investment.


 


“Affiliate
Transaction” has the meaning ascribed to such term in
Section 4.13.


 


“Agent”
means any Registrar, Paying Agent or co-registrar.


 


“Agent
Members” has the meaning provided in Section 2.14.


 


“Amended
and Restated Mortgage” means each amended and restated mortgage,
deed of trust or deed to secure debt made by the Company or any of its
Restricted Subsidiaries in favor or for the benefit of the Collateral Agent,
substantially in the form of Exhibit F hereto (with such changes thereto
as shall be advisable at the reasonable discretion of the Collateral Agent to
comply with the law of the jurisdiction in which such mortgage, deed of trust
or deed to secure debt is to be recorded).


 


“Applicable
Premium” means, with respect to a Note at any Redemption Date, the
greater of (i) 1.0% of the principal amount of such Note and (ii) the
excess of (A) the present value at such Redemption Date of (1) the
redemption price of such Note on April 1, 2006 (such redemption price
being that described in the first paragraph of Section 5 of the Notes)
plus (2) all required remaining scheduled interest payments due on such
Note through April 1, 2006, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the principal amount of
such Note on such Redemption Date. 
Calculation of the Applicable Premium will be made by the Company or on
behalf of the Company by such Person as the Company shall designate; provided,
however,
that such calculation shall not be a duty or obligation of the Trustee.


 


“Applicable
Trust Monies” means, as of any date of determination, the aggregate
amount of Trust Monies on such date multiplied by a fraction, the numerator of
which is the outstanding aggregate principal amount of the Notes on such date,
and the denominator of which is the sum of the outstanding aggregate principal
amount of all Equal Lien Indebtedness on such date.


 


“A/R
Facility” means the Receivables Purchase Agreement dated as of
March 19, 1996, as amended, among the Company, certain subsidiaries of the
Company and BFP Receivables Corporation in each case as such agreement may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
term thereof, and any successor or replacement agreement, including, without
limitation, any agreement or agreements governing a Qualified Receivables
Transaction.


 


“Asset
Acquisition” means (1) an Investment by the Company or any Restricted
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Restricted Subsidiary of the Company or of any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (2) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any


 


2

















 


Person (other than a Restricted Subsidiary of the Company) which
constitute all or substantially all of the assets of such Person or comprise
any division or line of business of such Person or any other properties or
assets of such Person other than in the ordinary course of business.


 


“Asset
Sale” means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary
course of business), assignment or other disposition for value by the Company
or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary of
the Company of: (1) any Capital Stock of any Restricted Subsidiary of the
Company; or (2) any other property or assets of the Company or any Restricted
Subsidiary of the Company other than in the ordinary course of business; provided,
however,
that Asset Sales shall not include:


 


(a)           any
transaction or series of related transactions for which the Company or its
Restricted Subsidiaries receive aggregate consideration of less than
$2.5 million;


 


(b)           the
sale, lease, conveyance, disposition or other transfer of all or substantially
all of the assets of the Company as permitted under Article V;


 


(c)           the
sale or discount, in each case without recourse, of accounts receivable arising
in the ordinary course of business;


 


(d)           the
factoring of accounts receivable arising in the ordinary course of business
pursuant to arrangements customary in the industry;


 


(e)           the
licensing of intellectual property;


 


(f)            disposals
or replacements of obsolete equipment in the ordinary course of business;


 


(g)           the
sale, lease, conveyance, disposition or other transfer by the Company or any
Restricted Subsidiary of assets or property in transactions constituting Permitted
Investments or Restricted Payments that are not prohibited under
Section 4.8;


 


(h)           sales
of accounts receivable and related assets of the type specified in the
definition of “Qualified Receivables Transaction” to a Receivables Entity (for
the purposes of this clause (h), Purchase Money Notes shall be deemed to
be cash);


 


(i)            transfers
of accounts receivable and related assets of the type specified in the
definition of “Qualified Receivables Transaction” (or a fractional undivided
interest therein) by a Receivables Entity in a Qualified Receivables
Transaction;


 


(j)            leases
or subleases to third persons not interfering in any material respect with the
business of the Company or any of its Restricted Subsidiaries; and


 


3

















 


(k)           the
surrender or waiver of contract rights or the settlement, release or surrender
of contract, tort or other claims of any kind.


 


“Attributed
Receivables Facility Indebtedness” at any time shall mean the principal
amount of Indebtedness which would be outstanding at such time under the A/R Facility
if same were structured as a secured lending agreement rather than a purchase
agreement; provided
that such principal amount shall be net of amounts of cash and Cash Equivalents
on deposit in any principal funding or equalization account established
pursuant to the A/R Facility which, if the A/R Facility were structured as a
secured lending arrangement rather than as a facility for the sale of
Receivables, would collateralize the Indebtedness issued thereunder.


 


“Bank
Lenders” means various lenders from time to time under the Senior
Credit Facility.


 


“Bankruptcy
Law” means Title 11 of the United States Code entitled “Bankruptcy,”
as now and hereafter in effect, or any successor statute or any other United
States federal, state or local law or the law of any other jurisdiction
relating to bankruptcy, insolvency, winding up, liquidation, reorganization or
relief of debtors, whether in effect on the date hereof or hereafter.


 


“Bankruptcy
Order” means any court order made in a proceeding pursuant to or
within the meaning of any Bankruptcy Law, containing an adjudication of
bankruptcy or insolvency, or providing for liquidation, winding up, dissolution
or reorganization, or appointing a custodian of a debtor or of all or any
substantial part of a debtor’s property, or providing for the staying,
arrangement, adjustment or composition of indebtedness or other relief of a
debtor.


 


“Board
of Directors” means, as to any Person, the board of directors of such
Person or any duly authorized committee thereof.


 


“Board
Resolution” means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.


 


“Business
Day” means any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of New York, New York or is a day on which banking
institutions therein located are authorized or required by law or other governmental
action to close.


 


“Capital
Stock” means:


 


(1)           with respect to any
Person that is a corporation, any and all shares, interests, participations or
other equivalents (however designated and whether or not voting) of corporate
stock, including each class of Common Stock and Preferred Stock of such Person;
and


 


4

















 


(2)           with respect to any
Person that is not a corporation, any and all partnership, membership or other
equity interests of such Person.


 


“Capitalized
Lease Obligation” means, as to any Person, the obligations of such
Person under a lease that are required to be classified and accounted for as
capital lease obligations under GAAP and, for purposes of this definition, the
amount of such obligations at any date shall be the capitalized amount of such
obligations at such date, determined in accordance with GAAP.


 


“Cash
Equivalents” means:


 


(1)           marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
any member state of the European Union or issued by any agency thereof and
backed by the full faith and credit of the United States or any member state of
the European Union, in each case maturing within one year from the date of
acquisition thereof;


 


(2)           marketable direct
obligations issued by any state of the United States of America or any member
state of the European Union or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor’s Ratings Group (“S&P”)
or Moody’s Investors Service, Inc. (“Moody’s”);


 


(3)           commercial paper
maturing no more than one year from the date of creation thereof and, at the
time of acquisition, having a rating of at least A-1 from S&P or at least
P-1 from Moody’s;


 


(4)           time deposits,
certificates of deposit or bankers’ acceptances (or with respect to foreign
banks, similar instruments) maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any
member state of the European Union or any U.S. branch of a foreign bank having
at the date of acquisition thereof combined capital and surplus of not less
than $200.0 million;


 


(5)           certificates of
deposit or bankers’ acceptances or similar instruments maturing within one year
from the date of acquisition thereof issued by any foreign bank that is a
lender under the Senior Credit Facility having at the date of acquisition
thereof combined capital and surplus of not less than $500.0 million;


 


(6)           repurchase
obligations with a term of not more than seven days for underlying securities
of the types described in clause (1) or (2) above entered into with any
bank meeting the qualifications specified in clause (4) above;


 


(7)           demand deposit
accounts maintained in the ordinary course of business; and


 


5

















 


(8)           investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (1) through (7) above.


 


“Change
of Control” means the occurrence of one or more of the following
events:


 


(1)           any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company to any
Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act (a “Group”), together with any Affiliates thereof (other than
one or more Permitted Holders);


 


(2)           the approval by the
holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company;


 


(3)           any Person or Group
(other than one or more Permitted Holders) shall become the beneficial owner
(as defined in Rules 13d-3 and 13d-5 or any successor rule or regulation
promulgated under the Exchange Act), directly or indirectly, of shares
representing more than 50% of the aggregate ordinary voting power represented
by the issued and outstanding Capital Stock of Holdings or the Company;


 


(4)           the occurrence of a
“Change of Control” as defined in the Senior Subordinated Credit Agreement, if
at such time any Indebtedness of the Company is outstanding under such
agreement; or


 


(5)           the first day on
which a majority of the Board of Directors of the Company are not Continuing
Directors.


 


“Change
of Control Date” has the meaning ascribed to such term in Section 4.14(a).


 


“Change
of Control Offer” has the meaning ascribed to such term in Section 4.14(a).


 


“Change
of Control Payment Date” has the meaning ascribed to such term in Section 4.14(b).


 


“Collateral”
means all of the assets of the Company and the Guarantors (whether real,
personal, or mixed) with respect to which any security interests or Liens that
have been granted (or purported to be granted) pursuant to the Security
Documents, which shall at all times include all assets and properties with
respect to which a Lien has been granted in favor of, or for the benefit of, to
the Collateral Agent to the benefit of the Holders pursuant to the U.S.
Security Agreement other than Excluded Collateral.


 


“Collateral
Agent” means JPMorgan Chase Bank (f/k/a The Chase Manhattan Bank) in
its capacity as collateral agent under the Security Documents and any successor
thereto.


 


6

















 


“Common
Stock” of any Person means any and all shares, interests or other participations
in, and other equivalents (however designated and whether voting or non-voting)
of such Person’s common stock, whether outstanding on the Issue Date or issued
after the Issue Date, and includes, without limitation, all series and classes
of such common stock.


 


“Company”
means the party named as such in this Indenture until a successor replaces it
in accordance with the provisions of this Indenture and, thereafter, means the
successor.


 


“Consolidated
EBITDA” means, with respect to any Person, for any period, the sum
(without duplication) of:


 


(1)           Consolidated Net
Income; and


 


(2)           to the extent
Consolidated Net Income has been reduced thereby:


 


(a)           all income taxes of
such Person and its Restricted Subsidiaries paid or accrued in accordance with
GAAP for such period (other than income taxes attributable to extraordinary,
unusual or nonrecurring gains or losses or taxes attributable to sales or
dispositions outside the ordinary course of business);


 


(b)           Consolidated
Interest Expense;


 


(c)           Consolidated
Non-cash Charges;


 


(d)           the amount of any
restructuring reserve or charge recorded during such period in accordance with
GAAP;


 


(e)           any fees permitted
pursuant to clause (b)(9) of Section 4.13;


 


(f)            amounts paid as a
spread payment in connection with a cashless exercise of options by a director
or employee of Holdings or any of its Restricted Subsidiaries (i.e.,
a payment equal to the spread of the then fair market value of Holdings’ Common
Stock which may be purchased with such options over the aggregate exercise
price of such options); and


 


(g)           less, without
duplication, non-cash items increasing Consolidated Net Income of such Person
and its Restricted Subsidiaries for such period in each case determined in
accordance with GAAP.


 


“Consolidated
Fixed Charge Coverage Ratio” means, with respect to any Person, the
ratio of Consolidated EBITDA of such Person during the four full fiscal
quarters (the “Four Quarter Period”) ending on or prior to the date of the
transaction giving rise to the need to calculate the Consolidated Fixed Charge
Coverage Ratio for which financial statements are available (the “Transaction
Date”) to Consolidated Fixed Charges of such Person for the Four
Quarter Period.  In addition to and
without limitation of the foregoing, for purposes of this


 


7

















 


definition, “Consolidated EBITDA” and “Consolidated Fixed Charges”
shall be calculated after giving effect on a pro  forma basis for the period
of such calculation to:


 


(1)           the incurrence or
repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four Quarter Period;


 


(2)           any asset sales or
other dispositions or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of such Person or one of its Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition)
incurring, assuming or otherwise being liable for Acquired Indebtedness and
also including any Consolidated EBITDA (including pro forma expense and cost
reductions calculated on a basis consistent with Regulation S-X under the
Exchange Act) attributable to the assets which are the subject of the Asset
Acquisition or asset sale during the Four Quarter Period) occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such asset sale
or Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four Quarter Period; and


 


(3)           any asset sales or
asset acquisitions (including any Consolidated EBITDA (including pro forma
expense and cost reductions calculated on a basis consistent with
Regulation S-X under the Exchange Act) attributable to the assets which
are the subject of the Asset Acquisition or asset sale during the Four Quarter
Period) that have been made by any Person that has become a Restricted
Subsidiary of the Company or has been merged with or into the Company or any Restricted
Subsidiary of the Company during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date that would have constituted asset sales or Asset Acquisitions
had such transactions occurred when such Person was a Restricted Subsidiary of
the Company or subsequent to such Person’s merger into the Company, as if such
asset sale or Asset Acquisition (including the incurrence, assumption or
liability for any Indebtedness or Acquired Indebtedness in connection
therewith) occurred on the first day of the Four Quarter Period;


 


provided
that to the extent that clause (2) or (3) of this sentence requires that pro forma effect
be given to an asset sale or Asset Acquisition, such pro  forma calculation shall be
based upon the four full fiscal quarters immediately preceding the Transaction
Date of the Person, or division or line of business of the Person, that is
acquired or disposed of for which financial information is available.  If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees


 


8

















 


Indebtedness of a third Person, the preceding sentence shall give
effect to the incurrence of such guaranteed Indebtedness as if such Person or
any Restricted Subsidiary of such Person had directly incurred or otherwise
assumed such guaranteed Indebtedness.


 


Furthermore, in calculating “Consolidated Fixed Charges” for purposes
of this “Consolidated Fixed Charge Coverage Ratio” interest on Indebtedness
determined on a fluctuating basis, to the extent such interest is covered by
agreements relating to Interest Swap Obligations, shall be deemed to accrue at
the rate per annum resulting after giving effect to the operation of such agreements.


 


“Consolidated
Fixed Charges” means, with respect to any Person for any period, the
sum, without duplication, of:


 


(1)           Consolidated
Interest Expense; plus


 


(2)           the product of
(x) the amount of all dividend payments on any series of Preferred Stock of
such Person and its Restricted Subsidiaries (other than dividends paid in
Qualified Capital Stock and dividends paid on Preferred Stock of Unrestricted
Subsidiaries) paid, accrued or scheduled to be paid or accrued during such
period times (y) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective consolidated
federal, state and local tax rate of such Person, expressed as a decimal; provided
that to the extent that such dividend payments are tax deductible, then this
clause (2) shall equal the amount set forth in clause (x) hereof
without giving effect to clause (y) hereof.


 


“Consolidated
Interest Expense” means, with respect to any Person for any period,
the sum of, without duplication:


 


(1)           the aggregate of all
cash and non-cash interest expense with respect to all outstanding Indebtedness
of such Person and its Restricted Subsidiaries, including the net costs
associated with Interest Swap Obligations for such period determined on a
consolidated basis in conformity with GAAP, but excluding amortization of
original issue discount and amortization of any deferred financing costs; and


 


(2)           the interest
component of Capitalized Lease Obligations paid, accrued and/or scheduled to be
paid or accrued by such Person and its Restricted Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP.


 


“Consolidated
Net Income” of the Company means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such period
on a consolidated basis, determined in accordance with GAAP; provided
that there shall be excluded therefrom:


 


(1)           gains and losses
from Asset Sales (without regard to the $2.5 million limitation set forth in
the definition thereof) or abandonments or reserves relating thereto and the
related tax effects according to GAAP;


 


9

















 


(2)           gains and losses due
solely to fluctuations in currency values and the related tax effects according
to GAAP;


 


(3)           extraordinary,
unusual or nonrecurring gains, losses, income or expense, and the related tax
effects;


 


(4)           the net income (or
loss) of any Person acquired in a “pooling of interests” transaction accrued
prior to the date it becomes a Restricted Subsidiary of the Company or is
merged or consolidated with the Company or any Restricted Subsidiary of the
Company;


 


(5)           the net income of
any Restricted Subsidiary of the Company to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
is restricted by a contract, operation of law or otherwise;


 


(6)           the net loss of any
Person other than a Restricted Subsidiary of the Company;


 


(7)           the net income of
any Person, other than a Restricted Subsidiary of the Company, except to the
extent of cash dividends or distributions paid to the Company or to a
Restricted Subsidiary of the Company by such Person unless, in the case of a
Restricted Subsidiary of the Company who receives such dividends or distributions,
such Restricted Subsidiary is subject to clause (5) above;


 


(8)           (A) all
non-cash charges (provided that any cash payments actually made with respect
to the liabilities for which such cash charges were created shall be deducted
from Consolidated Net Income in the period when made) and (B) all deferred
financing costs written off in connection with the early extinguishment of any
Indebtedness, in each case incurred by the Company or any of its Restricted
Subsidiaries in connection with the recapitalization of Holdings in December
1999 and the related financing transactions;


 


(9)           non-cash
compensation charges, including any arising from existing stock options
resulting from any merger or recapitalization transition; and


 


(10)         the cumulative effect
of a change in accounting principle.


 


“Consolidated
Non-cash Charges” means, with respect to any Person, for any period,
the aggregate depreciation, amortization and other non-cash expenses of such
Person and its Restricted Subsidiaries reducing Consolidated Net Income of such
Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges
constituting an extraordinary item or loss or any such charge which requires an
accrual of or a reserve for cash charges for any future period).


 


“Consolidated
Senior Secured Leverage Ratio” means, with respect to any Person,
the ratio of Senior Secured Indebtedness of such Person as of the Transaction
Date to Consolidated EBITDA of such Person during the Four Quarter Period
ending on or prior to the


 


10

















 


Transaction Date for which financial statements are available; provided,
however,
that in calculating the Consolidated Secured Leverage Ratio, (i) Senior
Secured Indebtedness and related Obligations incurred pursuant to
clause (2) of the definition of “Permitted Indebtedness”,
(ii) Attributed Receivables Facility Indebtedness in an amount not to
exceed $130.0 million and (iii) Indebtedness under Currency Agreements,
Interest Swap Obligations and Raw Material Hedge Agreements shall each be
excluded.  In addition to and without
limitation of the foregoing, for purposes of this definition, “Consolidated
EBITDA” and “Consolidated Senior Secured Indebtedness” shall be calculated
after giving effect on a pro  forma basis for the period of such calculation
to:


 


(1)           the incurrence or
repayment of any Indebtedness of such Person or any of its Restricted
Subsidiaries (and the application of the proceeds thereof) giving rise to the
need to make such calculation and any incurrence or repayment of other
Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, occurring
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date, as if such
incurrence or repayment, as the case may be (and the application of the
proceeds thereof), occurred on the first day of the Four Quarter Period;


 


(2)           any asset sales or
other dispositions or Asset Acquisitions (including, without limitation, any
Asset Acquisition giving rise to the need to make such calculation as a result
of such Person or one of its Restricted Subsidiaries (including any Person who
becomes a Restricted Subsidiary as a result of the Asset Acquisition)
incurring, assuming or otherwise being liable for Acquired Indebtedness and
also including any Consolidated EBITDA (including pro forma expense and cost
reductions calculated on a basis consistent with Regulation S-X under the
Exchange Act) attributable to the assets which are the subject of the Asset
Acquisition or asset sale during the Four Quarter Period) occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such asset sale
or Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four Quarter Period; and


 


(3)           any asset sales or
asset acquisitions (including any Consolidated EBITDA (including pro forma
expense and cost reductions calculated on a basis consistent with
Regulation S-X under the Exchange Act) attributable to the assets which
are the subject of the Asset Acquisition or asset sale during the Four Quarter
Period) that have been made by any Person that has become a Restricted Subsidiary
of the Company or has been merged with or into the Company or any Restricted
Subsidiary of the Company during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date that would have constituted asset sales or Asset Acquisitions
had such transactions occurred when such Person was a Restricted Subsidiary of
the Company or subsequent to such Person’s merger into the Company, as if such
asset sale or Asset Acquisition (including the incurrence, assumption or
liability


 


11

















 


for any
Indebtedness or Acquired Indebtedness in connection therewith) occurred on the
first day of the Four Quarter Period;


 


provided
that to the extent that clause (2) or (3) of this sentence requires that pro forma
effect be given to an asset sale or Asset Acquisition, such pro forma
calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business
of the Person, that is acquired or disposed of for which financial information
is available.  If such Person or any of
its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a
third Person, the preceding sentence shall give effect to the incurrence of
such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of
such Person had directly incurred or otherwise assumed such guaranteed
Indebtedness.


 


“Continuing
Directors” means, as of any date of determination, any member of the
Board of Directors of the Company who:


 


(1)           was a member of such
Board of Directors on the Issue Date;


 


(2)           was nominated for
election or elected to such Board of Directors with, or whose election to such
Board of Directors was approved by, the affirmative vote of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election; or


 


(3)           is any designee of a
Permitted Holder or was nominated by a Permitted Holder or any designees of a
Permitted Holder on the Board of Directors.


 


“Covenant
Defeasance” has the meaning provided in Section 8.2.


 


“Corporate
Trust Office” means the principal office of the Trustee at which at
any time its corporate trust business shall be administered, which office at
the date hereof is located at 101 Barclay Street, New York,
New York 10286, Attention: 
Corporate Trust Administration, or such other address as the Trustee may
designate from time to time by notice to the Holders and the Company, or the
principal corporate trust office of any successor Trustee (or such other
address as such successor Trustee may designate from time to time by notice to
the Holders and the Company).


 


“Currency
Agreement” means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.


 


“Custodian”
means any receiver, interim receiver, receiver and manager, trustee, assignee,
liquidator, sequestrator or similar official charged with maintaining
possession or control over property for one or more creditors, whether under
any Bankruptcy Law or otherwise.


 


“Default”
means an event or condition the occurrence of which is, or with the lapse of
time or the giving of notice or both would be, an Event of Default.


 


12

















 


“Depository”
means The Depository Trust Company, its nominees and successors.


 


“Destruction”
means any damage to, loss or destruction of all or any portion of the
Collateral.


 


“Disqualified
Capital Stock” means that portion of any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable at the option of the holder thereof), or upon the
happening of any event (other than an event which would constitute a Change of
Control), matures (excluding any maturity as the result of an optional
redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the sole option of
the holder thereof (except, in each case, upon the occurrence of a Change of
Control) on or prior to the final maturity date of the Notes.


 


“Dollars”
or the sign “$” means the lawful money of the United States of America.


 


“Domestic
Restricted Subsidiary” means a Restricted Subsidiary incorporated or
otherwise organized or existing under the laws of the United States, any state
thereof or any territory or possession of the United States.


 


“ECP”
shall mean Evercore Capital Partners L.P., a Delaware limited partnership.


 


“ECP
Affiliates” shall mean any Affiliate of ECP.


 


“ECP
Investors” shall mean ECP, Evercore Capital Partners (NQ) L.P. and
EBF Group L.L.C., or any limited or general partner, stockholder, officer or
employee of such ECP Investor.


 


“Equal
Lien Agreements” means (1) this Indenture, the Notes and the
Guarantees and (2) each other agreement under which Indebtedness of the
Company or any Restricted Subsidiary is incurred that is secured by Liens on
all or a portion of the Collateral, which Liens are equal in priority to the
Liens securing the Notes and the Guarantees; provided that at the time of
incurrence and after giving effect to the incurrence of such Indebtedness
secured by any such Lien, the Consolidated Senior Secured Leverage Ratio of the
Company would have been less than or equal to (i) 2.0 to 1.0 if such
Indebtedness is incurred on or before January 1, 2005 and (ii) 1.75
to 1.0 if such Indebtedness is incurred thereafter.


 


“Equal
Lien Creditors” means (1) the Notes Secured Creditors and
(2) each other lender or holder of other Indebtedness (and any trustee or
similar agent acting on behalf of such lenders or holders) of the Company or
any Restricted Subsidiary that is secured by Liens on all or a portion of the
Collateral, which Liens are equal in priority to the Liens securing the Notes
and the Guarantees.


 


13

















 


“Equal
Lien Indebtedness” means the Notes and the Guarantees and all other
Indebtedness incurred by the Company or any Restricted Subsidiary under any
Equal Lien Agreement; provided that at the time of incurrence
and after giving effect to the incurrence of such Indebtedness secured by such
Lien, the Consolidated Senior Secured Leverage Ratio of the Company would have
been less than or equal to (i) 2.0 to 1.0 if such Indebtedness is incurred on
or before January 1, 2005 and (ii) 1.75 to 1.0 if such Indebtedness is incurred
thereafter.


 


“Equity
Investors” shall mean THL, THL Investors, ECP, ECP Investors and
their respective Affiliates, taken as a whole.


 


“Equity
Offering” means any public or private sale of Qualified Capital
Stock of Holdings or the Company or any capital contribution to Holdings; provided
that, in the event of an Equity Offering by Holdings or any capital
contribution to Holdings, Holdings contributes to the capital of the Company
the portion of the net cash proceeds of such Equity Offering or capital
contribution necessary to pay the aggregate redemption price of the Notes to be
redeemed pursuant to Section 5(b) of the Notes.


 


“Event
of Default” means each of the events set forth in Section 6.1.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute or statutes thereto.


 


“Excluded
Collateral” shall mean the Excluded Collateral as defined in the
U.S. Security Agreement.


 


“fair
market value” means, with respect to any asset or property, the
price which could be negotiated in an arm’s-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of
whom is under undue pressure or compulsion to complete the transaction.  Fair market value shall be determined by the
Board of Directors of the Company acting reasonably and in good faith and shall
be evidenced by a Board Resolution of the Board of Directors of the Company
delivered to the Trustee.


 


“First-Lien
Obligations” means, collectively, the Obligations under the Senior
Credit Facility and any interest rate protection, currency and other hedging
agreements permitted thereunder.


 


“Funding
Guarantor” has the meaning ascribed to it in Section 10.6.


 


“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
may be approved by a significant segment of the accounting profession of the
United States, which are in effect as of the Issue Date.


 


“Global
Security” has the meaning provided in Section 2.2.


 


14

















 


“Guarantees”
means, collectively, the guarantees of the Notes by the Guarantors pursuant to
Article X which are evidenced by notations of guarantee substantially in
the form of Exhibit E.


 


“Guarantor”
means (1) each of the Company’s Domestic Restricted Subsidiaries that is a
guarantor under the Senior Credit Facility on the Issue Date and (2) each
of the Company’s Domestic Restricted Subsidiaries that in the future executes a
supplemental indenture in which such Domestic Restricted Subsidiary agrees to
be bound by the terms of this Indenture as a Guarantor; provided that any Person
constituting a Guarantor as described above shall cease to constitute a
Guarantor when its respective Guarantee is released in accordance with the
terms of this Indenture.


 


“Holder”
or “Securityholder”
means a Person in whose name a Note is registered.  The Holder of a Note will be treated as the owner of such Note
for all purposes.


 


“Holdings”
means Vertis Holdings, Inc., a Delaware corporation and the parent of the
Company.


 


“Indebtedness”
means, with respect to any Person, without duplication:


 


(1)           all Obligations of
such Person for borrowed money;


 


(2)           all Obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments;


 


(3)           all Capitalized
Lease Obligations of such Person;


 


(4)           all Obligations of
such Person issued or assumed as the deferred purchase price of property, all
conditional sale obligations and all Obligations under any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business);


 


(5)           all Obligations for
the reimbursement of any obligor on any letter of credit, banker’s acceptance
or similar credit transaction;


 


(6)           guarantees and other
contingent obligations in respect of Indebtedness referred to in
clauses (1) through (5) above and clause (8) below;


 


(7)           all Obligations of
any other Person of the type referred to in clauses (1) through (6) which
are secured by any lien on any property or asset of such Person, but which
Obligations are not assumed by such Person, the amount of such Obligation being
deemed to be the lesser of the fair market value of such property or asset or
the amount of the Obligation so secured;


 


(8)           all Obligations
under Currency Agreements and Interest Swap Agreements of such Person; and


 


15

















 


(9)           all Disqualified
Capital Stock issued by such Person with the amount of Indebtedness represented
by such Disqualified Capital Stock being equal to the greater of its voluntary
or involuntary liquidation preference and its maximum fixed repurchase price,
but excluding accrued dividends, if any.


 


For purposes hereof, (x) the “maximum fixed repurchase price” of
any Disqualified Capital Stock which does not have a fixed repurchase price
shall be calculated in accordance with the terms of such Disqualified Capital
Stock as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to this Indenture, and
if such price is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in
good faith by the Board of Directors of the issuer of such Disqualified Capital
Stock and (y) any transfer of accounts receivable or other assets which
constitutes a sale for purposes of GAAP shall not constitute Indebtedness
hereunder.  Accrual of interest,
accretion or amortization of original issue discount and the payment of any
interest on any Indebtedness in the form of additional Indebtedness with the
same terms will not be deemed to be an incurrence of Indebtedness for the purposes
of Section 4.9.


 


Notwithstanding the foregoing, if the Attributed Receivables Facility
Indebtedness exceeds $130.0 million or after giving effect to an increase in
the size of the A/R Facility will exceed $130.0 million, such excess above
$130.0 million will be deemed to be Indebtedness for purposes of this
Indenture, whether or not such Indebtedness would otherwise be included in this
definition of Indebtedness.


 


“Indenture”
means this Indenture as amended or supplemented from time to time pursuant to
the terms hereof.


 


“Initial
Notes” means $350.0 million in aggregate principal amount of
9 3/4% Senior Secured Second Lien Notes due 2009 of the Company issued on
the Issue Date.


 


“Initial
Purchasers” means Deutsche Bank Securities Inc., JP Morgan Securities
Inc., Banc of America Securities LLC and Fleet Securities, Inc.


 


“Institutional
Accredited Investor” means an institution that is an “accredited investor”
as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.


 


“Intercompany
Indebtedness” means any Indebtedness of the Company or any Guarantor
or Wholly Owned Restricted Subsidiary of the Company that is not a Guarantor which,
in the case of the Company, is owing to any Guarantor or Wholly Owned
Restricted Subsidiary of the Company that is not a Guarantor and which, in the
case of any such Subsidiary, is owing to the Company or any Guarantor or Wholly
Owned Restricted Subsidiary of the Company that is not a Guarantor; provided
that if as of any date any Person other than the Company or a Guarantor or
Wholly Owned Restricted Subsidiary of the Company that is not a Guarantor, a
lender under the Senior Credit Facility, a creditor under any interest rate protection,
currency or other hedging agreement or a Holder (or any collateral agent acting
on behalf of such lenders and/or creditors) owns or holds such Indebtedness, or
holds any Lien in respect thereof


 


16

















 


(other than a Lien in favor of
the Holders, the lenders under the Senior Credit Facility, the creditors under
any interest rate protection, currency or other hedging agreement or any
collateral agent for such lenders and/or creditors), such Indebtedness shall no
longer be Intercompany Indebtedness.


 


“interest,”
when used with respect to any Note, means the amount of all interest accruing
on such Note, including all interest accruing subsequent to the occurrence of
any events specified in Sections 6.1(f) and 6.1(g) or which would have
accrued but for any such event.


 


“Interest
Payment Date,” when used with respect to any Note, means the stated
maturity of an installment of interest specified in such Note.


 


“Interest
Swap Obligations” means the obligations of any Person, pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated
by applying a fixed or a floating rate of interest on the same notional amount.


 


“Investment”
by any Person in any other Person means, with respect to any Person, any direct
or indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by, such other Person. 
“Investment” shall exclude extensions of trade credit by the Company and
its Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the
case may be.  For the purposes of
Section 4.8:


 


(1)           the Company shall be
deemed to have made an “Investment” equal to the fair market value of the net
assets of any Restricted Subsidiary at the time that such Restricted Subsidiary
is designated an Unrestricted Subsidiary and the aggregate amount of
Investments made subsequent to the Issue Date shall exclude (to the extent the
designation as an Unrestricted Subsidiary was included as a Restricted Payment)
the fair market value of the net assets of any Unrestricted Subsidiary at the
time that such Unrestricted Subsidiary is designated a Restricted Subsidiary,
not to exceed the amount of the Investment deemed made at the date of
designation thereof as an Unrestricted Subsidiary; and


 


(2)           the amount of any
Investment shall be the original cost of such Investment plus the cost of all
additional Investments by the Company or any of its Restricted Subsidiaries,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment, reduced by the
payment of dividends or distributions (including tax sharing payments) in
connection with such Investment or any other amounts received in respect of
such Investment; provided that no such payment of dividends or distributions
or receipt of any such other amounts shall


 


17

















 


reduce the
amount of any Investment if such payment of dividends or distributions or
receipt of any such amounts would be included in Consolidated Net Income.


 


If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Common Stock of any direct or indirect Restricted Subsidiary of
the Company such that, after giving effect to any such sale or disposition, the
Company no longer owns, directly or indirectly, more than 50% of the
outstanding Common Stock of such Restricted Subsidiary, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Common Stock of such Restricted
Subsidiary not sold or disposed of.


 


“Issue
Date” means the date of original issuance of the Initial Notes.


 


“Laws”
means all applicable statutes, laws, ordinances, regulations, rules, orders,
judgments, writs, injunctions or decrees of any state, commonwealth, nation,
territory, possession or province, or Tribunal, and “Law” means each of the foregoing.


 


“Legal
Defeasance” has the meaning provided in Section 8.2.


 


“Legal
Holiday” means any day other than a Business Day.


 


“Lien”
means any lien, mortgage, deed of trust, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).


 


“Maturity
Date” means, when used with respect to any Note, the date specified
in such Note as the fixed date on which the final installment of principal of
such Note is due and payable (in the absence of any acceleration thereof
pursuant to Section 6.2 or any Net Proceeds Offer or Change of Control
Offer).


 


“Mortgage”
means a mortgage, deed of trust or deed to secure debt made by the Company or
any of its Restricted Subsidiaries in favor or for the benefit of the
Collateral Agent on behalf of the Notes Secured Creditors in form and substance
reasonably satisfactory to the Collateral Agent.


 


“Mortgaged
Property” means the real properties listed on Annex A hereto
and each other real property with respect to which the Collateral Agent is
granted a Lien pursuant to a Mortgage or Amended and Restated Mortgage executed
and delivered pursuant to the provisions of Section 12.1 hereof.


 


“Net
Cash Proceeds” means, with respect to any Asset Sale, the proceeds
in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of:


 


18

















 


(1)           out-of-pocket expenses
and fees relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees and sales commissions);


 


(2)           taxes paid or
payable after taking into account any reduction in consolidated tax liability
due to available tax credits or deductions and any tax sharing arrangements;


 


(3)           any relocation
expenses and severance, pension and shutdown costs incurred as a result
thereof;


 


(4)           the repayment of
Indebtedness that is secured by a Lien on the property or assets that are the
subject of such Asset Sale so long as such Lien is permitted by this Indenture
and, if such Lien is on Collateral, it is senior in priority to the Liens
securing the Notes; and


 


(5)           any portion of cash
proceeds which the Company determines in good faith should be reserved for
post-closing adjustments, it being understood and agreed that on the day that
all such post-closing adjustments have been determined, the amount (if any) by
which the reserved amount in respect of such Asset Sale exceeds the actual
post-closing adjustments payable by the Company or any of its Subsidiaries
shall constitute Net Cash Proceeds on such date; provided that, in the case
of the sale by the Company of an asset constituting an Investment made after
the Issue Date (other than a Permitted Investment), the “Net Cash Proceeds” in
respect of such Asset Sale shall not include the lesser of (x) the cash
received with respect to such Asset Sale and (y) the initial amount of such
Investment, less, in the case of clause (y), all amounts (up to an amount
not to exceed the initial amount of such Investment) received by the Company
with respect to such Investment, whether by dividend, sale, liquidation or
repayment, in each case prior to the date of such Asset Sale.


 


“Net
Insurance Proceeds” means the insurance proceeds (excluding
liability insurance proceeds payable to the trustee for any loss, liability or
expense incurred by it and excluding the proceeds of business interruption
insurance) or condemnation awards actually received by the Company or any
Restricted Subsidiary of the Company as a result of the Destruction or Taking
of all or any portion of the Collateral, net of:


 


(1)           reasonable
out-of-pocket expenses and fees relating to such Taking or Destruction
(including, without limitation, expenses of attorneys and insurance adjusters);
and


 


(2)           repayment of
Indebtedness that is secured by the property or assets that are the subject of
such Taking or Destruction; provided that, in the case of any
Destruction or Taking involving Collateral, the Lien securing such Indebtedness
constitutes a Lien permitted by this Indenture to be senior to the Lien granted
to the Collateral Agent for the benefit of the Notes Secured Creditors pursuant
to the Security Documents.


 


19

















 


“Net
Proceeds Offer” shall have the meaning ascribed to such term in Section 4.12(a).


 


“Net
Proceeds Offer Amount” shall have the meaning ascribed to such term
in Section 4.12(a).


 


“Net
Proceeds Offer Payment Date” shall have the meaning ascribed to such
term in Section 4.12(a).


 


“Net
Proceeds Offer Trigger Date” shall have the meaning ascribed to such
term in Section 4.12(a).


 


“Non-U.S.
Person” means a Person who is not a U.S. Person, as defined in
Regulation S.


 


“Notes”
means, collectively, the Initial Notes, the Additional Notes, if any, and the
Series B Notes issued in exchange for the Initial Notes, treated as a
single class of securities, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this Indenture.


 


“Notes
Secured Creditors” means, collectively, the Trustee and the Holders.


 


“Obligations”
means all obligations for (a) principal, premium, interest (including any
interest accruing subsequent to the filing of a petition of bankruptcy at the
rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law), penalties, fees and
(b) to the extent liquidated and quantifiable at the time of determination,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.


 


“Officer”
means the Chairman of the Board, the President, any Vice President, the Chief
Financial Officer, the Controller, the Treasurer, the Secretary or Assistant
Secretary.


 


“Officers’
Certificate” means, as applied to any corporation, a certificate executed
on behalf of such corporation by an Officer.


 


“Offshore
Physical Securities” has the meaning provided in Section 2.2.


 


“Opinion
of Counsel” means a written opinion from legal counsel who is reasonably
acceptable to the Trustee, which may include outside or in-house counsel to the
Company.


 


“Paying
Agent” has the meaning provided in Section 2.3.


 


“Payment
Restriction” has the meaning ascribed to such term in
Section 4.10.


 


“Permitted
Holders” shall mean and include (i) THL, THL Affiliates and THL
Investors and (ii) ECP, ECP Affiliates and ECP Investors.


 


20

















 


“Permitted
Indebtedness” means, without duplication, each of the following:


 


(1)           Indebtedness
under the Notes and this Indenture (including any Guarantees thereof by the
Guarantors) in an aggregate principal amount not to exceed $350.0 million;


 


(2)           Indebtedness
incurred pursuant to the Senior Credit Facility (including but not limited to
Indebtedness in respect of letters of credit or bankers’ acceptances issued or
created thereunder) (including the guarantees made thereunder) in a maximum
principal amount not to exceed in the aggregate the amount equal to $380
million less (x) the Attributed Receivables Facility Indebtedness up to
$130.0 million pursuant to the A/R Facility (it being understood that the
maximum Attributed Receivables Facility Indebtedness under the A/R Facility
will not exceed $130.0 million, unless such excess above $130.0 million could
be incurred under the Consolidated Senior Secured Leverage Ratio set forth in
Section 4.9 hereof) and (y) the amount of all mandatory repayments of term
loans actually made under, and permanent commitment reductions actually made in
the revolving credit portion of, the Senior Credit Facility with Net Cash
Proceeds of Asset Sales applied thereto as required by Section 4.12;


 


(3)           other
Indebtedness of the Company and its Restricted Subsidiaries outstanding on the
Issue Date reduced by the amount of any scheduled amortization payments or
mandatory prepayments when actually paid or permanent reductions thereon;


 


(4)           Interest
Swap Obligations of the Company or any Restricted Subsidiary of the Company
covering Indebtedness of the Company or any of its Restricted Subsidiaries; provided
that any Indebtedness to which any such Interest Swap Obligations correspond is
otherwise permitted to be incurred under this Indenture;


 


(5)           Indebtedness
of the Company or any of its Restricted Subsidiaries under (i) Currency
Agreements entered into, in the judgment of the Company, to protect the Company
or such Restricted Subsidiary from foreign currency exchange rates and
(ii) Raw Material Hedge Agreements;


 


(6)           Intercompany
Indebtedness of the Company or any of its Restricted Subsidiaries;


 


(7)           Acquired
Indebtedness of any Restricted Subsidiary of the Company that is not a
Guarantor to the extent the Company could have incurred such Indebtedness in
accordance with the Consolidated Fixed Charge Coverage Ratio of
Section 4.9 on the date such Indebtedness became Acquired Indebtedness; provided
that such Acquired Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted Subsidiary
of the Company; provided, further, that the aggregate amount of
Indebtedness (including refinancings thereof) pursuant to this clause (7)
and clause (10) shall not exceed $40.0 million in the aggregate;


 


21

















 


(8)           Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient funds in
the ordinary course of business;


 


(9)           any
refinancing, modification, replacement, renewal, restatement, refunding,
deferral, extension, substitution, supplement, reissuance or resale of existing
or future Indebtedness (other than pursuant to clauses (2), (4), (5), (6),
(7), (8), (10), (11), (12), (13), (14) and (15) of this definition), including
any additional Indebtedness incurred to pay interest or premiums required by
the instruments governing such existing or future Indebtedness as in effect at
the time of issuance thereof or other premiums to the extent the Company
reasonably determines that such premiums are necessary to effect the
refinancing (“Premiums”) and fees in connection therewith; provided
that any such event shall not (1) result in an increase in the aggregate
principal amount of Permitted Indebtedness (except to the extent such increase
is a result of a simultaneous incurrence of additional Indebtedness (A) to
pay Premiums and related fees or (B) otherwise permitted to be incurred
under this Indenture) of the Company and its Restricted Subsidiaries and
(2) except for Indebtedness that refinances Indebtedness under the Senior
Subordinated Credit Agreement which Indebtedness does not have a maturity prior
to the maturity of the Notes, create Indebtedness with a Weighted Average Life
to Maturity at the time such Indebtedness is incurred that is less than the
Weighted Average Life to Maturity at such time of the Indebtedness being
refinanced, modified, replaced, renewed, restated, refunded, deferred,
extended, substituted, supplemented, reissued or resold; provided that no Restricted
Subsidiary of the Company may refinance any Indebtedness pursuant to this
clause (9) other than its own Indebtedness;


 


(10)         (x) Indebtedness
incurred by the Company and its Restricted Subsidiaries to finance the
purchase, lease or improvement of property (real or personal) or equipment
(whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets) and (y) Capitalized Lease Obligations in an
aggregate principal amount outstanding for both clauses (x) and (y)
(including refinancings thereof), together with any Indebtedness pursuant to
clause (7), not to exceed $40.0 million at the time of any incurrence
thereof;


 


(11)         Indebtedness
incurred by the Company or any of its Restricted Subsidiaries constituting
reimbursement obligations with respect to letters of credit issued in the
ordinary course of business, including, without limitation, letters of credit
in respect of workers’ compensation claims or self-insurance, or other Indebtedness
with respect to reimbursement type obligations regarding workers’ compensation
claims;


 


(12)         Indebtedness
arising from agreements of the Company or a Restricted Subsidiary of the
Company providing for indemnification, adjustment of purchase price, earn out
or other similar obligations, in each case, incurred or assumed in connection
with the disposition or acquisition of any business, assets or a Restricted
Subsidiary of the Company;


 


22

















 


(13)         obligations
in respect of performance and surety bonds and completion guarantees provided
by the Company or any Restricted Subsidiary of the Company in the ordinary
course of business;


 


(14)         Indebtedness
consisting of guarantees (i) by the Company of Indebtedness and any other
obligation or liability permitted to be incurred under this Indenture by
Restricted Subsidiaries of the Company, and (ii) subject to the provisions
of Section 4.16, by Restricted Subsidiaries of the Company of Indebtedness
and any other obligation or liability permitted to be incurred by the Company
or other Restricted Subsidiaries of the Company; and


 


(15)         additional
Indebtedness of the Company or any Restricted Subsidiary in an aggregate
principal amount not to exceed $35.0 million at any one time outstanding
(which amount may, but need not, be incurred in whole or in part under the
Senior Credit Facility).


 


“Permitted
Investments” means:


 


(1)           Investments
by the Company or any Restricted Subsidiary of the Company in any Restricted
Subsidiary of the Company that is a Guarantor or any Wholly Owned Subsidiary of
the Company that is not a Guarantor (whether existing on the Issue Date or
created thereafter) and Investments in the Company by any Restricted Subsidiary
of the Company;


 


(2)           cash
and Cash Equivalents;


 


(3)           Investments
existing on the Issue Date;


 


(4)           loans
and advances to employees, officers and directors of the Company and its
Restricted Subsidiaries not in excess of $10.0 million at any one time
outstanding;


 


(5)           accounts
receivable owing to the Company or any Restricted Subsidiary created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms; provided, however, that such trade
terms may include concessionary trade terms as the customary trade terms;


 


(6)           Currency
Agreements, Interest Swap Obligations and Raw Material Hedge Agreements entered
into by the Company or any of its Restricted Subsidiaries for bona fide
business reasons and not for speculative purposes, and otherwise in compliance
with this Indenture;


 


(7)           Investments
in securities of trade creditors or customers received pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers;


 


23

















 


(8)           guarantees
by the Company or any of its Restricted Subsidiaries of Indebtedness otherwise
permitted to be incurred by the Company or any of its Restricted Subsidiaries
under this Indenture and the creation of Liens on the assets of the Company or
any of its Restricted Subsidiaries in compliance with Section 4.11;


 


(9)           Investments
by the Company or any Restricted Subsidiary of the Company in a Person, if as a
result of such Investment (a) such Person becomes a Restricted Subsidiary
of the Company and a Guarantor or a Wholly Owned Subsidiary of the Company that
is not a Guarantor or (b) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys all or substantially all of
its assets to, or is liquidated into, the Company or a Restricted Subsidiary of
the Company that is a Guarantor or any Wholly Owned Subsidiary of the Company
that is not a Guarantor;


 


(10)         additional
Investments having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (10) that are at the time
outstanding, not exceeding $20.0 million at the time of such Investment
(with the fair market value of each Investment being measured at the time made
and without giving effect to subsequent changes in value);


 


(11)         any
Investment by the Company or a Restricted Subsidiary of the Company in a
Receivables Entity or any Investment by a Receivables Entity in any other
Person in connection with a Qualified Receivables Transaction; provided
that any Investment in a Receivables Entity is in the form of a Purchase Money
Note or an equity interest;


 


(12)         Investments
received by the Company or its Restricted Subsidiaries as consideration for
asset sales, including Asset Sales; provided that such Asset Sale is effected
in compliance with Section 4.12; and


 


(13)         that
portion of any Investment where the consideration provided by the Company is
Capital Stock of the Company (other than Disqualified Capital Stock).


 


“Permitted
Liens” means the following types of Liens:


 


(1)           Liens
securing the Notes and the Guarantees in an aggregate principal amount not to
exceed $350.0 million;


 


(2)           Liens
securing Acquired Indebtedness incurred in reliance on clause (7) of the
definition of “Permitted Indebtedness”; provided that such Liens do not extend to
or cover any property or assets of the Company or of any of its Restricted
Subsidiaries other than the property or assets that secured the Acquired
Indebtedness prior to the time such Indebtedness became Acquired Indebtedness
of the Company or a Restricted Subsidiary of the Company; provided, further,
that such Liens are either junior in priority to the Liens securing the Notes
or are not secured by Collateral;


 


24

















 


(3)           Liens
existing on the Issue Date, together with any Liens securing Indebtedness
incurred in reliance on clause (9) of the definition of “Permitted
Indebtedness” in order to refinance the Indebtedness secured by Liens existing
on the Issue Date; provided that the Liens securing the
refinancing Indebtedness shall not extend to property other than that pledged
under the Liens securing the Indebtedness being refinanced;


 


(4)           Liens
in favor of the Company on the property or assets, or any proceeds, income or
profit therefrom, of any Restricted Subsidiary; provided that such Liens are
either junior in priority to the Liens securing the Notes or are not secured by
Collateral;


 


(5)           Liens
securing Obligations under the Senior Credit Facility (including, without
limitation, Indebtedness in respect of letters of credit issued thereunder and
guarantees thereunder), so long as the principal amount of the Indebtedness
thereunder was incurred pursuant to clause (2) of the definition of
“Permitted Indebtedness”;


 


(6)           Liens
securing the A/R Facility in respect of no more than $130.0 million of
Attributed Receivables Facility Indebtedness less the amount of Indebtedness
incurred pursuant to clause (2) of the definition of “Permitted
Indebtedness” in excess of $250.0 million;


 


(7)           Liens
securing Interest Swap Obligations permitted to be incurred pursuant to
clause (4) of the definition of “Permitted Indebtedness”;


 


(8)           Liens
securing Currency Agreements and Raw Material Hedge Agreements permitted to be
incurred pursuant to clause (5) of the definition of “Permitted
Indebtedness”;


 


(9)           Liens
securing Capitalized Lease Obligations and other Indebtedness permitted to be
incurred pursuant to clause (10) of the definition of “Permitted
Indebtedness”; provided that such Liens are either junior in priority to
the Liens securing the Notes or are not secured by Collateral;


 


(10)         Liens
securing Indebtedness permitted to be incurred pursuant to clause (11) of
the definition of “Permitted Indebtedness”;


 


(11)         Liens
securing Indebtedness permitted to be incurred pursuant to clause (15) of
the definition of “Permitted Indebtedness”; provided that such Liens are either junior
in priority to the Liens securing the Notes or are not secured by Collateral;


 


(12)         purchase
money Liens to finance property or assets (whether through the direct purchase
of assets or the Capital Stock of any person owning such assets) of the Company
or any Restricted Subsidiary of the Company acquired or constructed in the
ordinary course of business; provided, however, that (a) the
related purchase money Indebtedness shall not exceed the cost of such property
(including related expenses and taxes) or assets and shall not be secured by
any property or assets of the Company or any


 


25

















 


Restricted Subsidiary of the Company other than the property and assets
so acquired or constructed and (b) the Lien securing such Indebtedness
shall be created within 180 days of such acquisition or construction; provided,
further,
that such Liens are either junior in priority to the Liens securing the Notes
or are not secured by Collateral;


 


(13)         inchoate
Liens for taxes, assessments or governmental charges or levies not yet due and
payable or Liens for taxes, assessments or governmental charges or levies being
contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP;


 


(14)         Liens
arising out of the existence of judgments or awards not constituting an Event
of Default;


 


(15)         Liens
(other than any Lien imposed by ERISA) (x) incurred or deposits made in
the ordinary course of business of the Company and its Restricted Subsidiaries
in connection with workers’ compensation, unemployment insurance and other
types of social security, (y) to secure the performance by the Company and
its Restricted Subsidiaries of tenders, statutory obligations (other than
excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids,
leases, government contracts, trade contracts, performance and return of money
bonds and other similar obligations (exclusive of obligations for the payment
of borrowed money) or (z) to secure the performance by the Company and its
Restricted Subsidiaries of leases of real property, to the extent incurred or
made in the ordinary course of business consistent with past practices;


 


(16)         Liens
in favor of customs and revenue authorities arising as a matter of law or
regulation to secure the payment of customs duties in connection with the
importation of goods and deposits made to secure statutory obligations in the
form of excise taxes;


 


(17)         Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Company or any
Restricted Subsidiary in the ordinary course of business (excluding any general
inventory financing);


 


(18)         Liens
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and
other similar Liens, on the property of the Company or any Restricted
Subsidiary arising in the ordinary course of business and securing payment of
obligations that are being contested in good faith and by appropriate
proceedings;


 


(19)         Liens
upon specific items of inventory or other goods and proceeds of any Person
securing such Person’s obligations in respect of banker’s acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;


 


26

















 


(20)         Liens
encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements of the Company or any
Restricted Subsidiaries, including rights of offset and set-off; and


 


(21)         Liens
in respect of Senior Secured Indebtedness and the related Obligations
thereunder if on the date of the incurrence of such Indebtedness, after giving
effect to the incurrence thereof, the Consolidated Senior Secured Leverage
Ratio of the Company would have been less than or equal to (i) 2.0 to 1.0 if
such Indebtedness is incurred on or before January 1, 2005 and
(ii) 1.75 to 1.0 if such Indebtedness is incurred thereafter.


 


“Person”
means an individual, partnership, corporation, unincorporated organization,
trust or joint venture, or a governmental agency or political subdivision
thereof or any other entity.


 


“Physical
Security” means, collectively, the Offshore Physical Securities and
the U.S. Physical Securities.


 


“Preferred
Stock” of any Person means any Capital Stock of such Person that has
preferential rights to any other Capital Stock of such Person with respect to
dividends or redemptions or upon liquidation.


 


“principal”
of a debt security means the principal amount of the security plus, when
appropriate, the premium, if any, on the security.


 


“Private
Placement Legend” means the legend initially set forth on the
Series A Notes in the form set forth on Exhibit A-1.


 


“pro
forma” means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act as interpreted
by the Company’s chief financial officer or Board of Directors in consultation
with its independent certified public accountants.


 


“Productive
Assets” means assets (including Capital Stock) of a kind used or usable
in the businesses of the Company and its Restricted Subsidiaries as, or related
to such business, conducted on the Issue Date or in businesses reasonably
related thereto.


 


“Purchase
Money Note” means a promissory note of a Receivables Entity evidencing
a line of credit, which may be irrevocable, from the Company or any Subsidiary
of the Company in connection with a Qualified Receivables Transaction to a
Receivables Entity, which note shall be repaid from cash available to the
Receivables Entity, other than amounts required to be established as reserves
pursuant to agreements, amounts paid to investors in respect of interest,
principal and other amounts owing to such investors and amounts paid in
connection with the purchase of newly generated receivables.


 


27

















 


“Qualified
Capital Stock” means any Capital Stock that is not Disqualified Capital
Stock.


 


“Qualified
Institutional Buyer” or “QIB” shall have the meaning specified in
Rule 144A under the Securities Act.


 


“Qualified
Receivables Transaction” means any transaction or series of transactions
that may be entered into by the Company or any of its Subsidiaries pursuant to
which the Company or any of its Subsidiaries may sell, convey or otherwise
transfer to (a) a Receivables Entity (in the case of a transfer by the
Company or any of its Subsidiaries) and (b) any other Person (in the case
of a transfer by a Receivables Entity), or may grant a security interest in,
any accounts receivable (whether now existing or arising in the future) of the
Company or any of its Subsidiaries, and any assets related thereto including,
without limitation, all collateral securing such accounts receivable, all
contracts and all guarantees or other obligations in respect of such accounts
receivable, proceeds of such accounts receivable and other assets which are
customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.


 


“Raw
Material Hedge Agreements” means agreements designed to hedge
against fluctuations in the cost of raw materials entered into in the ordinary
course of business in connection with the operation of the Company’s and its
Restricted Subsidiaries’ business.


 


“Receivable”
means a right to receive payment arising from a sale or lease of goods or
services by a Person pursuant to an arrangement with another Person pursuant to
which such other Person is obligated to pay for goods or services under terms
that permit the purchase of such goods and services on credit, as determined in
accordance with GAAP.


 


“Receivables
Entity” means a Wholly Owned Subsidiary of the Company (or another
Person in which the Company or any Subsidiary of the Company makes an Investment
and to which the Company or any Subsidiary of the Company transfers accounts
receivable and related assets) which engages in no activities other than in
connection with the financing of accounts receivable, all proceeds thereof and
all rights (contractual or other), collateral and other assets relating
thereto, and any business or activities incidental or related to such business,
and which is designated by the Board of Directors of the Company (as provided
below) as a Receivables Entity:


 


(1)           no
portion of the Indebtedness or any other Obligations (contingent or otherwise)
of which:


 


(i)            is
guaranteed by the Company or any Subsidiary of the Company (excluding
guarantees of Obligations (other than the principal of, and interest on,
Indebtedness) pursuant to Standard Securitization Undertakings);


 


28

















 


(ii)           is
recourse to or obligates the Company or any Subsidiary of the Company in any
way other than pursuant to Standard Securitization Undertakings; or


 


(iii)          subjects
any property or asset of the Company or any Subsidiary of the Company, directly
or indirectly, contingently or otherwise, to the satisfaction thereof, other
than pursuant to Standard Securitization Undertakings;


 


(2)           with
which neither the Company nor any Subsidiary of the Company has any material
contract, agreement, arrangement or understanding other than on terms no less
favorable to the Company or such Subsidiary than those that might be obtained
at the time from Persons that are not Affiliates of the Company, other than
(i) pursuant to documents which evidence a Qualified Receivables
Transaction and (ii) fees payable in the ordinary course of business in
connection with servicing accounts receivable; and


 


(3)           to
which neither the Company nor any Subsidiary of the Company has any obligation
to maintain or preserve such entity’s financial condition or cause such entity
to achieve certain levels of operating results other than through the
contribution of additional Receivables, related security and collections
thereto and proceeds of the foregoing.


 


Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation and an Officers’ Certificate certifying that such designation
complied with the foregoing conditions.


 


“Redemption
Date” means, with respect to any Note, the Maturity Date of such
Note or the date on which such Note is to be redeemed by the Company pursuant
to the terms of the Notes.


 


“Reference
Date” shall have the meaning ascribed to such term in
Section 4.8(a).


 


“Registered
Exchange Offer” means an offer to exchange the Series B Notes
for the Initial Notes or Additional Notes in the form of Series A Notes in
accordance with the Registration Rights Agreement.


 


“Registrar”
has the meaning provided in Section 2.3.


 


“Registration
Rights Agreement” means (i) the Registration Rights Agreement by
and among the Company, the Guarantors and the Initial Purchasers relating to
the Notes and dated as of the Issue Date, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof or (ii) any similar agreement entered into in connection
with the issuance of Additional Notes in the form of Series A Notes after
the Issue Date.


 


“Regulation S”
means Regulation S under the Securities Act.


 


29

















 


“Responsible
Officer” shall mean, when used with respect to the Trustee, any officer
within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person’s knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.


 


“Restricted
Payment” has the meaning provided in Section 4.8.


 


“Restricted
Security” has the meaning set forth in Rule 144(a)(3) under the
Securities Act; provided that the Trustee shall be entitled to request and
conclusively rely upon an Opinion of Counsel with respect to whether any Note
is a Restricted Security.


 


“Restricted
Subsidiary” of any Person means any Subsidiary of such Person which
at the time of determination is not an Unrestricted Subsidiary.


 


“Rule
144A” means Rule 144A under the Securities Act.


 


“Sale
and Leaseback Transaction” means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to the Company or a Restricted Subsidiary of any property, whether
owned by the Company or any Restricted Subsidiary at the Issue Date or later
acquired, which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such
property.


 


“SEC”
means the Securities and Exchange Commission.


 


“Securities
Act” means the Securities Act of 1933, as amended.


 


“Security
Documents” means, collectively,


 


(1)           the
U.S. Security Agreement; and


 


(2)           all
other security agreements, mortgages, deeds of trust, deeds to secure debt,
pledges, collateral assignments and other agreements or instruments evidencing
or creating any security interest or Lien in favor of the Collateral Agent in
any or all of the Collateral.


 


“Securityholder”
means Holder.


 


“Senior
Credit Facility” means the Credit Agreement dated as of
December 7, 1999, among Holdings, the Company, certain of its
subsidiaries, the lenders party thereto in their capacities as lenders
thereunder and J.P. Morgan Securities Inc. (f/k/a Chase Securities Inc.) and
Deutsche Bank Securities Inc., as Joint Lead Arrangers and Joint Book Managers,
JP Morgan Chase Bank (f/k/a The Chase Manhattan Bank), as Administrative Agent,
Deutsche Bank Trust


 


30

















 


Company Americas (f/k/a Bankers
Trust Company), as Syndication Agent, Bank of America, N.A., as Documentation
Agent, and various co-agents, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder or adding Restricted Subsidiaries of the Company as additional borrowers
or guarantors thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.


 


“Senior Secured Indebtedness” means
Indebtedness secured by first or second-priority Liens on any Collateral.


 


“Senior Subordinated Credit Agreement”
means the Senior Subordinated Credit Agreement dated as of December 7, 1999, by
and among Holdings, the Company, the subsidiary guarantors named therein, the
lenders party thereto, and the agent banks named therein, as the same may be
amended from time to time.


 


“Series A Notes” means collectively,
the Initial Notes and any Additional Notes issued, authenticated and delivered
under this Indenture after the Issue Date substantially in the form set forth
in Exhibit A-1.


 


“Series B Notes” means the 9 3/4%
Senior Secured Second Lien Notes due 2009, Series B (the terms of which
are identical to the Series A Notes except that the Series B Notes
shall be registered under the Securities Act, and shall not contain the
restrictive legend on the face of the form of the Series A Notes) to be
issued in exchange for Series A Notes pursuant to a Registered Exchange
Offer and this Indenture substantially in the form set forth in Exhibit A-2.


 


“Significant Subsidiary” with respect to
any Person, means any Restricted Subsidiary of such Person that satisfies the
criteria for a “significant subsidiary” set forth in Rule 1.02(w) of
Regulation S-X under the Exchange Act.


 


“Standard Securitization Undertakings”
means representations, warranties, covenants and indemnities entered into by
the Company or any Subsidiary of the Company which, taken as a whole, are
reasonably customary in an accounts receivable transaction (including, without
limitation, all such representations, warranties, covenants and indemnities
included in the documents evidencing the A/R Facility as in effect on the Issue
Date).


 


“Subordinated Obligation”  means
(x) with respect to the Company, any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter incurred) which is (i) expressly
subordinate in right of payment to the Notes, pursuant to a written agreement
or (ii) pari
passu in right of payment to the Notes but which Indebtedness is
unsecured and (y) with respect to a Guarantor, any Indebtedness of such
Guarantor (whether outstanding on the Issue Date or thereafter incurred) which
is (i) expressly subordinate in right of


 


31

















 


payment to the Guarantee of such Guarantor, pursuant to a written
agreement or (ii) pari passu in right of payment to the Guarantee of such
Guarantor but which Indebtedness is unsecured.


 


“Subsidiary” with respect to any Person,
means:


 


(1)           any
corporation of which the outstanding Capital Stock having at least a majority
of the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly, by such
Person; or


 


(2)           any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.


 


“Taking”
means any taking of all or any portion of the Collateral by condemnation or
other eminent domain proceedings, pursuant to any law, general or special, or
by reason of the temporary requisition of the use or occupancy of all or any
portion of the Collateral by any governmental authority, civil or military, or
any sale pursuant to the exercise by any such governmental authority of any
right which it may then have to purchase or designate a purchaser or to order a
sale of all or any portion of the Collateral.


 


“THL”
shall mean Thomas H. Lee Partners, L.P., a Delaware limited partnership.


 


“THL
Affiliates” shall mean any Affiliate of THL; provided that for purposes
of the definition of “Change of Control,” the term THL Affiliate shall not
include any portfolio company of either THL or any Affiliate of THL.


 


“THL
Investor” shall mean and include Thomas H. Lee Equity Fund, IV,
L.P., Thomas H. Lee Foreign Fund, IV, L.P., Thomas H. Lee Equity Fund
IV, L.P., 1997 Thomas H. Lee Nominee Trust and Thomas H. Lee
Charitable Investment, L.P., or any limited or general partner, stockholder,
officer or employee of such THL Investor, or any officer or employee of THL.


 


“TIA”
means the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in
effect on the date of this Indenture.


 


“Transaction
Date” has the meaning ascribed to such term in the definition of
“Consolidated Fixed Charge Coverage Ratio.”


 


“Treasury
Rate” means, with respect to a Redemption Date, the yield to maturity
at the time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve Statistical
Release H.15(519) that has become publicly available at least two Business Days
prior to such 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 such Redemption Date to April 1, 2006; provided,
however,
that if the period from such Redemption Date to April 1, 2006, is not
equal to the constant maturity of the United States Treasury security for which
a weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a


 


32

















 


year) from the weekly average
yields of United States Treasury securities for which such yields are given,
except that if the period from such Redemption Date to April 1, 2006, 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.


 


“Tribunal”
means any government, any arbitration panel, any court or any governmental
department, commission, board, bureau, agency, authority or instrumentality of
the United States or any state, province, commonwealth, nation, territory or
possession, whether now or hereafter constituted and/or existing.


 


“Trust
Monies” means all cash and Cash Equivalents received by the Trustee,
net of reasonable out-of-pocket expenses and fees (including, without
limitation, expenses of attorneys):


 


(1)           upon
the release of Collateral, except pursuant to an Asset Sale; and


 


(2)           pursuant
to the Security Documents.


 


“Trustee”
means the party named as such in this Indenture until a successor replaces it
in accordance with the provisions of this Indenture and thereafter means such
successor.


 


“Unrestricted
Subsidiary” of any Person means:


 


(1)           any
Subsidiary of such Person that at the time of determination shall be or
continue to be designated an Unrestricted Subsidiary by the Board of Directors
of such Person in the manner provided below; and


 


(2)           any
Subsidiary of an Unrestricted Subsidiary.


 


The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided that:


 


(1)           the
Company certifies to the Trustee that such designation complies with
Section 4.8; and


 


(2)           each
Subsidiary to be so designated and each of its Subsidiaries has not at the time
of designation, and does not thereafter, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable with respect to any
Indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any of its Restricted Subsidiaries.


 


33

















 


The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary only if:


 


(1)           immediately
after giving effect to such designation, the Company is able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.9; and


 


(2)           immediately
before and immediately after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing.  Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers’ Certificate certifying that such designation complied with the
foregoing provisions.


 


“U.S.
Government Obligations” means direct non-callable obligations of, or
non-callable obligations guaranteed by, the United States of America for the
payment of which guarantee or obligations the full faith and credit of the
United States is pledged.


 


“U.S. Legal Tender” means such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts.


 


“U.S. Physical Securities” means Notes,
together with their related Guarantees, issued in the form of certificated
Notes, together with their related Guarantees, in registered form in substantially
the form set forth in Exhibit A-1 or Exhibit A-2.


 


“U.S. Security Agreement” means the
Security Agreement dated as of December 7, 1999 and amended and restated
as of June 6, 2003 (as amended, restated, modified, supplemented, extended
and/or replaced from time to time), among the Company, certain of its domestic
subsidiaries and Vertis Holdings, as Assignors, and JP Morgan Chase Bank (f/k/a
The Chase Manhattan Bank), as Collateral Agent.


 


“Weighted Average Life to Maturity” means,
when applied to any Indebtedness at any date, the number of years obtained by
dividing (a) the then outstanding aggregate principal amount of such
Indebtedness into (b) the sum of the total of the products obtained by
multiplying (i) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal, including payment
at final maturity, in respect thereof, by (ii) the number of years
(calculated to the nearest one-twelfth) which will elapse between such date and
the making of such payment.


 


“Wholly Owned Subsidiary” means any
Restricted Subsidiary of the Company all the outstanding voting interests or
voting Capital Stock of which (other than directors’ qualifying shares or an
immaterial amount of shares required to be owned by other Persons pursuant to applicable
law) is owned, directly or indirectly, by the Company.


 


34

















 


SECTION 1.2.        Incorporation
by Reference of Trust Indenture Act.


 


Whenever this Indenture refers to a provision of the TIA, the provision
shall be deemed incorporated by reference in and made a part of this
Indenture.  The following TIA terms used
in this Indenture have the following meanings:


 


(a)           “Commission”
means the SEC;


 


(b)           “indenture
securities” means the Notes, together with their related Guarantees;


 


(c)           “indenture
security holder” means a Securityholder;


 


(d)           “indenture to
be qualified” means this Indenture;


 


(e)           “indenture
trustee” or “institutional trustee” means the Trustee;
and


 


(f)            “obligor”
on the indenture securities means the Company or any other obligor on the Notes
and the Guarantees.


 


All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings so assigned to them therein.


 


SECTION 1.3.        Rules
of Construction.


 


Unless the context otherwise requires:


 


(a)           a
term has the meaning assigned to it;


 


(b)           “or”
is exclusive;


 


(c)           words
in the singular include the plural, and words in the plural include the
singular;


 


(d)           provisions
apply to successive events and transactions;


 


(e)           “herein,”
“hereof” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other Subdivision; and


 


(f)            unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP as in effect from time to time, applied on a basis
consistent with the most recent audited consolidated financial statements of
the Company.


 


35

















 


ARTICLE II.


 


THE SECURITIES


 


SECTION 2.1.        Form and Dating.


 


The Series A Notes and the Series B Notes and the Trustee’s
certificate of authentication with respect thereto shall be substantially in
the form set forth in Exhibits A-1 and A-2 annexed hereto, which are
hereby incorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends or
endorsements required by law, rule, usage or agreement to which the Company is
subject.  Each Note shall be dated the
date of its issuance and shall show the date of its authentication.  The terms and provisions contained in the
Notes and the Guarantees shall constitute, and are expressly made, a part of
this Indenture.


 


SECTION 2.2.        Execution and Authentication.


 


Two Officers shall execute the Notes on behalf of the Company by either
manual or facsimile signature.  The
Guarantors shall execute the Guarantees in the manner set forth in
Article X.


 


If a Person whose signature is on a Note as an Officer no longer holds
that office at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless.


 


A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. 
The signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.  Each Note shall
be dated the date of its authentication.


 


The Trustee shall initially authenticate Initial Notes for original
issue on the Issue Date in an aggregate principal amount of $350,000,000 upon a
written order of the Company in the form of an Officer’s Certificate of the Company
(other than as provided in Section 2.7).  The Trustee shall authenticate Additional Notes thereafter in
unlimited aggregate principal amount (so long as permitted by the terms of this
Indenture, including, without limitation, Section 4.9) for original
issue upon a written order of the Company in the form of an Officers’
Certificate in aggregate principal amount as specified in such order (other
than as provided in Section 2.7). 
Any such written order relating to the issuance of Additional Notes shall
confirm that such Officers have reviewed the Security Documents for the purpose
of (1) confirming that any limitation on the incurrence of additional
indebtedness provided in such Security Documents shall not be exceeded by the
issuance of such Additional Notes and (2) determining whether or not the Security
Documents secure the Additional Notes. 
In addition, on or prior to the date of consummation of a Registered
Exchange Offer, the Trustee or the authenticating agent shall authenticate
Series B Notes to be issued at the time of the consummation of a Registered
Exchange Offer (including with respect to the Initial Notes) upon receipt of an
Officer’s Certificate.  Each such written
order shall specify the amount of the Notes to be authenticated and the date on
which the Notes are to be authenticated. 
The aggregate principal amount of Notes outstanding at any time is
unlimited.


 


36

















 


The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes.  Unless
limited by the terms of such appointment, 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 agent. 
Such authenticating agent shall have the same authenticating rights and
duties as the Trustee in any dealings hereunder with the Company or with any
Affiliate of the Company.


 


The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 and any integral multiple thereof.


 


Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global notes in registered form,
substantially in the form set forth in Exhibit A-1 (“Global Security”), deposited
with the Trustee, as custodian for the Depository, and shall bear the legend
set forth on Exhibit B.  The
aggregate principal amount of any Global Security may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.


 


Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of certificated notes in
registered form set forth in Exhibit A-1 (“Offshore Physical Securities”).


 


SECTION 2.3.        Registrar and Paying Agent.


 


The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in the City of New York, State of New York) where
Notes may be presented for registration of transfer or for exchange (the “Registrar”),
an office or agency (which shall be located in the Borough of Manhattan, City
of New York, State of New York) where Notes may be presented for payment (the “Paying Agent”)
and an office or agency where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served.  The Registrar shall keep a register of the
Notes and of their transfer and exchange. 
The Company may have one or more co-registrars and one or more
additional paying agents.  The term
“Paying Agent” includes any additional paying agent.  The Company may act as its own Paying Agent, except that for the
purposes of payments on account of principal on the Notes pursuant to
Sections 4.12 and 4.14, neither the Company nor any Affiliate of the
Company may act as Paying Agent.


 


The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA.  The agreement shall implement
the provisions of this Indenture that relate to such Agent.  The Company shall notify the Trustee of the
name and address of any such Agent.  If
the Company fails to maintain a Registrar or Paying Agent, or fails to give the
foregoing notice, the Trustee shall act as such and shall be entitled to
appropriate compensation in accordance with Section 7.7.


 


The Company initially appoints the Trustee as Registrar and Paying
Agent and agent for service of notices and demands in connection with the
Notes.


 


37

















 


SECTION 2.4.        Paying Agent To Hold Money in Trust.


 


Each Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Notes, and shall notify the Trustee
of any default by the Company in making any such payment.  Money held in trust by the Paying Agent need
not be segregated except as required by law and in no event shall the Paying
Agent be liable for any interest on any money received by it hereunder.  The Company at any time may require the
Paying Agent to pay all money held by it to the Trustee and account for any
funds disbursed and the Trustee may at any time during the continuance of any
Event of Default specified in Section 6.1(a) or (b) upon written request
to the Paying Agent, require such Paying Agent to pay forthwith all money so
held by it to the Trustee and to account for any funds disbursed.  Upon making such payment, the Paying Agent
shall have no further liability for the money delivered to the Trustee.


 


SECTION 2.5.        Securityholder Lists.


 


The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Securityholders and otherwise comply with TIA § 312(a).  If the Trustee is not the Registrar, the
Company shall furnish or cause the Registrar to furnish to the Trustee before
each Interest Payment Date, and at such other times as the Trustee may request
in writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Securityholders.


 


SECTION 2.6.        Transfer and Exchange.


 


Subject to the provisions of Sections 2.14 and 2.15, when Notes
are presented to the Registrar or a co-registrar with a request from the Holder
of such Notes to register the transfer or to exchange them for an equal
principal amount of Notes of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested; provided that
every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorneys duly authorized in writing.  To permit registrations of transfers and exchanges, the Company
shall issue and execute and the Trustee shall authenticate new Notes (together
with related Guarantees executed by the Guarantors) evidencing such transfer or
exchange.  No service charge shall be
made to the Securityholder for any registration of transfer or exchange.  The Company may require from the Securityholder
payment of a sum sufficient to cover any transfer taxes or other governmental
charge that may be imposed in relation to a transfer or exchange, but this
provision shall not apply to any exchange pursuant to Section 2.10, 4.12,
4.14 or 9.5 (in which events the Company will be responsible for the payment of
such taxes).  The Registrar or
co-Registrar shall not be required to register the transfer of or exchange of
any Note (i) during a period beginning at the opening of business 15 days
before the mailing of a notice of redemption of Notes and ending at the close of
business on the day of such mailing and (ii) selected for redemption in
whole or in part pursuant to Article III, except the unredeemed portion of any
Note being redeemed in part.


 


38

















 


SECTION 2.7.        Replacement Notes.


 


If a mutilated Note is surrendered to the Registrar or the Trustee or
if the Holder of a Note of any series claims that the Note has been lost,
destroyed or wrongfully taken, the Company shall issue and the Trustee shall
authenticate a replacement Note (together with related Guarantees executed by
the Guarantors) if the Holder of such Note furnishes to the Company and to the
Trustee evidence reasonably acceptable to them of the ownership and the
destruction, loss or theft of such Note. 
If required by the Trustee or the Company, an indemnity bond shall be
posted, sufficient in the judgment of the Company or the Trustee, as the case
may be, to protect the Company, the Trustee or any Agent from any loss that any
of them may suffer if such Note is replaced. 
The Company may charge such Holder for the Company’s expenses in replacing
such Note and the Trustee may charge the Company for the Trustee’s expenses in
replacing such Note.  Every replacement
Note shall constitute an additional obligation of the Company and shall be
entitled to the benefits of this Indenture.


 


SECTION 2.8.        Outstanding Notes.


 


The Notes outstanding at any time are all Notes that have been
authenticated by the Trustee except for (a) those canceled by it,
(b) those delivered to it for cancellation or (c) those described in
this Section 2.8 as not outstanding. 
A Note does not cease to be outstanding because the Company or one of
its Affiliates holds the Note.


 


If a Note is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona  fide purchaser in whose hands such Note is
a legal, valid and binding obligation of the Company.


 


If the Paying Agent holds, in its capacity as such, on any Maturity
Date or on any optional redemption date money sufficient to pay all accrued
interest and principal with respect to such Notes payable on that date and is
not prohibited from paying such money to the Holders thereof pursuant to the
terms of this Indenture, then on and after that date such Notes cease to be
outstanding and interest on them ceases to accrue.


 


SECTION 2.9.        Treasury Notes.


 


In determining whether the Holders of the required principal amount of
Notes have concurred in any declaration of acceleration or notice of default or
direction, waiver or consent or any amendment, modification or other change to
this Indenture, Notes owned by the Company or any Subsidiary or an Affiliate of
the Company shall be deemed not to be outstanding, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent or any amendment, modification or other change to
this Indenture, only Notes that the Trustee knows are so owned shall be so disregarded.  The Company shall notify the Trustee, in
writing, when it or any of its Affiliates repurchases or otherwise acquires
Notes, of the aggregate principal amount of such Notes so repurchased or
otherwise acquired.


 


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SECTION 2.10.      Temporary Notes.


 


Until definitive Notes are prepared and ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes (together with
related Guarantees executed by the Guarantors).  Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Company reasonably considers appropriate
for temporary Notes.  Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Notes (together with related Guarantees executed by the
Guarantors) in exchange for temporary Notes. 
Until such exchange, such temporary Notes shall be entitled to the same
rights, benefits and privileges as the definitive Notes.


 


SECTION 2.11.      Cancellation.


 


The Company at any time may deliver Notes to the Trustee for
cancellation.  The Registrar and the
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 (subject to the record-retention requirements of the Exchange Act) dispose
of canceled Notes unless the Company directs the Trustee to return such Notes
to the Company.  The Company may not
reissue or resell, or issue new Notes to replace, Notes that the Company has
redeemed or paid, or that have been delivered to the Trustee for cancellation.


 


SECTION 2.12.      Defaulted Interest.


 


If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest, plus, to the extent permitted by law, any interest
payable on the defaulted interest, to the Persons who are Securityholders on a
subsequent special record date.  Such
record date shall be the fifteenth day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day.  At least 15 days before
the subsequent special record date, the Company shall mail (or cause to be
mailed) to each Securityholder a notice that states the record date, the
payment date and the amount of defaulted interest to be paid.  Notwithstanding the foregoing, any interest
which is paid prior to the expiration of the 30-day period set forth in
Section 6.1(a) or (b) shall be paid to Holders of Notes as of the
regular record date for the interest payment date for which interest has not
been paid.  Notwithstanding the
foregoing, the Company may make payment of any defaulted interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange.


 


SECTION 2.13.      CUSIP Number.


 


The Company in issuing the Notes may use a “CUSIP” number, and if so,
such CUSIP number shall be included in notices of redemption or exchange as a
convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance may be placed
only on the other identification numbers printed on the Notes.  The Company will promptly notify the Trustee
of any change in the CUSIP number.


 


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SECTION 2.14.      Book-Entry Provisions for Global
Securities.


 


(a)           The Global
Securities initially shall (i) be registered in the name of the Depository
or the nominee of such Depository, (ii) be delivered to the Trustee as
custodian for such Depository and (iii) bear legends as set forth in
Exhibit B.


 


Members of, or participants in, the Depository (“Agent Members”) shall have
no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. 
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee or any agent of the Company or the Trustee from giving effect to
any written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Note.


 


(b)           Transfers of Global
Securities shall be limited to transfers in whole, but not in part, to the
Depository, its successors or their respective nominees.  U.S. Physical Securities shall be
transferred to all beneficial owners in exchange for their beneficial interests
in Global Securities, in accordance with the rules and procedures of the
Depository, only if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for any Global Security and a
successor depositary is not appointed by the Company within 90 days of such
notice or (ii) an Event of Default has occurred and is continuing and the
Registrar has received a request from the Depository to issue U.S. Physical
Securities.


 


(c)           In connection with
the transfer of Global Securities as an entirety to beneficial owners pursuant
to paragraph (b), the Global Securities shall be deemed to be surrendered
to the Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the Global Securities, an
equal aggregate principal amount of U.S. Physical Securities (together with
related Guarantees executed by the Guarantors) of authorized denominations.


 


(d)           Any U.S. Physical
Security constituting a Restricted Security delivered in exchange for an
interest in a Global Security pursuant to paragraph (b) shall, except as
otherwise provided by paragraphs (a)(i)(x) and (c) of Section 2.15,
bear the legend regarding transfer restrictions applicable to the U.S. Physical
Securities set forth in Exhibit A-1.


 


(e)           The Holder of any
Global Security may grant proxies and otherwise authorize any Person, including
Agent Members and Persons that may hold interests through Agent Members, to
take any action which a Holder is entitled to take under this Indenture or the
Notes.


 


41

















 


SECTION 2.15.      Special Transfer Provisions.


 


(a)           Transfers to
Non-QIB Institutional Accredited Investors and Non-U.S. Persons.  The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to any Institutional Accredited Investor which is not a QIB
or to any Non-U.S. Person:


 


(i)            the
Registrar shall register the transfer of any Note constituting a Restricted
Security, whether or not such Note bears the Private Placement Legend, if
(x) the requested transfer is after the second anniversary of the Issue
Date or (y) (1) in the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the
proposed transferee has delivered to the Registrar a certificate substantially
in the form of Exhibit C hereto or (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferee has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto, together, in
the case of clause (i)(x), with such other certifications, legal opinions
or other information as the Company or the Trustee may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act; and


 


(ii)           if
the proposed transferor is an Agent Member holding a beneficial interest in a
Global Security, upon receipt by the Registrar of (x) the certificate, if any,
required by paragraph (i) above and (y) instructions given in accordance
with the Depository’s and the Registrar’s procedures,


 


whereupon (a) the Registrar shall reflect on its books and records
the date and (if the transfer does not involve a transfer of outstanding Physical
Securities) a decrease in the principal amount of a Global Security in an
amount equal to the principal amount of the beneficial interest in a Global
Security to be transferred, and (b) the Company shall execute and the
Trustee shall authenticate and deliver one or more Physical Securities
(together with related Guarantees executed by the Guarantors) of like tenor and
amount.


 


(b)           Transfers to QIBs.  The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons):


 


(i)            the
Registrar shall register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in writing,
that the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in writing,
that it is purchasing the Note for its own account or an account with respect
to which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to Rule
144A or has


 


42

















 


determined not to request such information and that it is aware that
the transferor is relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A; and


 


(ii)           if
the proposed transferee is an Agent Member, and the Notes to be transferred
consist of Physical Securities which after transfer are to be evidenced by an
interest in the Global Security, upon receipt by the Registrar of instructions
given in accordance with the Depository’s and the Registrar’s procedures, the
Registrar shall reflect on its books and records the date and an increase in
the principal amount of the Global Security in an amount equal to the principal
amount of the Physical Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred.


 


(c)           Private Placement
Legend.  Upon the transfer, exchange
or replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend.  Upon the transfer, exchange or replacement
of Notes bearing the Private Placement Legend, the Registrar shall deliver only
Notes that bear the Private Placement Legend unless (i) the circumstances
contemplated by paragraph (a)(i)(x) of this Section 2.15 exist,
(ii) there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act or
(iii) such Note has been sold pursuant to an effective registration
statement under the Securities Act.


 


(d)           General.  By its acceptance of any Note bearing the
Private Placement Legend, each Holder of such a Note acknowledges the restrictions
on transfer of such Note set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Note only as provided in
this Indenture.


 


The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.14 or this
Section 2.15.  The Company shall
have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.


 


ARTICLE III.


 


REDEMPTION


 


SECTION 3.1.        Notices to Trustee.


 


If the Company elects to redeem Notes pursuant to Section 5 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of Notes to be redeemed.


 


43

















 


The Company shall give each notice provided for in this
Section 3.1 at least 30 but not more than 60 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee), together
with an Officers’ Certificate stating that such redemption will comply with the
conditions contained herein and in the Notes.


 


SECTION 3.2.                       Selection of Notes To Be
Redeemed.


 


If less than all of the Notes are to be redeemed, the Trustee shall
select Notes to be so redeemed in compliance with applicable legal requirements
and the requirements of the principal national securities exchange, if any, on
which the Notes are listed or, if the Notes are not listed on a national securities
exchange, by lot, pro rata or in such other fair and appropriate manner chosen
at the discretion of the Trustee.  The
Trustee shall make the selection from the Notes outstanding and not previously
called for redemption.  Notes in
denominations of $1,000 or less may only be redeemed in whole.  The Trustee may select for redemption
portions (equal to $1,000 or any integral multiple thereof) of the principal of
Notes that have denominations larger than $1,000.  Provisions of this Indenture that apply to Notes called for
redemption also apply to portions of Notes 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 of each certificate
selected for redemption.


 


SECTION 3.3.                       Notice of Redemption.


 


At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause the mailing of a notice of redemption by
first-class mail, postage prepaid, to each Holder of Notes to be redeemed at
such Holder’s address as it appears on the Notes register maintained by the
Registrar with a copy to the Trustee and any Paying Agent.  The notice shall identify the Notes to be
redeemed and shall state:


 


(a)                                  the Redemption Date;


 


(b)                                 the redemption price
to be paid;


 


(c)                                  the name and address
of the Paying Agent;


 


(d)                                 that Notes called for
redemption must be surrendered to the Paying Agent to collect the redemption
price and accrued interest, if any;


 


(e)                                  that, unless the
Company defaults in making the redemption payment, interest on Notes called for
redemption ceases to accrue on and after the Redemption Date and the only
remaining right of the Holders of such Notes is to receive payment of the
redemption price upon surrender to the Paying Agent of the Notes to be
redeemed;


 


(f)                                    if any Note is to
be redeemed in part, the portion of the principal amount (equal to $1,000 or
any integral multiple thereof) of such Note to be redeemed and that, on or
after the Redemption Date, upon surrender of such Note, a new Note or Notes in


 


44

















 


aggregate principal amount equal to the unredeemed portion thereof will
be issued without charge to the Securityholder;


 


(g)                                 if less than all of
the Notes are to be redeemed, the identification of the particular Notes (or
portion thereof) to be redeemed, as well as the aggregate principal amount of
Notes to be redeemed; and


 


(h)                                 the CUSIP number, if
any.


 


At the Company’s request, made to the Trustee at least 35 days prior to
the Redemption Date, the Trustee shall give the notice of redemption, in the
Company’s name and at the Company’s expense, in accordance with this
Section 3.3.


 


SECTION 3.4.                       Effect of Notice of
Redemption.


 


Once notice of redemption is mailed, Notes called for redemption become
due and payable on the Redemption Date and at the redemption price.  Upon surrender to the Paying Agent, such
Notes shall be paid at the redemption price plus accrued interest to the Redemption
Date, but interest installments whose Interest Payment Date is on or prior to
such Redemption Date will be payable on the relevant Interest Payment Dates to
the Holders of record at the close of business on the relevant record dates
referred to in the Notes.


 


SECTION 3.5.                       Deposit of Redemption Price.


 


Prior to 10:00 a.m. New York City time on the Redemption
Date, the Company shall deposit with the Paying Agent in immediately available
funds U.S. Legal Tender sufficient to pay the redemption price of and accrued
interest on all Notes or portions thereof to be redeemed on that date.


 


If any Note surrendered for redemption in the manner provided in the
Notes shall not be so paid on the Redemption Date due to the failure of the
Company to deposit sufficient funds with the Paying Agent, interest will
continue to accrue from and including the Redemption Date until such payment is
made on the unpaid principal and, to the extent lawful, on any interest not
paid on such unpaid principal, in each case at the date and in the manner provided
in the Notes.


 


SECTION 3.6.                       Notes Redeemed in Part.


 


Upon surrender to the Paying Agent of a Note that is redeemed in part,
the Company shall execute and the Trustee shall authenticate for the Holder a
new Note (together with related Guarantees executed by the Guarantors) equal in
principal amount to the unredeemed portion of the Note surrendered.


 


45

















 


ARTICLE IV.


 


COVENANTS


 


SECTION 4.1.                       Payment of Notes.


 


The Company shall pay the principal of and interest on the Notes on the
dates and in the manner provided in the Notes and this Indenture.  An installment of principal or interest
shall be considered paid on the date due if the Trustee or Paying Agent (other
than the Company or any Subsidiary of the Company or any Affiliate of any
thereof) holds on such date immediately available funds designated for and sufficient
to pay such installment.


 


The Company shall pay interest (including Accrued Bankruptcy Interest)
on overdue principal and on overdue installments of interest, in each case at
the rate per annum specified in the Notes, to the extent lawful.


 


SECTION 4.2.                       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 surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served.  The Company
will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. 
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 11.2.


 


The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
the City of New York, for such purposes. 
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.


 


The Company hereby initially designates the Corporate Trust Office of
the Trustee set forth in Section 11.2 as an agency of the Company in
accordance with Section 2.3.


 


SECTION 4.3.                       Corporate Existence.


 


Subject to Article V hereof, the Company shall do or cause to be
done, at its own cost and expense, all things necessary to, and will cause each
of its Restricted Subsidiaries to, preserve and keep in full force and effect
the corporate existence and rights (charter and statutory), licenses and/or
franchises of the Company and each of its Restricted Subsidiaries; provided
that the Company shall not be required to preserve any such right, license or
franchise,


 


46

















 


or the corporate existence of any of its Restricted Subsidiaries, if in
the judgment of the Board of Directors or management of the Company
(i) such preservation or existence is not desirable in the conduct of
business of the Company or such Restricted Subsidiary and (ii) the loss of
such right, license or franchise or the dissolution of such Restricted
Subsidiary is not adverse in any material respect to the Holders.


 


SECTION 4.4.                       Payment of Taxes and Other
Claims.


 


The Company shall and shall cause each of its Subsidiaries to pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all material taxes, assessments and governmental charges
levied or imposed upon its or its Subsidiaries’ income, profits or property and
(b) all material lawful claims for labor, materials and supplies which, if
unpaid, would be reasonably likely to by law become a Lien upon its property or
the property of any of its Subsidiaries; provided 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 negotiations or proceedings and for
which disputed amounts adequate reserves (in the good faith judgment of the
Board of Directors or management of the Company) have been made in accordance
with GAAP.


 


SECTION 4.5.                       Maintenance of Properties;
Books and Records; Compliance with Law.


 


(a)                                  The
Company shall and shall cause each of its Restricted Subsidiaries to at all
times cause all properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order (reasonable
wear and tear excepted) and supplied with all necessary equipment, and shall
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereto; provided that nothing in this
Section 4.5 shall prevent the Company or any Restricted Subsidiary from
discontinuing the operation or maintenance of any of such properties, or
disposing of any of them, if such discontinuance or disposal is either
(i) in the ordinary course of business, (ii) in the reasonable and
good faith judgment of the Board of Directors or management of the Company or
the Restricted Subsidiary concerned, as the case may be, desirable in the
conduct of the business of the Company or such Restricted Subsidiary, as the
case may be, or (iii) otherwise permitted by this Indenture.


 


SECTION 4.6.                       Compliance Certificates;
Notice of Default.


 


(a)                                  The
Company shall deliver to the Trustee, within 120 days after the end of its
fiscal year, an Officers’ Certificate signed by the principal executive
officer, the principal financial officer or the principal accounting officer
complying with TIA § 314(a)(4) stating (i) that a review of the
activities of the Company and the activities of its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company and the Guarantors have
kept, observed, performed and fulfilled each of their respective obligations under
this Indenture, the Notes and the Guarantees and (ii) that, to the best
knowledge of such Officer after due inquiry, each of the Company and the
Guarantors has kept, observed, performed and fulfilled, in each case in all
material respects,


 


47

















 


each and every covenant and
other obligation contained in this Indenture, the Notes and the Guarantees and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof and has not failed to comply with any other
obligation hereunder (or, if a Default, Event of Default or failure to comply
with any other obligation hereunder shall have occurred, describing with
particularity all such Defaults, Events of Default or failures to comply with
any other obligation hereunder of which such Officer may have knowledge,
including, but not limited to, their status and what action the Company is
taking or proposes to take with respect thereto).


 


(b)                                 The
Company shall, so long as any of the Notes are outstanding, deliver to the
Trustee, forthwith upon becoming aware of any Default or Event of Default, an
Officers’ Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.


 


SECTION 4.7.                       Reports.


 


(a)                                  The
Company shall deliver to the Trustee and mail to each Holder whether or not
required by the rules and regulations of the SEC, so long as any Notes are
outstanding,


 


(1)                                  all
quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such form within the time period specified in the SEC’s rules
and regulations; and


 


(2)                                  all
current reports that would be required to be filed with the SEC on Form 8-K if
the Company were required to file such reports, in each case within the time
periods specified in the SEC’s rules and regulations.


 


(b)                                 In
addition, following the consummation of the Registered Exchange Offer with respect
to the Initial Notes contemplated by the Registration Rights Agreement, whether
or not required by the rules and regulations of the SEC, the Company will file
a copy of all such information and reports with the SEC for public availability
within the time periods specified in the SEC’s rules and regulations (unless
the SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request.  In addition, the Company will furnish to the
Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act if at the time of such request the Company is not
subject to Section 13 or 15(d) of the Exchange Act.


 


(c)                                  Notwithstanding
the foregoing, the filing of such information and reports with the SEC on
Forms 10-Q, 10-K and 8-K, as applicable, shall be deemed to satisfy all of
the requirements described in paragraphs (a) and (b) above.


 


(d)                                 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,


 


48

















 


including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).


 


SECTION 4.8.                       Limitation on Restricted Payments.


 


(a)                                  The
Company shall not, and shall not cause or permit any of its Restricted Subsidiaries
to, directly or indirectly:


 


(1)                                  declare
or pay any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock or options, warrants and other
rights to purchase the same) on or in respect of shares of Capital Stock of the
Company to holders of such Capital Stock;


 


(2)                                  purchase,
redeem or otherwise acquire or retire for value any Capital Stock of the
Company or any warrants, rights or options to purchase or acquire shares of any
class of such Capital Stock;


 


(3)                                  make
any principal payment on, purchase, defease, redeem, prepay or otherwise
acquire or retire for value, prior to any scheduled final maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated Obligation; or


 


(4)                                  make
any Investment (other than Permitted Investments) in any other Person (each of
the foregoing actions set forth in clauses (1), (2), (3) and (4) being
referred to as a “Restricted Payment”)


 


if at the time of such Restricted Payment or immediately after giving
effect thereto:


 


(i)                                     a
Default or an Event of Default shall have occurred and be continuing; or


 


(ii)                                  the
Company is not able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with Section 4.9; or


 


(iii)                               the
aggregate amount of Restricted Payments made subsequent to the Issue Date (the
amount expended for such purposes, if other than cash, being the fair market value
of such property as determined in good faith by the Board of Directors of the
Company) shall exceed the sum of (the “Restricted Payment Basket”):


 


(w)                               50% of the cumulative
Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss,
minus 100% of such loss) of the Company earned subsequent to June 30, 2002 and
on or prior to the date the Restricted Payment occurs (the “Reference
Date”) (treating such period as a single accounting period); plus


 


(x)                                   100% of the
aggregate net cash proceeds received by the Company from any Person (other than
a Subsidiary of the Company) from the issuance and sale subsequent to the Issue
Date and on or prior to the Reference Date of


 


49

















 


Qualified Capital Stock of the Company (including Capital Stock issued
upon the conversion of convertible Indebtedness or in exchange for outstanding
Indebtedness but excluding aggregate net cash proceeds from the sale of Capital
Stock to the extent used to repurchase or acquire shares of Capital Stock of
the Company or a Subordinated Obligation of the Company or a Guarantor pursuant
to clause (2) of the next succeeding paragraph (b) below); plus


 


(y)                                 without duplication of
any amounts included in clause (iii)(x) above, 100% of the aggregate net
cash proceeds of any equity contribution received by the Company from a holder
of the Company’s Capital Stock subsequent to the Issue Date; plus


 


(z)                                   to the extent that
any Investment (other than a Permitted Investment) that was made after the
Issue Date is sold for cash or otherwise liquidated or repaid for cash, the net
cash proceeds received with respect to such sale, liquidation or repayment of
such Investment, but only to the extent not included in the calculation of
Consolidated Net Income.


 


(b)                                 Notwithstanding
the foregoing, the provisions set forth in paragraph (a) do not prohibit:


 


(1)                                  the
payment of any dividend within 60 days after the date of declaration of such
dividend if the dividend would have been permitted on the date of declaration;


 


(2)                                  the
acquisition of any shares of Capital Stock of the Company or the repurchase,
redemption or other repayment of any Subordinated Obligation of the Company or
any Guarantor in exchange for or solely out of the proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Company) of shares of
Qualified Capital Stock of the Company;


 


(3)                                  the
repurchase, redemption or other repayment of any Subordinated Obligation of the
Company or any Guarantor in exchange for or solely out of the proceeds of the
substantially concurrent issuance (other than to a Subsidiary of the Company)
of a Subordinated Obligation of the Company or such Guarantor with no payments
of principal required until at least six months following the maturity date of
the Notes;


 


(4)                                  the
making of distributions, loans or advances in an amount not to exceed
(x) $5.0 million to pay the ordinary operating costs of Holdings
(including, without limitation, directors fees, indemnification obligations,
professional fees and expenses) related to Holdings’ ownership of Capital Stock
of the Company (other than to the Equity Investors or their Affiliates) in any
fiscal year plus (y) any other amounts of corporate overhead expenses
payable by Holdings which were deducted in calculating the Consolidated Net
Income of the Company in accordance with GAAP;


 


50

















 


(5)                                  the
payment by the Company of cash dividends to Holdings in the amounts and at the
times of any payment by Holdings in respect of taxes, provided that (x) the amount
of cash dividends paid pursuant to this clause (5) to enable Holdings to
pay federal and state income taxes at any time shall not exceed the lesser of
(A) the amount of such federal and state income taxes owing by Holdings at such
time for the respective period and (B) the amount of such federal and state
income taxes that would be owing by the Company and its Subsidiaries on a
consolidated basis for such period if determined without regard to Holdings’ ownership
of the Company and (y) any refunds shall promptly be returned by Holdings to
the Company;


 


(6)                                  payments
for the purpose of and in an amount equal to the amount required to permit
Holdings to redeem or repurchase Holdings’ common equity or options in respect
thereof, in each case in connection with the repurchase, put or call provisions
under employee stock option, management subscription, retained share or stock
purchase agreements or other agreements to compensate management employees; provided
that such redemptions or repurchases pursuant to this clause (6) shall not
exceed $10.0 million per annum; provided that amounts not used pursuant to
this clause (6) in prior years shall not be carried forward for use in
future years;


 


(7)                                  so
long as no Default or Event of Default shall have occurred and be continuing,
payments not to exceed $500,000 in the aggregate to enable Holdings to make
payments to holders of its Capital Stock in lieu of issuance of fractional
shares of its Capital Stock;


 


(8)                                  so
long as no Default or Event of Default shall have occurred and be continuing,
the repurchase, redemption or other repayment of up to $50.0 million aggregate
principal amount of Indebtedness under the Senior Subordinated Credit Agreement
in exchange for or out of the net proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of Indebtedness of the Company
and/or the Guarantors, which Indebtedness does not meet the requirements set
forth in clause (3) above of this paragraph (b);


 


(9)                                  payments
made to the Equity Investors allowed pursuant to Section 4.13;


 


(10)                            repurchases
of Capital Stock deemed to occur upon the exercise of stock options if such
Capital Stock represents a portion of the exercise price thereof; and


 


(11)                            additional
Restricted Payments in an aggregate amount not to exceed $13.0 million.


 


In determining the aggregate amount of the Restricted Payment Basket in
accordance with clause (iii) of paragraph (a) above, amounts expended
pursuant to clauses (1), (6) and (11) of paragraph (b) above shall be
included in such calculation.


 


51

















 


SECTION 4.9.                       Limitation on Incurrence of
Additional Indebtedness.


 


(a)                                  The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, acquire, become
liable, contingently or otherwise, with respect to, or otherwise become
responsible for payment of (collectively, “incur”) any Indebtedness (other than
Permitted Indebtedness); provided, however, that if no Default
or Event of Default shall have occurred and be continuing at the time or as a
consequence of the incurrence of any such Indebtedness, the Company or any
Guarantor may incur (x) Indebtedness (other than Senior Secured
Indebtedness) if on the date of the incurrence of such Indebtedness, after
giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage
Ratio of the Company would have been greater than (i) 2.25 to 1.0 if such
Indebtedness is incurred before January 1, 2005 and (ii) greater than
2.5 to 1.0 if such Indebtedness is incurred thereafter and (y) Senior
Secured Indebtedness, if on the date of the incurrence of such Indebtedness,
after giving effect to the incurrence thereof, the Consolidated Senior Secured
Leverage Ratio of the Company would have been less than or equal to
(i) 2.0 to 1.0 if such Senior Secured Indebtedness is incurred on or
before January 1, 2005 and (ii) 1.75 to 1.0 if such Senior Secured
Indebtedness is incurred thereafter.


 


No
Indebtedness incurred pursuant to the Consolidated Fixed Charge Coverage Ratio
or Consolidated Senior Secured Leverage Ratio test of the preceding sentence
(including, without limitation, Indebtedness under the Senior Credit Facility)
shall reduce the amount of Indebtedness which may be incurred pursuant to any
clause of the definition of “Permitted Indebtedness” (including, without
limitation, Indebtedness under the Senior Credit Facility pursuant to
clause (2) of the definition of “Permitted Indebtedness”).


 


(b)                                 The
Company will not, and will not permit any Guarantor to, directly or indirectly,
incur any Indebtedness which by its terms (or by the terms of any agreement
governing such Indebtedness) is subordinated in right of payment to any other Indebtedness
of the Company or such Guarantor, as the case may be, unless such Indebtedness
is also by its terms (or by the terms of any agreement governing such
Indebtedness) made expressly subordinate in right of payment to the Notes or
the Guarantee of such Guarantor, as the case may be, to the same extent and in
the same manner as such Indebtedness is subordinated to other Indebtedness of
the Company or such Guarantor, as the case may be.


 


(c)                                  For
purposes of determining compliance with this covenant, (1) in the event
that an item of Indebtedness meets the criteria of more than one of the types
of Indebtedness described in the definition of “Permitted Indebtedness”, the
Company, in its sole discretion, will classify such item of Indebtedness at the
time of incurrence and will be entitled to divide and classify an item of
Indebtedness in more than one of the types of Indebtedness described in the
definition of “Permitted Indebtedness” and (2) the Company will be
entitled from time to time to reclassify any Indebtedness incurred pursuant to
any clause in the definition of “Permitted Indebtedness”.


 


52

















 


SECTION 4.10.                 Limitation on Dividend and Other
Payment Restrictions Affecting Subsidiaries.


 


The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to:


 


(1)                                  pay
dividends or make any other distributions on or in respect of its Capital
Stock;


 


(2)                                  make
loans or advances or to pay any Indebtedness or other obligation owed to the
Company or any other Restricted Subsidiary of the Company; or


 


(3)                                  transfer
any of its property or assets to the Company or any other Restricted Subsidiary
of the Company,


 


except for such encumbrances or restrictions existing under or by
reason of:


 


(a)                                  applicable
law;


 


(b)                                 this
Indenture or the Senior Subordinated Credit Agreement or encumbrances or
restrictions substantially similar to the encumbrances and restrictions
contained in this Indenture or the Senior Subordinated Credit Agreement, taken
as a whole;


 


(c)                                  non-assignment
provisions of any contract or any lease entered into in the ordinary course of
business;


 


(d)                                 any
instrument governing Acquired Indebtedness, which encumbrance or restriction is
not applicable to the Company or any Restricted Subsidiary of the Company, or
the properties or assets of any such Person, other than the Person or the
properties or assets of the Person so acquired; provided, however,
that such Acquired Indebtedness was not incurred in connection with, or in
anticipation or contemplation, of an acquisition by the Company or the
Restricted Subsidiary;


 


(e)                                  agreements
existing on the Issue Date;


 


(f)                                    the
Senior Credit Facility or the A/R Facility;


 


(g)                                 restrictions
on the transfer of assets subject to any Lien permitted under this Indenture
imposed by the holder of such Lien;


 


(h)                                 restrictions
imposed by any agreement to sell assets permitted under this Indenture to any
Person pending the closing of such sale;


 


53

















 


(i)                                     Indebtedness
or other contractual requirements of a Receivables Entity in connection with a
Qualified Receivables Transaction; provided that such restrictions apply only
to such Receivables Entity;


 


(j)                                     agreements
governing Indebtedness permitted to be Incurred pursuant to Section 4.9, provided
that the provisions relating to such encumbrances or restrictions contained in
such Indebtedness are not materially less favorable to the Company as
determined by the Board of Directors of the Company in their reasonable and
good faith judgment than the provisions contained in the Senior Credit Facility
as in effect on the Issue Date; or


 


(k)                                  an
agreement effecting a refinancing, replacement or substitution of Indebtedness
issued, assumed or Incurred pursuant to an agreement referred to in
clause (b), (d), (e) or (f) above; provided, however, that the provisions
relating to such encumbrance or restriction contained in any such refinancing,
replacement or substitution agreement are no less favorable to the Company or
the Holders in any material respect as determined by the Board of Directors of
the Company than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (b), (d), (e) or (f).


 


SECTION 4.11.                 Limitation on Liens.


 


The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens (other than
Permitted Liens) of any kind against or upon any of their respective property
or assets, or any proceeds, income or profit therefrom which secure any
Indebtedness of the Company or a Guarantor, unless:


 


(1)                                  in
the case of Liens securing Subordinated Obligations of the Company, the Notes
are secured by a Lien on such property, assets, proceeds, income or profit that
is senior in priority to such Liens;


 


(2)                                  in
the case of Liens securing Subordinated Obligations of a Guarantor, such
Guarantor’s Guarantee is secured by a Lien on such property, assets, proceeds,
income or profit that is senior in priority to such Liens; and


 


(3)                                  in
all other cases, the Notes are or such Guarantor’s Guarantee is, as the case may
be, equally and ratably secured by a Lien on such property, assets, proceeds,
income or profit; provided that after giving effect to the incurrence of such
Indebtedness secured by such Lien, the Consolidated Senior Secured Leverage
Ratio of the Company would have been less than or equal to (i) 2.0 to 1.0
if such Indebtedness is incurred on or before January 1, 2005 and
(ii) 1.75 to 1.0 if such Indebtedness is incurred thereafter.


 


SECTION 4.12.                 Limitation on Asset Sales.


 


(a)                                  The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
consummate an Asset Sale unless:


 


54

















 


(1)                                  the
Company or the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets sold or otherwise disposed of (as determined in good faith
by the Company’s Board of Directors);


 


(2)                                  at
least 75% of the consideration received by the Company or such Restricted
Subsidiary, as the case may be, from such Asset Sale shall be cash or Cash
Equivalents and is received at the time of such disposition; provided
that the amount of (x) any liabilities (as shown on the Company’s or such
Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of
the Company or such Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Notes and other than liabilities consisting of
Disqualified Capital Stock) (i) that are assumed by the transferee of any
such assets and from which the Company and its Restricted Subsidiaries are
unconditionally released or (ii) in respect of which neither the Company
nor any Restricted Subsidiary following such sale has any obligation and (y)
any notes or other obligations received by the Company or such Restricted
Subsidiary from such transferee that are promptly, but in no event more than 60
days after receipt, converted by the Company or such Restricted Subsidiary into
cash or Cash Equivalents (to the extent of the cash or Cash Equivalents
received), shall be deemed to be cash for purposes of this provision; and


 


(3)                                  upon
the consummation of an Asset Sale, the Company shall apply, or cause such
Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset
Sale within 360 days of receipt thereof either:


 


(a)                                  to
repay any Obligations under the Senior Credit Facility and/or interest rate
protection, currency and other hedging agreements permitted under the Senior
Credit Facility and, in the case of any such Indebtedness under any revolving
credit facility, effect a permanent reduction in the availability under such
revolving credit facility;


 


(b)                                 to
reinvest in Productive Assets (and to the extent such reinvestment constitutes
an Investment, such reinvestment complies with Section 4.8); or


 


(c)                                  a
combination of prepayment and investment permitted by the foregoing
clauses (3)(a) and (3)(b).


 


On the 361st day after an Asset Sale or such earlier date, if any, as
the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as
set forth in clauses (3)(a), (3)(b) and (3)(c) of the immediately
preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such
aggregate amount of Net Cash Proceeds which have not been applied on or before
such Net Proceeds Offer Trigger Date as permitted in clauses (3)(a),
(3)(b) and (3)(c) of the immediately preceding sentence (each a “Net Proceeds
Offer Amount”) shall be applied by the Company or such Restricted
Subsidiary to make an offer to purchase for cash (the “Net Proceeds Offer”) on a
date


 


55

















 


(the “Net Proceeds Offer Payment Date”) not less than 30 nor more
than 60 days following the applicable Net Proceeds Offer Trigger Date,
from all Holders on a pro rata basis, that amount of Notes equal
to the Net Proceeds Offer Amount at a price in cash equal to 100% of the
principal amount of the Notes to be purchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase; provided, however, that if at any time any
non-cash consideration received by the Company or any Restricted Subsidiary of
the Company, as the case may be, in connection with any Asset Sale is converted
into or sold or otherwise disposed of for cash (other than interest, dividends
or other earnings received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder as of the date of such conversion or disposition and the Net Cash
Proceeds thereof shall be applied in accordance with this covenant.


 


(b)                                 Notwithstanding
the foregoing, if a Net Proceeds Offer Amount is less than $20.0 million, the
application of the Net Cash Proceeds constituting such Net Proceeds Offer
Amount to a Net Proceeds Offer may be deferred until such time as such Net
Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer
Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such
initial Net Proceeds Offer Amount from all Asset Sales by the Company and its
Restricted Subsidiaries aggregates at least $20.0 million, at which time
the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds
constituting all Net Proceeds Offer Amounts that have been so deferred to make
a Net Proceeds Offer (the first date the aggregate of all such deferred Net
Proceeds Offer Amounts is equal to $20.0 million or more shall be deemed to be
a Net Proceeds Offer Trigger Date).


 


(c)                                  Notwithstanding
paragraphs (a) and (b) of this Section 4.12, the Company and its
Restricted Subsidiaries will be permitted to consummate an Asset Sale without
complying with such paragraphs to the extent that:


 


(1)                                  at least 75% of the
consideration for such Asset Sale constitutes Productive Assets (and to the
extent any of such Productive Assets constitutes an Investment, such Investment
complies with Section 4.8); and


 


(2)                                  such Asset Sale is
for at least fair market value (as determined in good faith by the Company’s
Board of Directors); provided that any consideration not
constituting Productive Assets received by the Company or any of its Restricted
Subsidiaries in connection with any Asset Sale permitted to be consummated
under this paragraph shall constitute Net Cash Proceeds and shall be subject to
the provisions of this covenant with respect to the application of Net Cash
Proceeds; provided
that at the time of entering into such transaction or immediately after giving
effect thereto, no Default or Event of Default shall have occurred or be
continuing or would occur as a consequence thereof.


 


(d)                                 Within
25 days following the Net Proceeds Offer Trigger Date, the Company shall mail
or cause the Trustee to mail (in the Company’s name and at its expense) notice
of a Net Proceeds Offer to the Holders of the Notes at their last registered
addresses with a copy to the Trustee and the Paying Agent.  The Net Proceeds Offer shall remain open
from the time of mailing for at least 20 Business Days and until the close of business
on the third Business


 


56

















 


Day prior to the Net Proceeds Offer Payment Date or such longer period
as may be required by Law.  The notice
shall contain all instructions and materials necessary to enable such Holders
to tender Notes pursuant to the Net Proceeds Offer.  The notice, which shall govern the terms of the Net Proceeds
Offer, shall state:


 


(i)                                     that the Net
Proceeds Offer is being made pursuant to this Section 4.12;


 


(ii)                                  the purchase price
(including the amount of accrued and unpaid interest, if any) for each Note and
the Net Proceeds Offer Payment Date;


 


(iii)                               that any Note not
tendered or accepted for payment will continue to accrue interest in accordance
with the terms thereof;


 


(iv)                              that any Note accepted
for payment pursuant to the Net Proceeds Offer shall cease to accrue interest
after the Net Proceeds Offer Payment Date unless the Company shall fail to make
payment therefor;


 


(v)                                 that Holders electing
to have Notes purchased pursuant to a Net Proceeds Offer will be required to
surrender their Notes to the Paying Agent at the address specified in the
notice prior to 5:00 p.m., New York City time, on the third Business Day
immediately preceding the Net Proceeds Offer Payment Date and must complete any
form letter of transmittal proposed by the Company and acceptable to the
Trustee and the Paying Agent;


 


(vi)                              that Holders will be
entitled to withdraw their election if the Paying Agent receives, not later
than 5:00 p.m., New York City time, on the third Business Day immediately
preceding the Net Proceeds Offer Payment Date, a telex or facsimile
transmission (confirmed by overnight delivery of the original thereof) or
letter setting forth the name of the Holder, the principal amount of Notes the Holder
delivered for purchase, the Note certificate number (if any) and a statement
that such Holder is withdrawing his election to have such Notes purchased;


 


(vii)                           that if Notes in a principal
amount in excess of the Holders’ pro rata share of the Net Proceeds are
tendered pursuant to a Net Proceeds Offer, the Company shall purchase Notes on
a pro
rata basis among the Notes tendered (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of $1,000
or integral multiples of $1,000 shall be acquired);


 


(viii)                        that Holders whose Notes are
purchased only in part will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered; and


 


(ix)                                the instructions that
Holders must follow in order to tender their Notes.


 


On or before the Net Proceeds Offer Payment Date, the Company shall
(i) accept for payment, on a pro rata  basis among the Notes,
Notes or portions thereof tendered pursuant to the Net Proceeds Offer,
(ii) deposit with the Paying Agent money, in immediately available


 


57

















 


funds, in an amount sufficient to pay the purchase price of all Notes
or portions thereof so tendered and accepted and (iii) deliver to the
Paying Agent the Notes so accepted together with an Officers’ Certificate
setting forth the Notes or portions thereof tendered to and accepted for payment
by the Company.  The Paying Agent shall
promptly mail or deliver to Holders of Notes so accepted payment in an amount equal
to the purchase price, and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Note equal in principal amount to any unpurchased
portion of the Note surrendered.  Any
Notes not so accepted shall be promptly mailed or delivered by the Company to
the Holder thereof.  The Paying Agent
shall promptly deliver to the Company the balance of any moneys held by the
Paying Agent after payment to the Holders of Notes as aforesaid.


 


(e)                                  To
the extent that the aggregate amount of Notes tendered pursuant to a Net
Proceeds Offer is less than the Net Proceeds Offer Amount, the Company may use
any remaining Net Proceeds Offer Amount for general corporate purposes.  Upon completion of any such Net Proceeds
Offer, the Net Proceeds Offer Amount shall be reset at zero.


 


(f)                                    In
the event of the transfer of substantially all of the property and assets of
the Company and its Restricted Subsidiaries as an entirety to a Person in a
transaction permitted under Article V, which transaction does not constitute a
Change of Control, the successor Person shall be deemed to have sold the
properties and assets of the Company and its Subsidiaries not so transferred
for purposes of this Section 4.12, and shall comply with the provisions of
clause (a)(3) of this Section 4.12 with respect to such deemed sale
as if it were an Asset Sale.


 


(g)                                 The
Company shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or
regulations (including Rule 14e-1 under the Exchange Act) in connection with
the repurchase of Notes pursuant to a Net Proceeds Offer.  To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section 4.12,
the Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under this
Section 4.12 by virtue thereof.


 


SECTION 4.13.                 Limitations on
Transactions with Affiliates.


 


(a)                                  The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with, or for
the benefit of, any of its Affiliates (an “Affiliate Transaction”), other than
(x) Affiliate Transactions permitted under paragraph (b) below and
(y) Affiliate Transactions entered into on terms that are fair and
reasonable to, and in the best interests of, the Company or such Restricted
Subsidiary, as the case may be, as determined in good faith by the Company’s
Board of Directors; provided, however, that for a
transaction or series of related transactions with an aggregate value of $5.0 million
or more, at the Company’s option (i) such determination shall be made in
good faith by a majority of the disinterested members of the Board of the
Directors of the Company or (ii) the Board of Directors of the Company or
any such Restricted Subsidiary party to such Affiliate Transaction shall have
received a favorable opinion from a nationally recognized investment banking
firm


 


58

















 


that such Affiliate Transaction is fair from a financial point of view
to the Company or such Restricted Subsidiary; provided, further,
that for a transaction or series of related transactions with an aggregate
value of $20.0 million or more, the Board of Directors of the Company
shall have received a favorable opinion from a nationally recognized investment
banking firm that such Affiliate Transaction is fair from a financial point of
view to the Company or such Restricted Subsidiary.


 


(b)                                 The
foregoing restrictions shall not apply to:


 


(1)                                  transactions
exclusively between or among the Company and any of its Restricted Subsidiaries
or exclusively between or among such Restricted Subsidiaries, provided such
transactions are not otherwise prohibited by this Indenture;


 


(2)                                  transactions effected
as part of a Qualified Receivables Transaction;


 


(3)                                  any agreement as in
effect as of the Issue Date or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) or in any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Holders in any material respect
than the original agreement as in effect on the Issue Date;


 


(4)                                  Restricted Payments
permitted by this Indenture;


 


(5)                                  loans or advances to
officers, directors or employees of the Company or its Restricted Subsidiaries
not in excess of $10.0 million at any one time outstanding;


 


(6)                                  Permitted Investments
or Permitted Liens;


 


(7)                                  transactions with
Persons solely in their capacity as holders of Indebtedness or Capital Stock of
the Company or any of its Restricted Subsidiaries, where such Persons are
treated no more favorably than holders of Indebtedness or Capital Stock of the
Company or such Restricted Subsidiary generally;


 


(8)                                  reasonable and
customary fees and compensation paid to, and indemnity provided on behalf of,
officers, directors, consultants or employees of Holdings or any of its
Restricted Subsidiaries (other than the THL Affiliates and the ECP Affiliates,
which are set forth in clauses (9), (10) and (11) below), as determined by
the Board of Directors of the Company or any such Restricted Subsidiary or the
senior management thereof in good faith, including, without limitations,
issuances of stock, payment of bonuses and other transactions pursuant to
employment or compensation agreements, stock option agreements, indemnification
agreements and other arrangements in effect on the Issue Date or substantially
similar thereto;


 


(9)                                  the payment, on a
quarterly basis, of management fees to (A) THL and/or the THL Affiliates
not to exceed $250,000 in any fiscal quarter and (B) ECP and/or the ECP
Affiliates not to exceed $62,500 in any fiscal quarter, in each case in
accordance


 


59

















 


with the management agreement between THL, the THL Affiliates, ECP
and/or the ECP Affiliates and Holdings;


 


(10)                            the reimbursement of THL,
the THL Affiliates, ECP and/or the ECP Affiliates for the reasonable
out-of-pocket expenses incurred by them in connection with performing
management services to Holdings and its Restricted Subsidiaries;


 


(11)                            the payment of one-time
fees to THL, the THL Affiliates, ECP and/or the ECP Affiliates in connection
with acquisition transactions not prohibited by this Indenture, such fees to be
payable at the time of each such acquisition and not to exceed (for all fees
paid pursuant to this clause (11)) 2.5% of the aggregate consideration
paid by Holdings and its Restricted Subsidiaries for any such acquisition or
such lesser amount as is then permitted pursuant to the Senior Credit Facility;
and


 


(12)                            reasonable and customary
fees paid to members of the Board of Directors of the Company, other than THL,
the THL Affiliates, ECP and the ECP Affiliates.


 


Notwithstanding the foregoing, the Company shall only pay one-half of
any management or other fees or expenses permitted under clauses (9), (10)
and (11) to the Equity Investors or their Affiliates at a time when a Default
or an Event of Default exists; provided that such unpaid fees and/or
expenses shall be paid at such time as such Default or Event of Default shall
have been cured or waived.


 


SECTION 4.14.                 Change of Control.


 


(a)                                  Upon
the occurrence of a Change of Control (the date of such occurrence, the “Change of
Control Date”), each Holder shall have the right to require that the
Company purchase all or a portion of such Holder’s Notes pursuant to an offer
to purchase (the “Change of Control Offer”) at a purchase price
equal to 101% of the aggregate principal amount thereof plus accrued interest
thereon to the date of repurchase. 
Prior to the mailing of the notice to the Holders provided for in
paragraph (b) below but in any event within 30 days following the date
upon which the Company obtains actual knowledge of any Change of Control, the
Company hereby covenants to (i) repay in full all Obligations, and
terminate all commitments under the Senior Credit Facility or offer to repay in
full all Obligations, and terminate all commitments under the Senior Credit
Facility or offer to repay in full and terminate all commitments under the
Senior Credit Facility and to repay all Obligations of each Bank Lender which
has accepted such offer or (ii) obtain the requisite consents under the
Senior Credit Facility to permit the repurchase of the Notes as provided for in
paragraph (c) below.  The Company
shall first comply with the covenant in the immediately preceding sentence
before it shall be required to repurchase the Notes pursuant to this
Section 4.14.  The Company’s
failure to comply with the covenant described in the second preceding sentence
(and any failure to send the notice referred to in paragraph (b) below as a
result of the prohibition in the second preceding sentence) may (with notice
and lapse of time) constitute an Event of Default described in
Section 6.1(c) but shall not constitute an Event of Default described in
Section 6.1(b).


 


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(b)                                 Notice
of a Change of Control Offer shall be mailed by the Company within 30 days
following the date upon which the Company obtains actual knowledge that a
Change of Control occurred to the Holders of Notes at their last registered
addresses with a copy to the Trustee and the Paying Agent.  The date on which Notes are purchased
pursuant to the Change of Control Offer shall be a business day that is no
earlier than 30 days nor later than 60 days from the date such notice is mailed
(the “Change
of Control Payment Date”). 
The Change of Control Offer shall remain open from the time of mailing
for at least 20 Business Days and until 3:00 p.m., New York City time, on
the third Business Day prior to the Change of Control Payment Date.  The notice, which shall govern the terms of
the Change of Control Offer, shall include such disclosures as are required by
law and shall state:


 


(i)                                     that
the Change of Control Offer is being made pursuant to this Section 4.14
and that all Notes will be accepted for payment;


 


(ii)                                  the
purchase price (including the amount of accrued and unpaid interest, if any)
for each Note and the Change of Control Payment Date;


 


(iii)                               that
any Note not tendered for payment will continue to accrue interest in
accordance with the terms thereof;


 


(iv)                              that
any Note accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date unless the
Company shall fail to make payment therefor;


 


(v)                                 that
Holders electing to have Notes purchased pursuant to a Change of Control Offer
will be required to surrender their Notes to the Paying Agent at the address
specified in the notice prior to 3:00 p.m., New York City time, on the
Change of Control Payment Date and must complete any form letter of transmittal
proposed by the Company and acceptable to the Trustee and the Paying Agent;


 


(vi)                              that
Holders of Notes will be entitled to withdraw their election if the Paying
Agent receives, not later than 3:00 p.m., New York City time, on the
Business Day prior to the Change of Control Payment Date, a telex or facsimile
transmission (confirmed by overnight delivery of the original thereof) or
letter setting forth the name of the Holder, the principal amount of Notes the
Holder delivered for purchase, the Note certificate number (if any) and a
statement that such Holder is withdrawing his election to have such Notes
purchased;


 


(vii)                           that
Holders whose Notes are purchased only in part will be issued Notes equal in
principal amount to the unpurchased portion of the Notes surrendered; and


 


(viii)                        the
instructions that Holders must follow in order to tender their Notes.


 


(c)                                  On
the Change of Control Payment Date, the Company shall (i) accept for
payment Notes or portions thereof tendered pursuant to the Change of Control
Offer, (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all Notes or portions thereof


 


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so tendered and accepted and
(iii) deliver to the Trustee the Notes so accepted together with an
Officers’ Certificate setting forth the Notes or portions thereof tendered to
and accepted for payment by the Company. 
The Paying Agent shall promptly mail or deliver to the Holders of Notes
so accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note
surrendered.  Any Notes not so accepted
shall be promptly mailed or delivered by the Company to the Holder
thereof.  The Company will publicly
announce the results of the Change of Control Offer not later than the first
Business Day following the Change of Control Payment Date.


 


(d)                                 The
Company shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act, and any other securities laws or
regulations (including Rule 14e-1 under the Exchange Act) in connection with
the purchase of Notes pursuant to a Change of Control Offer.  To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.14,
the Company shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under this
Section 4.14 by virtue thereof.


 


SECTION 4.15.                 Waiver of Stay; Extension of Usury
Laws.


 


The Company
covenants (to the extent that it may lawfully do so) that it shall not, nor
shall it cause or permit any of the Guarantors to, at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would prohibit or
forgive the Company or any Guarantor from paying all or any portion of the
principal of or interest on the Notes or the Guarantees, as applicable, as
contemplated herein or in the Notes and the Guarantees, wherever enacted, now
or at any time hereafter in force, or that may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
each of the Company and the Guarantors 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.


 


SECTION 4.16.                 Limitation on Guarantees by
Restricted Subsidiaries.


 


The Company
shall not permit any of its Domestic Restricted Subsidiaries that is not a
Guarantor (whether formed or acquired before or after the Issue Date), directly
or indirectly, by way of the pledge of any intercompany note or otherwise, to
assume, guarantee or in any other manner become liable with respect to any
Indebtedness of the Company (other than: 
(1) Indebtedness under Currency Agreements in reliance on
clause (5) of the definition of “Permitted Indebtedness”; or
(2) Interest Swap Obligations incurred in reliance on clause (4) of
the definition of “Permitted Indebtedness”), unless, in any such case:


 


(1)                                  such
Restricted Subsidiary executes and delivers a supplemental indenture to this
Indenture providing a guarantee of payment of the Notes by such Restricted
Subsidiary, and


 


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(2)                                  if
any such assumption, guarantee or other liability of such Restricted Subsidiary
is provided in respect of Indebtedness that is expressly subordinated to the
Notes, the guarantee or other instrument provided by such Restricted Subsidiary
in respect of such Subordinated Obligation shall be subordinated to such
Guarantor’s Guarantee of the Notes


 


Notwithstanding the foregoing, any such Guarantee by a Restricted Subsidiary
of the Notes shall provide by its terms that it shall be automatically and
unconditionally released and discharged, without any further action required on
the part of the Trustee or any Holder, upon:


 


(1)                                  the
unconditional release of such Restricted Subsidiary from its liability in
respect of the Indebtedness in connection with which such Guarantee was
executed and delivered pursuant to the preceding paragraph and all other
Indebtedness which would require that a Guarantee be executed and delivered pursuant
to the preceding paragraph;


 


(2)                                  any
sale or other disposition (by merger or otherwise) to any Person which is not a
Restricted Subsidiary of the Company of all of the Company’s Capital Stock in,
or all or substantially all of the assets of, such Restricted Subsidiary; provided
that (a) such sale or disposition of such Capital Stock or assets is
otherwise in compliance with the terms of this Indenture and (b) such
assumption, guarantee or other liability of such Restricted Subsidiary has been
released by the holders of the other Indebtedness of the Company so guaranteed;


 


(3)                                  the
Legal Defeasance of the Notes as described under Section 8.2; or


 


(4)                                  such
Restricted Subsidiary being designated as an Unrestricted Subsidiary in
compliance with this Indenture.


 


SECTION 4.17.                 Limitation on Preferred Stock of
Subsidiaries.


 


The Company shall not permit any of its Restricted Subsidiaries that is
not a Guarantor to issue any Preferred Stock (other than to the Company or to a
Restricted Subsidiary of the Company) or permit any Person (other than the
Company or a Restricted Subsidiary of the Company) to own any Preferred Stock
of any Restricted Subsidiary of the Company that is not a Guarantor.


 


SECTION 4.18.                 Conduct of Business.


 


The Company and its Restricted Subsidiaries shall not engage in any businesses
which are not the same, similar, related or ancillary to the businesses in
which the Company and its Restricted Subsidiaries are engaged on the Issue
Date.


 


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SECTION 4.19.                 Impairment of Security Interest.


 


The Company
shall not, and the Company shall not permit any of its Restricted Subsidiaries
to, take, or knowingly omit to take, any action, which action or omission would
have the effect of causing a Lien to be created in favor of the Collateral
Agent or the Bank Lenders (in their respective capacities as such) on any
property or assets of the type that would constitute Collateral unless a Lien
is created in favor of the Collateral Agent for the benefit of the Notes
Secured Creditors with respect to such property or assets (which Lien in favor
of the Notes Secured Creditors shall have the priority set forth in the
Security Documents).  Such Lien in favor
of the Collateral Agent for the benefit of the Notes Secured Creditors shall at
all times be in accordance with the provisions of this Indenture and the
Security Documents.


 


SECTION 4.20.                 Post Closing Action Related to
Collateral.


 


Notwithstanding
anything to the contrary contained in this Agreement, the Indenture or the
Security Documents, the parties hereto acknowledge and agree that the Company
and the relevant Guarantor shall be required to take the following actions as
promptly as reasonably practicable, and in any event


 


(a)                                  Within
45 days after the Issue Date:


 


(i)                                     fully
executed counterparts of Mortgages or Amended and Restated Mortgages as
appropriate which Mortgages or Amended and Restated Mortgages, as the case may
be, (1) shall cover the Mortgaged Property owned or leased by the Company or
any of its Guarantors, as are designated on Annex A hereto,  together
with evidence that counterparts of the Mortgages or Amended and Restated
Mortgages as appropriate, have been delivered to the title insurance company
insuring the Lien of such Mortgages or Amended and Restated Mortgages, as the
case may be, for recording in all places to the extent necessary or, in the
reasonable opinion of the Collateral Agent, desirable to effectively create a
valid and enforceable second-priority mortgage Lien on each Mortgaged Property
in favor of the Collateral Agent for the benefit of the Notes Secured Creditors
securing the obligations under this Indenture, the Notes and the Security
Documents (provided that in jurisdictions that impose mortgage recording
taxes, such Mortgages or Amended and Restated Mortgages shall not secure
indebtedness in an amount exceeding 100% of the fair market value of such Real
Property, as reasonably determined, in good faith, by the Company and
reasonably acceptable to the Collateral Agent, subject to (i) those Liens,
created by the Security Documents, (ii) those Liens, encumbrances, hypothecs
and other matters affecting title to such Mortgaged Property and found
reasonably acceptable by the Collateral Agent, (iii) as to any particular Mortgaged
Property at any time, such easements, encroachments, covenants, rights of way,
minor defects, irregularities or encumbrances on title which could not
reasonably be expected to materially impair such Mortgaged Property for the
purpose for which it is held by the mortgagor or grantor thereof, or the lien
or hypothec held by the Collateral Agent, (iv) zoning and other municipal
ordinances which are not violated in any material respect by the existing
improvements and the present use made by the mortgagor or grantor thereof of
the premises, (v) general real estate taxes and assessments not yet


 


64

















 


delinquent,
and (vi) such other similar items as the Collateral Agent may consent to (such
consent not to be unreasonably withheld) (the liens described in clauses (i)
through (v) of this sentence, collectively, the “Permitted Encumbrances”);


 


(ii)                                  with
respect to each Mortgage intended to encumber a Mortgaged Property, a policy of
title insurance (or commitment to issue such a policy) or with respect to each
Amended and Restated Mortgage intended to encumber a Mortgaged Property, an
endorsement of an existing policy of title insurance, insuring (or committing
to insure) the Lien of such Mortgage or Amended and Restated Mortgage as a
valid and enforceable second-priority mortgage Lien on the Mortgaged Properties
described therein, in an amount not less than 100% of the fair market value of
such Mortgaged Property as reasonably determined, in good faith, by the Company
and reasonably acceptable to the Collateral Agent, (such policies collectively,
“the Mortgage Policies”) issued by such title insurers, which reasonably
assures the Collateral Agent that the Mortgages or Amended and Restated
Mortgages, as the case may be, on such Mortgaged Properties are valid and enforceable
second priority mortgage liens on the respective Mortgaged Properties, free and
clear of all defects and encumbrances except Permitted Encumbrances, and such
Mortgage Policies shall otherwise be in form and substance reasonably
satisfactory to the Trustee and shall include, as appropriate, to the extent
available at commercially reasonably rates, an endorsement for future advances
and for any and all other matters that the Collateral Agent may request, shall
not include an exception for mechanics’ liens or creditors’ rights, and shall
provide for affirmative insurance and such reinsurance (including direct access
agreements) as the Collateral Agent may reasonably request;


 


(iii)                               surveys,
in form and substance reasonably satisfactory to the Collateral Agent, of each
Mortgaged Property designated as a “Surveyed Property” on Annex B
hereto, dated a recent date acceptable to the Collateral Agent and certified in
a manner reasonably satisfactory to the Collateral Agent by a licensed
professional surveyor reasonably satisfactory to the Collateral Agent;


 


(iv)                              duly
authorized, fully executed, acknowledged and delivered subordination,
nondisturbance and attornment agreements, assignment of leases, landlord
consents, tenant estoppel certificates and such other documents relating to the
Mortgages that the Collateral Agent may reasonably request;


 


(v)                                 proper
fixture filings under the UCC on Form UCC-1 or the equivalent fully executed
for filing under the UCC in the
appropriate jurisdiction in which the Mortgaged Properties are located,
desirable to perfect the security interests purported to be created by the
Mortgage or Amended and Restated Mortgages in favor of the Collateral Agent for
the benefits of the holders of the Notes;


 


(vi)                              to
the extent necessary in order to perfect the security interest in that portion
of the Collateral constituting deposit accounts within the meaning of Section
9-102(a)(29) of the UCC, deposit account control agreements each substantially
in the form of Annex M to the Security Agreement (each a “Control Agreement”)
and satisfying the


 


65

















 


control
requirement of Section 9-104(a)(2) of the UCC; provided that the Collateral
Agent has specifically identified to the Company those deposit accounts
required to be governed by a Control Agreement to meet the control requirements
of the UCC; and


 


(vii)                           the
opinions, addressed to the Initial Purchasers, of (1) Sullivan & Cromwell
LLP, special counsel to the Company or other special or in-house counsel, as to
the due authorization, execution and delivery of the Amended and Restated
Mortgages by the Company or any of the Guarantors and (2) local counsel in each
jurisdiction where Mortgaged Property is located, each in form and substance
reasonably satisfactory to the Collateral Agent.


 


(b)                                 Within
seven days after the Issue Date, the Trustee shall have received to the extent
not received on the Issue Date any filings with the United States Patent and
Trademark Office or the United States Copyright Office or other appropriate
filing offices of each jurisdiction as may be necessary or, in the reasonable
opinion of the Trustee, desirable to perfect the security interests purported
to be created by the Security Agreement.


 


(c)                                  Within
five days after the Issue Date, the Trustee shall have received to the extent
not received on the Issue Date, proper forms of UCC-3 amendments or the
equivalent under revised Article 9 of the UCC in each applicable jurisdiction
to be filed as soon as reasonably practicable in the jurisdiction of incorporation
of the Company and each Guarantor, desirable to perfect the security interests
purported to be created by the U.S. Security Agreement in favor of the
Collateral Agent for the benefits of the holders of the Notes.


 


ARTICLE V.


 


SUCCESSOR
CORPORATION


 


SECTION 5.1.                       Limitation on
Mergers, Consolidations or Sales of Assets.


 


The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey
or otherwise dispose of) all or substantially all of the Company’s assets to,
another Person or Persons unless:


 


(1)                                  either:


 


(a)                                  the
Company shall be the surviving or continuing corporation of such merger or
consolidation; or


 


(b)                                 the
surviving Person is a corporation existing under the laws of the United States,
any state thereof or the District of Columbia and such surviving


 


66

















 


Person shall
expressly assume all the obligations of the Company under the Notes and this
Indenture;


 


(2)                                  immediately
after giving effect to such transaction (on a pro forma basis, including any
Indebtedness incurred or anticipated to be incurred in connection with such
transaction and the other adjustments that are referred to in the definition of
“Consolidated Fixed Charge Coverage Ratio”), the Company or the surviving
Person is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.9;


 


(3)                                  immediately
before and immediately after giving effect to such transaction (including any
Indebtedness incurred or anticipated to be incurred in connection with the
transaction), no Default or Event of Default shall have occurred and be
continuing; and


 


(4)                                  the
Company or the surviving entity, as the case may be, has delivered to the
Trustee an Officers’ Certificate and Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with this Indenture, that the
surviving Person agrees to be bound thereby and by the Notes and the
Registration Rights Agreement, and that all conditions precedent in this
Indenture relating to such transaction have been satisfied.


 


For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Company, the Capital Stock of which constitutes all or substantially all of
the properties and assets of the Company, shall be deemed to be the transfer of
all or substantially all of the properties and assets of the Company.


 


Notwithstanding the foregoing clauses (1), (2) and (3):


 


(a)                                  any
Restricted Subsidiary of the Company may consolidate with, merge into or transfer
all or part of its properties and assets to the Company; and


 


(b)                                 the
Company may merge with an Affiliate that is (x) a corporation that has no
material assets or liabilities and which was incorporated solely for the
purpose of reincorporating the Company in another jurisdiction or (y) a
Restricted Subsidiary of the Company that is a Guarantor so long as all assets
of the Company and the Restricted Subsidiaries immediately prior to such
transaction are owned by such Restricted Subsidiary and its Restricted
Subsidiaries immediately after the consummation thereof.


 


Each Guarantor (other than any Guarantor whose Guarantee is to be
released in accordance with the terms of this Indenture) shall not, and the
Company shall not cause or permit any Guarantor to, consolidate with or merge
with or into any Person other than the Company or any other Guarantor unless:


 


(1)                                  the
entity formed by or surviving any such consolidation or merger (if other than
the Guarantor) or to which such sale, lease, conveyance or other disposition


 


67

















 


shall have
been made is a corporation organized and existing under the laws of the United
States or any State thereof or the District of Columbia;


 


(2)                                  such
entity assumes by supplemental indenture all of the obligations of the
Guarantor on the Guarantee;


 


(3)                                  immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing; and


 


(4)                                  immediately
after giving effect to such transaction and the use of any net proceeds
therefrom on a pro forma basis, the Company could satisfy the provisions of
clause (2) of the first paragraph of this Section 5.1.


 


Any merger or consolidation of a Restricted Subsidiary with and into
the Company (with the Company being the surviving entity) or another Guarantor
that is a Wholly Owned Subsidiary of the Company need only comply with
clause (4) of the first paragraph of this Section 5.1.


 


The following additional conditions shall apply to each transaction
described in the above paragraphs:


 


(1)                                  the
Company, such Guarantor or the relevant surviving entity, as applicable, will
cause to be filed and recorded in the relevant jurisdictions (so long as such
jurisdictions are in the United States) such amendments or other instruments,
if any, as may be required by applicable law to preserve and protect the Lien
on the Collateral owned by or transferred to such Person created by the
Security Documents in favor of the Collateral Agent for the benefit of the
Notes Secured Creditors, together with such financing statements as may be
required to perfect any security interests in such Collateral which may be
perfected by the filing of a financing statement under the Uniform Commercial
Code of the relevant states;


 


(2)                                  following
any such transaction, to the extent that any assets constituted Collateral
prior to such transaction, the Collateral owned by or transferred to the
Company, such Guarantor or the relevant surviving entity, as applicable,
shall:  (a) continue to constitute
Collateral under this Indenture and the Security Documents; and (b) not be
subject to any Lien other than Liens permitted by this Indenture and created by
the Security Documents;


 


(3)                                  the
assets of the Person which is merged or consolidated with or into the relevant
surviving entity, to the extent such assets are of the types which would
constitute Collateral under the Security Documents and which would be required
to be pledged thereunder, shall be treated as after-acquired property and such
surviving entity shall take such action as may be reasonably necessary to cause
such assets to be made subject to the Lien created by the Security Documents in
the manner and to the extent required in this Indenture; and


 


68

















 


(4)                                  the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such transaction and, if a supplemental
indenture or supplemental Security Documents are required in connection with
such transaction, such supplemental indenture and Security Documents comply
with the applicable provisions of this Indenture, that all conditions precedent
in this Indenture relating to such transaction have been satisfied and that
such supplemental indenture and Security Documents are enforceable, subject to
customary qualifications.


 


SECTION 5.2.                       Successor Entity Substituted.


 


Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company or
any assignment of its obligations under this Indenture in accordance with
Section 5.1 hereof, upon assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual payment of the principal of, premium,
if any, and interest on all of the Notes and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be
performed or observed by the Company, the surviving entity formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition or assignment is made will 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 surviving entity has been
named as the Company herein and such surviving entity may cause to be signed
and may issue in its own name or in the name of the Company, any or all Notes
issuable hereunder and the predecessor Company in the case of a sale, lease,
conveyance or other disposition or assignment, will be released from all
obligations under the Notes.


 


ARTICLE VI.


 


DEFAULT AND
REMEDIES


 


SECTION 6.1.                       Events of Default.


 


“Event
of Default”, whenever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be 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):


 


(a)                                  the
failure to pay interest on any Notes when the same becomes due and payable and
the default continues for a period of 30 days;


 


(b)                                 the
failure to pay the principal of any Notes when such principal becomes due and
payable, at maturity, upon redemption or otherwise (including the failure to
make a payment to purchase Notes tendered pursuant to a Change of Control Offer
or a Net Proceeds Offer);


 


69

















 


(c)                                  a
default in the observance or performance of any other covenant or agreement contained
in this Indenture which default continues for a period of 30 days after the
Company receives written notice specifying the default (and demanding that such
default be remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Notes;


 


(d)                                 the
failure to pay at final stated maturity (giving effect to any applicable grace
periods and any extensions thereof) the principal amount of any Indebtedness of
the Company or any Restricted Subsidiary (other than a Receivables Entity) of
the Company, or the acceleration of the final stated maturity of any such
Indebtedness (which acceleration is not rescinded, annulled or otherwise cured
within 30 days of receipt by the Company or such Restricted Subsidiary of
notice of any such acceleration) if the aggregate principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness
in default for failure to pay principal at final stated maturity or which has
been accelerated (in each case with respect to which the 30-day period
described above has elapsed), aggregates $20.0 million or more at any
time;


 


(e)                                  one
or more judgments in an aggregate amount in excess of $20.0 million shall
have been rendered against the Company or any of its Significant Subsidiaries
and such judgments remain undischarged, unpaid or unstayed for a period of 60
days after such judgment or judgments become final and non-appealable;


 


(f)                                    a
court of competent jurisdiction enters a Bankruptcy Order under any Bankruptcy
Law that:


 


(1)                                  is for relief against
the Company or any of its Significant Subsidiaries in an involuntary case or
proceeding, or


 


(2)                                  appoints a Custodian
of the Company or any of its Significant Subsidiaries for all or substantially
all of its respective properties, or


 


(3)                                  orders the
liquidation of the Company or any of its Significant Subsidiaries,


 


and in each case the order or decree remains unstayed and in effect for
60 consecutive days;


 


(g)                                 the
Company or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:


 


(1)                                  commences a voluntary
case or proceeding, or


 


(2)                                  consents to the entry
of a Bankruptcy Order for relief against it in an involuntary case or
proceeding, or


 


70

















 


(3)                                  consents to the
appointment of a Custodian of it or for all or substantially all of its
property, or


 


(4)                                  makes a general
assignment for the benefit of its creditors or files a proposal or scheme of
arrangement involving the rescheduling or composition of its indebtedness, or


 


(5)                                  consents to the
filing of a petition in bankruptcy against it;


 


(h)                                 any
Guarantee of a Significant Subsidiary ceases to be in full force and effect or
any Guarantee of a Significant Subsidiary is declared to be null and void and
unenforceable or any Guarantee of a Significant Subsidiary is found to be
invalid or any Guarantor that is a Significant Subsidiary denies its liability
under its Guarantee (other than by reason of release of a Guarantor in
accordance with the terms of this Indenture); or


 


(i)                                     so
long as the Security Documents have not otherwise been terminated in accordance
with their terms or the Collateral as a whole has not otherwise been released
from the Lien in favor of the Collateral Agent for the benefit of the Notes
Secured Creditors created by the Security Documents in accordance with the
terms thereof, (a) a default by the Company or any Guarantor which is a
Significant Subsidiary in the performance of the Security Documents which
materially and adversely affects the enforceability, validity, perfection or
priority of the Lien granted to the Collateral Agent on the Collateral, in each
case taken as a whole, (b) a repudiation or disaffirmation by the Company
or any Guarantor that is a Significant Subsidiary of its material obligations
under the Security Documents or (c) the determination in a judicial
proceeding that all or any material portion of the Security Documents, taken as
a whole, is unenforceable or invalid against the Company or any Guarantor that
is a Significant Subsidiary for any reason (which default, repudiation,
disaffirmation or determination is not rescinded, annulled or otherwise cured
within 30 days after the Company receives written notice of such default,
repudiation, disaffirmation or determination from the Trustee or the Holders of
25% of the outstanding principal amount of the Notes, including the waiver
during such 30-day period by the Required Secured Creditors (as defined in the
U.S. Security Agreement) by written instrument delivered to the Company and the
applicable defaulting party).


 


SECTION 6.2.                       Acceleration.


 


(a)                                  If
an Event of Default (other than an Event of Default specified in
Section 6.1(f) or 6.1(g) above with respect to the Company) shall occur
and be continuing, then, and in every such case, unless the principal of all
the Notes shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the then
outstanding Notes, by notice in writing to the Company, the agent or other
representative under the Senior Credit Facility and to the Trustee (the “Acceleration
Notice”), may declare all of the unpaid principal of, and premium,
if any, and accrued interest thereon to be, and the same (x) shall become
immediately due and payable, or (y) if there are any amounts


 


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outstanding under the Senior
Credit Facility, shall become immediately due and payable upon the first to
occur of an acceleration under the Senior Credit Facility or five business days
after receipt by the Company and the agent or other representative under the
Senior Credit Facility of such Acceleration Notice but only if such Event of
Default is then continuing.  If an Event
of Default specified in Section 6.1(f) or 6.1(g) with respect to the
Company occurs and is continuing, all unpaid principal of, and premium, if
any,  and accrued interest due and
payable on all the outstanding Notes shall ipso facto become and be immediately
due and payable without any declaration, notice or other act on the part of the
Trustee or any Holder.


 


(b)                                 At
any time after a declaration of acceleration with respect to the Notes as
described in the preceding paragraph, the Holders of a majority in aggregate
principal amount of the Notes, by written notice to the Company and the
Trustee, may rescind and cancel, on behalf of all Holders, such declaration and
its consequences:


 


(1)                                  if
the rescission would not conflict with any judgment or decree;


 


(2)                                  if
all existing Events of Default have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration;


 


(3)                                  to
the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid;


 


(4)                                  if
the Company has paid the Trustee its reasonable compensation and reimbursed the
Trustee for its expenses, disbursements and advances; and


 


(5)                                  in
the event of the cure or waiver of an Event of Default of the type described in
Section 6.1(f) or (g), the Trustee shall have received an Officers’
Certificate to the effect that such Event of Default has been cured or waived.


 


No such rescission shall affect any subsequent Default or impair any
right consequent thereto.


 


In the event that the maturity of the Notes is accelerated pursuant to
this Section 6.2, 100% of the principal amount thereof plus accrued
interest to the date of payment shall become due and payable.


 


SECTION 6.3.                       Other Remedies.


 


If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment
of principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.


 


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The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding, 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 of the Notes in respect of which such judgment has been
recovered.


 


SECTION 6.4.                       Waiver of Past Default.


 


Subject to Sections 6.7 and 9.2, prior to the declaration of
acceleration of the maturity of the Notes, the Holder or Holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding by written notice to the Company and the Trustee may waive on
behalf of all the Holders any past default or Event of Default under this Indenture
and its consequence, except a default in the payment of principal of or
interest on any Note or a default with respect to any covenant or provision
which cannot be modified or amended without the consent of the Holder of each
outstanding Note affected pursuant to Section 9.2.


 


SECTION 6.5.                       Control by Majority.


 


The Holders of a majority in aggregate principal amount of the then outstanding
Notes may 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 it, including, without limitation, any remedies provided for in
Section 6.3.  However, the Trustee
may refuse to follow any direction that conflicts with law, the Notes or this
Indenture, or that the Trustee determines may be unduly prejudicial to the
rights of another Securityholder or that may involve the Trustee in personal
liability.


 


SECTION 6.6.                       Limitation on Suits.


 


A Securityholder may not pursue any remedy with respect to this
Indenture or the Notes unless:


 


(a)                                  the Holder gives to
the Trustee written notice of a continuing Event of Default;


 


(b)                                 the Holders of at
least 25% in principal amount of the then outstanding Notes make a written
request to the Trustee to pursue a remedy;


 


(c)                                  such Holder or Holders
offer and, if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;


 


(d)                                 the Trustee does not
comply with the request within 30 days after receipt of the request and the
offer of indemnity; and


 


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(e)                                  during such 30-day
period the Holders of at least a majority in principal amount of the then
outstanding Notes do not give the Trustee a direction which is inconsistent
with the request.


 


A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.


 


SECTION 6.7.                       Rights of Holders To Receive
Payment.


 


Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on a Note, on or after
the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, is absolute
and unconditional and shall not be impaired or affected without the consent of
such Holder.


 


SECTION 6.8.                       Collection Suit by Trustee.


 


If an Event of Default specified in Section 6.1(a) or
(b) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company or any other
obligor on the Notes for the whole amount of principal and accrued interest
remaining unpaid, together with interest overdue on principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the interest rate and 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.


 


SECTION 6.9.                       Trustee May File Proofs of
Claim.


 


The Trustee shall be entitled and empowered to file such proofs of
claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Securityholders allowed in any judicial proceedings
relative to the Company or any of its Subsidiaries (or any other obligor upon
the Notes), its creditors or its property and shall be entitled and empowered
to collect and receive any monies or other property payable or deliverable on
any such claims and to distribute the same, and any Custodian in any such
judicial proceedings is hereby authorized by each Securityholder 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 Securityholders, to pay to the Trustee
any amount due to it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agent and counsel, and any other amounts due
the Trustee under Section 7.7. 
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder 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
in respect of the claim of any Securityholder in any such proceeding.


 


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SECTION 6.10.                 Priorities.


 


If the Trustee collects any money pursuant to this Article VI, it shall
pay out such money in the following order:


 


First: 
to the Trustee for amounts due under Section 7.7;


 


Second: 
to Holders for amounts due and unpaid on the Notes for principal and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal and interest, respectively;
and


 


Third: 
to the Company.


 


The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Securityholders pursuant to this
Article VI.


 


SECTION 6.11.                 Undertaking
for Costs.


 


In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable attorneys’
fees, against any party litigant in the suit, having due regard to the merits
and good faith of the claims or defenses made by the party litigant.  This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.7, or a suit
by any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the outstanding Notes.


 


SECTION 6.12.                 Rights and
Remedies Cumulative.


 


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 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.


 


SECTION 6.13.                 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 VI 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.


 


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ARTICLE VII.


 


TRUSTEE


 


SECTION 7.1.                       Duties of Trustee.


 


(a)                                  If
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 Person would exercise
or use under the circumstances in the conduct of his own affairs.


 


(b)                                 Except
during the continuance of an Event of Default:


 


(i)                                     The
Trustee need perform only those duties as are specifically set forth in this
Indenture or the TIA and no others and no implied covenants or obligations
shall be read into this Indenture against the Trustee.


 


(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. 
However, in the case of any such certificate or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.


 


(c)                                  Notwithstanding
anything to the contrary herein contained, the Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act, or
its own willful misconduct, except that:


 


(i)                                     This
paragraph does not limit the effect of paragraph (b) of this
Section 7.1.


 


(ii)                                  The
Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.


 


(iii)                               The
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Sections 6.4 and 6.5.


 


(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.


 


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(e)                                  Every
provision of this Indenture that in any way relates to the Trustee is subject
to paragraphs (a), (b), (c) and (d) of this Section 7.1.


 


(f)                                    The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company.  Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.


 


SECTION 7.2.                       Rights of Trustee.


 


Subject to
Section 7.1:


 


(a)                                  The Trustee may rely
and shall be protected in acting or refraining from acting upon any document
reasonably believed by it to be genuine and to have been signed or presented by
the proper Person.  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.


 


(b)                                 Before the Trustee
acts or refrains from acting with respect to any matter contemplated by this
Indenture, it may require an Officers’ Certificate or an Opinion of Counsel,
which shall conform to the provisions of Section 11.5.  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such certificate
or opinion.


 


(c)                                  The Trustee may act
through its attorneys and agents and shall not be responsible for the
misconduct or negligence of any agent (other than the negligence or willful
misconduct of an agent who is an employee of the Trustee) appointed with due
care.


 


(d)                                 The Trustee shall not
be liable for any action it takes or omits to take in good faith and without
negligence which it reasonably believes to be authorized or within its rights
or powers conferred upon it by this Indenture or the TIA.


 


(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, order or direction of any of the Holders,
pursuant to the provisions of this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby.


 


(f)                                    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.


 


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(g)                                 The rights, privileges,
protections, immunities and benefits given to the Trustee, including, without
limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each
agent, custodian and other Person employed to act hereunder.


 


(h)                                 The Trustee may
request that the Company deliver an Officers’ Certificate setting forth the
names of individuals and or titles of officers authorized at such time to take
specified actions pursuant to this Indenture, which Officers’ Certificate may
be signed by any person authorized to sign an Officers’ Certificate, including
any person specified as so authorized in any such certificate previously
delivered and not superseded.


 


SECTION 7.3.                       Individual
Rights of Trustee.


 


The Trustee in its individual capacity or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company, or its
Subsidiaries and Affiliates with the same rights it would have if it were not
Trustee.  Any Agent may do the same with
like rights.  However, the Trustee is
subject to Sections 7.10 and 7.11.


 


SECTION 7.4.                       Trustee’s Disclaimer.


 


The Trustee makes no representation as to the validity or adequacy of
this Indenture, the Notes or the Guarantees, and it shall not be accountable
for the Company’s use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Company in this Indenture, or any
statement in the Notes other than the Trustee’s certificate of authentication.


 


SECTION 7.5.                       Notice of Defaults.


 


If a Default or an Event of Default with respect to the Notes occurs
and is continuing and is actually known to a Responsible Officer, the Trustee
shall mail to each Holder a notice of the Default or Event of Default within 60
days after it occurs or, if later, within 10 days after such Default or Event
of Default becomes known to the Trustee, unless such Default or Event of
Default has been cured.  Except in the
case of a Default or Event of Default in the payment of principal of or
interest on any Note, including an acceleration, and the failure to make
payment when required by Sections 4.12 and 4.14, the Trustee may withhold
the notice to the Holders if and so long as a committee of its Responsible
Officers determines in good faith that withholding the notice is in the
interest of the Holders.


 


SECTION 7.6.                       Reports
by Trustee to Holders.


 


Within 60 days after each November 15, beginning with November 15,
2003, the Trustee shall transmit to each Securityholder a report dated as of May
15 of the relevant year that complies with the requirements of TIA
§ 313(a).  The Trustee also shall
comply with TIA § 313(b) and TIA § 313(c) and (d).  A copy of such report at the time of its
transmission to Securityholders shall be filed with the SEC, if required, with
each stock exchange, if any, on which the Notes are listed and with the Company.


 


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The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA
§ 313(d).


 


SECTION 7.7.                       Compensation and Indemnity.


 


The Company shall pay to the Trustee, the Paying Agent and the
Registrar from time to time such compensation for their respective services
rendered hereunder as agreed in writing. 
The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. 
The Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket disbursements, expenses and advances (including reasonable fees
and expenses of counsel) incurred or made by each of them in connection with
the performance of its duties under this Indenture.  Such expenses shall include the reasonable compensation,
reasonable out-of-pocket disbursements and reasonable expenses of the Trustee’s
agents and counsel.


 


The Company shall indemnify and hold harmless the Trustee and their
agents, employees, officers, directors and shareholders against (i) any
and all claims, expenses, loss or liability incurred by it arising out of or in
connection with the administration of its duties under this Indenture and
(ii) Environmental Damages (as defined below).  The Trustee shall notify the Company promptly of any claim
asserted against it for which it may seek indemnity.  The Company shall defend the claim with counsel designated by the
Company, who may be outside counsel to the Company, but shall in all events be
reasonably satisfactory to the Trustee, and the Trustee shall cooperate in the
defense.  The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel; provided
that the Company will not be required to pay such fees and expenses if it assumes
the Trustee’s defense and there is no conflict of interest between the Company
and the Trustee in connection with such defense.  The Company need not pay for any settlement made without its
written consent, which consent may not be unreasonably withheld.  The Company need not reimburse any expense
or indemnify against any loss or liability incurred by the Trustee through the
Trustee’s own willful misconduct, negligence or bad faith.


 


“Environmental Damages” shall mean all claims, demands,
liabilities, losses, damages, causes of action, judgments, penalties, fines,
costs and expenses, made, incurred, suffered, brought, or imposed at any time
and from time to time relating to:


 


(i)                                     the presence of
any Hazardous Material on the Mortgaged Property in violation of any
Environmental Law, or any escape, seepage, leakage, spillage, emission, release,
discharge or disposal of any Hazardous Material on or from the Mortgaged
Property, requiring any investigation remediation pursuant to any Environmental
Law; or


 


(ii)                                  any act, omission, or
event occurring in connection with the handling, treatment, containment,
removal, storage, decontamination, clean-up, transport or disposal of any
Hazardous Material which is present on the Mortgaged Property requiring
investigation or remediation pursuant to any Environmental Law; or


 


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(iii)                               any violation of any
Environmental Law, regardless of whether any act, omission, event or
circumstance giving rise to the violation constituted a violation at the time
of the occurrence or inception of such act, omission, event or circumstance.


 


“Environmental Law” means any federal, state or local law,
statue, ordinance, code, rule, regulation, license, authorization, order,
injunction or decree, of any of the foregoing, which pertains to health and
safety as it relates to any Hazardous Material, or to the protection of the
environment (including but not limited to ground or air or water or noise
pollution or contamination, and underground or above ground tanks) and shall
include without limitation, the Solid Waste Disposal Act, 42 U.S.C. § 6901
et  seq.; the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. § 9601 et  seq. (“CERCLA”),
as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”);
the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et  seq.;
the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et  seq.;
the Clean Air Act, 42 U.S.C. § 7401 et  seq.; the Toxic
Substances Control Act, 15 U.S.C. § 2601 et  seq.; the Safe
Drinking Water Act, 42 U.S.C. § 300f et  seq.; and any other
state or federal environmental statutes, and all rules, regulations, orders and
decrees now or hereafter promulgated under any of the foregoing, as any of the
foregoing now exist or may be changed or amended or come into effect in the
future.


 


 “Hazardous Material”
means any substance, whether solid, liquid or gaseous: which is listed defined
or regulated as a “hazardous substance”, “hazardous waste” or “solid waste”, or
otherwise classified as hazardous or toxic, in or pursuant to any Environmental
Requirement; or which is or contains asbestos, radon, any polychlorinated
biphenyl, urea formaldehyde foam insulation, explosive or radioactive material,
or motor fuel or other petroleum hydrocarbons.


 


To secure the Company’s payment obligations in this Section 7.7,
the Trustee shall have a lien prior to the Notes and the Guarantees on all
money or property held or collected by it in its capacity as Trustee, except
money or property held in trust to pay principal of or interest on particular
Notes.


 


When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(f) or 6.1(g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.


 


This section shall survive the resignation or removal of the Trustee.


 


SECTION 7.8.                       Replacement
of Trustee.


 


The Trustee may resign at any time by so notifying the Company in
writing, such resignation to be effective upon the appointment of a successor
Trustee.  The Holders of a majority in
principal amount of the outstanding Notes may remove the Trustee by so notifying
the Trustee in writing and may appoint a successor Trustee with the Company’s
consent which consent shall not be unreasonably withheld.  The Company may remove the Trustee if:


 


(a)                                  the Trustee fails to
comply with Section 7.10;


 


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(b)                                 the Trustee is
adjudged a bankrupt or an insolvent;


 


(c)                                  a receiver or other
public officer takes charge of the Trustee or its property; or


 


(d)                                 the Trustee becomes
incapable of acting.


 


If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.  Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount
of the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.


 


A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company.  Immediately after that, the retiring Trustee
shall transfer all property held by it as Trustee to the successor Trustee
(subject to the lien provided in Section 7.7), the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this
Indenture.  A successor Trustee shall
mail notice of its succession to each Securityholder.


 


If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 25% in principal amount of then outstanding Notes may
petition any court of competent jurisdiction at the expense of the Company for
the appointment of a successor Trustee.


 


If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.


 


Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company’s obligations under Section 7.7 shall
continue for the benefit of the retiring Trustee.


 


SECTION 7.9.                       Successor Trustee by Merger,
Etc.


 


If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation or national banking association, the resulting, surviving or
transferee corporation or national banking association without any further act
shall be the successor Trustee; provided such corporation shall be otherwise
qualified and eligible under this Article VII.


 


SECTION 7.10.                 Eligibility; Disqualification.


 


This Indenture shall always have a Trustee who satisfies the
requirements of TIA § 310(a)(1) and (2). 
The Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.  The Trustee shall comply
with TIA § 310(b); provided that there shall be excluded from
the operation of TIA


 


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§ 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities,
of the Company are outstanding if the requirements for such exclusion set forth
in TIA § 310(b)(1) are met.  The
provisions of TIA § 310 shall apply to the Company, as obligor of the
Notes.


 


SECTION 7.11.                 Preferential Collection of Claims
Against Company.


 


The Trustee shall comply with TIA § 311(a), excluding any creditor
relationship listed in TIA § 311(b). 
A Trustee who has resigned or been removed shall be subject to TIA
§ 311(a) to the extent indicated therein.


 


ARTICLE VIII.


 


DISCHARGE OF
INDENTURE; DEFEASANCE


 


SECTION 8.1.                       Termination of the Company’s
Obligations.


 


This Indenture will be discharged and will cease to be of further
effect (except as set forth below) and the Trustee at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture when:


 


(1)                                  either:


 


(a)                                  all
the Notes theretofore authenticated and delivered (except lost, stolen or
destroyed notes which have been replaced or paid as provided in Section 2.7
and Notes for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust) have been delivered to the Trustee for cancellation;
or


 


(b)                                 all
Notes not theretofore delivered to the Trustee for cancellation have become due
and payable and the Company has irrevocably deposited or caused to be deposited
with the Trustee funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on the Notes to
the date of deposit together with irrevocable instructions from the Company
directing the Trustee to apply such funds to the payment thereof at maturity or
redemption, as the case may be;


 


(2)                                  the Company has paid
all other sums payable under this Indenture by the Company; and


 


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(3)                                  the Company has
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel
stating that all conditions precedent under this Indenture relating to the
satisfaction and discharge of this Indenture have been complied with.


 


Notwithstanding the foregoing paragraph, the Company’s obligations in
Sections 2.5, 2.6, 2.7, 2.10, 7.7, 8.5 and 8.6 shall survive until the Notes
are no longer outstanding pursuant to the last paragraph of
Section 2.8.  After the Notes are
no longer outstanding, the Company’s obligations in Sections 7.7, 8.5 and 8.6
shall survive.


 


After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company’s and the Guarantors’
obligations under the Notes and the Guarantees, as the case may be, and this Indenture
except for those surviving obligations specified above.


 


SECTION 8.2.                       Legal Defeasance and Covenant
Defeasance.


 


(a)                                  The
Company may, at its option by Board Resolution of the Board of Directors, at
any time, elect to have either paragraph (b) or (c) below be applied to
all outstanding Notes upon compliance with the conditions set forth in
Section 8.3.


 


(b)                                 Upon
the Company’s exercise under paragraph (a) hereof of the option applicable
to this paragraph (b), each of the Company and the Guarantors shall,
subject to the satisfaction of the conditions set forth in Section 8.3, 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 8.4 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
outstanding Notes to receive solely from the trust fund described in Section 8.4
hereof, and as more fully set forth in such Section, payments in respect of the
principal of and interest on such Notes when and to the extent such payments
are due, (ii) the Company’s obligations with respect to such Notes under
Article II and Section 4.2 hereof, (iii) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company’s obligations in
connection therewith, including Section 7.7 hereof and (iv) this Article
VIII.  Subject to compliance with this
Article VIII, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c)
hereof.


 


(c)                                  Upon
the Company’s exercise under paragraph (a) hereof of the option applicable
to this paragraph (c), each of Holdings, the Company and the Guarantors
shall, subject to the satisfaction of the conditions set forth in
Section 8.3 hereof, be released from its obligations under the covenants
contained in Sections 4.8 through 4.14 and Sections 4.16 through 4.18 and
Article V hereof with respect to the outstanding Notes on and after the date
the


 


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conditions set forth below 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, such Covenant Defeasance means that, with respect to the outstanding
Notes, the Company and its Subsidiaries 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 or Default under
Section 6.1(c) 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 paragraph (a) hereof of the option applicable to this
paragraph (c), subject to the satisfaction of the conditions set forth in
Section 8.3 hereof, Sections 6.1(c) and 6.1(e) shall not constitute Events
of Default.


 


SECTION 8.3.                       Conditions to Legal
Defeasance or Covenant Defeasance.


 


The following shall be the conditions to the application of either
Section 8.2(b) or 8.2(c) hereof to the outstanding Notes:


 


In order to exercise either Legal Defeasance or Covenant Defeasance:


 


(a)                                  the Company must
irrevocably deposit with the Trustee, in trust, for the benefit of the Holders,
U.S. Legal Tender, U.S. Government Obligations 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
on the Notes, U.S. Legal Tender, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on the Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, of such principal or
installment of principal of or interest on the Notes; provided that the Trustee
shall have received an irrevocable written order from the Company instructing
the Trustee to apply such U.S. Legal Tender or the proceeds of such U.S.
Government Obligations to said payments with respect to the Notes;


 


(b)                                 in the case of an
election under Section 8.2(b) hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States reasonably acceptable to
the Trustee confirming that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the date
of this Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of the Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax


 


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on the same amounts, in the same manner and at the same times as would
have been the case if such Legal Defeasance had not occurred;


 


(c)                                  in the case of an
election under Section 8.2(c) hereof, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States reasonably acceptable to
the Trustee confirming that the Holders of the 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)                                 no Default or Event of
Default or event which with notice or lapse of time or both would become a
Default or an Event of Default with respect to the Notes shall have occurred
and be continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this Article
VIII concurrently with such incurrence) or insofar as Sections 6.1(f) and
6.1(g) hereof are concerned, at any time in the period ending on the 91st day
after the date of such deposit;


 


(e)                                  such Legal Defeasance
or Covenant Defeasance shall not result in a breach or violation of or
constitute a default under this Indenture, the Senior Credit Facility or any
other material agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;


 


(f)                                    the Company shall
have delivered to the Trustee an Officers’ Certificate stating that the deposit
was not made by the Company with the intent of preferring the Holders over any
other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;


 


(g)                                 the Company shall have
delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel,
each stating that all conditions precedent provided for or relating to the
Legal Defeasance or the Covenant Defeasance have been complied with; and


 


(h)                                 the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that assuming no
intervening bankruptcy or insolvency of the Company between the date of deposit
and the 91st day following the date of deposit and that no Holder is an insider
of the Company, after the 91st day following the date of deposit, the trust
funds will not be subject to the effect of any applicable Bankruptcy Laws
affecting creditors’ rights generally.


 


Notwithstanding the foregoing, the Opinion of Counsel required by
clause (b) above of this Section 8.3 need not be delivered if all
Notes not theretofore delivered to the Trustee for cancellation (i) have
become due and payable, or (ii) will become due and payable on the
Maturity Date 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.


 


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SECTION 8.4.                       Application of Trust Money.


 


The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to this Article VIII,
and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of
principal of and interest on the Notes. 
The Trustee shall be under no obligation to invest said U.S. Legal
Tender or U.S. Government Obligations except as it may agree with the Company.


 


The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.3 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 VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
Company’s request any U.S. Legal Tender or U.S. Government Obligations held by
it as provided in Section 8.3 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.


 


SECTION 8.5.                       Repayment
to the Company.


 


Subject to this Article VIII, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. 
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; provided that the Trustee or such Paying
Agent, before being required to make any payment, may at the expense of the
Company cause to be published once in a newspaper of general circulation in the
City of New York or mail to each Holder entitled to such money notice that such
money remains unclaimed and that after a date specified therein which shall be
at least 30 days from the date of such publication or mailing any unclaimed
balance of such money then remaining will be repaid to the Company.  After payment to the Company, Holders
entitled to such money must look to the Company for payment as general
creditors unless an applicable law designates another Person.


 


SECTION 8.6.                       Reinstatement.


 


If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender
or U.S. Government Obligations in accordance with this Article VIII by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company’s obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred


 


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pursuant to this Article VIII until such time as the Trustee or Paying
Agent is permitted to apply all such U.S. Legal Tender or U.S. Government
Obligations in accordance with this Article VIII; provided that if the Company
has made any payment of interest on or principal of any Notes because of 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 U.S. Legal Tender
or U.S. Government Obligations held by the Trustee or Paying Agent.


 


ARTICLE IX.


 


AMENDMENTS, SUPPLEMENTS
AND WAIVERS


 


SECTION 9.1.                       Without Consent of Holders.


 


Without the consent of any Holders, the Company and the Guarantors,
when authorized by resolutions of their respective Boards of Directors (copies
of which shall be delivered to the Trustee), and the Trustee may amend or
supplement this Indenture, the Notes or the Guarantees without notice to any Holder
for any of the following purposes:


 


(a)                                  to cure any
ambiguity, defect or inconsistency herein;


 


(b)                                 to add to the
covenants of the Company for the benefit of the Holders, or surrender any right
or power herein conferred upon the Company;


 


(c)                                  to provide for
collateral for the Notes;


 


(d)                                 to provide for
uncertificated Notes in addition to or in place of certificated Notes;


 


(e)                                  to effect or maintain
the qualification of this Indenture under the TIA;


 


(f)                                    to evidence the
succession in accordance with Article V hereof of another Person to the
Company and the assumption by any such successor of the covenants of the
Company herein and in the Notes; or


 


(g)                                 to make any other
change that does not adversely affect the rights of any Holder in any material
respect; provided
that in making such change, the Trustee may rely upon an Opinion of Counsel
stating that such change does not adversely affect the rights of any Holder in
any material respect.


 


SECTION 9.2.                       With
Consent of Holders.


 


Subject to Section 6.7 and the provisions of this
Section 9.2, the Company and the Guarantors, when authorized by
resolutions of their respective Boards of Directors (copies of which shall be
delivered to the Trustee), and the Trustee may amend or supplement this Indenture
with the written consent of the Holders of at least a majority in aggregate
principal


 


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amount of the Notes then outstanding. 
Subject to Section 6.7 and the provisions of this Section 9.2,
the Holders of, in the aggregate, at least a majority in principal amount of
the then outstanding Notes affected may waive compliance by the Company with
any provision of this Indenture without notice to any other Securityholder.


 


However, without the consent of each Securityholder affected, an
amendment, supplement or waiver, including a waiver pursuant to
Section 6.4 may not:


 


(a)                                  reduce the percentage
of principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver of any provision of this Indenture or the Notes;


 


(b)                                 reduce the rate of or
change or have the effect of changing the time for payment of interest,
including defaulted interest, on any Note;


 


(c)                                  reduce the principal
of or change or have the effect of changing the fixed maturity of any Notes, or
change the date on which any Notes may be subject to redemption or reduce the
redemption price therefor;


 


(d)                                 make the principal of,
or any interest on, any Note payable in money other than that stated in the
Note;


 


(e)                                  make any change in
provisions of this Indenture protecting the right of each Holder to receive
payment of principal of and interest on such Note on or after the due date
thereof or to bring suit to enforce such payment, or permitting Holders of a
majority in principal amount of Notes to waive Defaults or Events of Default;


 


(f)                                    after the Company’s
obligation to purchase Notes arises thereunder, amend, change or modify any
provisions of this Indenture or the related definitions affecting the Company’s
obligation to make a Change of Control Offer in a manner which adversely
affects the Holders;


 


(g)                                 after the Company’s
obligation to purchase Notes arises thereunder, amend, change or modify in any
material respect the obligation of the Company to make and consummate a Net
Proceeds Offer with respect to any Asset Sale that has been consummated or,
after such Asset Sale has been consummated, modify any of the provisions or
definitions with respect thereto; or


 


(h)                                 release any Guarantor
that is a Significant Subsidiary from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of this
Indenture.


 


Without the consent of the Holders of at least 75% in principal amount
of the Notes then outstanding, no amendment may release from the Lien created
by the Security Documents in favor of the Collateral Agent for the benefit of
the Notes Secured Creditors


 


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pursuant to this Indenture or the Notes and the Security Documents all
or substantially all of the Collateral otherwise than in accordance with the
terms of such Security Documents.


 


It shall not be necessary for the consent of the Holders under this
Section 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.


 


After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver.  Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.


 


In connection with any amendment, supplement or waiver under this Article
IX, the Company may, but shall not be obligated to, offer to any Holder who
consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder’s consent to such amendment, supplement or
waiver.


 


SECTION 9.3.                       Compliance
with Trust Indenture Act.


 


Every amendment to or supplement of this Indenture, the Notes or the
Guarantees shall be set forth in a supplemental indenture that complies with
the TIA as then in effect.


 


SECTION 9.4.                       Revocation
and Effect of Consents.


 


Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of that Note or portion of that Note that evidences the same debt as the
consenting Holder’s Note, even if notation of the consent is not made on any
Note.  However, any such Holder or
subsequent Holder may revoke the consent as to his Note or portion of a
Note.  Such revocation shall be
effective only if the Trustee receives the notice of revocation before the date
the amendment, supplement or waiver becomes effective.  Notwithstanding the above, nothing in this
paragraph shall impair the right of any Securityholder under § 316(b) of
the TIA.


 


The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver which record date shall be at least 10 days prior to the
first solicitation of such consent.  If
a record date is fixed, then notwithstanding the second and third sentences of
the immediately preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall
be entitled to consent to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date.  Such consent
shall be effective only for actions taken within 90 days after such record
date.


 


After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder unless it makes a change described in any of
clauses (a) through (l) of


 


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Section 9.2.  In that case
the amendment, supplement or waiver shall bind each Holder of a Note who has
consented to it.


 


SECTION 9.5.                       Notation
on or Exchange of Notes.


 


If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may (in accordance with the specific direction of the Company) request
the Holder of the Note to deliver it to the Trustee.  The Trustee may (in accordance with the specific direction of the
Company) place an appropriate notation on the Note about the changed terms and
return it to the Holder.  Alternatively,
if the Company or the Trustee so determines, the Company in exchange for the
Note shall issue and the Trustee shall authenticate a new Note (together with
related Guarantees of the Guarantors) that reflects the changed terms.  Failure to make the appropriate notation or
issue a new Note shall not affect the validity and effect of such amendment,
supplement or waiver.


 


SECTION 9.6.                       Trustee To Sign
Amendments, Etc.


 


The Trustee shall sign any amendment, supplement or waiver authorized
pursuant to this Article IX if the amendment, supplement or waiver does not
adversely affect the rights, duties or immunities of the Trustee.  If it does, the Trustee may, but need not,
sign it.  In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive, if requested,
an indemnity reasonably satisfactory to it and to receive, and shall be fully
protected in relying upon, an Officers’ Certificate and an Opinion of Counsel
stating that the execution of any amendment, supplement or waiver authorized
pursuant to this Article IX is authorized or permitted by this
Indenture.  Neither the Company nor any
Guarantor may sign an amendment until its Board of Directors approves it.


 


ARTICLE X.


 


GUARANTEE


 


SECTION 10.1.                 Unconditional
Guarantee.


 


Each Guarantor hereby unconditionally, jointly and severally, guarantees
(each such guarantee to be referred to herein as a “Guarantee”), to each of the
Holders and to the Trustee and their respective successors and assigns that
(i) the principal of and interest on the Notes will be promptly paid in
full when due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal, if any, and interest
on any interest, if any, to the extent lawful, of the Notes and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any of the Notes or of any such other obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration or


 


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otherwise, subject, however, in the case of clauses (i) and (ii)
above, to the limitations set forth in Section 10.4.  Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any of the Holders with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor.  Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenants that this Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes, this Indenture
and in this Guarantee.  If any Holder or
the Trustee is required by any court or otherwise to return to the Company, any
Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Guarantor, any amount paid by the
Company or any Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and
effect.  Each Guarantor further agrees
that, as between each Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article VI for the purposes of
this Guarantee, and (y) in the event of any acceleration of such obligations
as provided in Article VI, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Guarantor for the
purpose of this Guarantee.


 


SECTION 10.2.                 Severability.


 


In case any provision of this Guarantee 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 10.3.                 Release of a
Guarantor.


 


Upon (i) the unconditional release of a Guarantor from its
liability in respect of the Indebtedness in connection with which such
Guarantee was executed and delivered in accordance with the first paragraph of
Section 4.16, (ii) any sale or other disposition (by merger or
otherwise) to any Person which is not a Restricted Subsidiary of the Company of
all of the Company’s Capital Stock in, or all or substantially all of the
assets of, a Guarantor; provided that (a) such sale or
disposition of such Capital Stock or assets is otherwise in compliance with the
terms of this Indenture and (b) such assumption, guarantee or other
liability of such Guarantor has been released by the holders of the other
Indebtedness of the Company so guaranteed, (iii) the Legal Defeasance of
the Notes as described under Section 8.2, or (iv) a Guarantor being
designated as an Unrestricted Subsidiary as described under the definition of
“Unrestricted Subsidiary,” such Guarantor shall be deemed released from all
obligations under this Article X without any further action required on
the part of the Trustee or any Holder; provided that any such termination shall
occur only to the extent that all obligations of such Guarantor under all of
its guarantees of, and under all of its pledges of assets or other security
interests which secure, such Indebtedness of the Company shall also terminate
upon such release, sale or transfer.


 


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The Trustee shall promptly deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers’ Certificate certifying as to the compliance with this
Section 10.3.  Any Guarantor not so
released remains liable for the full amount of principal of and interest on the
Notes as provided in this Article X.


 


SECTION 10.4.                 Limitation of
Guarantor’s Liability.


 


Each Guarantor and by its acceptance hereof each of the Holders hereby
confirm that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or
state law.  To effectuate the foregoing
intention, the Holders and such Guarantor hereby irrevocably agree that the
obligations of such Guarantor under the Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed liabilities
of such Guarantor (including, but not limited to, the Guarantor Senior Debt of
such Guarantor) and after giving effect to any collections from or payments
made by or on behalf of any other Guarantor in respect of the obligations of
such other Guarantor under its Guarantee or pursuant to Section 10.6,
result in the obligations of such Guarantor under the Guarantee not
constituting such fraudulent transfer or conveyance.


 


SECTION 10.5.                 Consolidation,
Merger and Sale of Assets.


 


Upon any consolidation, merger, sale or conveyance of a Guarantor as
permitted by Article V, the Guarantee of such Guarantor set forth in this
Article X, and the due and punctual performance and observance of all of
the covenants and conditions of this Indenture to be performed by such
Guarantor, shall be expressly assumed (in the event that the Company, the Guarantor
or another Guarantor is not the surviving corporation in the merger), by an
agreement or supplemental indenture reasonably satisfactory in form to the
Trustee, executed and delivered to the Trustee, by the corporation formed by
such consolidation, or into which the Guarantor shall have merged, or by the
corporation that shall have acquired such property.  In the case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by an agreement or supplemental
indenture executed and delivered to the Trustee and satisfactory in form and
substance to the Trustee of the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.


 


SECTION 10.6.                 Contribution.


 


In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter  se, that in the event any payment or
distribution is made by any Guarantor (a “Funding Guarantor”) under its Guarantee,
such Funding Guarantor shall be entitled to a contribution from all other
Guarantors in a pro rata amount based on the Adjusted Net Assets of each
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company’s
obligations with respect to the Obligations. 
“Adjusted
Net Assets” of such Guarantor at any date shall mean the


 


92

















 


lesser of (x) the amount by which the fair value of the property
of such Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date (other than liabilities
of such Guarantor under Subordinated Obligation)), but excluding liabilities
under the Guarantee, of such Guarantor at such date and (y) the amount by
which the present fair salable value of the assets of such Guarantor at such
date exceeds the amount that will be required to pay the probable liabilities
of such Guarantor on its debts (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date and after giving effect to any
collection from any Subsidiary of such Guarantor in respect of the obligations
of such Subsidiary under the Guarantee), excluding debt in respect of the
Guarantee of such Guarantor, as they become absolute and matured.


 


SECTION 10.7.                 Waiver of
Subrogation.


 


Each Guarantor hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Guarantor’s obligations
under its Guarantee and this Indenture, including, without limitation, any
right of subrogation, reimbursement, exoneration, indemnification, and any
right to participate in any claim or remedy of any Holder against the Company,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim
or other rights.  If any amount shall be
paid to any Guarantor in violation of the preceding sentence and the Notes
shall not have been paid in full, such amount shall be deemed to have been paid
to such Guarantor for the benefit of, and held in trust for the benefit of, the
Holders, and shall, subject to the provisions of Section 10.2, forthwith
be paid to the Trustee for the benefit of such Holders to be credited and applied
upon the Notes, whether matured or unmatured, in accordance with the terms of
this Indenture.  Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 10.7 is knowingly made in contemplation of such
benefits.


 


SECTION 10.8.                 Evidence of
Guarantee.


 


To evidence their guarantees to the Holders set forth in this
Article X, each of the Guarantors hereby agrees to execute the notation of
Guarantee in substantially the form included in Exhibit E.  Each such notation of Guarantee shall be
signed on behalf of each Guarantor by an Officer or an assistant Secretary.


 


SECTION 10.9.                 Waiver of Stay,
Extension or Usury Laws.


 


Each Guarantor covenants that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would prohibit or
forgive such Guarantor from performing its Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect
the covenants or the performance of this Indenture; and each Guarantor hereby


 


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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 XI.


 


MISCELLANEOUS


 


SECTION 11.1.                 Trust Indenture Act Controls.


 


The provisions
of TIA §§ 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included unless expressly excluded by this Indenture)
are a part of and govern this Indenture, whether or not physically contained
herein.


 


If any
provision of this Indenture limits, qualifies or conflicts with the duties imposed
by the above paragraph, the imposed duties shall control.


 


SECTION 11.2.                 Notices.


 


Any notice or
communication shall be sufficiently given if in writing and delivered in Person
or mailed by first-class mail or by telecopier, followed by first-class mail,
or by overnight service guaranteeing next-day delivery, addressed as follows:


 


(a)                                  if
to the Company or any Guarantor:


 


c/o Vertis, Inc.

250 W. Pratt Street

18th Floor

Baltimore, MD  21201

Attention:  Chief Financial Officer

Telecopier Number:  (410) 528-9287


 


with a copy to:


 


Sullivan & Cromwell LLP

125 Broad Street

New York, New York  10004

Attention:  Robert E. Buckholz, Jr.,
Esq.

Telecopier Number:  (212) 558-3588


 


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(b)                                 if to the Trustee:


 


The Bank of New York

101 Barclay Street

New York, NY  10286

Attention:  Corporate Trust Administration

Telecopier Number:  (212) 815-5704


 


The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.


 


Any notice or communication mailed to a Securityholder, including any
notice delivered in connection with TIA § 310(b), TIA § 313(c), TIA
§ 314(a) and TIA § 315(b), shall be mailed to such Holder,
first-class postage prepaid, at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to such Holder if so
mailed within the time prescribed.


 


Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders.  Except for a notice to
the Trustee, which is deemed given only when received, if a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.


 


SECTION 11.3.                 Communications
by Holders with Other Holders.


 


Securityholders may communicate pursuant to TIA § 312(b) with
other Securityholders with respect to their rights under this Indenture, the
Notes or the Guarantees.  The Company,
the Guarantors, the Trustee, the Registrar and any other Person shall have the
protection of TIA § 312(c).


 


SECTION 11.4.                 Certificate
and Opinion of Counsel as to Conditions Precedent.


 


Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee at
the request of the Trustee (a) an Officers’ Certificate in form and
substance reasonably satisfactory to the Trustee stating that, in the opinion
of the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with (which
officer signing such certificate may rely, as to matters of law, on an Opinion
of Counsel), (b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of counsel, all such
conditions have been complied with (which counsel, as to factual matters, may
rely on an Officers’ Certificate and certificates of public officials) and
(c) where applicable, a certificate or opinion by an independent certified
public accountant satisfactory to the Trustee that complies with TIA
§ 314(c).


 


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SECTION 11.5.                 Statements
Required in Certificate and Opinion of Counsel.


 


Each certificate and Opinion of Counsel with respect to compliance with
a condition or covenant provided for in this Indenture shall include:


 


(a)                                  a statement that the
Person making such certificate or rendering such Opinion of Counsel has read
such covenant or condition;


 


(b)                                 a brief statement as
to the nature and scope of the examination or investigation upon which the
statements contained in such certificate or Opinion of Counsel are based;


 


(c)                                  a statement that, in
the opinion of such Person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and


 


(d)                                 a statement as to
whether or not, in the opinion of such Person, such condition or covenant has
been complied with.


 


SECTION 11.6.                 Rules by Trustee, Paying Agent,
Registrar.


 


The Trustee may make reasonable rules in accordance with the Trustee’s
customary practices for action by or at a meeting of Securityholders.  The Paying Agent or Registrar may make
reasonable rules for its functions.


 


SECTION 11.7.                 Legal Holidays.


 


If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.


 


SECTION 11.8.                 Governing Law.


 


THE
LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE NOTES WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. 
THE COMPANY AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS INDENTURE OR THE NOTES.


 


SECTION 11.9.                 No Recourse
Against Others.


 


No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or any Guarantor under the Notes, the
Guarantees or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. 
Each Holder by 


 


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accepting a Note waives and releases
all such liability.  The waiver and
release are part of the consideration for issuance of the Notes and the Guarantees.


 


SECTION 11.10.           Successors.


 


All agreements of the Company and the Guarantors in this Indenture, the
Notes and the Guarantees shall bind their respective successors.  All agreements of the Trustee in this
Indenture shall bind its successor.


 


SECTION 11.11.           Counterparts.


 


The parties may sign any number of counterparts of this Indenture.  Each such counterpart shall be an original,
but all of them together represent the same agreement.


 


SECTION 11.12.           Severability.


 


In case any provision in this Indenture, the Notes or the Guarantees
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, and a Holder shall have no claim therefor against any party
hereto.


 


SECTION 11.13.           Table of Contents, Headings, Etc.


 


The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, and are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.


 


SECTION 11.14.           No Adverse
Interpretation of Other Agreements.


 


This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries.  Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.


 


SECTION 11.15.           Benefits of
Indenture.


 


Nothing in this Indenture, the Notes or the Guarantees, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture, the Notes or the Guarantees.


 


SECTION 11.16.           Independence of
Covenants.


 


All covenants and agreements in this Indenture shall be given
independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another 


 


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covenant shall not avoid the
occurrence of a Default or an Event of Default if such action is taken or
condition exists.


 


ARTICLE XII.


 


COLLATERAL AND
SECURITY DOCUMENTS


 


SECTION 12.1.                 Security
Documents; Additional Collateral.


 


(a)                                  In
order to secure the due and punctual payment of the Notes and all other
Obligations in respect of the Notes and this Indenture, and the other amounts
payable to the Trustee hereunder, the Company and the Guarantors shall, on the
Issue Date, enter into the applicable Security Documents to create the Lien on
the Collateral in favor of the Collateral Agent for the benefit of the Notes
Secured Creditors and to provide for certain related intercreditor
matters.  Any Guarantor shall, upon
becoming a Guarantor, become a party to each applicable Security Document as
shall be necessary or appropriate to grant and create a valid Lien on and
security interest in the personal property of such Guarantor of the type
described in the definition of “Collateral” in the U.S. Security Agreement and,
to the extent required by the Senior Credit Facility, all real property owned
by such Guarantor, in each case, subject to no Liens other than Permitted
Liens.


 


(b)                                 If
at any time after the Non-2003 Senior Secured Notes Obligations Termination
Date (as defined in the U.S. Security Agreement), the Company or any Guarantor
acquires in fee simple any real property with a fair market value in excess of
$1.0 million or any entity which owns in fee simple any real property with a
fair market value in excess of $1.0 million becomes a Guarantor, in either case
as determined in good faith by the Company’s Board of Directors, the Company or
such Guarantor shall grant to the Collateral Agent for the benefit of the Notes
Secured Creditors a Mortgage or Amended and Restated Mortgage, as appropriate,
on such real property that is not already covered by the Security
Documents.  All such Mortgages or
Amended and Restated Mortgages, as appropriate, shall be reasonably
satisfactory in form and substance to the Collateral Agent.  In connection therewith, the Company shall
deliver title insurance policies, proper fixture filings under the UCC on Form
UCC-1, opinions of counsel, documents of the type described in clause (iv) of
Section 4.20 of this Indenture, surveys and insurance certificates, in each
case, in form and substance reasonably satisfactory to the Collateral Agent.


 


(c)                                  The
Trustee (in its capacity as a secured creditor on behalf of the Holders
pursuant to the Security Documents) and each Holder, by accepting a Note,
agrees to all of the terms and provisions of each of the Security Documents, as
the same may be amended from time to time pursuant to the provisions of
Security Documents and this Indenture, and acknowledge that (i) until such
time as all First-Lien Obligations, all commitments and letters of credit under
the Senior Credit Facility and all interest rate protection, currency and other
hedging agreements entitled to the benefits of the Security Documents have been
paid in full in cash in accordance with the respective terms thereof and/or
terminated, the Security Documents may be amended, to 


 


98

















 


the extent set forth therein and to the extent permitted by law,
without the consent of the Trustee or the Holders and (ii) the Security
Documents also may be amended to the extent permitted by law without the
consent of the Trustee or the Holders to add new classes of creditors to the
extent such Indebtedness and Liens are permitted hereby.


 


(d)                                 The
Trustee (in its capacity as a secured creditor on behalf of the Holders
pursuant to the Security Documents) and the Holders expressly acknowledge and
agree (i) to all of the terms and agreements contained in Annex I to the U.S.
Security Agreement, (ii) that the claims of the Holders and the Trustee against
the Assignors (as defined in the U.S. Security Agreement) in respect of the
Collateral constitute junior claims separate and apart (and of a different
class) from the senior claims of the Lender Creditors and the Other Creditors
(as such term is defined in the U.S. Security Agreement) against the Assignors
in respect of the Collateral and (iii) the Obligations under the Senior Credit
Facility and all Primary Obligations and Secondary Obligations (as each such
term is defined in the U.S. Security Agreement) include all interest that
accrues after the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency, reorganization or similar proceeding of any
Assignor at the rate provided for in the respective Secured Debt Agreements (as
defined in the U.S. Security Agreement) governing the same, whether or not a
claim for post-petition interest is allowed in any such case, proceeding or
other action.


 


(e)                                  In
the event that any provisions of this Indenture are deemed to conflict with any
Security Document, the provisions of such Security Document shall govern.


 


SECTION 12.2.                 Recording, Etc.


 


(a)                                  The
Company and the Guarantors shall take or cause to be taken all action required
or desirable to be taken by the Company or such Guarantor to maintain and
perfect the Lien on the Collateral granted by the Security Documents, to the
extent required thereby, including, but not limited to, causing all financing
statements, any mortgage or deed of trust, the Security Documents (or a short
form version thereof), other instruments of further assurance, including,
without limitation, continuation statements covering security interests in
personal property to be executed and delivered to the Collateral Agent to be
promptly recorded, registered and filed, and at all times to be kept recorded
and will execute and cause to be filed such financing statements and cause to
be issued and filed such continuation statements, all in such manner and in
such places as may be required by law fully to maintain the perfection of the
Holders’ and the Trustee’s rights under this Indenture and the Security
Documents to all property comprising the Collateral.  Without limiting the generality of the foregoing, the Company
will cause each Guarantor that is not in existence on the date hereof to
execute and deliver to the Collateral Agent and the Trustee at such time as
such Guarantor becomes a Guarantor and owns, possesses or acquires any property
or assets of the type or nature that would constitute Collateral (i) a
counterpart to the U.S. Security Agreement and such other documents as required
by the U.S. Security Agreement and (ii) any other Security Documents as
shall be necessary or reasonably requested by the Collateral Agent or the
Trustee in order to grant and perfect the Lien on the Collateral of such property
and assets.  Notwithstanding the
foregoing, to the extent the Bank Lenders do not require the Company or the
Guarantors to maintain or perfect a Lien in 


 


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certain Collateral, the Holders shall not require the Company or the
Guarantors to maintain or perfect a Lien on such Collateral.


 


The Company shall from time to time promptly pay and discharge all
mortgage and financing and continuation statement recording and/or filing fees,
charges and taxes relating to this Indenture and the Security Documents, any
amendments thereto and any other instruments of further assurance.  Notwithstanding the foregoing, the Trustee
shall not have any duty or obligation to ascertain whether any such taxes are
required to be paid at any time, and the determination referred to in the
preceding sentence shall only be made by the Trustee upon receipt of written
notice that such taxes are due and owing. 
This paragraph (a) is subject to the provisions of the U.S. Security
Agreement.


 


(b)                                 The
Company shall furnish or cause to be furnished to the Trustee:


 


(1)                                  at the time of
execution and delivery of this Indenture, a reliance letter with respect to
Opinions of Counsel delivered on the Issue Date to the Initial Purchasers
(other than from counsel to the Initial Purchasers) with respect to UCC
Collateral;


 


(2)                                  as promptly as
practicable after the Issue Date (1) in any event within five days after the
Issue Date in the case of UCC-3 amendments or the equivalent under revised
Article 9 of the UCC in each applicable jurisdiction; and (2) in any event
within 45 days after the Issue Date in the case of Real Property, Opinion(s) of
Counsel either (a) substantially to the effect that, in the opinion of
such counsel, each Security Document and all other instruments of further
assurance or assignment have been properly recorded, or filed to the extent
necessary to perfect or create the security interests created by each such
Security Document, to the extent that perfection of such security interests is
required by the Security Documents, and reciting the details of such action,
and stating that as to the security interests created pursuant to each such
Security Document, such recordings, registrations and filings are the only
recordings, registrations and filings necessary to give notice thereof and that
no re-recordings, re-registrations or refilings are necessary to maintain such
notice (other than as stated in such opinion), or (b) if perfection of
such security interests is required by the Security Documents, to the effect
that, in the opinion of such counsel, no such action is necessary to perfect
such security interests; and


 


(3)                                  within 30 days after
June 30 in each year beginning with June 30, 2004, an Opinion of Counsel dated
as of such date either (a) to the effect that, in the opinion of such
counsel, such action has been taken with respect to the recordings,
registrations, filings, re-recordings, re-registrations and refilings of all
instruments of further assurance as is necessary to maintain the validity,
enforceability and perfection of the security interests of each of the Security
Documents, to the extent that perfection of such security interests is required
by the Security Documents, and reciting with respect to such security interests
the details of such action (or to the extent that further action is required to
be taken within the next twelve months, details of such further action) or
referencing prior Opinions of Counsel in which such details are given, or
(b) if perfection of such security 


 


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interests is required by the Security Documents, to the effect that, in
the opinion of such counsel, no such action is necessary to maintain such
security interests.


 


SECTION 12.3.                 Release of Collateral.


 


The Company, the Guarantors and the Trustee agree that, and each
Holder, by accepting a Note, acknowledges that, subject to the terms of the
Security Documents:


 


(a)                                  The Bank Lenders (or,
after the Obligations and all commitments and letters of credit under the
Senior Credit Facility have been paid in full in cash in accordance with the
respective terms thereof and/or terminated, the holders of the Obligations
under all interest rate protection, currency and other hedging agreements
entitled to the benefits of the Security Documents) shall have the exclusive
right and authority to determine the release, sale or other disposition of the
Collateral; provided
that no release of the Notes Secured Creditors’ Lien on the Collateral shall be
made if the Collateral to be released is not the subject of a sale or other
disposition and such release is being made in connection with or in
contemplation of the repayment in full of the First-Lien Obligations.


 


(b)                                 At such time as all
First-Lien Obligations, all commitments and letters of credit under the Senior
Credit Facility, all interest rate protection, currency and other hedging
agreements entitled to the benefits of the Security Documents and any other
senior-priority Permitted Liens have been satisfied in full in cash in
accordance with the terms thereof and/or terminated, except as set forth in
paragraphs (c) and (d) below and subject to Article IX, the Trustee
(together with any other representative under Equal Lien Agreements) will
have the exclusive right and authority to determine the release, sale or other
disposition of the Collateral in accordance with instructions from the holders
of a majority in aggregate principal amount of all Equal Lien Indebtedness
(acting together as a single class) or, in the absence of such
instructions, in such manner as the Trustee (together with any other under
Equal Lien Agreements) deems appropriate in its (or their) absolute
discretion.


 


(c)                                  At such time as all
First-Lien Obligations, all commitments and letters of credit under the Senior
Credit Facility, all interest rate protection, currency and other hedging
agreements entitled to the benefits of the Security Documents and any other
senior-priority Permitted Liens have been satisfied in full in cash in
accordance with the terms thereof and/or terminated, the Company and the
Guarantors shall have the right to obtain a release of items of Collateral (the
“Released
Interest”) in connection with an Asset Sale upon compliance with the
condition that the Company deliver to the Trustee the following:


 


(1)                                  an
Officers’ Certificate stating that:


 


(i)                                     such Asset Sale
complies with the terms and conditions of Section 4.12;


 


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(ii)                                  all Net Cash Proceeds
from the sale of the Released Interest will be applied pursuant to the
provisions of Section 4.12; and


 


(iii)                               all conditions precedent
in this Indenture relating to the release in question have been complied with;


 


(2)                                  appropriate legal
opinion(s) (from counsel, which may be in-house counsel, reasonably acceptable
to the Trustee) to the effect set forth in clause (1) above, if requested by
the Trustee (although the Trustee shall have no obligation to make any such
request);


 


(3)                                  all documentation
necessary or reasonably requested by the Trustee to grant to the Trustee a
first priority security interest in and Lien on all assets (other than cash or
Cash Equivalents) comprising a portion of the consideration received in
such Asset Sale, if any,  to the extent
such security interest and Lien are required by this Indenture or the Security
Documents; and


 


(4)                                  all documentation
required by the TIA, if any, prior to the release of the Collateral.


 


Upon compliance by the Company with the conditions set forth in this
paragraph (c), the Trustee will instruct the Collateral Agent to release
the Released Interest from the Lien in favor of the Collateral Agent for the
benefit of the Notes Secured Creditors.


 


(d)                                 At such time as all
First-Lien Obligations, all commitments and letters of credit under the Senior
Credit Facility, all interest rate protection and other hedging agreements
entitled to the benefits of the Security Documents have been satisfied in full
in cash in accordance with the terms thereof and/or terminated, subject to the
provisions of this Indenture and the Security Documents, the Company or any
Guarantor may, without any release or consent by the Trustee or the Collateral
Agent, if no Default or Event of Default shall have occurred and be continuing:


 


(1)                                  abandon, terminate,
cancel, release or make alterations in or substitutions of any leases,
contracts or rights-of-way subject to the Lien of the Security Documents; provided
that (i) any altered or substituted leases, contracts or rights-of-way
shall forthwith, without further action, be subject to the Lien created by the
Security Documents to the same extent as those previously existing and
(ii) if the Company or such Guarantor, as the case may be, shall receive
any money or property in excess of its expenses in connection with such
termination, cancellation, release, alteration or substitution as consideration
or compensation for such termination, cancellation, release, alteration or
substitution, such money or property shall be treated as monies received in
connection with an Asset Sale and subject to the provisions of
Section 4.12 hereof;


 


(2)                                  surrender or modify
any franchise, license or permit subject to the Lien created by the Security
Documents which it may own or under which it may 


 


102

















 


be operating; provided that, after the surrender or
modification of any such franchise, license or permit, the Company or such
Guarantor, as the case may be, shall still, in its reasonable business
judgment, be entitled, under some other or without any franchise, license or
permit, to conduct its business in the territory in which it is then operating;
and provided,
further,
that if the Company or such Guarantor, as the case may be, shall be entitled to
receive any money or property in excess of its expenses in connection with such
surrender or modification as consideration or compensation for such surrender
or modification, such money or property shall be treated as monies received in
connection with an Asset Sale and subject to the provisions of
Section 4.12 hereof;


 


(3)                                  alter, repair,
replace, change the location or position of and add to its plants, structures,
machinery, systems, equipment, fixtures and appurtenances;


 


(4)                                  demolish, dismantle,
tear down, scrap or abandon any Collateral if, in the Company’s or such
Guarantor’s reasonable business judgment, such demolition, dismantling, tearing
down, scrapping or abandonment is in the best interest of the Company or such
Guarantor;


 


(5)                                  grant a license of
any Patent, Mark or Copyright (each as defined in the U.S. Security Agreement);
provided
that the Company or such Guarantor receives consideration at least equal to the
fair market value of such license;


 


(6)                                  abandon any Patent,
Mark or Copyright where subsequent applications relating to such Patent, Mark
or Copyright have been filed with respect to similar subject matter or where
the Company or such Guarantor, as the case may be, in its reasonable business
judgment, concludes that such Patent, Mark or Copyright is no longer useful in
the conduct of its business;


 


(7)                                  grant rights-of-way
and easements over or in respect of any real property; provided that such grant
will not in any material respect, in the reasonable business judgment of the
Company or the Guarantor, as the case may be, impair the usefulness of such
property in the conduct of its business and will not be prejudicial to the
interests of the Holders;


 


(8)                                  grant leases or
subleases in respect of any owned real property in the event that the Company
or such Guarantor, as the case may be, determines, in its reasonable business
judgment, that such owned real property is no longer useful in the conduct of
its business and that such lease or sublease would not be reasonably likely to
have a material adverse effect on the value of the property subject thereto; provided
that any such lease or sublease shall by its terms be subject and subordinate
to the Lien, and otherwise comply with the provisions, of the mortgage
affecting such real property; and


 


(9)                                  sell, exchange or
otherwise dispose of any asset constituting Collateral; provided that such sale,
exchange or other disposition does not 


 


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constitute an Asset Sale; provided, further, that if the
Collateral being sold, exchanged or otherwise disposed of is real property and
constitutes a portion (but not all) of the real property covered by a single
mortgage, then the Company shall, if requested by the Collateral Agent or the
Trustee, deliver to the Trustee a title endorsement and an updated survey, in
each case covering the portion of such real property that is not so sold,
exchanged or otherwise disposed of.


 


Upon any such sale, exchange or other
disposition permitted by this Section 12.3(d) (other than sales, exchanges
or dispositions to the Company or a Guarantor) such Collateral shall be sold,
exchanged or otherwise disposed of free and clear of Liens created by the
Security Documents.  In the event that
the Company or a Guarantor has sold, exchanged or otherwise disposed of or
proposes to sell, exchange or otherwise dispose of any portion of the
Collateral (other than sales, exchanges or dispositions to the Company or a
Guarantor) which under the provisions of this Section 12.3(d) may be sold,
exchanged or otherwise disposed of by the Company or such Guarantor without any
release or consent of the Trustee or the Collateral Agent, and the Company or
such Guarantor requests the Trustee to furnish a written disclaimer, release or
quitclaim of any interest in such property under any of the Security Documents,
the Trustee shall promptly execute such an instrument (in recordable form,
where appropriate) upon delivery to the Trustee of (i) an Officers’
Certificate by the Company or such Guarantor reciting the sale, exchange or
other disposition made or proposed to be made and describing in reasonable
detail the property affected thereby, and stating that such property is
property which may be sold, exchanged or otherwise disposed of or dealt with by
the Company or such Guarantor without any release or consent of the Trustee or
the Collateral Agent in accordance with the provisions of this
Section 12.3(d), and (ii) if requested by the Trustee, an Opinion of
Counsel stating that the sale, exchange or other disposition made or proposed
to be made was duly taken by the Company or such Guarantor in conformity with
this Section 12.3(d) and that the execution of such written disclaimer,
release or quitclaim is appropriate under this Section 12.3(d).


 


SECTION 12.4.                 Taking and Destruction.


 


At such time as all First-Lien Obligations, all commitments and letters
of credit under the Senior Credit Facility and all interest rate protection and
other hedging agreements entitled to the benefits of the Security Documents
have been satisfied in full in cash in accordance with the terms thereof and/or
terminated, upon any Taking or Destruction of any Collateral, all Net Insurance
Proceeds received by the Company or any Guarantor shall be deemed Net Cash Proceeds
and shall be applied in accordance with Section 4.12.


 


SECTION 12.5.                 Trust
Indenture Act Requirements.


 


The release of any Collateral from the Lien of any of the Security
Documents or the release of, in whole or in part, the Liens created by any of
the Security Documents will not be deemed to impair the security interests in
contravention of the provisions hereof if and to the extent the Collateral or
Liens are released pursuant to the applicable Security Documents and 


 


104

















 


pursuant to the terms hereof. 
The Trustee and each of the Holders acknowledge that a release of
Collateral or Liens strictly in accordance with the terms of the Security
Documents and the terms hereof will not be deemed for any purpose to be an
impairment of the Security Interests in contravention of the terms of this
Indenture.  To the extent applicable
following the qualification of this Indenture under the TIA, without
limitation, the Company and the Guarantors will comply with TIA
section 314(d) relating to the release of property or securities from the
Liens hereof and of the Security Documents. 
Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company, except in cases in which TIA
Section 314(d) requires that such certificate or opinion be made by an
independent Person.


 


SECTION 12.6.                 Suits To
Protect the Collateral.


 


Subject to the provisions of the Security Documents, the Trustee and
any other representative under Equal Lien Agreements, acting together, on
behalf of the Equal Lien Creditors, shall have power to instruct the Collateral
Agent to institute and to maintain such suits and proceedings as it may deem
expedient to prevent any impairment of the Collateral by any acts which may be
unlawful or in violation of any of the Security Documents or this Indenture,
and such suits and proceedings as the Trustee and any other representative
under Equal Lien Agreements, acting together, may deem expedient to preserve or
protect the interests of the Equal Lien Creditors in the Collateral (including
power to instruct the Collateral Agent to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the Security Interests or be prejudicial to the
interests of the Equal Lien Creditors).


 


SECTION 12.7.                 Purchaser Protected.


 


In no event shall any purchaser in good faith of any property purported
to be released hereunder or under any of the Security Documents be bound to
ascertain the authority of the Trustee or the Collateral Agent, as the case may
be, to execute the release or to inquire as to the satisfaction of any
conditions required by the provisions hereof for the exercise of such authority
or to see to the application of any consideration given by such purchaser or
other transferee; nor shall any purchaser or other transferee of any property
or rights permitted by this Article XII to be sold be under obligation to ascertain
or inquire into the authority of the Company, to make any such sale or other
transfer.


 


SECTION 12.8.                 Powers
Exercisable by Receiver or Trustee.


 


In case the Collateral shall be in the possession of a receiver or
trustee, lawfully appointed, the powers conferred in this Article XII upon the
Company with respect to the release, sale or other disposition of such property
may be exercised by such receiver or trustee, and an instrument signed by such
receiver or trustee shall be deemed the equivalent of any similar instrument of
the Company or of any officer or officers thereof required by the provisions of
this Article XII.


 


105

















 


SECTION 12.9.                 Determinations
Relating to Collateral.


 


In the event (i) the Trustee shall receive any written request
from the Company or any Guarantor under any Security Document for consent or
approval with respect to any matter or thing relating to any Collateral or the
Company’s or any Guarantor’s obligations with respect thereto; or
(ii) there shall be required from the Trustee under the provisions of any
Security Document any performance or the delivery of any instrument; or
(iii) a Responsible Officer of the Trustee shall become aware of any
nonperformance by the Company or any Guarantor of any covenant or any breach of
any representation or warranty of the Company or any Guarantor set forth in any
Security Document, and, in the case of clause (i), (ii) or (iii) above,
the Trustee’s response or action is not otherwise specifically contemplated
hereunder then, in each such event, the Trustee shall, within seven Business
Days thereafter, advise the Holders, in writing and at the Company’s expense,
of the matter or thing as to which consent has been requested or the performance
or instrument required to be delivered or the nonperformance or breach of which
the Trustee has become aware.  Subject
to Article IX, the Holders of not less than a majority in aggregate principal
amount of the outstanding Notes shall have the exclusive authority to direct
the Trustee’s response to any of the circumstances contemplated in
clauses (i), (ii) and (iii) above. 
In the event the Trustee shall be required to respond to any of the
circumstances contemplated in this Section 12.9, the Trustee shall not be
required so to respond unless it shall have received written authority by not
less than a majority in aggregate principal amount of the outstanding Notes; provided
that the Trustee shall be entitled to hire experts, consultants, agents and
attorneys to advise the Trustee on the manner in which the Trustee should
respond to such request or render any requested performance or response to such
nonperformance or breach (the expenses of which shall be reimbursed to the
Trustee pursuant to Section 7.7). 
The Trustee shall be fully protected in the taking of any action
recommended or approved by any such expert, consultant, agent or attorney or
agreed to by a majority of such Holders.


 


SECTION 12.10.           Release upon
Termination of the Company’s Obligations.


 


In the event that the Company delivers an Officers’ Certificate
certifying that its obligations under this Indenture have been satisfied and
discharged by complying with the provisions of Article VIII and such other
documents and/or funds as are required to be delivered or paid pursuant to
Article VIII, (i) the Trustee shall or shall instruct the Collateral Agent
to execute and deliver, in each case without recourse, representation or
warranty, such releases, termination statements and other instruments (in
recordable form, where appropriate) as the Company may reasonably request
evidencing the termination of the Liens created by the Security Documents in favor
of the Collateral Agent for the benefit of the Trustee and the Holders and
(ii) neither the Trustee nor the Collateral Agent shall be deemed to hold
the Liens for the benefit of the Trustee and the Holders.


 


SECTION 12.11.           Limitation on Duty
of Trustee in Respect of Collateral


 


(a)                                  Beyond
the exercise of reasonable care in the custody thereof, the Trustee shall have
no duty as to any Collateral in its possession or control or in the possession
or control


 


106

















 


of any agent or bailee or any income thereon or as to preservation of
rights against prior parties or any other rights pertaining thereto and the
Trustee shall not be responsible for filing any financing or continuation
statements or recording any documents or instruments in any public office at
any time or times or otherwise perfecting or maintaining the perfection of the
security interest in the Collateral.


 


(b)                                 The
Trustee shall not be responsible for the existence, genuineness or value of any
of the Collateral or for the validity, perfection, priority or enforceability
of the Liens upon any of the Collateral, whether impaired by operation of law
or by reason of any action or omission to act on its part hereunder, except to
the extent such action or omission constitutes negligence or willful misconduct
on the part of the Trustee, for the validity or sufficiency of the Collateral
or any agreement or assignment contained therein, for the validity of the title
of the Company to the Collateral, for insuring the Collateral or for the
payment of taxes, charges, assessments or Liens upon the Collateral or
otherwise as to the maintenance of the Collateral.


 


ARTICLE XIII.


 


TRUST MONIES


 


SECTION 13.1.                 Trust Monies.


 


All Trust Monies shall be held by or delivered to the Trustee, for the
benefit of the Equal Lien Creditors in accordance with the provisions of the
applicable Security Documents. 
Applicable Trust Monies, if any, shall, at the direction of the Company,
be (a) applied by the Trustee from time to time to the payment of the principal
of, premium, if any, and interest on any Notes at maturity or upon redemption
or retirement, or to the purchase of notes upon tender or in the open market or
otherwise, (b) released to the extent such cash would be considered Collateral
under the Security Documents following such release or (c) applied to cure any
payment Event of Default in each case in accordance with the Security
Documents.


 


SECTION 13.2.                 Investment of
Trust Monies.


 


All or any part of any Trust Monies held by the Trustee hereunder
(except such as may be held for the account of any particular Notes) shall from
time to time be invested or reinvested by the Trustee in any Cash Equivalents
pursuant to the written direction of the Company, which shall specify the Cash
Equivalents in which such Trust Monies shall be invested.  Unless an Event of Default occurs and is
continuing, any interest on such Cash Equivalents (in excess of any accrued
interest paid at the time of purchase) which may be received by the Trustee
shall be forthwith paid to the Company. 
Such Cash Equivalents shall be held by the Trustee as a part of the
Collateral, subject to the same provisions hereof as the cash used by it to
purchase such Cash Equivalents. The Trustee shall not be liable or responsible
for any loss resulting from such investments or sales except only for its own
grossly negligent action, its own grossly negligent failure to act or its own
willful misconduct in complying with this Section 13.2.


 


107

















 


SECTION 13.3.                 Return of
Applicable Trust Monies.


 


The Company shall be entitled to request in writing the return of any
or all of the Applicable Trust Monies and the Trustee shall return such
Applicable Trust Monies to the Company if: 
(1) no Default or Event of Default has occurred and is continuing,
(2) such Applicable Trust Monies, when released to the Company, will be
deposited into a Deposit Account (as defined in the U.S. Security Agreement)
over which the Collateral Agent has control (as defined in the UCC (as defined
in the U.S. Security Agreement)), (3) such Applicable Trust Monies are
applied pursuant to the U.S. Security Agreement and (4) the Company
delivers to the Trustee an Officers’ Certificate stating that all conditions
precedent herein provided for relating to such return of Applicable Trust
Monies have been complied with.


 


[Signature Pages Follow]


 


108

















 


IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.


 


	
   

  	
  VERTIS, INC.,

  
	
   

  	
  as Issuer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN V. HOWARD, JR.

  	
   

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ GEOVANNI BARRIS

  	
   

  
	
   

  	
   

  	
  Name: Geovanni Barris

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINTCO., INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN V. HOWARD, JR.

  	
   

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN V. HOWARD, JR.

  	
   

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT CHEMICALS LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN V. HOWARD, JR.

  	
   

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
					



 


109

















 


	
   

  	
  ENTERON GROUP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN V. HOWARD, JR.

  	
   

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BIG FLOWER DIGITAL SERVICES

  
	
   

  	
  (DELAWARE), INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN V. HOWARD, JR.

  	
   

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BIG FLOWER DIGITAL LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Big Flower Digital Services (Delaware), Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN V. HOWARD, JR.

  	
   

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice Address for all Guarantors:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Vertis, Inc.

  
	
   

  	
   

  	
  250 W. Pratt Street

  
	
   

  	
   

  	
  18th Floor

  
	
   

  	
   

  	
  Baltimore, MD  21201

  
	
   

  	
   

  	
  Attention:  Chief Financial
  Officer

  
	
   

  	
   

  	
  Telephone:  (410) 528-9800

  
	
   

  	
   

  	
  Telecopy:  (410) 528-9287

  



 


110

















 


EXHIBIT A-1


 


[FORM OF SERIES A SECURITY]


 


THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S.
PERSONS EXCEPT AS SET FORTH BELOW.  BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (C) IT IS AN ACCREDITED
INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN “ACCREDITED INVESTOR”), (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR
HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE) (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL
GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.  IN
CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND
THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER
OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES”
AND


 


A-1-1

















 


 “U.S. PERSON” HAVE THE MEANING
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.


 


A-1-2

















 


	
  No.

  	
  $

  



 


VERTIS, INC.


 


9 3/4% SENIOR SECURED SECOND LIEN NOTES
DUE 2009


 


VERTIS, INC. promises to pay to
              
or registered assigns the principal sum of
                   
Dollars on April 1, 2009.


 


Interest Payment Dates: 
April 1 and October 1


 


Record Dates:  March 15 and
September 15


 


	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: 
                 ,

  	
   

  	
   

  



 


CERTIFICATE OF AUTHENTICATION


 


This is one of the 9 3/4% Senior Secured Second Lien Notes due
2009 referred to in the within-mentioned Indenture.


 


	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  



 


A-1-3

















 


(REVERSE OF SECURITY)


 


9 3/4% SENIOR SECURED SECOND LIEN NOTES
DUE 2009


 


1.                                       Interest.  VERTIS, INC., a Delaware corporation (the “Company”,
which term shall include any successor thereto in accordance with the Indenture),
promises to pay, until the principal hereof is paid or made available for
payment, interest (including any Accrued Bankruptcy Interest) on the principal
amount set forth on the reverse side hereof at a rate of 9 3/4% per
annum.  Interest on the Notes will accrue from and
including the most recent date to which interest has been paid or, if no
interest has been paid, from and including the date of issuance of such Notes
through but excluding the date on which interest is paid.  Interest shall be payable in arrears on
April 1 and October 1 (each an “Interest Payment Date”).  Interest will be computed on the basis of a
360-day year of twelve full 30-day months.


 


2.                                       Method
of Payment.  The Company will pay
interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the March 15 or
September 15 immediately preceding the Interest Payment Date.  Holders must surrender Notes to a Paying Agent
to collect principal payments.  The
Company will pay principal, premium, if any, and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts.  At the Company’s
option, interest may be paid by check mailed to the registered address of the
Holder of this Note.


 


3.                                       Paying
Agent and Registrar.  Initially, The
Bank of New York (the “Trustee”) will act as Paying Agent and
Registrar.  The Company may change any
Paying Agent, Registrar or co-Registrar without notice.


 


4.                                       Indenture.  The Company issued the Notes under an
Indenture dated as of June 6, 2003 (the “Indenture”) among the
Company, the Guarantors and the Trustee. 
This Note is one of an issue of Notes of the Company issued under the
Indenture.  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 (15 U.S. Code
§§ 77aaa-77bbbb) as amended from time to time.  The Notes are subject to all such terms, and Securityholders are
referred to the Indenture and such Act for a statement of them.  Capitalized terms used herein and not
otherwise defined have the meanings set forth in the Indenture.  The Notes are general unsecured obligations
of the Company and are unlimited in aggregate principal amount,
$350.0 million of which will be issued in the offering of the Notes on the
Issue Date and Additional Notes may be issued after the Issue Date, subject to
the limitations set forth in Section 4.9 of the Indenture.


 


5.                                       Redemption.


 


(a)                                  Optional
Redemption.  The Notes are not
redeemable before April 1, 2006. 
Thereafter, the Company may redeem the Notes at its option, in whole or
in part, upon not less than 30 nor more than 60 days’ notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on April 1 of the year
set forth below:


 


A-1-4

















 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2006

  	
   

  	
  105.188

  	
  %

  
	
  2007

  	
   

  	
  102.594

  	
  %

  
	
  2008 and thereafter

  	
   

  	
  100.0000

  	
  %

  



 


In addition, the Company must pay accrued and unpaid interest on the
Notes redeemed.


 


(b)                                 Optional
Redemption upon Equity Offerings. 
At any time, or from time to time, on or prior to April 1, 2006, the
Company may, at its option, use the net cash proceeds of one or more Equity
Offerings (as defined below) to redeem up to 35% of the aggregate principal
amount of the Notes (including any Additional Notes) issued under the Indenture
at a redemption price equal to 109.75% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date of redemption; provided
that:


 


(1)                                  at least 65% of the
original principal amount of Notes issued under the Indenture (including any
Additional Notes) remains outstanding immediately after any such redemption;
and


 


(2)                                  the Company makes
such redemption not more than 90 days after the consummation of any such Equity
Offering.


 


“Equity
Offering” means any public or private sale of Qualified Capital Stock
of Holdings or the Company or any capital contribution to Holdings; provided
that, in the event of an Equity Offering by Holdings or any capital
contribution to Holdings, Holdings contributes to the capital of the Company
the portion of the net cash proceeds of such Equity Offering or capital
contribution necessary to pay the aggregate redemption price of the Notes to be
redeemed pursuant to the preceding paragraph.


 


(c)                                  Optional
Redemption upon a Change of Control. 
At any time on or prior to April 1, 2006, the Notes may also be
redeemed or purchased (by the Company or any other Person) in whole but not in
part, at the Company’s option, upon the occurrence of a Change of Control, at a
price equal to 100% of the principal amount thereof plus the Applicable Premium
as of, and accrued but unpaid interest, if any, to the date of redemption or
purchase (the “Redemption Date”) (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date).  Subject to the terms of
the Indenture, such redemption or purchase may be made upon notice mailed by
first-class mail to each Holder’s registered address, not less than 30 nor more
than 60 days prior to the Redemption Date (but in no event more than 90 days
after the occurrence of such Change of Control).  The Company may provide in such notice that payment of such price
and performance of the Company’s obligations with respect to such redemption or
purchase may be performed by another Person. 
Any such notice may be given prior to the occurrence of the related
Change of Control, and any such redemption, purchase or notice may, at the
Company’s discretion, be subject to the satisfaction of one or more conditions
precedent, including but not limited to the occurrence of the related Change of
Control.


 


A-1-5

















 


“Applicable
Premium” means, with respect to a Note at any Redemption Date, the
greater of (i) 1.0% of the principal amount of such Note and (ii) the
excess of (A) the present value at such Redemption Date of (1) the
redemption price of such Note on April 1, 2006 (such redemption price
being that described in the first paragraph of this “Optional Redemption” section)
plus (2) all required remaining scheduled interest payments due on such
Note through April 1, 2006, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the principal amount of
such Note on such Redemption Date. 
Calculation of the Applicable Premium will be made by the Company or on
behalf of the Company by such Person as the Company shall designate; provided,
however,
that such calculation shall not be a duty or obligation of the Trustee.


 


“Treasury
Rate” means, with respect to a Redemption Date, the yield to maturity
at the time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) that has become publicly available at least two
Business Days prior to such 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 such Redemption Date to April 1,
2006; provided,
however,
that if the period from such Redemption Date to April 1, 2006 is not equal
to the constant maturity of the United States Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from such Redemption Date to April 1,
2006 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.


 


6.                                       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 of Notes to be redeemed at his registered address.  On and after the Redemption Date, unless the
Company defaults in making the redemption payment, interest ceases to accrue on
Notes or portions thereof called for redemption.


 


7.                                       Offers
to Purchase.  Sections 4.12 and 4.14
of the Indenture provide that after an Asset Sale, or upon the occurrence of a
Change of Control, and subject to further limitations contained therein, the
Company shall make an offer to purchase certain amounts of Notes in accordance
with the procedures set forth in the Indenture.


 


8.                                       Security
Documents.  In order to secure the
due and punctual payment of the Notes and all other Obligations in respect of
the Notes and the Indenture, and the other amounts payable to the Trustee, the
Company and the Guarantors shall, on the Issue Date, enter into the applicable
Security Documents to create the Lien on the Collateral in favor of the
Collateral Agent for the benefit of the Notes Secured Creditors and to provide
for certain related intercreditor matters. 
Any Guarantor shall, upon becoming a Guarantor, become a party to each
applicable Security Document as shall be necessary or appropriate to grant and
create a valid Lien on and security interest in the personal property of such
Guarantor of the type described in the definition of “Collateral” in the U.S.
Security Agreement and, to the extent required by the 


 


A-1-6

















 


Senior Credit Facility, all real property owned by such Guarantor, in
each case, subject to no Liens other than Permitted Liens.


 


If at any time after the Non-2003 Senior Secured Notes Obligations
Termination Date (as defined in the U.S. Security Agreement), the Company or
any Guarantor acquires in fee simple any real property with a fair market value
in excess of $1.0 million or any entity which owns in fee simple any real
property with a fair market value in excess of $1.0 million becomes a
Guarantor, in either case as determined in good faith by the Company’s Board of
Directors, the Company or such Guarantor shall grant to the Collateral Agent
for the benefit of the Notes Secured Creditors a Mortgage or Amended and
Restated Mortgage, as appropriate, on such real property that is not already
covered by the Security Documents.  All
such Mortgages or Amended and Restated Mortgages, as appropriate, shall be
reasonably satisfactory in form and substance to the Collateral Agent.  In connection therewith, the Company shall
deliver a title insurance policy, survey and insurance certificate in form and
substance reasonably satisfactory to the Collateral Agent.


 


The Trustee (in its capacity as a secured creditor on behalf of the
Holders pursuant to the Security Documents) and each Holder, by accepting a
Note, agrees to all of the terms and provisions of each of the Security
Documents, as the same may be amended from time to time pursuant to the
provisions of Security Documents and the Indenture, and acknowledge that
(i) until such time as all First-Lien Obligations, all commitments and
letters of credit under the Senior Credit Facility and all interest rate
protection, currency and other hedging agreements entitled to the benefits of
the Security Documents have been paid in full in cash in accordance with the
respective terms thereof and/or terminated, the Security Documents may be
amended, to the extent set forth therein, without the consent of the Trustee or
the Holders and (ii) the Security Documents also may be amended without
the consent of the Trustee or the Holders to add new classes of creditors to
the extent such Indebtedness and Liens are permitted hereby.


 


The Trustee (in its capacity as a secured creditor on behalf of the
Holders pursuant to the Security Documents) and the Holders expressly
acknowledge and agree (i) to all of the terms and agreements contained in Annex
I to the U.S. Security Agreement, (ii) that the claims of the Holders and the
Trustee against the Assignors (as defined in the U.S. Security Agreement) in
respect of the Collateral constitute junior claims separate and apart (and of a
different class) from the senior claims of the Lender Creditors and the Other
Creditors (as such term is defined in the U.S. Security Agreement) against the
Assignors in respect of the Collateral and (iii) the Obligations under the
Senior Credit Facility and all Primary Obligations and Secondary Obligations
(as each such term is defined in the U.S. Security Agreement) include all
interest that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of any Assignor at the rate provided for in the respective Secured
Debt Agreements (as defined in the U.S. Security Agreement) governing the same,
whether or not a claim for post-petition interest is allowed in any such case,
proceeding or other action.


 


In the event that any provisions of the Indenture are deemed to
conflict with any Security Document, the provisions of such Security Document
shall govern.


 


A-1-7

















 


The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture
will not be deemed for any purpose to be an impairment of the security under
the Indenture.


 


9.                                       Denominations,
Transfer, Exchange.  The Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  A Holder may
transfer or exchange Notes in accordance with the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay to it any taxes and fees required by law or permitted by the Indenture.  The Registrar need not transfer or exchange
any Note or portion of a Note selected for redemption, or transfer or exchange
any Notes for a period of 15 days before a selection of Notes to be redeemed.


 


10.                                 Persons
Deemed Owners.  The registered
holder of a Note may be treated as the owner of it for all purposes.


 


11.                                 Unclaimed
Money.  If money for the payment of
principal or interest remains unclaimed for two years, the Trustee or Paying
Agent will pay the money back to the Company at its request.  After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an “abandoned
property” law designates another Person.


 


12.                                 Amendment,
Supplement, Waiver.  The Company and
the Trustee may, without the consent of the Holders of any outstanding Notes,
amend, waive or supplement the Indenture or the Notes for certain specified
purposes, including, among other things, curing ambiguities, defects or inconsistencies,
maintaining the qualification of the Indenture under the Trust Indenture Act of
1939 or making any other change that does not adversely affect the rights of
any Holder.  Other amendments and
modifications of the Indenture or the Notes may be made by the Company, the
Guarantors and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the outstanding Notes, subject to certain
exceptions requiring the consent of the Holders of the particular Notes to be affected.


 


13.                                 Successor
Corporation.  When a successor
corporation assumes all the obligations of its predecessor under the Notes and
the Indenture and the transaction complies with the terms of Article V of
the Indenture, the predecessor corporation will, subject to certain exceptions,
be released from those obligations.


 


14.                                 Defaults
and Remedies.  Events of Default include:  default in payment of principal of or
premium on the Notes at maturity, or upon acceleration, redemption or otherwise;
default in payment of interest on any Note for 30 days; certain defaults under
other Indebtedness; failure by the Company for 30 days after written notice to
it from the Trustee or Holders of at least 25% in principal amount of the then
outstanding Notes, to comply with any of the other agreements or covenants in
or provisions of the Indenture or the Notes; certain events of bankruptcy or
insolvency with respect to the Company and its Significant Subsidiaries;
certain final judgments that remain undischarged for 60 days after being
entered; any Guarantee of a Significant Subsidiary ceases to be in full force
and effect; and any Guarantor that is a Significant Subsidiary shall deny its
obligations under its Guarantee.  If an
Event of Default 


 


A-1-8

















 


occurs and is continuing (and has not been waived in accordance with
the provisions of the Indenture), the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes may declare all the
Notes to be immediately due and payable for an amount equal to 100% of the
principal amount of the Notes plus accrued interest to the date of payment,
except that in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes become due and payable
immediately without further action or notice. 
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture.  The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Notes.  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 notice
of any continuing Default or Event of Default (except a Default or an Event of
Default in payment of principal, premium, if any, or interest) if and so long
as a committee of its Responsible Officers determines in good faith that
withholding notice is in their interests. 
The Company must furnish an annual compliance certificate to the Trustee.


 


15.                                 Restrictive
Covenants.  The Indenture imposes
certain limitations on the ability of the Company and its Subsidiaries to,
among other things, pay dividends and make distributions with respect to or
repurchase or otherwise acquire or retire for value any of their equity
interests, make certain Investments, incur additional Indebtedness, enter into
transactions with Affiliates, incur Liens, sell assets, merge or consolidate
with any other Person and sell, lease, transfer or otherwise dispose of
substantially all of their properties or assets.  The limitations are subject to a number of important
qualifications and exceptions.  The
Company must annually report to the Trustee on compliance with such limitations.


 


16.                                 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 Trustee.


 


17.                                 No
Recourse Against Others.  No past,
present or future director, officer, employee, incorporator or stockholder of
the Company, as such, 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 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.


 


18.                                 Discharge
of Indenture; Defeasance.  The
Indenture contains provisions for defeasance at any time, upon compliance with
certain conditions set forth therein, of (i) the entire indebtedness of
this Note or (ii) certain restrictive covenants and Events of Default with
respect to this Note.


 


19.                                 Authentication.  This Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this Note.


 


20.                                 Abbreviations.  Customary abbreviations may be used in the
name of a Securityholder or an assignee, such as:  TEN COM (= tenants in common), TENANT (= tenants 


 


A-1-9

















 


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).


 


21.                                 Registration
Rights.  Pursuant to the
Registration Rights Agreement, the Company will be obligated to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right
to exchange this Note for Notes of a separate series issued under the Indenture
(or a trust indenture substantially identical to the Indenture in accordance
with the terms of the Registration Rights Agreement) which have been registered
under the Securities Act, in like principal amount and having identical terms
as this Note.  The Holders of the Notes
shall be entitled to receive certain additional interest payments in the event
such exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights Agreement.


 


22.                                 GOVERNING
LAW.  THE INDENTURE AND THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.


 


The provisions of this Note are expressly made subject to the more
detailed provisions set forth in the Indenture and the Registration Rights
Agreement, which shall for all purposes be controlling.  The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture.  Requests may be made to:


 


VERTIS, INC.

250 W. Pratt Street

18th Floor

Baltimore, MD  21201

Attention:  Chief Financial Officer


 


A-1-10

















 


ASSIGNMENT FORM


 


If you the holder want to assign this Note, fill in the form below and
have your signature guaranteed:


 


I or we assign and transfer this Note to


 


	
   

  
	
   

  
	
  (Insert assignee’s social security or tax ID number)

  	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  



 


(Print or type assignee’s name, address and zip code) and irrevocably
appoint


 


agent 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 other side of this Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  
					



 

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you wish to have this Note purchased by the Company pursuant to
Section 4.12 or 4.14 of the Indenture, check the Box:  o


 


If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.12 or 4.14 of the Indenture, state the amount:


 


$                               


 


	
  Date:

  	
   

  	
  Your signature:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side of this Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
						



 

















 


EXHIBIT A-2


 


[FORM OF SERIES B SECURITIES]


 


	
  No.

  	
  $

  



 


VERTIS, INC.


 


9 3/4% SENIOR SECURED SECOND LIEN NOTES
DUE 2009


 


VERTIS, INC. promises to pay to
              
or registered assigns the principal sum of
              
Dollars on April 1, 2009.


 


Interest Payment Dates: 
April 1 and October 1


 


Record Dates:  March 15 and
September 15


 


	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  



 


CERTIFICATE OF AUTHENTICATION


 


This is one of the 9 3/4% Senior Secured Second Lien Notes due
2009 referred to in the within-mentioned Indenture.


 


	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  



 


A-2-1

















 


(REVERSE OF SECURITY)


 


9 3/4% SENIOR SECURED SECOND LIEN NOTES
DUE 2009


 


1.                                       Interest.  VERTIS, INC., a Delaware corporation (the “Company”,
which term shall include any successor thereto in accordance with the
Indenture), promises to pay, until the principal hereof is paid or made
available for payment, interest (including any Accrued Bankruptcy Interest) on
the principal amount set forth on the reverse side hereof at a rate of
9 3/4% per
annum.  Interest on the Notes will accrue from and
including the most recent date to which interest has been paid or, if no
interest has been paid, from and including the date of issuance of such Notes
through but excluding the date on which interest is paid.  Interest shall be payable in arrears on
April 1 and October 1 (each an “Interest Payment Date”).  Interest will be computed on the basis of a
360-day year of twelve full 30-day months.


 


2.                                       Method
of Payment.  The Company will pay
interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the March 15 or
September 15 immediately preceding the Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments. 
The Company will pay principal, premium, if any, and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts.  At the
Company’s option, interest may be paid by check mailed to the registered
address of the Holder of this Note.


 


3.                                       Paying
Agent and Registrar.  Initially, The
Bank of New York (the “Trustee”) will act as Paying Agent and
Registrar.  The Company may change any
Paying Agent, Registrar or co-Registrar without notice.


 


4.                                       Indenture.  The Company issued the Notes under an
Indenture dated as of June 6, 2003 (the “Indenture”) among the
Company, the Guarantors and the Trustee. 
This Note is one of an issue of Notes of the Company issued under the
Indenture.  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 (15 U.S. Code
§§ 77aaa-77bbbb) as amended from time to time.  The Notes are subject to all such terms, and Securityholders are
referred to the Indenture and such Act for a statement of them.  Capitalized terms used herein and not
otherwise defined have the meanings set forth in the Indenture.  The Notes are general unsecured obligations
of the Company and are unlimited in aggregate principal amount,
$350.0 million of which will be issued in the offering of the Notes on the
Issue Date and Additional Notes may be issued after the Issue Date, subject to
the limitations set forth in Section 4.9 of the Indenture.


 


5.                                       Redemption.


 


(a)                                  Optional
Redemption.  The Notes are not
redeemable before April 1, 2006. 
Thereafter, the Company may redeem the Notes at its option, in whole or
in part, upon not less than 30 nor more than 60 days’ notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on April 1 of the year
set forth below:


 


A-2-2

















 


	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2006

  	
   

  	
  105.188

  	
  %

  
	
  2007

  	
   

  	
  102.594

  	
  %

  
	
  2008 and thereafter

  	
   

  	
  100.0000

  	
  %

  



 


In addition, the Company must pay accrued and unpaid interest on the
Notes redeemed.


 


(b)                                 Optional
Redemption upon Equity Offerings. 
At any time, or from time to time, on or prior to April 1, 2006,
the Company may, at its option, use the net cash proceeds of one or more Equity
Offerings (as defined below) to redeem up to 35% of the aggregate principal
amount of the Notes (including any Additional Notes) issued under the Indenture
at a redemption price equal to 109.75% of the principal amount thereof plus
accrued and unpaid interest thereon, if any, to the date of redemption; provided
that:


 


(1)                                  at least 65% of the
original principal amount of Notes issued under the Indenture (including any
Additional Notes) remains outstanding immediately after any such redemption;
and


 


(2)                                  the Company makes
such redemption not more than 90 days after the consummation of any such Equity
Offering.


 


“Equity
Offering” means any public or private sale of Qualified Capital
Stock of Holdings or the Company or any capital contribution to Holdings; provided
that, in the event of an Equity Offering by Holdings or any capital
contribution to Holdings, Holdings contributes to the capital of the Company
the portion of the net cash proceeds of such Equity Offering or capital
contribution necessary to pay the aggregate redemption price of the Notes to be
redeemed pursuant to the preceding paragraph.


 


(c)                                  Optional
Redemption upon a Change of Control. 
At any time on or prior to April 1, 2006, the Notes may also be
redeemed or purchased (by the Company or any other Person) in whole but not in
part, at the Company’s option, upon the occurrence of a Change of Control, at a
price equal to 100% of the principal amount thereof plus the Applicable Premium
as of, and accrued but unpaid interest, if any, to the date of redemption or
purchase (the “Redemption Date”) (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest payment
date).  Subject to the terms of the
Indenture, such redemption or purchase may be made upon notice mailed by
first-class mail to each Holder’s registered address, not less than 30 nor more
than 60 days prior to the Redemption Date (but in no event more than 90 days
after the occurrence of such Change of Control).  The Company may provide in such notice that payment of such price
and performance of the Company’s obligations with respect to such redemption or
purchase may be performed by another Person. 
Any such notice may be given prior to the occurrence of the related
Change of Control, and any such redemption, purchase or notice may, at the
Company’s discretion, be 


 


A-2-3

















 


subject to the satisfaction of one or more conditions precedent, including
but not limited to the occurrence of the related Change of Control.


 


“Applicable
Premium” means, with respect to a Note at any Redemption Date, the
greater of (i) 1.0% of the principal amount of such Note and (ii) the
excess of (A) the present value at such Redemption Date of (1) the
redemption price of such Note on April 1, 2006 (such redemption price
being that described in the first paragraph of this “Optional Redemption” section)
plus (2) all required remaining scheduled interest payments due on such
Note through April 1, 2006, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the principal amount of such
Note on such Redemption Date. 
Calculation of the Applicable Premium will be made by the Company or on
behalf of the Company by such Person as the Company shall designate; provided,
however,
that such calculation shall not be a duty or obligation of the Trustee.


 


“Treasury
Rate” means, with respect to a Redemption Date, the yield to maturity
at the time of computation of United States Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15(519) that has become publicly available at least two
Business Days prior to such 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 such Redemption Date to April 1,
2006; provided,
however,
that if the period from such Redemption Date to April 1, 2006 is not equal
to the constant maturity of the United States Treasury security for which a
weekly average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from such Redemption Date to April 1,
2006 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.


 


6.                                       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 of Notes to be redeemed at his registered address.  On and after the Redemption Date, unless the
Company defaults in making the redemption payment, interest ceases to accrue on
Notes or portions thereof called for redemption.


 


7.                                       Offers
to Purchase.  Sections 4.12 and 4.14
of the Indenture provide that after an Asset Sale, or upon the occurrence of a
Change of Control, and subject to further limitations contained therein, the
Company shall make an offer to purchase certain amounts of Notes in accordance
with the procedures set forth in the Indenture.


 


8.                                       Security
Documents.  In order to secure the
due and punctual payment of the Notes and all other Obligations in respect of
the Notes and the Indenture, and the other amounts payable to the Trustee, the
Company and the Guarantors shall, on the Issue Date, enter into the applicable
Security Documents to create the Lien on the Collateral in favor of the
Collateral Agent for the benefit of the Notes Secured Creditors and to provide
for certain related intercreditor matters. 
Any Guarantor shall, upon becoming a Guarantor, become a party to each 


 


A-2-4

















 


applicable Security Document as shall be necessary or appropriate to
grant and create a valid Lien on and security interest in the personal property
of such Guarantor of the type described in the definition of “Collateral” in
the U.S. Security Agreement and, to the extent required by the Senior Credit
Facility, all real property owned by such Guarantor, in each case, subject to
no Liens other than Permitted Liens.


 


If at any time after the Non-2003 Senior Secured Notes Obligations
Termination Date (as defined in the U.S. Security Agreement), the Company or
any Guarantor acquires in fee simple any real property with a fair market value
in excess of $1.0 million or any entity which owns in fee simple any real
property with a fair market value in excess of $1.0 million becomes a
Guarantor, in either case as determined in good faith by the Company’s Board of
Directors, the Company or such Guarantor shall grant to the Collateral Agent
for the benefit of the Notes Secured Creditors a Mortgage or Amended and
Restated Mortgage, as appropriate, on such real property that is not already
covered by the Security Documents.  All
such Mortgages or Amended and Restated Mortgages, as appropriate, shall be
reasonably satisfactory in form and substance to the Collateral Agent.  In connection therewith, the Company shall
deliver a title insurance policy, survey and insurance certificate in form and
substance reasonably satisfactory to the Collateral Agent.


 


The Trustee (in its capacity as a secured creditor on behalf of the
Holders pursuant to the Security Documents) and each Holder, by accepting a
Note, agrees to all of the terms and provisions of each of the Security
Documents, as the same may be amended from time to time pursuant to the
provisions of Security Documents and the Indenture, and acknowledge that
(i) until such time as all First-Lien Obligations, all commitments and
letters of credit under the Senior Credit Facility and all interest rate
protection, currency and other hedging agreements entitled to the benefits of
the Security Documents have been paid in full in cash in accordance with the
respective terms thereof and/or terminated, the Security Documents may be
amended, to the extent set forth therein, without the consent of the Trustee or
the Holders and (ii) the Security Documents also may be amended without
the consent of the Trustee or the Holders to add new classes of creditors to
the extent such Indebtedness and Liens are permitted hereby.


 


The Trustee (in its capacity as a secured creditor on behalf of the
Holders pursuant to the Security Documents) and the Holders expressly
acknowledge and agree (i) to all of the terms and agreements contained in Annex
I to the U.S. Security Agreement, (ii) that the claims of the Holders and the
Trustee against the Assignors (as defined in the U.S. Security Agreement) in
respect of the Collateral constitute junior claims separate and apart (and of a
different class) from the senior claims of the Lender Creditors and the Other
Creditors (as such term is defined in the U.S. Security Agreement) against the
Assignors in respect of the Collateral and (iii) the Obligations under the
Senior Credit Facility and all Primary Obligations and Secondary Obligations
(as each such term is defined in the U.S. Security Agreement) include all
interest that accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency, reorganization or similar
proceeding of any Assignor at the rate provided for in the respective Secured
Debt Agreements (as defined in the U.S. Security 


 


A-2-5

















 


Agreement) governing the same, whether or not a claim for post-petition
interest is allowed in any such case, proceeding or other action.


 


In the event that any provisions of the Indenture are deemed to
conflict with any Security Document, the provisions of such Security Document
shall govern.


 


The Trustee and each Holder acknowledge that a release of any of the
Collateral or any Lien strictly in accordance with the terms and provisions of
any of the Security Documents and the terms and provisions of the Indenture
will not be deemed for any purpose to be an impairment of the security under
the Indenture.


 


9.                                       Denominations,
Transfer, Exchange.  The Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  A Holder may
transfer or exchange Notes in accordance with the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay to it any taxes and fees required by law or permitted by the Indenture.  The Registrar need not transfer or exchange
any Note or portion of a Note selected for redemption, or transfer or exchange
any Notes for a period of 15 days before a selection of Notes to be redeemed.


 


10.                                 Persons
Deemed Owners.  The registered
holder of a Note may be treated as the owner of it for all purposes.


 


11.                                 Unclaimed
Money.  If money for the payment of
principal or interest remains unclaimed for two years, the Trustee or Paying
Agent will pay the money back to the Company at its request.  After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an “abandoned
property” law designates another Person.


 


12.                                 Amendment,
Supplement, Waiver.  The Company,
the Guarantors and the Trustee may, without the consent of the Holders of any
outstanding Notes, amend, waive or supplement the Indenture or the Notes for
certain specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies, maintaining the qualification of the Indenture under
the Trust Indenture Act of 1939 or making any other change that does not
adversely affect the rights of any Holder. 
Other amendments and modifications of the Indenture or the Notes may be
made by the Company, the Guarantors and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the outstanding
Notes, subject to certain exceptions requiring the consent of the Holders of
the particular Notes to be affected.


 


13.                                 Successor
Corporation.  When a successor
corporation assumes all the obligations of its predecessor under the Notes and
the Indenture and the transaction complies with the terms of Article V of
the Indenture, the predecessor corporation will, subject to certain exceptions,
be released from those obligations.


 


14.                                 Defaults
and Remedies.  Events of Default include:  default in payment of principal of or
premium on the Notes at maturity, or upon acceleration, redemption or otherwise;



 


A-2-6

















 


default in payment of interest on any Note for 30 days; certain
defaults under other Indebtedness; failure by the Company or its Subsidiaries
for 30 days after written notice to it from the Trustee or Holders of at least
25% in principal amount of the then outstanding Notes, to comply with any of
the other agreements or covenants in or provisions of the Indenture or the
Notes; certain events of bankruptcy or insolvency with respect to the Company
and its Significant Subsidiaries; certain final judgments that remain
undischarged for 60 days after being entered; any Guarantee of a Significant
Subsidiary ceases to be in full force and effect; and any Guarantor that is a
Significant Subsidiary shall deny its obligations under its Guarantee.  If an Event of Default occurs and is
continuing (and has not been waived in accordance with the provisions of the
Indenture), the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may declare all the Notes to be immediately
due and payable for an amount equal to 100% of the principal amount of the
Notes plus accrued interest to the date of payment, except that in the case of
an Event of Default arising from certain events of bankruptcy or insolvency,
all outstanding Notes become due and payable immediately without further action
or notice.  Holders may not enforce the
Indenture or the Notes except as provided in the Indenture.  The Trustee may require indemnity satisfactory
to it before it enforces the Indenture or the Notes.  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 notice of any continuing Default or Event of
Default (except a Default or an Event of Default in payment of principal,
premium, if any, or interest) if and so long as a committee of its Responsible
Officers determines in good faith that withholding notice is in their
interests.  The Company must furnish an
annual compliance certificate to the Trustee.


 


15.                                 Restrictive
Covenants.  The Indenture imposes
certain limitations on the ability of the Company and its Subsidiaries to,
among other things, pay dividends and make distributions with respect to or
repurchase or otherwise acquire or retire for value any of their Equity
Interests, make certain Investments, incur additional Indebtedness, enter into
transactions with Affiliates, incur Liens, sell assets, merge or consolidate
with any other Person and sell, lease, transfer or otherwise dispose of substantially
all of their properties or assets.  The
limitations are subject to a number of important qualifications and
exceptions.  The Company must annually
report to the Trustee on compliance with such limitations.


 


16.                                 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 Trustee.


 


17.                                 No
Recourse Against Others.  No past,
present or future director, officer, employee, incorporator or stockholder of
the Company, as such, 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 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.


 


A-2-7

















 


18.                                 Discharge
of Indenture; Defeasance.  The
Indenture contains provisions for defeasance at any time, upon compliance with
certain conditions set forth therein, of (i) the entire indebtedness of
this Note or (ii) certain restrictive covenants and Events of Default with
respect to this Note.


 


19.                                 Authentication.  This Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this Note.


 


20.                                 Abbreviations.  Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: 
TEN COM (= tenants in common), TENANT (= 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).


 


21.                                 GOVERNING
LAW.  THE INDENTURE AND THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.


 


The provisions of this Note are expressly made subject to the more
detailed provisions set forth in the Indenture, which shall for all purposes be
controlling.  The Company will furnish
to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:


 


VERTIS, INC.

250 W. Pratt Street

18th Floor

Baltimore, MD  21201

Attention:  Chief Financial Officer


 


A-2-8

















 


ASSIGNMENT FORM


 


If you the holder want to assign this Note, fill in the form below and
have your signature guaranteed:


 


	
  I or we assign and transfer this Note to

  
	
   

  
	
   

  
	
   

  
	
  (Insert assignee’s social security or tax ID number)

  	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Print or type assignee’s name, address and zip code) and irrevocably
  appoint

  
	
   

  
	
   

  
	
   

  
	
  agent 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 other side of this Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  
					



 

















 


OPTION OF HOLDER TO ELECT PURCHASE


 


If you wish to have this Note purchased by the Company pursuant to
Section 4.12 or 4.14 of the Indenture, check the Box:  o


 


If you wish to have a portion of this Note purchased by the Company
pursuant to Section 4.12 or 4.14 of the Indenture, state the amount:


 


$                               


 


	
  Date:

  	
   

  	
  Your signature:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side of this Note)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
						



 

















 


EXHIBIT B


 


FORM OF LEGEND FOR BOOK-ENTRY SECURITIES


 


Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:


 


THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.  THIS SECURITY IS NOT EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS
NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY
TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.


 


UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.


 


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EXHIBIT C


 


Form of
Certificate To Be

Delivered in Connection with

Transfers to Non-QIB Accredited
Investors


 


                       ,
         


 


The Bank of New York

101 Barclay Street

New York, NY 10286


 


Attention:  Corporate Trust
Administration


 


Re:                               Vertis, Inc. (the
“Company”) 9 3/4% Senior

Secured Second Lien Notes due 2009 (the “Securities”)


 


Ladies and Gentlemen:


 


In connection with our proposed purchase of
$             
aggregate principal amount of the Securities, we confirm that:


 


We have received such information as we deem necessary in order to make
our investment decision.


 


We understand that any subsequent transfer of the Securities 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
Securities except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the “Securities Act”).


 


We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities 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 or otherwise transfer any Securities prior to the date which is two years
after the original issuance of the Securities, we will do so only (i) to
the Company or any subsidiary thereof, (ii) inside the United States in
accordance with Rule 144A under the Securities Act to a person who we
reasonably believe is a “qualified institutional buyer” (as defined in
Rule 144A under the Securities Act), (iii) inside the United States
to an 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 a
signed letter containing certain representations and agreements relating to the
restrictions on transfer of the Securities, (iv) outside the United States
in an offshore transaction in accordance with Rule 904 of
Regulation S under the Securities Act, (v) pursuant to the exemption
from registration provided 


 


C-1

















 


by Rule 144 under the Securities Act (if available), or
(vi) pursuant to an effective registration statement under the Securities
Act, and we further agree to provide to any Person purchasing any of the
Securities from us a notice advising such purchaser that resales of the Securities
are restricted as stated herein.


 


We understand that, on any proposed resale of any Securities, we will
be required to furnish to you and the Company such certification, 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 Securities
purchased by us will bear a legend to the foregoing effect.


 


We are an institutional “accredited investor” (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act) (an “accredited investor”) 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 Securities, and we and any accounts for which we
are acting are each able to bear the economic risk of our or their investment,
as the case may be.


 


We are acquiring the Securities purchased by us for our account or for
one or more accounts (each of which is an accredited investor) as to each of
which we exercise sole investment discretion.


 


C-2

















 


You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  	
   

  



 


C-3

















 


EXHIBIT D


 


Form of Certificate To Be Delivered

in Connection with Transfers

Pursuant to Regulation S


 


                     ,
        


 


The Bank of New York


101 Barclay Street


New York, New York 10286


 


Attention:  Corporate Trust
Administration


 


Re:                               Vertis, Inc. (the
“Company”) 9 3/4% Senior

Secured Second Lien Notes due 2009 (the “Securities”)


 


Dear Sirs:


 


In connection with our proposed sale of
$                 
aggregate principal amount of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the
U.S. Securities Act of 1933, as amended (the “Securities Act”), and,
accordingly, we represent that:


 


(1)                                  the offer of the
Securities was not made to a Person in the United States;


 


(2)                                  either (a) at
the time the buy offer was originated, the transferee was outside the United
States or we and any Person acting on our behalf reasonably believed that the
transferee was outside the United States, or (b) the transaction was executed
in, on or through the facilities of a designated off-shore securities market
and neither we nor any Person acting on our behalf knows that the transaction
has been pre-arranged with a buyer in the United States;


 


(3)                                  no directed selling
efforts have been made in the United States in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;


 


(4)                                  the transaction is
not part of a plan or scheme to evade the registration requirements of the
Securities Act; and


 


(5)                                  we have advised the
transferee of the transfer restrictions applicable to the Securities.


 


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 


 


D-1

















 


legal proceedings or official inquiry with respect to the matters
covered hereby.  Terms used in this
certificate have the meanings set forth in Regulation S.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferor]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  	
   

  



 


D-2

















 


EXHIBIT E


 


[FORM OF NOTATION ON NOTE

RELATING TO GUARANTEES]


 


GUARANTEES


 


The Guarantors (as defined in the Indenture (the “Indenture”) referred to in
the Note upon which this notation is endorsed and each hereinafter referred to
as a “Guarantor”)
have unconditionally guaranteed on a senior unsecured basis (such guarantee by
each Guarantor being referred to herein as the “Guarantee”) (i) the due
and punctual payment of the principal of and interest on the Notes in full when
due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise and interest on the overdue principal, if any, and
interest on any interest, if any, to the extent lawful, of the Notes and all
other obligations of the Company to the Holders all in accordance with the
terms set forth in of the Indenture and (ii) in case of any extension of
time of payment or renewal of any Notes or of any of such other obligations, that
the same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration or otherwise.


 


Each Guaranty will be limited to an amount not to exceed the maximum
amount that can be guaranteed by such Guarantor after giving effect to all of
its other contingent and fixed liabilities without rendering such Guaranty, as
it relates to such Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.


 


The obligations of the undersigned to the Holders of the Notes and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set forth
in Article X of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Guarantee and all other of the provisions of the
Indenture to which this Guarantee relates.


 


No past, present or future stockholder, director, officer, employee or
incorporator, as such, of any of the Guarantors shall have any liability for
any obligation of the Guarantors under the Guarantee or the Indenture or for
any claim based on, in respect of or by reason of, such obligations or their
creation.  Each Holder of a Note by
accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Guarantees.


 


	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  PrintCo., Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


E-1

















 


	
   

  	
  Webcraft LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Webcraft Chemicals LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Enteron Group LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Big Flower Digital Services (Delaware), Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Big Flower Digital LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


E-2