Document:

EX-10.18: 2ND AMENDMENT TO NOTE PURCHASE AGREEMENT

 

EXHIBIT 10.18

EXECUTION COPY

BOWNE & Co., INC.

SECOND AMENDEMENT

Dated as of March 28, 2003

to

NOTE PURCHASE AGREEMENTS

Dated as of January 30, 2002

		
	Re:	$25,000,000 6.90% Senior Notes, Series A, due January 30, 2007
	  	$28,000,000 7.31% Senior Notes, Series B, due January 30, 2012 
	  	$22,000,000 7.85% Senior Notes, Series C, due January 30, 2012
 

 

 

SECOND AMENDMENT TO NOTE PURCHASE AGREEMENTS

     This Second Amendment dated as of March 28, 2003 (the or this “Second
Amendment”) to the Note Purchase Agreements dated as of January 30, 2002 is
between Bowne & Co., Inc., a Delaware corporation (the “Company”), and each of
the institutions which is a signatory to this Second Amendment (collectively,
the “Noteholders”).

R E C I T A L S:

     A.     The Company and each of the Noteholders have heretofore entered into
separate and several Note Purchase Agreements each dated as of January 30,
2002, as amended by the First Amendment to Note Purchase Agreements dated as of
July 2, 2002 (collectively, as amended, the “Note Purchase Agreements”). The
Company has heretofore issued (a) $25,000,000 aggregate principal amount of its
6.90% Senior Notes, Series A, due January 30, 2007 (the “Series A Notes”), (b)
$28,000,000 aggregate principal amount of its 7.31% Senior Notes, Series B, due
January 30, 2012 (the “Series B Notes”) and (c) $22,000,000 aggregate principal
amount of its 7.85% Senior Notes, Series C, due January 30, 2012 (the “Series C
Notes;” the Series A Notes, the Series B Notes and the Series C Notes being
hereunder collectively referred to as the “Notes”) pursuant to the Note
Purchase Agreements.

     B.     The Company and the Noteholders now desire to amend the Note Purchase
Agreements in the respects, but only in the respects, hereinafter set forth.

     C.     Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Purchase Agreements, as amended by this Second
Amendment, unless herein defined or the context shall otherwise require.

     D.     All requirements of law have been fully complied with and all other
acts and things necessary to make this Second Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed
have been done or performed.

     Now, therefore, upon the full and complete satisfaction of the conditions
precedent to the effectiveness of this Second Amendment set forth in Section
4.1 hereof, and in consideration of good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the Company and the
Noteholders do hereby agree as follows:

Section 1.      AMENDMENTS.

     Section 1.1.     Section 1 of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows:

		
	 	     “Section 1. Authorization of Notes; Interest Rate.

		
	 	     Section 1.1.     Authorization of Notes. The
Company will authorize the issue and sale of (a)
$25,000,000 aggregate principal

 

 

		
	 	amount of its 6.90%
Senior Notes, Series A, due January 30, 2007 (the
“Series A Notes”), (b) $28,000,000 aggregate
principal amount of its 7.31% Senior Notes, Series
B, due January 30, 2012 (the “Series B Notes”), and
(c) $22,000,000 aggregate principal amount of its
7.85% Senior Notes, Series C, due January 30, 2012
(the “Series C Notes”; the Series A Notes, the
Series B Notes and the Series C Notes being
hereinafter collectively referred to as the “Notes”,
such term to include any such notes issued in
substitution therefor pursuant to Section 13 of this
Agreement or the Other Agreements (as hereinafter
defined)). The Notes shall be substantially in the
form set out in Exhibit 1(a), 1(b) and 1(c),
respectively, with such changes therefrom, if any,
as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined
in Schedule B; references to a “Schedule” or an
“Exhibit” are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.

		
	 	     Section 1.2.     Change in Interest Rate. From
January 1, 2003 to and until the date on which (i)
all Security Documents have been released pursuant
to Section 22.8 and (ii) the “Applicable Fee
Percentage” (as defined in the Credit Agreement) or
similar fee arrangement under the Credit Agreement
or in any extension, renewal, refinancing or
replacement thereof shall revert to the “Applicable
Fee Percentage” as in effect under the Credit
Agreement on July 2, 2002, the interest rate on the
Notes shall be adjusted as follows: (i) the interest
rate on the Series A Notes shall be increased by 25
basis points (0.25%) to 7.15% per annum, (ii) the
interest rate on the Series B Notes shall be
increased by 25 basis points (0.25%) to 7.56% per
annum and (iii) the interest rate on the Series C
Notes shall be increased by 25 basis points
(0.25%)to 8.10% per annum.”

     Section 1.2.     Section 7.1(h) of the Note Purchase Agreements shall be and
is amended by deleting the “.” at the end thereof and replacing the same with
“; and” and adding thereafter a new Section 7.1(i) in its entirety as follows:

	 	 	 	“(I) Accounts Receivable Aging Reports. Simultaneously with the
delivery of each financial statement pursuant to Section 7.1(a)
and Section 7.1(b),a certificate of a Responsible Officer of the
Company setting forth an accounts receivable aging as of the end
of the fiscal period for which such financial statements are being
provided, in such form and detail and with such supporting documentation
as shall be required by the Required Holders in their reasonable discretion.”

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     Section 1.3.     The following shall be added in numerical order as a new
Section 9.10 to the Note Purchase Agreements:

		
	 	     “Section 9.10. Security Documents. Upon
delivery of a security interest to the Agent or any
other lender which is a party to the Credit
Agreement, the Company will concurrently enter into
a substantially similar Security Document for the
benefit of the holders of the Notes, and within
three Business Days thereafter will deliver to each
of the holders of the Notes the following items:

		
	 	     (a)     an executed counterpart of such Security
Document or joinder agreement in respect of an
existing Security Document, as appropriate;

		
	 	     (b)     to the extent a similar certificate is
delivered pursuant to the Credit Agreement, a
certificate signed by the President, a Vice
President or another authorized Responsible Officer
of the Company making representations and warranties
to the effect of those contained in Sections 5.1,
5.2, 5.6 and 5.7, but with respect to such Security
Document, as applicable;

		
	 	     (c)     to the extent documents or evidence are
delivered pursuant to the Credit Agreement, such
documents and evidence with respect to the Company
as any holder of the Notes may reasonably request in
order to establish the authorization of the
transactions contemplated by such Security Document;

		
	 	     (d)     to the extent an opinion is delivered
pursuant to the terms of the Credit Agreement, an
opinion of counsel satisfactory to the Required
Holders to the effect that such Security Document
has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract
and agreement of the Company enforceable in
accordance with its terms, except as an enforcement
of such terms may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar
laws
affecting the enforcement of creditors’ rights
generally and by general equitable principles and
that the security interest granted therein is
effective and has been perfected; and

		
	 	     (e)     an executed counterpart of an intercreditor
agreement or amendment in respect of the
Intercreditor Agreement, as necessary, among the
holders of the Notes and each such Person to which
the Company is then delivering a Security Document
giving rise the requirements of this Section 9.10,
which agreement or amendment, as the case may be,
shall provide that the proceeds

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	 	     from the enforcement
of any such Security Document shall be shared on an
equal and ratable basis with the holders of the
Notes.”

     Section 1.4.     Section 10.2 of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows:

		
	 	     “Section 10.2. Fixed Charge Coverage Ratio.
The Company and its Restricted Subsidiaries will not
permit as at the end of each fiscal quarter the
ratio of (a) Consolidated EBITDAR for the four
immediately preceding fiscal quarters (taken as a
single accounting period) to (b) Consolidated Fixed
Charges for such fiscal period to be less than the
following at each date indicated below:

	 	 	 
	March 31, 2003	 	
1.50 to 1.00 
	June 30, 2003	 	
1.30 to 1.00 
	September 30, 2003	 	
1.30 to 1.00 
	December 31, 2003	 	
1.75 to 1.00 
	March 31, 2004 and thereafter	 	
2.00 to 1.00”

     Section 1.5.     Section 10.5 shall be and is amended by deleting paragraphs
(h) and (i) thereof and replacing the same with new Sections 10.5(h), 10.5(i)
and 10.5(j) to read as in their entirety follows:

		
	 	     “(h)     Liens created or incurred after the date
of the Closing given to secure Indebtedness of the
Company or any Restricted Subsidiary in addition to
the Liens permitted by the preceding clauses (a)
through (g) and (j) hereof; provided that (i) all
Indebtedness secured by such Liens shall have been
incurred within the limitations provided in Section
10.4 and (ii) at the time of creation, issuance,
assumption, guarantee or incurrence of the
Indebtedness secured by such Lien and after giving
effect
thereto and to the application of the proceeds
thereof, no Default or Event of Default would exist;

		
	 	     (i)     any extension, renewal or refunding of any
Lien permitted by the preceding clauses (e), (f) and
(g) and clause (j) of this Section 10.5 in respect
of the same property theretofore subject to such
Lien in connection with the extension, renewal or
refunding of the Indebtedness secured thereby;
provided that (i) such extension, renewal or
refunding of Indebtedness shall be without increase
in the principal amount remaining unpaid as of the
date of such extension, renewal or refunding, (ii)
such Lien shall attach solely to the same such
property, and (iii) at the time of such extension,
renewal or refunding and after giving effect
thereto, no Default or Event of Default would exist;
and

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	 	     (j)     Liens created or incurred in favor of the
Secured Party (as therein defined) under the
Security Documents for the ratable benefit of the
lenders under the Credit Agreement and the
Noteholders.”

     Section 1.6.     Subject to Section 2 of this Second Amendment, the following
shall be added in numerical order as a new Section 10.11 to the Note Purchase
Agreements:

		
	 	     “Section 10.11. Acquisitions. The Company
will not make any Acquisition, or enter into any
binding agreement to make any Acquisition which is
not contingent on obtaining the consent of the
Required Holders, or permit any of its Restricted
Subsidiaries so to do, except:

		
	 	     (a)     Acquisitions by the Company or any of its
Subsidiaries of Investments permitted by Section
8.10 of the Credit Agreement, as amended, waived or
replaced from time to time; and

		
	 	     (b)     An Acquisition of one or more Operating
Entities (including, without limitation,
Acquisitions of Capital Stock of an Operating Entity
or as a result of a merger or consolidation with an
Operating Entity which is not the Company or a
Restricted Subsidiary of the Company), provided that
(i) such Operating Entity is in the same line or
lines of business as the Company and its
Subsidiaries, (ii) the Company has provided evidence
satisfactory to the holders of the Notes that after
giving effect to such Acquisition no Default or
Event of Default
would exist, (iii) such Acquisition does not involve
a “hostile” transaction, and (iv) the aggregate
consideration paid by the Company and its
Subsidiaries for such Acquisition, including
assumption of Indebtedness and the transfer of
property (other than the Capital Stock of the
Company) does not exceed $100,000,000; provided
however that, to and until March 31, 2004, the
aggregate consideration paid by the Company and its
Subsidiaries for such Acquisition, including,
assumption of Indebtedness and the transfer of
property (other than the Capital Stock of the
Company) shall not exceed $25,000,000.

     Section 1.7.     Section 11(d) of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows:

		
	 	          “(d)     any representation or warranty made in
writing by or on behalf of the Company or a
Subsidiary Guarantor or by any officer of the
Company or a Subsidiary Guarantor in this Agreement,
the Subsidiary Guaranty, the Security Documents or
in any writing furnished in connection with the
transactions

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	 	contemplated hereby or thereby proves
to have been false or incorrect in any material
respect on the date as of which made; or”

     Section 1.8.     Section 11(e) of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows:

		
	 	     “(e)     (i) the Company or any Restricted
Subsidiary is in default (as principal or as
guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or
interest on any Indebtedness that is outstanding in
an aggregate principal amount of at least
$15,000,000 beyond any period of grace provided with
respect thereto, or (ii) the Company or any
Restricted Subsidiary is in default in the
performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate
outstanding principal amount of at least $15,000,000
or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and
as a consequence of such default or condition such
Indebtedness has become, or has been declared (or
one or more Persons are entitled to declare such
Indebtedness to be), due and payable before its date
of maturity or before its regularly stated dates of
payment or (iii) as a consequence of the occurrence
or continuation of any event or condition (other
than the passage of time or
the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), the
Company or any Restricted Subsidiary has become
obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly
scheduled dates of payment in an aggregate
outstanding principal amount of at least
$15,000,000; or”

     Section 1.9.     Section 11(j) of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows, and the following paragraph
(k) shall be added to Section 11 of the Note Purchase Agreements immediately
thereafter as a new paragraph (k):

		
	 	     “(j)     the Subsidiary Guaranty or any Security
Documents shall cease to be in full force and effect
for any reason whatsoever, including, without
limitation, a determination by any Governmental
Authority that such Subsidiary Guaranty or Security
Document is invalid, void or unenforceable or the
Company or any Subsidiary Guarantor which is a party
to such Subsidiary Guaranty or Security Document
shall contest or deny in writing the validity or
enforceability of any of its obligations under such
Subsidiary Guaranty or Security Document, but
excluding any Subsidiary Guaranty or any Security
Document which ceases to be in full force and effect
in accordance with and by reason of the expressed
provisions of Section 22.7 or Section 22.8, as the
case may be;

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	 	              (k)     any Lien created under the Security
Documents for any reason ceases to be or is not a
valid and perfected Lien on the Collateral
constituting a first priority security interest, or
there shall have occurred waste or conversion of a
material part of the Collateral, but excluding any
Lien terminated in accordance with and by reason of
the expressed provisions of Section 22.8.”

     Section 1.10.     Section 15.1 of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows:

		
	 	        “Section 15.1. Transaction Expenses.     Whether
or not the transactions contemplated hereby are
consummated, the Company will pay all costs and
expenses (including reasonable attorneys’ fees of a
special counsel and, if reasonably required, local
or other counsel) incurred by you and each Other
Purchaser or holder of a Note in connection with
such transactions and in connection with any
amendments, waivers or consents under or in respect
of this Agreement, the Notes, the Subsidiary
Guaranty, the Security Documents or the
Intercreditor Agreement (whether or not such
amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and
expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any
rights under this Agreement, the Notes, the
Subsidiary Guaranty, the Security Documents or the
Intercreditor Agreement, or in responding to any
subpoena or other legal process or informal
investigative demand issued in connection with this
Agreement, the Notes, the Subsidiary Guaranty, the
Security Documents or the Intercreditor Agreement,
or by reason of being a holder of any Note, (b) the
costs and expenses, including financial advisors’
fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Restricted
Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated
hereby, by the Notes, the Subsidiary Guaranty, the
Security Documents and the Intercreditor Agreement.
The Company will pay, and will save you and each
other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses, if any, of
brokers and finders (other than those retained by
you).”

     Section 1.11.     Section 15.2 of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows:

		
	 	        “Section 15.2. Survival.     The obligations of
the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of

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	 	this
Agreement, the Notes, the Subsidiary Guaranty or the
Security Documents, and the termination of this
Agreement.”

     Section 1.12.     Section 16 of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows:

		
	 	        “Section 16. Survival of Representations and
Warranties; Entire Agreement.     All representations
and warranties contained herein or in the Subsidiary
Guaranty or the Security Documents shall survive the
execution and delivery of this Agreement, the
Subsidiary Guaranty, the Security Documents and the
Notes, the purchase or transfer by you of any Note
or portion thereof or interest therein and the
payment of any Note, and may be relied upon by
any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of
you or any other holder of a Note. All statements
contained in any certificate or other instrument
delivered by or on behalf of the Company or any
Subsidiary Guarantor pursuant to this Agreement, the
Subsidiary Guaranty or the Security Documents shall
be deemed representations and warranties of the
Company and the Subsidiary Guarantors under this
Agreement, the Subsidiary Guaranty and the Security
Documents. Subject to the preceding sentence, this
Agreement, the Notes, the Subsidiary Guaranty and
the Security Documents embody the entire agreement
and understanding between you, the Company and the
Subsidiary Guarantors and supersede all prior
agreements and understandings relating to the
subject matter hereof.”

     Section 1.13.     Section 17.1 of the Note Purchase Agreements shall be and is
hereby amended in its entirety to read as follows:

		
	 	        “Section 17.1. Requirements.     This Agreement
and the Notes may be amended, and the observance of
any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and
only with) the written consent of the Company and
the Required Holders, except that (a) no amendment
or waiver of any of the provisions of Section 1, 2,
3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such
amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding
affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission,
change the amount or time of any prepayment or
payment of principal of, or reduce the rate or
change the time of payment or method of computation
of interest or of the Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal
amount of

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	 	the Notes the holders of which are
required to consent to any such amendment or waiver,
or (iii) amend any of Section 8, 11(a), 11(b), 12,
17 or 20. The Subsidiary Guaranty, the Security
Documents and the Intercreditor Agreement may be
amended in accordance with the terms thereof.”

     Section 1.14.     The following shall be added in numerical order as a new
Section 22.8 to the Note Purchase Agreements:

		
	 	     “Section 22.8. Release of Security Documents.

		
	 	     (a)     The holders of the Notes acknowledge and
agree that the Company shall be automatically
discharged and released from any Security Document
to which it is a party pursuant to the written
request of the Company, provided that (i) the
Company has been released and discharged under and
in respect of the Credit Agreement or any extension,
renewal, refinancing or replacement thereof with
respect to the security interest granted the Agent
on the assets covered by such Security Document and
the Company so certifies to the holders of the Notes
in a certificate, which certificate shall also
include information in reasonable detail to show
compliance with clause (iii), (ii) any such release
and discharge shall be expressly conditioned upon
receipt by the holders of the Notes of a written
agreement executed by the Company pursuant to which
the Company shall agree that if, for any reason
whatsoever, it thereafter becomes grants a security
interest under and in respect of the Credit
Agreement, then the Company shall contemporaneously
provide written notice thereof to the holders of the
Notes accompanied by an executed Security Document,
(iii) for a period of two consecutive fiscal
quarters, the Company shall have maintained the
ratio of (1) Consolidated EBITDAR for the period of
four consecutive quarters ending with each such
fiscal quarter (taken as a single accounting period)
to (2) Consolidated Fixed Charges for such fiscal
period at not less than 2.00 to 1.00 and (iv) at the
time of such release and discharge, the Company
shall deliver a certificate of a Responsible Officer
to the holders of the Notes to the effect that no
Default or Event of Default exists.

		
	 	     (b)     Upon the release of any Security Document
pursuant to paragraph (a) of this Section 22.8, the
holders of the Notes shall, at the sole cost and
expense of the Company, take all actions reasonably
required by the Company to evidence such Security
Document’s release.

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	 	     (c)     The Company agrees that it will not, nor
will it permit any Subsidiary or Affiliate to,
directly or indirectly, pay or cause to be paid any
consideration or remuneration, whether by way of
supplemental or
additional interest, fee or otherwise, to any
creditor of the Company as consideration for or as
an inducement to the entering into by any such
creditor of any release or discharge of any Security
Document, unless such consideration or remuneration
is concurrently paid, on the same terms, ratably to
the holders of all of the Notes then outstanding.”

     Section 1.15.     The definitions of “Consolidated EBITDAR”, “Default Rate”
and “Intercreditor Agreement” set forth in Schedule B to the Note Purchase
Agreements shall be and are hereby amended in their entirety to read as
follows:

	 	“‘Consolidated EBITDAR’” for any period means the
sum of (a) Consolidated Net Income of the Company
and its Restricted Subsidiaries from continuing
operations and before extraordinary items, plus (to
the extent included in determining Consolidated Net
Income), (b) all provisions for federal, state and
local income taxes for the Company and its
Restricted Subsidiaries during such period, (c) all
provisions for depreciation and amortization (other
than amortization of debt discount) made by the
Company and its Restricted Subsidiaries during such
period, (d) Consolidated Fixed Charges during such
period and (e) the impact of any restructuring,
integration or asset impairment charges relating to
the reduction of the cost structure of the Company
during the fiscal year ending December 31, 2003;
provided that in no event shall such restructuring
charge exceed $5,000,000 per fiscal quarter.
	 
	 	‘Default Rate’ means that rate of interest that is
the greater of (i) 1% per annum above the rate of
interest stated in clause (a) of the first paragraph
of the Notes, as increased by the terms of Section
1.2 or (ii) 1% over the rate of interest publicly
announced by J.P. Morgan Chase in New York, New York
as its “base” or “prime” rate.
	 
	 	‘Intercreditor Agreement’ means that certain
Intercreditor and Collateral Agency Agreement dated
as of March 28, 2003 among the holders of the Notes,
the Agent on behalf of the lenders under the Credit
Agreement and the Collateral Agent, as the same may
be amended or supplemented, from time to time.”

     Section 1.16.     The following definitions shall be added in alphabetical
order to Schedule B to the Note Purchase Agreements:

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	 	“‘Acquisition’ means with respect to any Person, the
purchase or other acquisition by such Person, by any
means whatsoever (including through a merger,
dividend or otherwise and whether in a single
transaction or in a series of related transactions),
of (a) any Voting Equity Capital of any other Person
if, immediately thereafter, such other Person would
be either a Subsidiary of such Person or otherwise
under the control of such Person, (b) any business,
going concern or divisions or segment of any other
Person, or (c) any property of any other Person
other than (i) in the ordinary course of business,
provided, however, that no acquisition of all or
substantially all of the assets of such other Person
shall be deemed to be in the ordinary course of
business; or (ii) property acquired for use in the
ordinary course of business without any associated
goodwill or other intangible assets.
	 
	 	‘Capital Stock’ means as to any Person, all shares,
interests, partnership interests, limited liability
company interests, participations and other rights
in, or other equivalents (however designated) of,
such Person’s equity (however designated), and any
rights, warrants or options exchangeable for, or
convertible into, such shares, interests,
participations, rights or other equivalents.
	 
	 	‘Collateral’ shall have the meaning ascribed thereto
in the Intercreditor Agreement.
	 
	 	‘Collateral Agent’ means Fleet National Bank, as
collateral agent under the Intercreditor Agreement,
or any successor collateral agent thereto.
	 
	 	‘Investments’ has the meaning set forth in Section
8.10 of the Credit Agreement.
	 
	 	‘Operating Entity’ means any Person or any business
or operating unit of a Person which is, or could be,
operated separate and apart from (a) the other
businesses and operations of such Person, or (b) any
other line of business or business segment.
	 
	 	‘Security Agreement’ means that certain Security
Agreement dated as of March 28, 2003 from the
Company and the other “Grantors” named therein in
favor of the Secured Party (as therein defined).
	 
	 	‘Security Documents’ means, collectively, the
Security Agreement, as the same may be amended or
supplemented from time to time, together with any
additional security or pledge agreement entered into
as security for the Notes pursuant to Section 9.10.”

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Section 2.      AFFIRMATION.

     The Company hereby acknowledges and affirms that pursuant to Section 9.8
of the Note Purchase Agreement, Section 8.3 (Leverage Ratio) and Section 8.8
(Acquisitions) of the Credit Agreement shall each constitute an “Incorporated
Financial Covenant” and the Noteholders shall enjoy the benefits thereof.

Section 3.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     Section 3.1.     To induce the Noteholders to execute and deliver this Second
Amendment (which representations shall survive the execution and delivery of
this Second Amendment), the Company represents and warrants to the Noteholders
that:

		
	 	     (a)     this Second Amendment has been duly authorized, executed and
delivered by it and this Second Amendment constitutes the legal, valid
and binding obligation, contract and agreement of the Company enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws or equitable principles relating to or limiting creditors’ rights
generally;

		
	 	     (b)     the Note Purchase Agreements, as amended by this Second
Amendment, constitute the legal, valid and binding obligations, contracts
and agreements of the Company enforceable against it in accordance with
their respective terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors’ rights generally;

		
	 	     (c)     the execution, delivery and performance by the Company of this
Second Amendment (i) has been duly authorized by all requisite corporate
action and, if required, shareholder action, (ii) does not require the
consent or approval of any governmental or regulatory body or agency, and
(iii) will not (A) violate (1) any provision of law, statute, rule or
regulation or its certificate of incorporation or bylaws, (2) any order
of any court or any rule, regulation or order of any other agency or
government binding upon it, or (3) any provision of any material
indenture, agreement or other instrument to which it is a party or by
which its properties or assets are or may be bound, including, without
limitation, the Credit Agreement or (B) result in a breach or constitute
(alone or with due notice or lapse of time or both) a default under any
indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this Section 3.1(c);

		
	 	     (d)     as of the date hereof and after giving effect to this Second
Amendment, no Default or Event of Default has occurred which is
continuing; and

		
	 	     (e)     all the representations and warranties contained in Section 5 of
the Note Purchase Agreements are true and correct in all material
respects with the same force and effect as if made by the Company on and
as of the date hereof except that for purposes of this paragraph, the
following words shall be deemed to have been added to the end of the
parenthetical contained in Section 5.10 of the Note Purchase Agreements:
“, the sale of a

-12-

 

		
	 	headquarters building used by Bowne of Chicago, Inc. and
the sale of assets of the Company’s publishing division”; and

		
	 	     (f)     Ohio Franklin Corp., a Subsidiary of the Company, has no
operating assets, conducts no operations and sold its only remaining
material asset (certain improved real estate) in 2002.

     Section 3.2.     In order to induce the Noteholders to enter into this
Amendment, and the Noteholders to accept the Security Documents, the Company
further makes the following representations and warranties to the Noteholders:

		
	 	     (a)     the Company and each Subsidiary Guarantor has full legal power
and authority to enter into, execute, deliver and perform the terms of
the Security Documents, all of which have been duly authorized by all
proper and necessary corporate, partnership or other applicable action
and are in full compliance with its organizational documents. The
Company and each Subsidiary Guarantor has duly executed and delivered the
Security Documents;

		
	 	     (b)     the Security Documents constitute the valid and legally binding
obligations of the Company and each Subsidiary Guarantor enforceable in
accordance with their terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors’ rights generally;

		
	 	     (c)     no consent, authorization or approval of, filing with, notice
to, or exemption by, stockholders or holders of any other equity
interest, any Governmental Authority or any other Person, is required to
be obtained or made by the Company or the Subsidiary Guarantors in order
to authorize, or is required to be obtained or made by the Company or the
Subsidiary Guarantors in connection with, the execution, delivery or
performance of, the Security Documents, or is required to be obtained or
made by the Company or the Subsidiary Guarantors as a condition to the
validity or enforceability of the Security Documents;

		
	 	     (d)     neither the Company nor any of the Subsidiary Guarantors is in
default (1) under any mortgage, indenture, contract, instrument or
agreement to which it is a party or by which it or any of its property is
bound, or (2) with
respect to any judgment, order, writ, injunction, decree or decision of
any Governmental Authority; the effect of which default, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect. The execution, delivery or carrying out of the terms of the
Security Documents will not constitute a default under, or result in the
creation or imposition of, or obligation to create, any Lien upon any
property of the Company or a Subsidiary Guarantor or result in a breach
of (or require the mandatory repayment of or other acceleration of
payment under or pursuant to the terms of) any such mortgage, indenture,
note, contract, instrument, agreement, judgment, order, writ, injunction,
decree or decision of any Governmental Authority.

-13-

 

Section 4.      CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT.

     Section 4.1.     This Second Amendment shall not become effective until, and
shall become effective when, each and every one of the following conditions
shall have been satisfied:

		
	 	     (a)     executed counterparts of this Second Amendment, duly executed by
the Company and the holders of at least 51% of the outstanding principal
of the Notes, shall have been delivered to the Noteholders, and the same
shall be in full force and effect and shall constitute the legal, valid
and binding obligations of all the parties thereto;

		
	 	     (b)     executed counterparts of the Intercreditor Agreement,
substantially in the form attached hereto as Exhibit A, duly executed by
the Noteholders, the Agent on behalf of the lenders under the Credit
Agreement and the Collateral Agent, shall have been delivered to the
Noteholders, and the same shall be in full force and effect and shall
constitute the legal, valid and binding obligations of all the parties
thereto;

		
	 	     (c)     executed counterparts of the Security Agreement, substantially
in the form attached hereto as Exhibit B duly executed by the Company and
the Subsidiary Guarantors, shall have been delivered to the Secured
Party, with copies to the Noteholders, and the same shall be in full
force and effect and shall constitute the legal, valid and binding
obligations of all the parties thereto;

		
	 	     (d)     the Noteholders shall have received a copy of the resolutions of
the Board of Directors of the Company authorizing the execution, delivery
and performance by the Company of this Second Amendment, the Security
Documents, and the Intercreditor Agreement, certified by its Secretary or
an Assistant Secretary;

		
	 	     (e)     the Noteholders shall have received from each Subsidiary
Guarantor a certificate certifying as to the true, correct and complete
resolutions attached thereto and to other corporate proceedings relating
to the authorization, execution and delivery of the Security Documents;

		
	 	     (f)     the representations and warranties of the Company set forth in
Section 3 hereof are true and correct on and with respect to the date
hereof;

		
	 	     (g)     the Noteholders shall have received the favorable opinion of (i)
Simpson Thacher & Bartlett, counsel to the Company and the Subsidiary
Guarantors and (ii) Philip E. Kucera, Esq., General Counsel of the
Company which opinions, taken together, shall cover (1) the matters set
forth in Sections 3.1(a), 3.1(b) and 3.1(c) hereof, (2) the due
authorization, execution and delivery of the Security Documents, (3) to
the effect that the Security Documents constitute the legal, valid and
binding contracts and agreements of the Company and such Subsidiary
Guarantor enforceable in accordance with their terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles and (4)
such other matters as the

-14-

 

		
	 	Noteholders deem necessary; which opinions
shall be in form and substance satisfactory to the Noteholders;

		
	 	     (h)     the Collateral Agent shall have received all such UCC-1
financing statements and other instruments and agreements as the
Noteholders may request in order to confirm that the Security Agreement
is effective to create in favor of the Collateral Agent a valid,
enforceable first priority security interest in the Collateral;

		
	 	     (i)     the Noteholders shall have received a true, correct and complete
copy of the First Amendment to Credit Agreement as certified by a
Responsible Officer of the Company together with true, correct and
complete copies of any additional or supplemental letters or agreements
delivered in connection therewith;

		
	 	     (j)     the Noteholders shall have received an amendment fee in an
amount equal to 0.15% times the aggregate outstanding principal amount of
the Notes held by such Noteholder; and

		
	 	     (k)     the Company shall have paid, the reasonable fees and expenses of
Chapman and Cutler, counsel to the Noteholders, in connection with the
negotiation, preparation, approval, execution and delivery of this Second
Amendment.

Upon receipt of all of the foregoing, this Second Amendment shall become effective.

Section 5.     PAYMENT OF FEES AND EXPENSES; POST EFFECTIVENESS ITEMS.

     Section 5.1.     Supplemented Amendment Fee. The Company agrees to pay within
one Business Day of the effectiveness of this Second Amendment, a supplemental
amendment fee to each Noteholder in an amount equal to (a) the excess, if any,
of (1) the weighted average up front fee rate paid to the Agent or any other
lender which is a party
to the Credit Agreement in connection with the First Amendment to the Credit
Agreement over (2) 0.15% times (b) the aggregate outstanding principal amount
of the Notes held by such Noteholder.

     Section 5.2.     Post Effectiveness Items. The Company agrees that, no later
than May 15, 2003, the Company shall cause to be delivered opinions of local
counsel in the jurisdictions of the states of incorporation or organization of
the Subsidiary Guarantors with respect to which an opinion of counsel was not
delivered on or about March 28, 2003. Each such opinion shall be reasonably
satisfactory to the Required Holders in all respects and shall be substantially
in the form of the opinions regarding the Subsidiary Guarantors delivered in
connection with the Second Amendment to the Note Purchase Agreements. Default
by the Company of the provisions of this Section 5.2 shall constitute a default
under Section 11(c) of the Note Purchase Agreements.

-15-

 

Section 6.      MISCELLANEOUS.

     Section 6.1.     This Second Amendment shall be construed in connection with
and as part of each of the Note Purchase Agreements, and except as modified and
expressly amended by this Second Amendment, all terms, conditions and covenants
contained in the Note Purchase Agreements and the Notes are hereby ratified and
shall be and remain in full force and effect.

     Section 6.2.     Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
Second Amendment may refer to the Note Purchase Agreements without making
specific reference to this Second Amendment but nevertheless all such
references shall include this Second Amendment unless the context otherwise
requires.

     Section 6.3.     The descriptive headings of the various Sections or parts of
this Second Amendment are for convenience only and shall not affect the meaning
or construction of any of the provisions hereof.

     Section 6.4.     This Second Amendment shall be governed by and construed in
accordance with New York law.

-16-

 

     Section 6.5.     The execution hereof by you shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this Second
Amendment may be executed in any number of counterparts, each executed
counterpart constituting an original, but all together only one agreement.

	 	 	 
	 	 	
BOWNE & Co.,INC.
	 	 	 
	 	 	
By  /s/ C. Cody Colquitt
     Its
Senior Vice President and
          Chief
Financial Officer

[Noteholder Signature Pages to Follow]

-17-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	AMCO INSURANCE COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young 
	 	 	 	 	Name: Joseph P. Young 
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	CANADA LIFE INSURANCE COMPANY OF

   AMERICA
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By
	 	/s/ C. Paul English 
	 	 	 	 	Name: C. Paul English
	 	 	 	 	Title: Assistant Treasurer
	 	 	 	 	 

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	CANADA LIFE ASSURANCE COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By
	 	/s/ C. Paul English 
	 	 	 	 	Name: C. Paul English 
	 	 	 	 	Title: Associate Treasurer 
	 	 	 	 	 

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL ASSURANCE

   COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	
BY GE ASSET MANAGEMENT INCORPORATED,
   ITS
INVESTMENT ADVISOR	 	 
	 	 	 	 	 
	 	 	
By /s/ Stephen De Motto	 	 
	 	 	
Name: Stephen De Motto
	 	 
	 	 	
Title: Vice President – Private Investments 
	 	 
	 	 	
 	 	 

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	GE LIFE AND ANNUITY ASSURANCE COMPANY
	 	 	 	 	 
	 	 	
BY GE ASSET MANAGEMENT INCORPORATED,
   ITS
INVESTMENT ADVISOR	 	 
	 	 	 	 	 
	 	 	
By /s/ Stephen De Motto 	 	 
	 	 	
Name: Stephen De Motto
	 	 
	 	 	
Title: Vice President – Private Investments
	 	 
	 	 	
 	 	 

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	MODERA WOODMEN OF AMERICA
	 	 	 	 	 
	 	 	
By
	 	/s/ Nick S. Coin
	 	 	 	 	Name:
Nick S. Coin 

	 	 	 	 	Title:
Treasurer & Investment Manager

	 	 	 	 	 

 

 

\

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE INDEMNITY COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
By
	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities 

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE LIFE INSURANCE COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
By
	/s/ Joseph P. Young

	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE LIFE AND ANNUITY INSURANCE

   COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young 
	 	 	 	 	Name: Joseph P. Young 
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE MUTUAL FIRE INSURANCE

   COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young 
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE MUTUAL INSURANCE COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young 
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	PACIFIC LIFE INSURANCE COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By
	 	/s/ David C. Patch
	 	 	 	 	Name: David C. Patch
	 	 	 	 	Title: Assistant Vice President
	 	 	 	 	 
	 	 	
By
	 	/s/ Cathy Schwartz
	 	 	 	 	Name: Cathy Schwartz
	 	 	 	 	Title: Assistant Secretary

 

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	SCOTTSALE INSURANCE COMPANY
	 	 	 	 	 
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

 

 

     Each of the undersigned hereby confirms its continued guaranty of the
obligations of the Company under the Note Purchase Agreements, as amended
hereby, pursuant to the terms of the Subsidiary Guaranty Agreement dated as of
July 2, 2002, on this 28th day of March, 2003.

	 	 	 
	BOWNE BUSINESS COMMUNICATIONS, INC.,	 	
BOWNE ENTERPRISE SOLUTIONS, L.L.C.,
	a New York corporation	 	
a New York limited liability company
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	  Name: Philip E. Kucera	 	
  Name: Philip E. Kucera
	  Title: Vice President and Assistant Secretary	 	
  Title: Vice President and Assistant Secretary
	 	 	 
	BOWNE BUSINESS SOLUTIONS, INC.,	 	
BOWNE OF NEW YORK CITY, L.L.C.,
	a Delaware corporation	 	
a New York limited liability company
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	  Name: Philip E. Kucera	 	
  Name: Philip E. Kucera
	  Title: Vice President and Assistant Secretary	 	
  Title: Vice President and Assistant Secretary
	 	 	 
	BOWNE OF ATLANTA, INC.,	 	
BOWNE OF PHOENIX, INC.,
	a Georgia corporation	 	
an Arizona corporation
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	  Name: Philip E. Kucera	 	
  Name: Philip E. Kucera
	  Title: Vice President and Assistant Secretary	 	
  Title: Vice President and Assistant Secretary
	 	 	 
	BOWNE OF BOSTON, INC.,	 	
BOWNE OF SOUTH BEND, INC.,
	a Massachusetts corporation	 	
a Delaware corporation
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	  Name: Philip E. Kucera	 	
  Name: Philip E. Kucera
	  Title: Vice President and Assistant Secretary	 	
  Title: Vice President and Assistant Secretary
	 	 	 
	BOWNE OF CLEVELAND, INC.,	 	
BOWNE OF CHICAGO, INC.,
	an Ohio corporation	 	
a Delaware corporation
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	  Name: Philip E. Kucera	 	
  Name: Philip E. Kucera
	  Title: Vice President and Assistant Secretary
	 	
  Title: Vice President and Assistant Secretary

 

 

	 	 	 
	BOWNE OF DALLAS LIMITED PARTNERSHIP,	 	
BOWNE OF LOS ANGELES, INC.,
	a Delaware limited partnership	 	
a California corporation
	 	 	 
	By Bowne of Dallas Inc., a	 	 
	Delaware corporation, as general partner	 	
By /s/ Philip E. Kucera
	 	 	
  Name: Philip E. Kucera
	By /s/ Philip E. Kucera	 	
  Title: Vice President and Assistant Secretary
	  Name: Philip E. Kucera	 	 
	  Title: Vice President and Assistant Secretary	 	 
	 	 	 
	DOCUMENT MANAGEMENT SERVICES, INC	 	
BOWNE TRANSLATION SERVICES, LLC,
	a Massachusetts corporation	 	
a New York limited liability company
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	  Name: Philip E. Kucera	 	
  Name: Philip E. Kucera
	  Title: Vice President and Assistant Secretary	 	
  Title: Vice President and Assistant Secretary
	 	 	 
	BGS Companies, Inc., a Delaware	 	 
	Corporation (also a successor by merger	 	 
	with Bowne Localization, Inc., a Delaware	 	 
	corporation)	 	 
	 	 	 
	By /s/ Philip E. Kucera	 	 
	  Name: Philip E. Kucera	 	 
	  Title: Vice President and Assistant Secretary	 	 

 

 

EXHIBIT A

INTERCREDITOR AGREEMENT

 

 

EXHIBIT B

SECURITY AGREEMENTEX-10.19: INTERCREDITOR AND COLLATERAL AGENCY AGMT

 

EXHIBIT 10.19

Execution Copy

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT

Dated as of March 28, 2003

	 	 	 
	Re:	Creditors	 

of

BOWNE & Co., INC.

FLEET NATIONAL BANK, AS COLLATERAL AGENT

FLEET NATIONAL BANK, AS BANK AGENT

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	SECTION	 	HEADING	 	PAGE
	Parties	 	 	 	 	1	 
	Recitals	 	 	 	 	1	 
	SECTION 1.	 	
DEFINITIONS
	 	 	3	 
	SECTION 2.	 	
APPOINTMENT AND AUTHORITY OF COLLATERAL AGENT
	 	 	6	 
	SECTION 3.	 	
PRIORIT OF LINES
	 	 	7	 
	SECTION 4.	 	
ENFORCEMENT AGAINST COLLATERAL; APPLICATION OF PROCEEDS FROM COLLATERAL AND GUARANTIES	 	 	7	 
	     Section 4.1.	 	
Limit on Enforcement
	 	 	7	 
	     Section 4.2.	 	
Enforcement
	 	 	7	 
	     Section 4.3.	 	
Application of Proceeds
	 	 	8	 
	     Section 4.4.	 	
Sharing of Recoveries
	 	 	9	 
	     Section 4.5.	 	
Return of Amounts
	 	 	10	 
	     Section 4.6.	 	
[Reserved]
	 	 	10	 
	     Section 4.7.	 	
Determination of Amounts of Obligations
	 	 	10	 
	     Section 4.8.	 	
Acts of Creditors
	 	 	10	 
	SECTION 5.	 	
THE COLLATERAL AGENT	 	 	11	 
	     Section 5.1.	 	
Duties of Collateral Agent
	 	 	11	 
	     Section 5.2.	 	
Collateral Agent’s Liability
	 	 	13	 
	     Section 5.3.	 	
Certain Limitations on Collateral Agent’s Rights to Compensation
	 	 	14	 
	     Section 5.4.	 	
Status of Moneys Received
	 	 	15	 
	     Section 5.5.	 	
Resignation or Termination of Collateral Agent
	 	 	15	 
	     Section 5.6.	 	
Succession of Successor Collateral Agent
	 	 	16	 
	     Section 5.7.	 	
Eligibility of Collateral Agent
	 	 	16	 
	     Section 5.8.	 	
Successor Collateral Agent by Merger
	 	 	16	 
	     Section 5.9.	 	
Compensation and Reimbursement of Collateral Agent
	 	 	16	 
	     Section 5.10.	 	
Self Dealing
	 	 	17	 
	     Section 5.11.	 	
Non-Reliance on Collateral Agent	 	 	17	 
	     Section 5.12.	 	
General Exculpation
	 	 	18	 
	SECTION 6.	 	
AGREEMENTS AMONG THE CREDITORS	 	 	18	 
	     Section 6.1.	 	
Independent Actions by Creditors
	 	 	18	 

-i-

	 	 	 	 	 	 	 

 

 

	 	 	 	 	 	 	 
	SECTION	 	HEADING	 	PAGE
	     Section 6.2.	 	
Relation of Creditors
	 	 	18	 
	     Section 6.3.	 	
Acknowledgment of Collateral
	 	 	19	 
	     Section 6.4.	 	
[Reserved]
	 	 	19	 
	     Section 6.5.	 	
Additional Guarantors
	 	 	19	 
	SECTION 7.	 	
MISCELLANEOUS	 	 	19	 
	     Section 7.1.	 	
Entire Agreement
	 	 	19	 
	     Section 7.2.	 	
Notices
	 	 	19	 
	     Section 7.3.	 	
Successors and Assigns
	 	 	19	 
	     Section 7.4.	 	
Consents, Amendment, Waivers
	 	 	20	 
	     Section 7.5.	 	
Governing Law
	 	 	20	 
	     Section 7.6.	 	
Counterparts
	 	 	20	 
	     Section 7.7.	 	
Sale of Interest
	 	 	20	 
	     Section 7.8.	 	
Severability
	 	 	20	 
	     Section 7.9.	 	
Purchase of Collateral
	 	 	20	 
	     Section 7.10.	 	
Further Assurances, Etc.
	 	 	21	 
	     Section 7.11.	 	
Existing Intercreditor Agreement
	 	 	21	 
	Signatures	 	 	 	 	22	 

-ii-

 

 

INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT

     This INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT is dated as of March
28, 2003, among (i) FLEET NATIONAL BANK, as collateral agent (in such capacity,
together with any successor collateral agent hereunder, the “Collateral Agent”)
for the ratable benefit of the Noteholders (as hereinafter defined), (ii) FLEET NATIONAL BANK, as authorized agent (in such capacity, the “Bank Agent”) for and
on behalf of the lenders under the Credit Agreement (as hereinafter defined)
(each such bank in such capacity, together with its successors and assigns, is
referred to herein as a “Bank Lender” and such banks in such capacities are
collectively referred to herein as “Bank Lenders”), (iii) the NOTEHOLDERS (as
hereinafter defined) , (iv) BOWNE & Co., INC., a Delaware corporation (the
“Company”), and (v) the SUBSIDIARY GUARANTORS (as hereinafter defined).

R E C I T A L S:

     A.     Under and pursuant to separate and several Note Purchase Agreements,
each dated as of January 30, 2002 (as amended by the First Amendment (as
defined below) and as subsequently amended or restated, the “Note Purchase
Agreements”), between the Company and the purchasers named on Schedule A
attached to said Note Purchase Agreements (together with their successors and
assigns, individually a “Noteholder” and collectively, the “Noteholders”), the
Company issued (a) $25,000,000 aggregate principal amount of its 6.90% Senior
Notes, Series A, due January 30, 2007 (the “Series A Notes”), (b) $28,000,000
aggregate principal amount of its 7.31% Senior Notes, Series B, due January 30,
2012 (the “Series B Notes”) and (c) $22,000,000 aggregate principal amount of
its 7.85% Senior Notes, Series C, due January 30, 2012 (the “Series C Notes”;
the Series A Notes, the Series B Notes and the Series C Notes being hereinafter
collectively referred to as the “Notes”).

     B.     The Noteholders previously amended the terms of the Note Purchase
Agreements pursuant to the terms of the First Amendment to the Note Purchase
Agreement dated as of July 2, 2002 (the “First Amendment”). The Noteholders
required as a condition of their execution and delivery of the First Amendment
that each of the parties listed on Schedule A hereto (each a “Subsidiary
Guarantor” and collectively the “Subsidiary Guarantors”, and together with the
Company, the “Credit Parties”) enter into a guaranty as security for the Notes
and accordingly each of the Subsidiary Guarantors executed and delivered the
Guaranty Agreement (the “Noteholders’ Guaranty”) dated as of July 2, 2002
pursuant to which each Subsidiary Guarantor has irrevocably, absolutely and
unconditionally guaranteed to the Noteholders the payment of the principal of,
premium, if any, and interest on the Notes and the payment and performance of
all other obligations of the Company under the Note Purchase Agreements.

     C.     Under and pursuant to that certain Credit Agreement dated as of July 2,
2002 (as it may be amended, modified, supplemented, renewed and extended from
time to time, the “Credit Agreement”) by and among the Company, the Subsidiary
Borrowers (as defined therein) party thereto, the Bank Agent, the Bank Lenders,
JPMorgan Chase Bank, as Documentation Agent, Wachovia Bank, National
Association, as Syndication Agent, with Fleet Securities, Inc. having acted as
the Arranger, the Bank Lenders have made available to the Company and the
Subsidiary

 

 

Borrowers certain credit facilities in a current aggregate principal amount up
to $175,000,000 (all amounts outstanding in respect of said credit facilities
being hereinafter collectively referred to as the “Bank Loans”).

     D.     In connection with the execution of the Credit Agreement and as
security for the Bank Loans made thereunder, the Subsidiary Guarantors have
heretofore guaranteed to the Bank Lenders the payment of the Bank Loans and all
other obligations of the Company and the Subsidiary Borrowers under the Credit
Agreement under that certain guaranty agreement (as such agreement may be
modified, amended, renewed or replaced, including any increase in the amount
thereof, the “Bank Lenders’ Guaranty”).

     E.     The Bank Lenders’ Guaranty and the Noteholders’ Guaranty are each
hereinafter individually referred to as a “Subsidiary Guaranty” and
collectively referred to as the “Subsidiary Guaranties”.

     F.     In connection with the First Amendment and the Credit Agreement, the
Bank Lenders and the Noteholders entered into that certain Intercreditor
Agreement dated as of July 2, 2002 (the “Existing Intercreditor Agreement”),
pursuant to which the Bank Lenders and the Noteholders agreed to share, on a
pro rata basis, any payments received pursuant to the Subsidiary Guaranties.

     G.     The Company has requested that the Noteholders amend the terms of the
Note Purchase Agreements pursuant to the terms of the Second Amendment to the
Note Purchase Agreement dated as of March 28, 2003 (the “Second Amendment”).
The Company has also requested that the Bank Lenders amend the terms of the
Credit Agreement pursuant to the terms of the First Amendment to Credit
Agreement dated as of March 28, 2003 (the “Credit Agreement Amendment”).

     H.     In connection with the execution of the Second Amendment and the Credit
Agreement Amendment and as further security for the Notes and the Bank Loans
under the Credit Agreement, the Creditors have required, and the Company and
the other grantors named therein have agreed, to execute and deliver a Security
Agreement dated as of March 28, 2003 (the “Security Agreement”) in favor of the
Secured Party (as hereinafter defined) pursuant to which the Company and the
other grantors named therein shall grant to the Secured Party (as hereinafter
defined), for the equal and ratable benefit of the Creditors, a security
interest in the Collateral (as hereinafter defined).

     I.     The Noteholders desire that Fleet National Bank shall be the collateral
agent to act on behalf the Noteholders, all as more fully provided herein; and
the Collateral Agent, Bank Lenders (either through the Bank Agent or on their
own behalf) and the Noteholders have entered into this Agreement to, among
other things, further define the rights, duties, authority and responsibilities
of the Collateral Agent and the Secured Party and the relationship among the
Creditors regarding the relative rights and priorities with respect to the
Collateral.

     J.     As a condition precedent to the execution and delivery of the Second
Amendment and the Credit Agreement Amendment, the parties hereto have consented
and agreed that all such

-2-

 

other actions shall be taken as may be necessary to expressly provide or
otherwise effect the agreement of the parties hereto that the Credit Agreement
Obligations and the Note Agreement Obligations shall be secured on an equal and
ratable basis.

     K.     The Company and the Subsidiary Guarantors contemplate that from time to
time after the date hereof, additional subsidiaries of the Company may, subject
to the terms and conditions of the Credit Agreement and the Note Purchase
Agreements, issue additional guaranties which the Company, the Subsidiary
Guarantors and the Creditors wish to become subject to this Agreement pursuant
to the requirements of Section 6.5 hereof.

     L.     Pursuant to the requirements of the Second Amendment and the Credit
Agreement Amendment, the Company has requested that the Bank Agent on behalf of
the Bank Lenders and the Noteholders enter into this Agreement, and the Bank
Agent on behalf of the Bank Lenders and the Noteholders have so agreed, such
Agreement to succeed and replace the Existing Intercreditor Agreement.

     NOW, THEREFORE, in consideration of the mutual benefit to be provided
hereby and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the parties hereto, including the Credit
Parties, hereby agree as follows:

SECTION 1.     DEFINITIONS.

     The following terms shall have the meanings assigned to them below in this
Section 1 or as otherwise defined in the provisions of this Agreement:

     “Act” shall have the meaning assigned thereto in Section 4.8.

     “Actionable Default” shall mean any “Event of Default.”

     “Bank Agent” shall have the meaning assigned thereto in the introductory
paragraph hereto.

     “Bank Credit Documents” shall mean the “Loan Documents” as defined in the
Credit Agreement.

     “Bank Lender” shall have the meaning assigned thereto in the Recitals
hereof.

     “Bank Lenders’ Guaranty” and “Bank Lenders’ Guaranties” shall have the
meanings assigned thereto in the Recitals hereof.

     “Bank Loans” shall have the meaning assigned thereto in the Recitals
hereof.

     “Collateral” shall mean the property described in the granting clauses of
any Security Document outstanding from time to time granting collateral
security to the Secured Party (as hereinafter defined) for the benefit of the
Bank Lenders and/or the Noteholders.

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     “Collateral Agent” shall have the meaning assigned thereto in the
introductory paragraph hereto.

     “Company” shall have the meaning assigned thereto in the Recitals hereof.

     “Credit Agreement” shall have the meaning assigned thereto in the Recitals
hereof.

     “Credit Agreement Obligations” shall mean the collective reference to the
unpaid principal of and interest on the Bank Loans and all other obligations
and liabilities of the Credit Parties to the Bank Agent or the Bank Lenders
(including, without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the Bank Loans and
interest accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to any of the Credit
Parties, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Credit Agreement, any notes
issued thereunder, or any other document made, delivered or given in connection
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the Bank Agent or
the Bank Lenders that are required to be paid by the Credit Parties pursuant to
the terms of the Credit Agreement, this Agreement or any other Bank Credit
Document.

     “Credit Documents” shall mean the collective reference to the Bank Credit
Documents, the Security Documents, the Note Purchase Agreements, the
Noteholders’ Guaranty and the Notes.

     “Credit Party” and “Credit Parties” shall have the meaning assigned
thereto in the Recitals hereof.

     “Creditor” shall mean a Bank Lender or a Noteholder, as the case may be.
The Bank Lenders and the Noteholders are sometimes collectively referred to
herein as the “Creditors”.

     “Event of Default” shall mean the occurrence of any event or the existence
of any condition which is specified as an “Event of Default” under the Credit
Agreement, the Bank Credit Documents or the Note Purchase Agreements.

     “Majority Creditors” shall mean, (i) for purposes of giving a Notice of
Actionable Default or any other action to be taken by the Secured Party in its
capacity as Bank Agent, the Bank Agent (acting as such in accordance with the
terms and provisions of the Credit Agreement) or (ii) for purposes of giving a
Notice of Actionable Default or any other action to be taken by the Secured
Party in its capacity as Collateral Agent, the Required Holders under the Note
Purchase Agreement..

     “Maturity Event” shall mean (a) the maturity of any of the Bank Loans or
the Notes by acceleration or otherwise; (b) the Company shall (1) petition or
apply to any tribunal for the

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appointment of a trustee, custodian, receiver or liquidator for all or any
substantial part of its business, estate or assets, or (2) commence any
proceeding under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect; or (c) any such petition or application
shall be filed or any such proceeding shall be commenced against the Company
and (1) the Company shall indicate approval thereof, consent thereto or
acquiescence therein, or (2) an order shall be entered appointing a trustee,
custodian, receiver or liquidator of all or any substantial part of the assets
of the Company or granting relief to the Company or approving the petition in
any such proceeding, and such order shall remain in effect for more than 30
days.

     “Note Agreement Obligations” shall mean the collective reference to the
unpaid principal of, interest on and premium, if any, on the Notes and all
other obligations and liabilities of the Credit Parties to the Noteholders
(including, without limitation, interest accruing at the then applicable rate
provided in the Note Purchase Agreements after the maturity of the Notes and
interest accruing at the then applicable rate provided in the Note Purchase
Agreements after the filing of any petition in bankruptcy, or the commencement
of any insolvency, reorganization or like proceeding, relating to any of the
Credit Parties, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect, absolute
or contingent, due or to become due, now existing or hereafter incurred, which
may arise under, out of, or in connection with, the Note Purchase Agreements,
the Noteholders’ Guaranty, any Notes or any other document made, delivered or
given in connection therewith, whether on account of principal, interest,
premium, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Noteholders that are
required to be paid by the Credit Parties pursuant to the terms of the Note
Purchase Agreements, the Noteholders’ Guaranty, the Notes, or this Agreement).

     “Note Purchase Agreements” shall have the meaning assigned thereto in the
Recitals hereof.

     “Noteholder” shall have the meaning assigned thereto in the Recitals
hereof.

     “Noteholders’ Guaranty” shall have the meaning assigned thereto in the
Recitals hereof.

     “Notes” shall have the meaning assigned thereto in the Recitals hereof.

     “Notice of Actionable Default” shall mean a written notice issued to the
Secured Party with a copy to the Credit Parties by the Majority Creditors
certifying that an Actionable Default has occurred and is continuing.

     “Obligations” shall mean the collective reference to the Credit Agreement
Obligations and the Note Agreement Obligations.

     “Person” shall mean an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, and a government or agency
or political subdivision thereof.

     “Recovered Payments” shall have the meaning assigned thereto in Section
4.5.

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     “Recovering Party” shall have the meaning assigned thereto in Section 4.5.

     “Required Holders” shall have the meaning assigned thereto in the Note
Purchase Agreements.

     “Required Lenders” shall have the meaning assigned thereto in the Credit
Agreement.

     “Secured Party” shall mean Fleet National Bank, as Bank Agent and as
Collateral Agent, acting in either its capacity as Bank Agent or Collateral
Agent and/or both capacities.

     “Security Agreement” shall have the meaning assigned thereto in the
Recitals hereof.

     “Security Documents” shall mean the Security Agreement together with any
security agreement or pledge agreement executed pursuant to the requirements of
the Credit Agreement or the Note Purchase Agreements and any other instrument
or agreement pursuant to which a lien in collateral security is created or
arises to secure any or all of the Obligations owing to the Bank Lenders or the
Noteholders.

     “Specified Payment” shall mean any payments made pursuant to the terms of
a Subsidiary Agreement.

     “Subsidiary” shall mean each subsidiary of a Credit Party now existing or
from time to time created or formed.

     “Subsidiary Agreements” shall mean the Subsidiary Guaranties.

     “Subsidiary Guarantor” and “Subsidiary Guarantors” shall have the meaning
assigned thereto in the Recitals hereof.

     “Subsidiary Guaranty” and “Subsidiary Guaranties” shall have the meanings
assigned thereto in the Recitals hereof.

     “Uniform Commercial Code” shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York.

SECTION 2.     APPOINTMENT AND AUTHORITY OF COLLATERAL AGENT.

     (a)     The Noteholders hereby appoint Fleet National Bank to act as
Collateral Agent on the terms and conditions set forth in this Agreement and
the Security Documents and authorize the Collateral Agent to execute the
Security Documents in the name of and for the benefit of the Noteholders, and
Fleet National Bank hereby accepts such appointment and shall have all of the
rights and obligations of the Collateral Agent hereunder and under the Security
Documents.

     (b)     The Noteholders hereby appoint the Collateral Agent as agent for the
purposes of perfecting by possession in accordance with Article 9 of the
Uniform Commercial Code, the
security interest in assets pledged pursuant to any Security Document that can
be perfected by

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possession only, and the Collateral Agent hereby acknowledges
that it shall hold any such Collateral for the ratable benefit of all
Noteholders.

     (c)     Subject to the requirements of Section 4.2 hereof relating to the
instructions of the Majority Creditors, each Creditor hereby authorizes, and
each Bank Lender which is or hereafter becomes a party to the Credit Agreement
and each Noteholder by the acceptance of any Note, shall be deemed to
authorize, the Secured Party to take such action on its behalf hereunder and
under the provisions of the Security Documents and any other instrument and
agreement referred to therein or now or hereafter delivered thereunder and to
exercise such powers thereunder as are specifically delegated to or required of
the Secured Party by the terms thereof, subject to the provisions hereof.

SECTION 3.     PRIORITY OF LINES.

     Notwithstanding any contrary provision contained in the Uniform Commercial
Code, any applicable law or judicial decision or the Credit Documents, or
whether any Creditor has possession of all or any part of the Collateral, as
among the Creditors the respective rights of each Creditor in respect of liens
and security interests existing under the Security Documents shall at all times
remain on a parity with one another without preference, priority or distinction
and shall be shared as provided herein.

SECTION 4.     ENFORCEMENT AGAINST COLLATERAL; APPLICATION OF PROCEEDS FROM COLLATERAL AND GUARANTIES.

     Section 4.1.     Limit
on Enforcement. The Bank Lenders and the Noteholders
agree among themselves and for their own benefit alone that the liens and
security interest granted and provided for in the Security Documents shall not
be enforced as against any of the Collateral except at the direction of the
Majority Creditors upon the occurrence of a Maturity Event and in compliance
with the provisions hereof. Each Creditor agrees that, as long as any
Obligations exist or may become outstanding pursuant to the terms of the Credit
Documents, the provisions of this Agreement shall provide the exclusive method
by which any Creditor may exercise rights and remedies under the Security
Documents.

     Section 4.2.     Enforcement. (a) Upon the occurrence of a Maturity Event and
the Secured Party’s receipt of a Notice of Actionable Default for the same, the
Secured Party, at the direction of the Majority Creditors, shall seek to
realize upon the security interests and liens granted to the Secured Party
under the Security Documents in such manner as shall be directed by the
Majority Creditors. Whether before or after any Actionable Default, subject to
the terms and conditions hereof, the Secured Party shall follow the
instructions of the Majority Creditors with respect to the preservation,
protection, collection or realization upon any Collateral. If the Secured
Party has requested instructions from the Majority Creditors at a time when a
Notice of Actionable Default shall be outstanding and the Majority
Creditors have not responded to such request within 30 days thereafter
(excluding a notification that the Majority Creditors have not agreed upon the
actions to be taken by the Secured Party, in which case the Secured Party shall
take no action until instructions of the Majority Creditors are received), the
Secured Party may take, but

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shall have no obligation to take, any
and all actions under the Security Documents or any of them or otherwise, including
foreclosure of any lien or any other exercise of remedies, as the Secured
Party, in good faith, shall determine to be in the best interests of the
Creditors and to maximize both the value of the Collateral and the present
value of the recovery by each of the Creditors on the Obligations; provided,
however, that, if instructions are thereafter received from the Majority
Creditors, then any subsequent actions of the Secured Party shall be subject to
such instructions.

     (b)     In the event that (i) the Secured Party, in either its capacity as
Bank Agent or Collateral Agent and acting at the direction of the Majority
Creditors applicable to such capacity, shall seek to realize upon the security
interests and liens granted to the Secured Party under the Security Documents
in such manner as shall be directed by the Majority Creditors applicable to
such capacity and (ii) the Majority Creditors applicable to the Secured Party’s
second capacity shall not have similarly so directed the Secured Party to act
in its second capacity, the Secured Party, in such second capacity, shall
release any of the Collateral which is sold or otherwise transferred in
connection with the realization upon the security interests and liens granted
to the Secured Party under the Security Documents; provided, that, in any
event, all proceeds and avails of any such realization of the Collateral, or
any part thereof, shall at all times be shared by the Creditors and shall be
paid to and applied by the Secured Party, in either capacity, subject to the
provisions of Section 4.3.

     Section 4.3.     Application of Proceeds. The Secured Party and each of the
Creditors agree that (a) the proceeds and avails of any sale of the Collateral,
or any part thereof, following the delivery of a Notice of Actionable Default
relating to a Maturity Event and during the continuation of the Maturity Event
to which such notice relates and the proceeds and avails of any right or remedy
under the Security Documents, and (b) any and all Specified Payments, in all
cases, shall be shared by the Creditors and shall be paid to and applied by the
Secured Party to the Obligations in accordance with the priorities as follows,
with application against the Obligations owed each Creditor made in the manner
determined by such Creditor:

	 	 	     (i)     First, to the payment of the costs and reasonable expenses, fees
and indemnities of the Secured Party incurred in connection with the
execution of its duties as Secured Party, in exercising or attempting to
exercise any right or remedy hereunder or thereunder or in taking
possession of, protecting, preserving or disposing of any item of
Collateral, and all amounts against or for which the Secured Party is to
be indemnified or reimbursed hereunder (excluding any such costs,
expenses or amounts which have theretofore been reimbursed);
	 
	 	 	     (ii)    Second, after payment in full of the amounts set forth in Item
First, to the Bank Lenders and to the Noteholders, ratably, in accordance
with the respective amounts of (1) the Credit Agreement Obligations
constituting the then aggregate unpaid principal amount of the
outstanding Bank Loans, together with all accrued and unpaid interest
thereon at such time, and (2) the Note Agreement Obligations constituting
the then aggregate unpaid principal amount of the Notes together with all
accrued and unpaid interest thereon at such time, for application to such
Credit Agreement Obligations and Note Agreement Obligations, without
priority of one over the other;

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	 	 	     (iii)   Third, after payment in full of the amounts set forth in Item
Second, to the Bank Lenders and to the Noteholders, ratably, in
accordance with the respective amounts of (1) the Credit Agreement
Obligations constituting the amount of all commitment fees and all
break-costs, if any, then owing to the Bank Lenders under the Credit
Agreement and (2) the Note Agreement Obligations constituting premium or
make-whole amount, if any, then owing to the Noteholders under the Note
Purchase Agreements, for application to such Credit Agreement Obligations
and Note Agreement Obligations, without priority of one over the other;
	 
	 	 	     (iv)    Fourth, after payment in full of all amounts set forth in Item
Third, to the payment to the Bank Agent in the amount of all agent’s fees
then owing by the Credit Parties to the Bank Agent under the Credit
Agreement;
	 
	 	 	     (v)     Fifth, after payment in full of all amounts set forth in Item
Fourth, to the payment to the Bank Lenders and the Noteholders, ratably,
in accordance with the respective amounts of (1) all other Credit
Agreement Obligations and (2) all other Note Agreement Obligations,
without priority of one over the other;
	 
	 	 	     (vi)    Last, after payment in full of the Obligations, to the payment
of the surplus, if any, to any Credit Party, any of their respective
successors or to whomsoever may be lawfully entitled to receive the same.

     For purposes of determining outstanding Obligations owed a Creditor, (x)
commitments to advance funds shall not constitute outstanding Obligations and
(y) the undrawn amount of any issued irrevocable letters of credit shall
constitute outstanding Bank Loans of the issuers of such letters of credit. If
any payment is made pursuant to Section 4 with respect to the undrawn amount of
any issued letter of credit and if, subsequently, such letter of credit expires
without having been drawn upon in full, then the issuer of such letter of
credit shall calculate the aggregate amount that it received or retained under
Section 4 solely as a result of the treatment of the undrawn amount of such
letter of credit as an outstanding Bank Loans and such amount shall thereafter
constitute proceeds of the Security Documents subject to sharing pursuant to
Section 4. Notwithstanding the foregoing or anything else to the contrary
contained herein, any amount to be paid to, and applied by, the Secured Party
to any Credit Agreement Obligations pursuant to the terms of the provisions of
this Section 4.3 shall be paid to, and applied, by, the Bank Agent in
accordance with Section 9.2(b) of the Credit Agreement.

     Section 4.4.     Sharing of Recoveries. If any Creditor shall receive any
Specified Payment or following the delivery of a Notice of Actionable Default
and during the continuation of the Actionable Default to which such notice
relates, any payment on any Creditor’s Obligations out of the proceeds of any
Collateral other than payments thereon received pursuant to Section 4.3 hereof
(any such non-excluded payment being
hereinafter referred to as a “Recovery”), including such a payment by reason of
a setoff against deposit balances of any of the Credit Parties to the extent of
proceeds of Collateral, and as a result thereof such Creditor shall receive an
amount which exceeds the amount to which such Creditor would have been entitled
to receive under Section 4.3 hereof had such Recovery represented the proceeds
of the sale of Collateral (the amount of such excess being herein referred to
as the “Excess Amount”), then such Creditor shall

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pay to the Secured Party, the
Excess Amount of such Recovery, and the Collateral Agent shall pay such Excess
Amount to each other Creditor to the extent (if any) such payee would have been
entitled thereto if Section 4.3 had governed the application of such Recovery
and, pending such payment, to the Secured Party, who shall hold such amount in
trust for the other Creditors.

     Section 4.5.     Return of Amounts. In the event that any Creditor which
shall receive any amount pursuant to Section 4.4 above (a “Recovering Party”)
shall be legally required to return or repay any or all of such amount to a
Credit Party, or the representative or successor in interest of a Credit Party,
whether required pursuant to a settlement approved by such Creditor or required
by court order (the portion required to be so returned or repaid being
hereinafter referred to as a “Recovered Payment”), each other Creditor which
shall have received any portion of such Recovered Payment shall, promptly upon
its receipt of notice thereof from the Secured Party or such Recovering Party,
pay to the Secured Party such portion (without interest), and the Secured Party
shall promptly return such portion to the Recovering Party. If any such
Recovered Payment, or any part thereof, is subsequently re-recovered by the
Recovering Party from a Credit Party or the representative or successor in
interest of a Credit Party, such Recovered Payment, or any part thereof, shall,
to the extent required by Section 4.4 hereof, be paid by the Recovering Party
to the Secured Party (without interest), and the Secured Party shall
redistribute such Recovered Payment to the other Creditors on the same basis as
such amounts were originally distributed. The obligations of the Creditors and
the Secured Party under this paragraph shall survive the repayment of the
Obligations and the termination of the Security Documents.

     Section 4.6.     [Reserved].

     Section 4.7.     Determination of Amounts of Obligations. Whenever the
Secured Party is required to determine the existence or amount of any of the
Obligations or any portion thereof or the existence of any Actionable Default
for any purposes of this Agreement, it shall be entitled, absent manifest
error, to make such determination on the basis of one or more certificates of
any Creditor (with respect to the Obligations owed to such Creditor); provided,
however, that if, notwithstanding the request of the Secured Party, any
Creditor shall fail or refuse within ten business days of such request to
certify as to the existence or amount of any Obligations or any portion thereof
owed to it or the existence of any Actionable Default, the Secured Party shall
be entitled to determine such existence or amount by such method as the Secured
Party may, in its sole discretion, determine, including by reliance upon a
certificate of the Company; provided, further, that, promptly following
determination of any such amount, the Secured Party shall notify such Creditor
of such determination and thereafter shall correct any error that such Creditor
brings to the attention of the Secured Party. The Secured Party may rely
conclusively, and shall be fully protected in so relying, on any determination
made by it in accordance with the provisions of the preceding
sentence (or as otherwise directed by a court of competent jurisdiction) and
shall have no liability to any of the Credit Parties or any Subsidiary, any
Creditor or any other person as a result of any action taken by the Secured
Party based upon such determination prior to receipt of notice of any error in
such determination.

     Section 4.8.     Acts of Creditors. Any request, demand, authorization,
direction, notice, consent, waiver or other action permitted or required by
this Agreement to be given or taken by the Creditors or any portion thereof
(including the Majority Creditors) may be and, at the request

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of the Secured
Party, shall be embodied in and evidenced by one or more instruments
satisfactory in form to the Secured Party and signed by or on behalf of such
persons and, except as otherwise expressly provided in any such instrument, any
such action shall become effective when such instrument or instruments shall
have been delivered to the Secured Party. The instrument or instruments
evidencing any action (and the action embodied therein and evidenced thereby)
are sometimes referred to herein as an “Act” of the persons signing such
instrument or instruments. In the absence of bad faith on the part of the
Secured Party, the Secured Party shall be entitled to rely absolutely upon an
Act of any Creditor if such Act purports to be taken by or on behalf of such
Creditor, and nothing in this Section 4.8 or elsewhere in this Agreement shall
be construed to require any Creditor to demonstrate that it has been authorized
to take any action which it purports to be taking, the Secured Party being
entitled to rely conclusively, and being fully protected in so relying, on any
Act of such Creditor.

SECTION 5.     THE COLLATERAL AGENT.

     The Collateral Agent accepts the duties hereunder and under the Security
Documents and agrees to perform the same, but only upon the terms and
conditions hereof and the Security Documents, including the following, to all
of which the Credit Parties and the respective Noteholders by their acceptance
hereof agree:

     Section 5.1.     Duties of Collateral Agent. (a) The Secured Party, in its
capacity as Collateral Agent or otherwise, upon receipt of a Notice of
Actionable Default furnished to the Secured Party, in its capacity as
Collateral Agent or otherwise, pursuant to the provisions of this Agreement
shall promptly furnish copies of the same to all holders of the Obligations.

     (b)     In the event that the Secured Party, in its capacity as Collateral
Agent or otherwise, shall receive any material notice from any Creditor or from
any of the Credit Parties, the Secured Party, in its capacity as Collateral
Agent or otherwise, shall promptly furnish copies of the same to all holders of
the Obligations.

     (c)     The Collateral Agent shall not have any duty or obligation to manage,
control, use, sell, dispose of or otherwise deal with the Collateral, or, to
otherwise take or refrain from taking any action under, or in connection with,
this Agreement or the Security Documents, except, subject to Section 5.9, as
expressly provided by the terms and conditions of this Agreement or the
Security Documents, or expressly provided in written instructions received
pursuant to the terms of this Agreement or the Security Documents. The
Collateral Agent may take, but shall have no obligation to take, any and all
such actions under the Security Documents or any of them
or otherwise as it shall deem to be in the best interests of the Noteholders in
order to maintain the Collateral and protect and preserve the Collateral and
the rights of the Noteholders; provided, however, that, except as otherwise
expressly provided herein, in the absence of written instructions (which may
relate to the exercise of specific remedies or to the exercise of remedies in
general) from the Majority Creditors the Collateral Agent shall not foreclose
on any lien or security interest on the Collateral or exercise any other
remedies available to it under any Security Documents with respect to the
Collateral or any part thereof.

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     (d)     The Collateral Agent shall not be responsible in any manner whatsoever
for the correctness of any recitals, statements, representations or warranties
contained herein or in any other Security Document. The Collateral Agent makes
no representation as to the value or condition of the Collateral or any part
thereof, as to the title of any of the Credit Parties or any of their
Subsidiaries to the Collateral, as to the security afforded by this Agreement
or any Security Document or, as to the validity, execution, enforceability,
legality, priority, perfection or sufficiency of this Agreement or any other
Credit Document, and the Collateral Agent shall incur no liability or
responsibility in respect of any such matters. The Collateral Agent shall not
be required to ascertain or inquire as to the performance by any of the Credit
Parties or any of their Subsidiaries.

     (e)     The Collateral Agent shall not be responsible for insuring the
Collateral, for the payment of taxes, charges, assessments or liens upon the
Collateral or otherwise as to the maintenance of the Collateral, except as
provided in the immediately following sentence when the Collateral Agent has
possession of the Collateral. The Collateral Agent shall have no duty to any
of the Credit Parties or any of their Subsidiaries or to the Noteholders as to
any Collateral in its possession or control or in the possession or control of
any agent or nominee of the Collateral Agent or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto, except the duty to accord such of the Collateral as may be in its
possession substantially the same care as it accords its own assets and the
duty to account for monies received by it.

     (f)     The Collateral Agent may execute any of the powers granted under this
Agreement or any of the Security Documents and perform any duty hereunder or
thereunder either directly or by or through agents or attorneys-in-fact, and
shall not be responsible for the negligence or wilful misconduct of any agents
or attorneys-in-fact selected by it with reasonable care and without gross
negligence or wilful misconduct.

     (g)     In the event (i) the Collateral Agent shall have received any written
request from any of the Credit Parties for consent or approval to any matter or
thing relating to any Collateral or the Credit Party’s obligations with respect
thereto or (ii) there shall be due from the Collateral Agent under the
provisions of any Security Document any performance or the delivery of any
instrument, then, in each such event, the Collateral Agent shall send to each
of the Noteholders a notice setting forth, in reasonable detail, (x) an account
of the matter or thing as to which such consent has been requested or the
performance or instrument required to be so delivered, as the case may be, (y)
the Collateral Agent’s proposed course of action with respect thereto and (z)
reference to this Section 5.1(g) and that a failure to respond to such notice
shall be deemed a consent to the Collateral Agent’s proposed course of action.
In the event the Collateral Agent
shall not have received a response from any Noteholder within ten (10) business
days after the giving of such notice, such Noteholder shall be deemed to have
agreed to the course of action proposed by the Collateral Agent. No such
consent of the Noteholder shall be required with respect to any action taken in
accordance with the provisions of Section 4.2 hereof or with respect to any
consent, determination or other matter that is, in the Collateral Agent’s
reasonable judgment, ministerial or administrative in nature.

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     (h)     The Collateral Agent shall not be deemed to have actual, constructive,
direct or indirect notice or knowledge of the occurrence of any Actionable
Default unless and until the Secured Party, in its capacity as Collateral Agent
or otherwise, shall have received a Notice of Actionable Default or a notice
from any of the Credit Parties to the Secured Party indicating that an
Actionable Default has occurred. The Collateral Agent shall have no obligation
either prior to or after receiving such notice to inquire whether an Actionable
Default has, in fact, occurred or is continuing and shall be entitled to rely
conclusively, and shall be fully protected in so relying, on any notice so
furnished to it until such time as the Collateral Agent has received a similar
notice to the contrary. The Collateral Agent may (but shall not be obligated
to) take action hereunder on the basis of an Actionable Default of the type
specified in Section 9.1(g) or (h) of the Credit Agreement, or Section 11(g) or
(h) of the Note Purchase Agreements (each as in effect on the date of this
Agreement) whether or not the Collateral Agent has received any Notice of
Actionable Default stating that such Actionable Default has occurred, provided
that any such action taken by the Collateral Agent without direction from the
Majority Creditors shall be limited to actions that the Collateral Agent
determines to be necessary to protect and preserve the Collateral and the
rights of the Noteholders, provided, further, that the Collateral Agent shall
promptly notify all Noteholders in writing of any action taken without
direction from the Majority Creditors.

     (i)     Upon receipt of a Notice of Actionable Default pursuant to the
provisions of this Agreement, the Collateral Agent shall, at the request of any
Noteholder, schedule a meeting of all Noteholders to be held at the offices of
the Secured Party, or another mutually convenient place, to discuss the
exercise of rights and remedies under the Security Documents, provided that any
Noteholder may participate via telephone.

     Section 5.2.     Collateral Agent’s Liability. No provision of this Agreement
(except to the extent provided in Section 5.9 hereof) shall be construed to
relieve the Collateral Agent from liability for its own grossly negligent
action, grossly negligent failure to act, or its own willful misconduct, except
that:

	 	 	     (a)     the Collateral Agent shall not be liable except for the
performance of such duties as are specifically set forth in this
Agreement or in the Security Documents and no implied covenants or
obligations shall be read into this Agreement or into the Security
Documents against the Collateral Agent but the duties and obligations of
the Collateral Agent shall be determined solely by the express provisions
of this Agreement and the Security Documents, including, without
limitation, as a result of (i) the Collateral Agent acting or refraining
from acting in accordance with the directions of the Majority Creditors,
(ii) the Collateral Agent refraining from acting in the absence of
instructions to act from the Majority Creditors, whether or not the
Collateral Agent has discretionary
power to take such action, or (iii) the Collateral Agent taking
discretionary action it is authorized to take under this Section; and
	 
	 	 	     (b)     in the absence of bad faith on the part of the Collateral Agent,
the Collateral Agent may rely upon the authenticity of, and the truth of
the statements and the correctness of the opinions expressed in, and
shall be protected in acting upon, any resolution, officer’s certificate,
opinion of counsel, note, request, notice, consent, waiver,

-13-

 

	 	 	order,
signature guaranty, notarial seal, stamp, acknowledgment, verification,
appraisal, report, stock certificate, or other paper or document believed
by the Collateral Agent to be genuine and to have been signed, affixed or
presented by the proper party or parties; and
	 
	 	 	     (c)     in the absence of bad faith on the part of the Collateral Agent,
whenever the Collateral Agent, or any of its agents, representatives,
experts or counsel, shall consider it necessary or desirable that any
matter be proved or established, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by an officer’s certificate;
provided, however, that the Collateral Agent, or such agent,
representative, expert or counsel, may require such further and
additional evidence and make such further investigation as it or they may
consider reasonable; and
	 
	 	 	     (d)     the Collateral Agent may consult with counsel and the advice or
opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered hereunder in good
faith and in accordance with such advice or opinion of counsel; and
	 
	 	 	     (e)     the Collateral Agent shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with any direction or request of a Noteholder pursuant to the terms of
this Agreement or any of the Security Documents; and
	 
	 	 	     (f)     the Collateral Agent shall not be liable for any error of
judgment made in good faith by an officer of the Collateral Agent unless
it shall be proved that the Collateral Agent was grossly negligent in
ascertaining the pertinent facts; and
	 
	 	 	     (g)     whether or not an Event of Default shall have occurred, the
Collateral Agent shall not be under any obligation to take or refrain
from taking any action under this Agreement or any of the Security
Documents which may tend to involve it in any expense or liability,
unless and until it is requested in writing so to do by the Majority
Creditors and furnished, from time to time as it may require, with
satisfactory security and indemnity.

This Section does not impair or otherwise affect the Noteholders’ obligations
and liabilities to the Credit Parties (if any) under the terms of the Credit
Agreement and Note Purchase Agreements for any act or failure to act by the
Collateral Agent in each case that is in accordance with the provisions of this
Agreement.

     Section 5.3.     Certain Limitations on Collateral Agent’s Rights to
Compensation. Each of the Noteholders severally agrees to reimburse the
Collateral Agent on demand in accordance with its pro rata share for any
reasonable expenses and fees incurred by the Collateral Agent or
indemnifications to which it is entitled hereunder arising out of or as a
result of the performance by the Collateral Agent pursuant to this Agreement of
its obligations hereunder or in connection with the enforcement or protection
of the rights of the Collateral Agent and the Noteholders hereunder, in each
case to the extent that the foregoing (including, without limitation, the

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obligations of the Credit Parties set forth in Section 5.9) shall not have been
reimbursed by the Credit Parties, which obligations to reimburse the Collateral
Agent are hereby acknowledged by the Credit Parties, or directly by one or more
of the Noteholders or paid from the proceeds of the Collateral as provided in
Section 4.3; provided, that no Noteholder shall be liable to the Collateral
Agent for any portion of such obligations resulting from any action taken by
the Collateral Agent that is (1) not reasonably related to protecting the
interest of the Noteholders or (2) results from the gross negligence or willful
misconduct of the Collateral Agent. The agreements in this Section 5.3 shall
survive the payment of the Obligations and the termination of the other
provisions of this Agreement.

     Section 5.4.     Status of Moneys Received. (a) Except as otherwise
specifically prescribed in this Agreement, all moneys received by the
Collateral Agent shall, until used or applied as herein provided, be held for
the purposes for which they were received, in segregated accounts, and may be
deposited by the Collateral Agent under such general conditions as may be
prescribed by law in the Collateral Agent’s general banking department, and the
Collateral Agent shall be under no liability for interest on any moneys
received by it hereunder. The Collateral Agent and any affiliated corporation
may become the owner of any of the Obligations and be interested in any
financial transaction with any of the Credit Parties or any affiliated
corporation, or the Collateral Agent may act as depository or otherwise in
respect to other securities of any of the Credit Parties or any affiliated
corporation, all with the same rights which it would have if not the Collateral
Agent.

     (b)     The Collateral Agent may invest and reinvest any funds from time to
time held by the Collateral Agent in direct obligations of the United States of
America or obligations for which the full faith and credit of the United States
is pledged to provide for the payment of principal and interest, maturing not
more than 90 days from the date of such investment.

     Section 5.5.     Resignation or Termination of Collateral Agent. The
Collateral Agent may resign as Collateral Agent upon not less than 60 days’
written notice to each of the Noteholders (with copies to the Credit Parties),
such resignation to take effect upon the acceptance by a successor Collateral
Agent of its appointment as the Collateral Agent hereunder. In addition, the
Required Holders may remove the Collateral Agent at any time by giving written
notice thereof to the Collateral Agent. Upon any such resignation or removal,
the Required Holders shall have the right to appoint a successor Collateral
Agent which meets the eligibility requirements of Section 5.7. If no successor
Collateral Agent shall have been so appointed and shall have accepted such
appointment in writing within 30 days after the retiring Collateral Agent’s
giving of notice of resignation or its removal, then the retiring Collateral
Agent may, on behalf of the Noteholders,
appoint a successor Collateral Agent which meets the eligibility requirements
of Section 5.7, and the Credit Parties agree to pay such reasonable fees and
expenses of any such appointee as shall be necessary to induce such appointee
to agree to become a successor Collateral Agent hereunder. Upon acceptance of
appointment as Collateral Agent, such successor shall thereupon and forthwith
succeed to and become vested with all the rights, powers and privileges,
immunities and duties of the retiring Collateral Agent, and the retiring
Collateral Agent, upon the signing, transferring and setting over to such
successor Collateral Agent all rights, moneys and other collateral held by it
in its capacity as Collateral Agent, shall be discharged from its duties and
obligations hereunder. After any retiring Collateral Agent’s

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resignation or
removal as Collateral Agent, the provisions of this Section 5 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it acted
as Collateral Agent.

     Section 5.6.     Succession of Successor Collateral Agent. Any successor
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
the Credit Parties and the predecessor Collateral Agent an instrument accepting
such appointment, and thereupon such successor Collateral Agent, without any
further act, deed, conveyance or transfer, shall become vested with the title
to the Collateral, and with all the rights, powers, duties and obligations of
the predecessor Collateral Agent in the trust hereunder, with like effect as if
originally named as Collateral Agent herein.

     Upon the request of any such successor Collateral Agent, however, the
Credit Parties and the predecessor Collateral Agent shall promptly execute and
deliver such instruments of conveyance and further assurance reflecting terms
consistent with the terms of the Credit Documents then in effect and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in such successor Collateral Agent its interest in the
Collateral and all such rights, powers, duties and obligations of the
predecessor Collateral Agent hereunder, and the predecessor Collateral Agent
shall also promptly assign and deliver to the successor Collateral Agent any
Collateral subject to the lien and security interest of this Agreement which
may then be in its possession.

     Section 5.7.     Eligibility of Collateral Agent. Any successor Collateral
Agent shall be a state or national bank or trust company in good standing,
organized under the laws of the United States of America or of any state,
having a capital, surplus and undivided profits aggregating at least
$500,000,000, if there be such a bank or trust company willing and able to
accept the duties hereunder upon reasonable and customary terms.

     Section 5.8.     Successor Collateral Agent by Merger. Any corporation into
which the Collateral Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Collateral Agent shall be a party, or any state or national bank or trust
company in any manner succeeding to the corporate trust business of the
Collateral Agent as a whole or substantially as a whole, if eligible as
provided in Section 5.7, shall be the successor of the Collateral Agent
hereunder without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything to the contrary contained
herein notwithstanding.

     Section 5.9.     Compensation and Reimbursement of Collateral Agent. The
Credit Parties agree:

	 	 	     (a)     to pay to the Collateral Agent all of its out-of-pocket expenses
in connection with the preparation, execution and delivery of this
Agreement and the transactions contemplated hereby, including but not
limited to the reasonable charges and disbursements of its special
counsel;

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	 	 	     (b)     to pay to the Collateral Agent from time to time reasonable
compensation for all services rendered by it hereunder as such
compensation may be determined by the Collateral Agent from time to time;
	 
	 	 	     (c)     to reimburse the Collateral Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Collateral Agent in accordance with any provision of this Agreement
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable solely to its gross negligence or willful
misconduct; and
	 
	 	 	     (d)     to indemnify the Collateral Agent, its directors, officers,
employees, agents, attorneys-in-fact and/or shareholders for, and to hold
each of them harmless against, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, the reasonable fees and expenses of
counsel) or disbursements of any kind whatsoever which may at any time be
imposed on, incurred by or asserted against the Collateral Agent in any
way relating to or arising out of this Agreement, the Security Documents,
or any documents contemplated hereby or thereby or referred to herein or
therein or the transactions contemplated hereby or thereby or any action
taken or omitted by the Collateral Agent hereunder or thereunder or in
connection therewith but excluding any acts or omissions of the
Collateral Agent finally determined by a court of competent jurisdiction
to be as a result of the Collateral Agent’s gross negligence or willful
misconduct.

The agreements in this Section 5.9 shall survive the payment of the Obligations
and the termination of the other provisions of this Agreement.

     Notwithstanding any other provision of this Agreement or the Security
Documents, the Collateral Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall be indemnified to its
satisfaction by the Noteholders against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such
action.

     Section 5.10.     Self Dealing. In the event that a Creditor serves as the
Collateral Agent, such Creditor acting in its capacity as such shall have the
same rights and powers under the Credit Documents as any other Creditor and may
exercise or refrain from exercising the same as though it were not the
Collateral Agent. Without limiting the generality of the foregoing, the
Collateral Agent or any holding company, trust company or corporation in or
with which the Collateral Agent or the Collateral Agent’s stockholders may be
interested or affiliated, or any officer or director of the Collateral Agent,
or of any other such entity, or any agent appointed by the Collateral Agent,
may have commercial relations or otherwise deal with any of the Credit Parties,
or any Creditor, or with any other corporation having relations with any of the
Credit Parties or any Creditor, and with any other entity, whether or not
affiliated with the Collateral Agent.

     Section 5.11.     Non-Reliance on Collateral Agent. Each Noteholder expressly
acknowledges that neither the Collateral Agent nor any of its officers,
directors, employees,

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agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Collateral Agent
hereinafter taken, including any review of the affairs of the Credit Parties,
shall be deemed to constitute any representation or warranty by the Collateral
Agent to any Noteholder. Each Noteholder represents to the Collateral Agent
that such Noteholder independently and without reliance upon the Collateral
Agent, and based on such documents and information it has deemed or will deem
appropriate, has made and will make its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Credit Parties and has made and will make its own
decision to extend credit to the Credit Parties. Each Noteholder also
represents that it will, independently and without reliance upon the Collateral
Agent, and based on such documents and information as it shall deem appropriate
at the time continue to make its own creditor analysis, appraisals and
decisions in taking or not taking action under the this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Credit Parties. Except for notices, reports and other documents expressly
required to be furnished to the Noteholders by the Collateral Agent hereunder,
the Collateral Agent shall not have any duty or responsibility to provide any
Noteholder with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Credit Parties which may come into its possession or the possession of any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates.
Each Noteholder acknowledges that the Collateral Agent and its affiliates may
exercise all contractual and legal rights and remedies which may exist from
time to time with respect to other existing and future relationships with the
Credit Parties without any duty to account therefor to such Noteholder.

     Section 5.12.     General Exculpation. Notwithstanding any other provision
hereof or of any other Security Document neither the Collateral Agent nor any
of its directors, officers, agents or employees shall be liable to any Credit
Party or the Noteholders for any action taken or omitted to be taken by it or
them hereunder or under any other Security Document or in connection herewith
or therewith unless caused by its or their own gross negligence or willful
misconduct.

SECTION
6.     AGREEMENTS AMONG THE CREDITORS.

     Section 6.1.     Independent Actions by Creditors. Nothing contained in this
Agreement shall prohibit any Creditor from (a) accelerating the maturity of, or
demanding payment from any of the Credit Parties on, any Obligation of the
Credit Parties to such Creditor, (b) instituting legal action against any of
the
Credit Parties to obtain a judgment or other legal process in respect of such
Obligation, (c) imposing a default rate of interest in accordance with the
Credit Agreement or the Note Purchase Agreements, as applicable, or (d) raising
any defenses in any action in which it has been made a party defendant or has
been joined as a third party, except that the Secured Party may direct and
control any defense to the extent directly relating to the Collateral or any
one or more of the Security Documents, subject to and in accordance with the
provisions of this Agreement.

     Section 6.2.     Relation of Creditors. This Agreement is entered into solely
for the purposes set forth herein, and no Creditor assumes any responsibility
to any other party hereto to advise such other party of information known to
such other party regarding the financial

-18-

 

condition of the Credit Parties or of
any other circumstances bearing upon the risk of nonpayment of any Obligation.
Each Creditor specifically acknowledges and agrees that nothing contained in
this Agreement is or is intended to be for the benefit of a Credit Party and
nothing contained herein shall limit or in any way modify any of the
obligations of the Credit Parties to the Creditors.

     Section 6.3.     Acknowledgment of Collateral. Each party hereto hereby
expressly acknowledges the collateral security given under the Credit Agreement
and the collateral security delivered pursuant to the requirements of the Note
Purchase Agreements.

     Section 6.4.     [Reserved].

     Section 6.5.     Additional Guarantors. Additional Persons may become
“Subsidiary Guarantors” hereunder by executing and delivering to a then
existing Creditor a guaranty by which such Person has become a guarantor of the
Notes or Credit Agreement Obligations pursuant to the terms of the Credit
Agreement or the Note Purchase Agreements. Accordingly, upon the execution and
delivery of any such copy of the guaranty by any such Person, such Person
shall, thereinafter become a “Subsidiary Guarantor” for all purposes of this
Agreement.

SECTION 7.     MISCELLANEOUS.

     Section 7.1.     Entire Agreement. This Agreement represents the entire
Agreement among the Creditors and, except as otherwise provided, this Agreement
may not be altered, amended or modified except in a writing executed by all the
parties to this Agreement.

     Section 7.2.     Notices. Notices hereunder shall be given to the Noteholders
at their addresses as set forth in the Note Purchase Agreements, and to the
Secured Party, in either capacity, at its address as set forth in Schedule B,
or at such other address as may be designated by each in a written notice to
the other parties hereto.

     Section 7.3.     Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each of the Creditors and their respective
successors and assigns (including, without limitation, any holder of a
participation interest in any Obligation), whether so expressed or not, and, in
particular, shall inure to the benefit of and be enforceable by any future
holder or holders of any Obligations, and the term “Creditor” shall include any
such subsequent holder of Obligations, wherever the context permits. Without
limiting the foregoing, the rights and obligations of any Bank Lender or
Noteholder under this Agreement shall be assigned automatically, without the
need for the execution of any document or any other action, to, and the term
“Bank Lender” or “Noteholder” as used in this Agreement shall include, any
assignee, transferee or successor of such Bank Lender under a Credit Agreement
or such Noteholder under any Note Agreement, as the case may be, and any such
assignee, transferee or successor shall automatically become a party to this
Agreement. If required by any party to this Agreement, such assignee,
transferee or successor shall execute and deliver to the other parties to this
Agreement a written confirmation of its assumption of the obligations of the
assignor or transferor hereunder. Each of the Bank Lenders and the Noteholders
agrees that it shall deliver a complete copy of this

-19-

 

Agreement to any assignee,
transferee or successor of a Bank Lender or a Noteholder prior to or
substantially concurrently with the execution of any such assignment or
transfer.

     Section 7.4.     Consents, Amendment, Waivers. All amendments, waivers or
consents of any provision of this Agreement shall be effective only if the same
shall be in writing and signed by the Required Holders, the Bank Agent (acting
as such in accordance with the terms and provisions of the Credit Agreement)
and the Secured Party and no such modification or amendment shall be binding on
the Credit Parties without the consent of the Credit Parties, provided,
however, that (i) no such modification or amendment shall adversely affect any
of the Collateral Agent’s rights, immunities or rights to indemnification
hereunder or under any Security Document or expand its duties hereunder or
under any Security Document, without the prior written consent of the
Collateral Agent, (ii) no such modification or amendment shall modify any
provision hereof which is intended to provide for the equal and ratable
security of all outstanding Obligations without the prior written consent of
all Creditors and (iii) no such modification or amendment shall change the
definition of “Majority Creditors” or this Section 7.4 or Section 4 without the
prior written consent of each Creditor. No waiver of any provision of this
Agreement and no consent to any departure by any party hereto from the
provisions hereof shall be effective unless such waiver or consent shall be set
forth in a written instrument executed by the party against which it is sought
to be enforced, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.

     Section 7.5.     Governing Law. This Agreement shall be governed by and
construed in accordance with, and the rights of the parties shall be governed
by, the laws of the State of New York, excluding choice-of-law principles of
the law of such State that would require the application of the laws of a
jurisdiction other than such State.

     Section 7.6.     Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one Agreement,
and any of the parties hereto may execute this Agreement by signing any such
counterpart.

     Section 7.7.     Sale of Interest. Without limiting the provisions of Section
7.3, any Creditor which sells, transfers or otherwise disposes of any interest
in the Obligations shall use its best efforts to cause such purchaser or
transferee to agree in writing to be bound by the terms of this Agreement.

     Section 7.8.     Severability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby.

     Section 7.9.     Purchase of Collateral. Any Creditor may purchase Collateral
at any public sale of such Collateral pursuant to any of the Security Documents
and may make payment on account thereof by using any outstanding Obligation
then due and payable to such Creditor from the person which granted a security
interest in such Collateral as a credit against the purchase price to the
extent, but only to the extent such action (i) has been approved by the
Majority Creditors and (ii) does not contravene any applicable laws.

-20-

 

     Section 7.10.     Further Assurances, Etc. Each party hereto shall execute
and deliver such other documents and instruments, in form and substance
reasonably satisfactory to the other parties hereto, and shall take such other
action, in each case as any other party hereto may reasonably have requested
(at the cost and expense of the Credit Parties which costs and expenses the
Credit Parties, by countersigning this Agreement, agree to pay), to effectuate
and carry out the provisions of this Agreement, including, by recording or
filing in such places as the requesting party may deem desirable, this
Agreement or such other documents or instruments.

     Section 7.11.     Existing Intercreditor Agreement. Each party hereto agrees
that this Agreement shall succeed and replace the Existing Intercreditor
Agreement.

-21-

 

     In Witness Whereof, each of the parties hereto has caused this Agreement
to be executed as of the date first above written.

Accepted and Agreed to:

	 	 	 	 	 
	 	 	AMCO INSURANCE COMPANY, as a Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

-22-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	CANADA LIFE INSURANCE COMPANY OF
	 	 	 	 	AMERICA, as a Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ C. Paul English
	 	 	 	 	Name: C. Paul English
	 	 	 	 	Title: Assistant Treasurer

-23-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	CANADA LIFE ASSURANCE COMPANY, as a
	 	 	 	 	Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ C. Paul English
	 	 	 	 	Name: C. Paul English
	 	 	 	 	Title: Associate Treasurer

-24-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL ASSURANCE
	 	 	 	 	COMPANY, as a Noteholder
	 	 	BY GE ASSET MANAGEMENT INCORPORATED,
	 	 	 	 	ITS INVESTMENT ADVISOR
	 	 	 	 	 
	 	 	
By
	 	/s/ Stephen De Motto
	 	 	 	 	Name: Stephen De Motto
	 	 	 	 	Title: Vice President – Private Investments

-25-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	GE LIFE
AND ANNUITY ASSURANCE COMPANY,
	 	 	
       as a Noteholder	 	 
	 	 	
By GE ASSET MANAGEMENT INCORPORATED,	 	 
	 	 	
      ITS INVESTMENT ADVISOR	 	 
	 	 	 	 	 
	 	 	
By /s/ Stephen De Motto	 	 
	 	 	
      Name: Stephen De Motto	 	 
	 	 	
      Title: Vice President – Private Investments	 	 

-26-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	MODERN WOODMEN OF AMERICA, as a
	 	 	 	 	Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ Nick S. Coin
	 	 	 	 	Name: Nick S. Coin
	 	 	 	 	Title: Treasurer & Investment Manager

-27-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE INDEMNITY COMPANY, as a
	 	 	 	 	Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

-28-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE LIFE INSURANCE COMPANY, as a
	 	 	 	 	Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

-29-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE LIFE AND ANNUITY INSURANCE
	 	 	 	 	COMPANY, as a Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

-30-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE MUTUAL FIRE INSURANCE
	 	 	 	 	COMPANY, as a Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

-31-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	NATIONWIDE MUTUAL INSURANCE COMPANY, as
	 	 	 	 	a Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

-32-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	PACIFIC LIFE INSURANCE COMPANY, as a
	 	 	 	 	Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ David C. Patch
	 	 	 	 	Name: David C. Patch
	 	 	 	 	Title: Assistant Vice President
	 	 	 	 	 
	 	 	
By
	 	/s/ Cathy Schwartz
	 	 	 	 	Name: Cathy Schwartz
	 	 	 	 	Title: Assistant Secretary

-33-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	SCOTTSDALE INSURANCE COMPANY, as a
	 	 	 	 	Noteholder
	 	 	 	 	 
	 	 	
By
	 	/s/ Joseph P. Young
	 	 	 	 	Name: Joseph P. Young
	 	 	 	 	Title: Credit Officer, Fixed Income Securities

-34-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	FLEET NATIONAL BANK, as Bank Agent
	 	 	 	 	under the Credit Agreement
	 	 	 	 	 
	 	 	
By:
	 	/s/ Jana L. Baker
	 	 	 	 	Name: Jana L. Baker
	 	 	 	 	Title: Vice President

-35-

 

Accepted and Agreed to:

	 	 	 	 	 
	 	 	FLEET NATIONAL BANK, as Collateral Agent
	 	 	 	 	 
	 	 	
By:
	 	/s/ Jana L. Baker
	 	 	 	 	Name: Jana L. Baker
	 	 	 	 	Title: Vice President

-36-

 

     The undersigned hereby acknowledge and agree to the foregoing Agreement.

	 	 	 
	BOWNE BUSINESS COMMUNICATIONS, INC.,	 	
BOWNE ENTERPRISE SOLUTIONS, L.L.C.,
	a New York corporation	 	
a New York limited liability company
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	   Name: Philip E. Kucera	 	
   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary	 	
   Title: Vice President & Assistant Secretary
	 	 	 
	BOWNE BUSINESS SOLUTIONS, INC.,	 	
BOWNE OF NEW YORK CITY, L.L.C.,
	a Delaware corporation	 	
a New York limited liability company
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	   Name: Philip E. Kucera	 	
   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary	 	
   Title: Vice President & Assistant Secretary
	 	 	 
	BOWNE OF ATLANTA, INC.,	 	
BOWNE OF PHOENIX, INC.,
	a Georgia corporation	 	
an Arizona corporation
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	   Name: Philip E. Kucera	 	
   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary	 	
   Title: Vice President & Assistant Secretary
	 	 	 
	BOWNE OF BOSTON, INC.,	 	
BOWNE OF SOUTH BEND, INC.,
	a Massachusetts corporation	 	
    a Delaware corporation
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	   Name: Philip E. Kucera	 	
   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary	 	
   Title: Vice President & Assistant Secretary
	 	 	 
	BOWNE OF CHICAGO, INC.,	 	
BOWNE OF LOS ANGELES, INC.,
	a Delaware corporation	 	
    a California corporation
	 	 	 
	By /s/ Philip E. Kucera	 	
By /s/ Philip E. Kucera
	   Name: Philip E. Kucera	 	
   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary	 	
   Title: Vice President & Assistant Secretary

-37-

 

	 
	BOWNE OF CLEVELAND, INC.,
	an Ohio corporation
	 
	By /s/ Philip E. Kucera
	   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary
	 
	BOWNE OF DALLAS LIMITED PARTNERSHIP,
	a Delaware limited partnership
	 
	By /s/ Philip E. Kucera
	   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary
	 
	DOCUMENT MANAGEMENT SERVICES, INC.,
	a Massachusetts corporation
	 
	By /s/ Philip E. Kucera
	   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary
	 
	BGS COMPANIES, INC., a Delaware corporation
	 
	By /s/ Philip E. Kucera
	   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary
	 
	BOWNE TRANSLATION SERVICES, LLC,
	a New York limited liability company
	 
	By /s/ Philip E. Kucera
	   Name: Philip E. Kucera
	   Title: Vice President & Assistant Secretary

-38-

 

	 
	BOWNE & CO., INC.,
	a Delaware corporation
	 
	By /s/ C. Cody Colquitt
	   Name: C. Cody Colquitt
	   Title: Senior Vice President and Chief Financial Officer

-39-

 

Schedule A

Subsidiary Guarantors

Bowne Business Communications, Inc., a New York corporation

Bowne Business Solutions, Inc., a Delaware corporation

Bowne Enterprise Solutions, L.L.C., a New York limited liability company

Bowne of New York City, L.L.C., a New York limited liability company

Bowne of Phoenix, Inc., an Arizona corporation

Bowne of Atlanta, Inc., a Georgia corporation

Bowne of Boston, Inc., a Massachusetts corporation

Bowne of South Bend, Inc., a Delaware corporation

Bowne of Chicago, Inc., a Delaware corporation

Bowne of Cleveland, Inc., an Ohio corporation

Bowne of Dallas Limited Partnership, a Delaware limited partnership

Bowne of Los Angeles, Inc., a California corporation

Document Management Services, Inc., a Massachusetts corporation

BGS Companies, Inc., a Delaware corporation

Bowne Translation Services, LLC, a New York limited liability company

 

 

Schedule B

Jana L. Baker, Vice President

Fleet National Bank

208 Harristown Road

Glen Rock, New Jersey 07452

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