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	 	 	Exhibit 4.61
	

 	 	 

n e w s    r e l e a s e 

 
 

NORANDA COMPLETES PRIVATE PLACEMENT OF PREFERRED SHARES    
  

TORONTO, ONTARIO, April 25, 2003 — Noranda Inc. today announced that it has completed a private
placement of 6,000,000 cumulative preferred shares, Series I, at a price of $25.00 per share for aggregate gross proceeds of $150,000,000. All of the Series I shares were purchased by
Brascan Corporation pursuant to the exercise by Noranda of a put option previously granted by Brascan. 

The
Series I shares carry a quarterly cumulative dividend at a rate of 8% per annum and allow Noranda to pay any portion of any dividend, at its option and subject to regulatory approval, by
issuing common shares of Noranda at the current market price of the common shares on the date of payment. Noranda may, at its option, redeem the Series I shares, in whole or in part, by
(i) payment of $25.00 per share together with all accrued and unpaid dividends up to but excluding the date fixed for redemption, or (ii) at its option at any time after April 24,
2008, delivery of that number of Noranda common shares equal to the redemption price divided by the current market price of the common shares on the redemption date for each preferred share redeemed.
If Noranda redeems any of the Series I shares within 120 days of the date of the their issue, the redemption price payable by Noranda will be reduced by $0.75 per share. Noranda is
required to apply the net proceeds received by it from a subsequent public issue of its equity securities to redeem any of the Series I shares then outstanding. 

Noranda
paid to Brascan a placement fee of $4,500,000 in connection with this offering. The net proceeds from the sale of the Series I shares will be used to repay debt. 

Noranda Inc. is a leading international mining and metals company with more than 48 mining and metallurgical operations and projects under
development in 17 countries. Noranda is one of the world's largest producers of zinc and nickel and is a significant producer of copper, primary and fabricated aluminum, lead, silver, gold, sulphuric
acid and cobalt. Noranda is also a major recycler of secondary copper, nickel and precious metals. Noranda employs over 15,000 people. It is listed on The Toronto Stock Exchange and The
New York Stock Exchange (NRD).

— 30 —

Contact:

	Denis Couture

Vice-President, Communications and

Public Affairs

Noranda Inc.

(416) 982-7020

denis.couture@toronto.norfalc.com

www.noranda.com	 	Lars-Eric Johansson

Executive Vice-President and Chief

Financial Officer

Noranda Inc.

(416) 982-7377

johanssl@noranda.com

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NORANDA COMPLETES PRIVATE PLACEMENT OF PREFERRED SHARESExhibit
4.1

 

 

VERTIS, INC.,

 

as Issuer,

 

the Guarantors

named herein

 

 

and

 

 

THE BANK OF NEW YORK,

 

as Trustee

 

 

INDENTURE

Dated as of
February 28, 2003

 

 

 

up to $293,500,000

 

 

131⁄2% Senior Subordinated
Notes due 2009

 

 

 

[CROSS-REFERENCE TABLE]

 

	
  TIA Section

  	
   

  	
  Indenture Section

  
	
  § 310 (a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  7.10

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  7.10

  
	
  (b)

  	
   

  	
  7.8; 7.10; 13.2

  
	
  (c)

  	
   

  	
  N.A.

  
	
  § 311 (a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  § 312 (a)

  	
   

  	
  2.5

  
	
  (b)

  	
   

  	
  13.3

  
	
  (c)

  	
   

  	
  13.3

  
	
  § 313 (a)

  	
   

  	
  7.6

  
	
  (b)(1)

  	
   

  	
  7.6

  
	
  (b)(2)

  	
   

  	
  7.6

  
	
  (c)

  	
   

  	
  7.6; 13.2(b)

  
	
  (d)

  	
   

  	
  7.6

  
	
  § 314 (a)

  	
   

  	
  4.6; 4.7; 13.2

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  13.4

  
	
  (c)(2)

  	
   

  	
  13.4

  
	
  (c)(3)

  	
   

  	
  13.4

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  13.5

  
	
  (f)

  	
   

  	
  N.A.

  
	
  § 315 (a)

  	
   

  	
  7.1(b)

  
	
  (b)

  	
   

  	
  7.5; 13.2

  
	
  (c)

  	
   

  	
  7.1(a)

  
	
  (d)

  	
   

  	
  7.1(c)

  
	
  (e)

  	
   

  	
  6.11

  
	
  § 316 (a) (last sentence)

  	
   

  	
  2.9

  
	
  (a)(1)(A)

  	
   

  	
  6.5

  
	
  (a)(1)(B)

  	
   

  	
  6.4

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  6.7

  
	
  (c)

  	
   

  	
  9.4

  
	
  § 317 (a)(1)

  	
   

  	
  6.8

  
	
  (a)(2)

  	
   

  	
  6.9

  
	
  (b)

  	
   

  	
  2.4

  
	
  § 318 (a)

  	
   

  	
  13.1

  
	
  (c)

  	
   

  	
  13.1

  

 

N.A. means Not
Applicable.

 

i

 

NOTE:            This Cross-Reference
Table shall not, for any purpose, be deemed to be a part of this Indenture.

 

ii

 

TABLE OF CONTENTS

 

	
  ARTICLE
  I

  
	
   

  
	
  DEFINITIONS AND INCORPORATION BY
  REFERENCE

  
	
   

  	
   

  
	
  SECTION 1.1

  	
  Definitions.

  
	
  SECTION 1.2

  	
  Incorporation by
  Reference of Trust Indenture Act.

  
	
  SECTION 1.3

  	
  Rules of Construction.

  
	
   

  	
   

  
	
  ARTICLE
  II

  
	
   

  	
   

  
	
  THE SECURITIES

  
	
   

  
	
  SECTION 2.1

  	
  Form and Dating.

  
	
  SECTION 2.2

  	
  Execution and
  Authentication.

  
	
  SECTION 2.3

  	
  Registrar and Paying
  Agent.

  
	
  SECTION 2.4

  	
  Paying Agent To Hold
  Money in Trust.

  
	
  SECTION 2.5

  	
  Securityholder Lists.

  
	
  SECTION 2.6

  	
  Transfer and Exchange.

  
	
  SECTION 2.7

  	
  Replacement Notes.

  
	
  SECTION 2.8

  	
  Outstanding Notes.

  
	
  SECTION 2.9

  	
  Treasury Notes.

  
	
  SECTION 2.10

  	
  Temporary Notes.

  
	
  SECTION 2.11

  	
  Cancellation.

  
	
  SECTION 2.12

  	
  Defaulted Interest.

  
	
  SECTION 2.13

  	
  CUSIP Number.

  
	
  SECTION 2.14

  	
  Book-Entry Provisions
  for Global Securities.

  
	
  SECTION 2.15

  	
  Special Transfer
  Provisions.

  
	
   

  	
   

  
	
  ARTICLE III

  
	
   

  	
   

  
	
  REDEMPTION

  
	
   

  	
   

  
	
  SECTION 3.1

  	
  Notices to Trustee.

  
	
  SECTION 3.2

  	
  Selection of Notes To Be
  Redeemed.

  
	
  SECTION 3.3

  	
  Notice of Redemption.

  
	
  SECTION 3.4

  	
  Effect of Notice of
  Redemption.

  
	
  SECTION 3.5

  	
  Deposit of Redemption
  Price.

  
	
  SECTION 3.6

  	
  Notes Redeemed in Part.

  

 

iii

 

	
  ARTICLE
  IV

  
	
   

  	
   

  
	
  COVENANTS

  
	
   

  	
   

  
	
  SECTION 4.1

  	
  Payment of Notes.

  
	
  SECTION 4.2

  	
  Maintenance of Office or
  Agency.

  
	
  SECTION 4.3

  	
  Corporate Existence.

  
	
  SECTION 4.4

  	
  Payment of Taxes and
  Other Claims.

  
	
  SECTION 4.5

  	
  Maintenance of
  Properties.

  
	
  SECTION 4.6

  	
  Compliance Certificates;
  Notice of Default.

  
	
  SECTION 4.7

  	
  Reports.

  
	
  SECTION 4.8

  	
  Limitation on Restricted
  Payments.

  
	
  SECTION 4.9

  	
  Limitation on Incurrence
  of Additional Indebtedness.

  
	
  SECTION 4.10

  	
  Limitation on Dividend
  and Other Payment Restrictions Affecting Subsidiaries.

  
	
  SECTION 4.11

  	
  Limitation on Liens.

  
	
  SECTION 4.12

  	
  Limitation on Asset
  Sales.

  
	
  SECTION 4.13

  	
  Limitations on
  Transactions with Affiliates.

  
	
  SECTION 4.14

  	
  Prohibition on
  Incurrence of Senior Subordinated Debt.

  
	
  SECTION 4.15

  	
  Change of Control.

  
	
  SECTION 4.16

  	
  Waiver of Stay;
  Extension of Usury Laws.

  
	
  SECTION 4.17

  	
  Limitation on
  Guarantees by Restricted Subsidiaries.

  
	
  SECTION 4.18

  	
  Limitation on
  Preferred Stock of Subsidiaries.

  
	
  SECTION 4.19

  	
  Conduct of Business.

  
	
   

  	
   

  
	
  ARTICLE
  V

  
	
   

  	
   

  
	
  SUCCESSOR CORPORATION

  
	
   

  	
   

  
	
  SECTION 5.1

  	
  Limitation on Mergers,
  Consolidations or Sales of Assets.

  
	
  SECTION 5.2

  	
  Successor Entity
  Substituted.

  
	
   

  	
   

  
	
  ARTICLE
  VI

  
	
   

  	
   

  
	
  DEFAULT AND REMEDIES

  
	
   

  	
   

  
	
  SECTION 6.1

  	
  Events of Default.

  
	
  SECTION 6.2

  	
  Acceleration.

  
	
  SECTION 6.3

  	
  Other Remedies.

  
	
  SECTION 6.4

  	
  Waiver of Past Default.

  
	
  SECTION 6.5

  	
  Control by Majority.

  
	
  SECTION 6.6

  	
  Limitation on Suits.

  
	
  SECTION 6.7

  	
  Rights of Holders To
  Receive Payment.

  
	
  SECTION 6.8

  	
  Collection Suit by
  Trustee.

  
	
  SECTION 6.9

  	
  Trustee May File Proofs
  of Claim.

  

 

iv

 

	
  SECTION 6.10

  	
  Priorities.

  
	
  SECTION 6.11

  	
  Undertaking for Costs.

  
	
  SECTION 6.12

  	
  Rights and Remedies
  Cumulative.

  
	
  SECTION 6.13

  	
  Delay or Omission Not
  Waiver.

  
	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  	
   

  
	
  TRUSTEE

  
	
   

  	
   

  
	
  SECTION 7.1

  	
  Duties of Trustee.

  
	
  SECTION 7.2

  	
  Rights of Trustee.

  
	
  SECTION 7.3

  	
  Individual Rights of
  Trustee.

  
	
  SECTION 7.4

  	
  Trustee’s Disclaimer.

  
	
  SECTION 7.5

  	
  Notice of Defaults.

  
	
  SECTION 7.6

  	
  Reports by Trustee to
  Holders.

  
	
  SECTION 7.7

  	
  Compensation and
  Indemnity.

  
	
  SECTION 7.8

  	
  Replacement of Trustee.

  
	
  SECTION 7.9

  	
  Successor Trustee by
  Merger, Etc.

  
	
  SECTION 7.10

  	
  Eligibility;
  Disqualification.

  
	
  SECTION 7.11

  	
  Preferential
  Collection of Claims Against Company.

  
	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  	
   

  
	
  DISCHARGE OF INDENTURE; DEFEASANCE

  
	
   

  	
   

  
	
  SECTION 8.1

  	
  Termination of the
  Company’s Obligations.

  
	
  SECTION 8.2

  	
  Legal Defeasance and
  Covenant Defeasance.

  
	
  SECTION 8.3

  	
  Conditions to Legal
  Defeasance or Covenant Defeasance.

  
	
  SECTION 8.4

  	
  Application of Trust
  Money.

  
	
  SECTION 8.5

  	
  Repayment to the
  Company.

  
	
  SECTION 8.6

  	
  Reinstatement.

  
	
   

  	
   

  
	
  ARTICLE
  IX

  
	
   

  	
   

  
	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  
	
   

  	
   

  
	
  SECTION 9.1

  	
  Without Consent of
  Holders.

  
	
  SECTION 9.2

  	
  With Consent of Holders.

  
	
  SECTION 9.3

  	
  Compliance with Trust
  Indenture Act.

  
	
  SECTION 9.4

  	
  Revocation and Effect of
  Consents.

  
	
  SECTION 9.5

  	
  Notation on or Exchange
  of Notes.

  
	
  SECTION 9.6

  	
  Trustee To Sign
  Amendments, Etc.

  

 

v

 

	
  ARTICLE
  X

  
	
   

  	
   

  
	
  SUBORDINATION

  
	
   

  	
   

  
	
  SECTION 10.1

  	
  Notes Subordinated to
  Senior Debt.

  
	
  SECTION 10.2

  	
  Suspension of Payment
  When Senior Debt Is in Default.

  
	
  SECTION 10.3

  	
  Obligations
  Subordinated to Prior Payment of All Senior Debt on Dissolution, Liquidation
  or Reorganization of Company.

  
	
  SECTION 10.4

  	
  Payments May Be Paid
  Prior to Dissolution.

  
	
  SECTION 10.5

  	
  Holders To Be
  Subrogated to Rights of Holders of Senior Debt.

  
	
  SECTION 10.6

  	
  Obligations of the
  Company Unconditional.

  
	
  SECTION 10.7

  	
  Reliance on Judicial
  Order or Certificate of Liquidating Agent.

  
	
  SECTION 10.8

  	
  Subordination Rights
  Not Impaired by Acts or Omissions of the Company or Holders of Senior Debt.

  
	
  SECTION 10.9

  	
  Holders Authorize
  Trustee To Effectuate Subordination of Obligations.

  
	
  SECTION 10.10

  	
  Amendments or
  Modifications to Article X.

  
	
  SECTION 10.11

  	
  Article X Not to
  Prevent Events of Default.

  
	
  SECTION 10.12

  	
  No Fiduciary Duty of
  Trustee to Holders of Senior Debt.

  
	
   

  	
   

  
	
  ARTICLE
  XI

  
	
   

  	
   

  
	
  GUARANTEE

  
	
   

  	
   

  
	
  SECTION 11.1

  	
  Unconditional
  Guarantee.

  
	
  SECTION 11.2

  	
  Subordination of
  Guarantee.

  
	
  SECTION 11.3

  	
  Severability.

  
	
  SECTION 11.4

  	
  Release of a
  Guarantor.

  
	
  SECTION 11.5

  	
  Limitation of
  Guarantor’s Liability.

  
	
  SECTION 11.6

  	
  Consolidation, Merger
  and Sale of Assets.

  
	
  SECTION 11.7

  	
  Contribution.

  
	
  SECTION 11.8

  	
  Waiver of Subrogation.

  
	
  SECTION 11.9

  	
  Evidence of Guarantee.

  
	
  SECTION 11.10

  	
  Waiver of Stay,
  Extension or Usury Laws.

  
	
   

  	
   

  
	
  ARTICLE XII

  
	
   

  	
   

  
	
  SUBORDINATION OF GUARANTEE
  OBLIGATIONS

  
	
   

  	
   

  
	
  SECTION 12.1

  	
  Guarantee Obligations
  Subordinated to Guarantor Senior Debt.

  

 

vi

 

	
  SECTION 12.2

  	
  Suspension of
  Guarantee Obligations When Guarantor Senior Debt Is in Default.

  
	
  SECTION 12.3

  	
  Guarantee Obligations
  Subordinated to Prior Payment of All Guarantor Senior Debt on Dissolution,
  Liquidation or Reorganization of Such Guarantor.

  
	
  SECTION 12.4

  	
  Payments May Be Paid
  Prior to Dissolution.

  
	
  SECTION 12.5

  	
  Holders To Be
  Subrogated to Rights of Lenders of Guarantor Senior Debt.

  
	
  SECTION 12.6

  	
  Guarantee Obligations
  of the Guarantors Unconditional.

  
	
  SECTION 12.7

  	
  Reliance on Judicial
  Order or Certificate of Liquidating Agent.

  
	
  SECTION 12.8

  	
  Subordination Rights
  Not Impaired by Acts or Omissions of the Guarantors or Lenders of Guarantor
  Senior Debt.

  
	
  SECTION 12.9

  	
  Holders Authorize
  Trustee To Effectuate Subordination of Guarantee Obligations.

  
	
  SECTION 12.10

  	
  This Article XII Not
  To Prevent Events of Default.

  
	
  SECTION 12.11

  	
  Amendments or
  Modifications to Article XII.

  
	
  SECTION 12.12

  	
  No Fiduciary Duty of Trustee to Holders
  of Senior Debt.

  
	
   

  	
   

  
	
  ARTICLE XIII

  
	
   

  	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  
	
  SECTION 13.1

  	
  Trust Indenture Act
  Controls.

  
	
  SECTION 13.2

  	
  Notices.

  
	
  SECTION 13.3

  	
  Communications by
  Holders with Other Holders.

  
	
  SECTION 13.4

  	
  Certificate and
  Opinion of Counsel as to Conditions Precedent.

  
	
  SECTION 13.5

  	
  Statements Required in
  Certificate and Opinion of Counsel.

  
	
  SECTION 13.6

  	
  Rules by Trustee,
  Paying Agent, Registrar.

  
	
  SECTION 13.7

  	
  Legal Holidays.

  
	
  SECTION 13.8

  	
  Governing Law.

  
	
  SECTION 13.9

  	
  No Recourse Against
  Others.

  
	
  SECTION 13.10

  	
  Successors.

  
	
  SECTION 13.11

  	
  Counterparts.

  
	
  SECTION 13.12

  	
  Severability.

  
	
  SECTION 13.13

  	
  Table of Contents,
  Headings, Etc.

  
	
  SECTION 13.14

  	
  No Adverse
  Interpretation of Other Agreements.

  
	
  SECTION 13.15

  	
  Benefits of
  Indenture.

  
	
  SECTION 13.16

  	
  Independence of
  Covenants.

  

 

vii

 

	
  Exhibit A-1

  	
  —

  	
  Form of Series A Note

  	
   

  
	
  Exhibit A-2

  	
  —

  	
  Form of Series B Note

  	
   

  
	
  Exhibit B 

  	
  —

  	
  Form
  of Legend for Global Securities

  	
   

  
	
  Exhibit C 

  	
  —

  	
  Transferee
  Certificate for Non-QIB Accredited Investors

  	
   

  
	
  Exhibit D 

  	
  —

  	
  Transferee
  Certificate for Transfers Pursuant to Regulation S

  	
   

  
	
  Exhibit E 

  	
  —

  	
  Form
  of Guarantee

  	
   

  
	
   

  	
   

  
	
  Note:

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

  	
   

  
					

 

 

viii

 

INDENTURE dated as of February 28, 2003, among VERTIS,
INC., a corporation duly organized and existing under the laws of the State of
Delaware, as issuer (the “Company”), the Guarantors (as defined herein) and THE
BANK OF NEW YORK, a New York banking corporation, as Trustee (the “Trustee”).

 

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

 

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.1                          Definitions.

 

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

 

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

 

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

 

“Adjusted Net Assets” shall have the meaning provided
in Section 11.7.

 

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

 

 

Subsidiary of the Company) in whom a Receivables Entity makes an
Investment in connection with a Qualified Receivables Transaction shall be
deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investment.

 

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

 

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

 

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

 

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

 

“Asset Acquisition” means (1) an Investment by the
Company or any Restricted Subsidiary of the Company in any other Person
pursuant to which such Person shall become a Restricted Subsidiary of the
Company or of any Restricted Subsidiary of the Company, or shall be merged with
or into the Company or any Restricted Subsidiary of the Company, or (2) the
acquisition by the Company or any Restricted Subsidiary of the Company of the
assets of any Person (other than a Restricted Subsidiary of the Company) which
constitute all or substantially all of the assets of such Person or comprise
any division or line of business of such Person or any other properties or
assets of such Person other than in the ordinary course of business.

 

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

 

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

 

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

 

2

 

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

 

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

 

(e)                                  the
licensing of intellectual property;

 

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

 

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

 

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

 

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

 

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

 

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

 

“Banc of America” means Banc of America Bridge LLC
(f/k/a NationsBridge, L.L.C.).

 

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

 

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

 

3

 

providing for the staying, arrangement, adjustment or composition of
indebtedness or other relief of a debtor.

 

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

 

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

 

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

 

“Capital Stock” means:

 

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

 

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

 

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

 

“Cash Equivalents” means:

 

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

 

(2)                                                                                  marketable
direct obligations issued by any state of the United States of America or any
member state of the European Union or any political subdivision of

 

4

 

any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
Standard & Poor’s Ratings Group (“S&P”) or Moody’s Investors Service,
Inc. (“Moody’s”);

 

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

 

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

 

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

 

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

 

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

 

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

 

provided, that for purposes of
Articles X and XII, the term “Cash Equivalents” shall not include the Cash
Equivalents referred to in clause (6) above.

 

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

 

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

 

5

 

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

 

(3)                                                                                  any
Person or Group (other than one or more Permitted Holders) shall become the
beneficial owner (as defined in Rules 13d-3 and 13d-5 or any successor rule or
regulation promulgated under the Exchange Act), directly or indirectly, of
shares representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding Capital Stock of Vertis Holdings or
the Company, unless at such time the Equity Investors beneficially own,
directly or indirectly, in the aggregate, shares representing not less than a
majority of the voting power represented by the issued and outstanding Capital
Stock of the Company; or

 

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

 

“Change of Control Offer” has the meaning ascribed to
such term in Section 4.15.

 

“Change of Control Payment Date” has the meaning
ascribed to such term in Section 4.15.

 

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

 

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

 

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

 

(1)                                                                                  Consolidated
Net Income; and

 

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

 

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

 

6

 

(b)                                 Consolidated
Interest Expense;

 

(c)                                  Consolidated
Non-cash Charges;

 

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

 

(e)                                  any
fees permitted pursuant to clause (b)(10) of Section 4.13;

 

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

 

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

 

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

 

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

 

(2)                                                                                  any
asset sales or other dispositions or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including

 

7

 

any Person who becomes a
Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming
or otherwise being liable for Acquired Indebtedness and also including any
Consolidated EBITDA (including pro forma expense and cost reductions
calculated on a basis consistent with Regulation S-X under the Exchange Act)
attributable to the assets which are the subject of the Asset Acquisition or
Asset Sale during the Four Quarter Period) occurring during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter Period and
on or prior to the Transaction Date, as if such asset sale or Asset Acquisition
(including the incurrence, assumption or liability for any such Indebtedness or
Acquired Indebtedness) occurred on the first day of the Four Quarter Period;
and

 

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

 

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

 

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

 

8

 

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

 

(1)                                                                                  Consolidated
Interest Expense; plus

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Designated Senior Debt” means (1) Indebtedness
under or in respect of the Senior Credit Facility and (2) any other
Indebtedness constituting Senior Debt which, at the time of determination, has
an aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof are committed to lend up to, at least
$25.0 million and is specifically designated in the instrument evidencing
such Senior Debt as “Designated Senior Debt” by the Company.

 

“Deutsche Bank” means Deutsche Bank Trust Company
Americas (f/k/a Bankers Trust Company).

 

11

 

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

 

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

 

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

 

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

 

“ECP Affiliates” shall mean any Affiliate of ECP.

 

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

 

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

 

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

 

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

 

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

 

“Funding Guarantor” has the meaning ascribed to it in
Section 11.7.

 

12

 

“GAAP” means generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect as of the
Issue Date.

 

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

 

“Guarantee Obligations” shall mean, as to any Guarantor,
all obligations of every nature of such Guarantor from time to time owing to
the Holders and the Trustee under this Indenture and the Notes (including its
Guarantee), whether for principal, reimbursements, interest, premium, fees,
penalties, expenses, indemnities, damages or otherwise.

 

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

 

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

 

“Guarantor Senior Debt” means, with respect to any
Guarantor:  the principal of, premium,
if any, and interest (including any interest accruing subsequent to the filing
of a petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on any Indebtedness of a Guarantor, whether outstanding on the
Issue Date or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Guarantee of such
Guarantor.  Without limiting the
generality of the foregoing, “Guarantor Senior Debt” shall also include the
principal of, premium, if any, interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for
in the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in respect
of:

 

(x)                                   all
monetary obligations of every nature of such Guarantor under, or with respect
to, the Senior Credit Facility and the A/R Facility, including, without

 

13

 

limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities (and guarantees thereof);

 

(y)                                 all
Interest Swap Obligations of such Guarantor (and guarantees thereof by such
Guarantor); and

 

(z)                                   all
obligations of such Guarantor (and guarantees thereof by such Guarantor) under
Currency Agreements;

 

in each case whether outstanding on the Issue Date or thereafter
incurred.

 

Notwithstanding the foregoing, “Guarantor Senior Debt”
shall not include:

 

(1)                                                                                  any
Indebtedness of such Guarantor to a Subsidiary of the Company;

 

(2)                                                                                  Indebtedness
to, or guaranteed on behalf of, any shareholder, director, officer or employee
of such Guarantor or any Subsidiary of such Guarantor (including, without
limitation, amounts owed for compensation) other than a shareholder who is also
a lender (or an Affiliate of a lender) under the Senior Credit Facility;

 

(3)                                                                                  Indebtedness
to trade creditors and other amounts incurred in connection with obtaining
goods, materials or services;

 

(4)                                                                                  Indebtedness
represented by Disqualified Capital Stock;

 

(5)                                                                                  any
liability for federal, state, local or other taxes owed or owing by such
Guarantor;

 

(6)                                                                                  that
portion of any Indebtedness incurred in violation of Section 4.9 (but, as
to any such obligation, no such violation shall be deemed to exist for purposes
of this clause (6) if the holder(s) of such obligation or their representative
shall have received an officers’ certificate of the Company to the effect that
the incurrence of such Indebtedness does not (or, in the case of revolving
credit indebtedness, that the incurrence of the entire committed amount thereof
at the date on which the initial borrowing thereunder is made would not)
violate Section 4.9); provided that the foregoing shall not apply to any
incurrence under the Senior Credit Facility pursuant to clause (2) of the
definition of “Permitted Indebtedness” which incurrence was in violation of
such clause (2) solely as a result of the increase in Attributed Receivables
Facility Indebtedness (as defined in the Senior Credit Facility as in effect on
June 24, 2002) and the lenders under the Senior Credit Facility extended such additional
amounts in good faith without knowledge of such increase;

 

14

 

(7)                                                                                  Indebtedness
which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse
to such Guarantor; and

 

(8)                                                                                  any
Indebtedness which is, by its express terms, subordinated or junior in right of
payment to any other Indebtedness of such Guarantor.

 

“Guarantor Senior Debt Obligations” means all
obligations of any Guarantor for principal, premium, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Guarantor Senior Debt, and all guarantees by
such Guarantor of any of the foregoing.

 

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

 

“Incur” means, with respect to any Indebtedness or
other obligation of any Person, to create, issue, incur (by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the balance
sheet of such Person (and “Incurrence,” “Incurred,” “Incurrable” and
“Incurring” shall have meanings correlative to the foregoing); provided
that any amendment, modification or waiver of any document pursuant to which
Indebtedness was previously Incurred shall only be deemed to be an Incurrence
of Indebtedness if and to the extent such amendment, modification or waiver
(i) increases the principal thereof or interest rate or premium payable
thereon or (ii) changes to an earlier date the stated maturity thereof or
the date of any scheduled or required principal payment thereon or the time or
circumstances under which such Indebtedness shall be redeemed; provided,
further, that any Indebtedness of a Person existing at the time such
Person becomes a Restricted Subsidiary of the Company (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the
Company.

 

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

 

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

 

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

 

(3)                                                                                  all
Capitalized Lease Obligations of such Person;

 

(4)                                                                                  all
Obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations and all Obligations under

 

15

 

any title retention
agreement (but excluding trade accounts payable and other accrued liabilities
arising in the ordinary course of business);

 

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

 

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

 

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

 

(8)                                                                                  all
Obligations under currency agreements and interest swap agreements of such
Person; and

 

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

 

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

 

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

 

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

 

16

 

“Intercompany Indebtedness” means any Indebtedness of
the Company or any Guarantor or Wholly Owned Restricted Subsidiary of the
Company that is not a Guarantor which, in the case of the Company, is owing to
any Guarantor or Wholly Owned Restricted Subsidiary of the Company that is not
a Guarantor and which, in the case of any such Subsidiary, is owing to the
Company or any Guarantor or Wholly Owned Restricted Subsidiary of the Company
that is not a Guarantor; provided that if as of any date any Person
other than the Company or a Guarantor or a Wholly Owned Restricted Subsidiary
of the Company that is not a Guarantor, a lender under the Senior Credit
Facility or a creditor under any interest rate protection or other hedging
agreement (or any collateral agent acting on behalf of such lenders and/or
creditors) owns or holds such Indebtedness, or holds any Lien in respect
thereof (other than a Lien in favor of the Holders, the lenders under the
Senior Credit Facility, the creditors under any interest rate protection or
other hedging agreement or any collateral agent for such lenders and/or
creditors), such Indebtedness shall no longer be Intercompany Indebtedness.

 

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

 

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

 

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

 

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

 

(1)                                                                                  the
Company shall be deemed to have made an “Investment” equal to the fair market
value of the net assets of any Restricted Subsidiary at the time that such

 

17

 

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

 

(2)                                                                                  the
amount of any Investment shall be the original cost of such Investment plus the
cost of all additional Investments by the Company or any of its Restricted
Subsidiaries, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment, reduced
by the payment of dividends or distributions (including tax sharing payments)
in connection with such Investment or any other amounts received in respect of
such Investment; provided that no such payment of dividends or
distributions or receipt of any such other amounts shall reduce the amount of
any Investment if such payment of dividends or distributions or receipt of any
such amounts would be included in Consolidated Net Income.  If the Company or any Restricted Subsidiary
of the Company sells or otherwise disposes of any Common Stock of any direct or
indirect Restricted Subsidiary of the Company such that, after giving effect to
any such sale or disposition, the Company no longer owns, directly or indirectly,
more than 50% of the outstanding Common Stock of such Restricted Subsidiary,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Common Stock of such
Restricted Subsidiary not sold or disposed of.

 

“Issue Date” means February 28, 2003.

 

“JP Morgan” means JP Morgan Chase Bank (f/k/a The
Chase Manhattan Bank).

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

(3)                                                                                  any
repayment of debt under the Senior Subordinated Credit Agreement to the extent
such repayment is required thereunder;

 

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

 

(5)                                                                                  the
repayment of Indebtedness that is secured by a Lien on the Property or assets
that are subject of such Asset Sale and such Lien is permitted by this
Indenture; and

 

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

 

19

 

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

 

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

 

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

 

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

 

“Non-payment Default” shall have the meaning ascribed to
such term in Section 10.2(b).

 

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

 

“Notes” means the Series A Notes and
Series B Notes as amended or supplemented from time to time in accordance
with the terms hereof that are issued pursuant to this Indenture.

 

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

 

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

 

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

 

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

 

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

 

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

 

20

 

“Payment Blockage Notice” has the meaning ascribed to
such term in Section 10.2(b).

 

“Payment Blockage Period” has the meaning provided in
Section 10.2(b).

 

“Payment Default” shall have the meaning ascribed to
such term in Section 10.2(a).

 

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

 

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

 

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

 

(1)                                                                                  Indebtedness
under the Notes and this Indenture and under the Senior Subordinated Credit
Agreement (including the guarantees made thereunder) in an aggregate principal
amount not to exceed $293.5 million;

 

(2)                                                                                  Indebtedness
incurred pursuant to the Senior Credit Facility (including but not limited to
Indebtedness in respect of letters of credit or bankers’ acceptances issued or
created thereunder) (including the guarantees made thereunder) in a maximum
principal amount not to exceed in the aggregate the amount equal to
$670 million less (x) the amount of any proceeds from any incurrence
by the Company or any of its Restricted Subsidiaries of Attributed Receivables
Facility Indebtedness (as defined in the Senior Credit Facility as in effect on
June 24, 2002) pursuant to the A/R Facility in excess of $150.0 million
and (y) the amount of all mandatory repayments of term loans actually made
under, and permanent commitment reductions actually made in the revolving
credit portion of, the Senior Credit Facility with Net Cash Proceeds of Asset
Sales applied thereto as required by Section 4.12;

 

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

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

22

 

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

 

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

 

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

 

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

 

(14)                                                                            Indebtedness
consisting of guarantees (i) by the Company of Indebtedness and any other
obligation or liability permitted to be incurred under this Indenture by
Restricted Subsidiaries of the Company, and (ii) subject to the provisions
of Section 4.17, by Restricted Subsidiaries of the Company of Indebtedness and
any other obligation or liability permitted to be incurred by the Company or
other Restricted Subsidiaries of the Company; and

 

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

 

(16)                                                                            Indebtedness
of the Company represented by the Senior Notes in an aggregate principal amount
not to exceed $350.0 million and the related guarantees by the Guarantors.

 

23

 

Notwithstanding anything in this Indenture to the
contrary, transactions contemplated pursuant to the A/R Facility shall not be
deemed to be the incurrence of Indebtedness by the Company or by any Restricted
Subsidiary.

 

“Permitted Investments” means:

 

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

 

(2)                                                                                  cash
and Cash Equivalents;

 

(3)                                                                                  Investments
existing on the Issue Date;

 

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

 

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

 

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

 

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

 

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

 

(9)                                                                                  Investments
by the Company or any Restricted Subsidiary of the Company in a Person, if as a
result of such Investment (a) such Person becomes a Restricted Subsidiary
of the Company and a Guarantor or a Wholly Owned Subsidiary

 

24

 

of the Company that is
not a Guarantor or (b) such Person is merged, consolidated or amalgamated
with or into, or transfers or conveys all or substantially all of its assets
to, or is liquidated into, the Company or a Restricted Subsidiary of the
Company that is a Guarantor or any Wholly Owned Subsidiary of the Company that
is not a Guarantor;

 

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

 

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

 

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

 

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

 

“Permitted Liens” means the following types of Liens:

 

(1)                                                                                  Liens
securing the Notes and the Guarantees;

 

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

 

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

 

25

 

(4)                                                                                  Liens
in favor of the Company on the property or assets, or any proceeds, income or
profit therefrom, of any Restricted Subsidiary.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

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

 

“Registrar” has the meaning provided in Section 2.3.

 

“Registration Rights Agreement” means the Registration
Rights Agreement by and among the Company, Deutsche Bank, JP Morgan and Banc of
America, as agents, and the lenders named therein, relating to $293.5 million
of the Notes and dated as of the Issue Date, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof.

 

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

 

28

 

“Representative” means a trustee or other trustee,
agent or representative in respect of any Designated Senior Debt; provided
that if, and for so long as, any Designated Senior Debt lacks such a
representative, then the Representative for such Designated Senior Debt shall
at all times constitute the holders of a majority in outstanding principal
amount of such Designated Senior Debt in respect of any Designated Senior Debt.

 

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

 

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

 

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

 

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

 

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

 

“SEC” means the Securities and Exchange Commission.

 

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

 

“Securityholder” means Holder.

 

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

 

29

 

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

 

“Senior Debt” means the principal of, premium, if any,
and interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on any Indebtedness of the Company, whether outstanding on the
Issue Date or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes.  Without limiting the generality of the
foregoing, “Senior Debt” shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) on, and all other amounts owing in respect of:

 

(1)                                                                                  all
monetary obligations of every nature of the Company under, or with respect to,
the Senior Credit Facility and the A/R Facility, including, without limitation,
obligations to pay principal and interest, reimbursement obligations under
letters of credit, fees, expenses and indemnities (and guarantees thereof);

 

(2)                                                                                  all
Interest Swap Obligations of the Company (and guarantees thereof by the
Company); and

 

(3)                                                                                  all
obligations of the Company (and guarantees thereof by the Company) under
Currency Agreements;

 

in each case whether outstanding on the Issue Date or
thereafter incurred.

 

Notwithstanding the foregoing, “Senior Debt” shall not
include:

 

(1)                                                                                  any
Indebtedness of the Company to a Subsidiary of the Company;

 

30

 

(2)                                                                                  Indebtedness
to, or guaranteed on behalf of, any shareholder, director, officer or employee
of the Company or any Subsidiary of the Company (including, without limitation,
amounts owed for compensation) other than a shareholder who is also a lender
(or an Affiliate of a lender) under the Senior Credit Facility;

 

(3)                                                                                  Indebtedness
to trade creditors and other amounts incurred in connection with obtaining
goods, materials or services;

 

(4)                                                                                  Indebtedness
represented by Disqualified Capital Stock;

 

(5)                                                                                  any
liability for federal, state, local or other taxes owed or owing by the
Company;

 

(6)                                                                                  that
portion of any Indebtedness incurred in violation of Section 4.9 (but, as
to any such obligation, no such violation shall be deemed to exist for purposes
of this clause (6) if the holder(s) of such obligation or their representative
shall have received an officers’ certificate of the Company to the effect that
the incurrence of such Indebtedness does not (or, in the case of revolving
credit indebtedness, that the incurrence of the entire committed amount thereof
at the date on which the initial borrowing thereunder is made would not)
violate such provisions of this Indenture); provided that the foregoing shall
not apply to any incurrence under the Senior Credit Facility pursuant to clause
(2) of the definition of “Permitted Indebtedness” which incurrence was in
violation of such clause (2) solely as a result of the increase in Attributed
Receivables Facility Indebtedness (as defined in the Senior Credit Facility as
in effect on June 24, 2002) and the lenders under the Senior Credit Facility
extended such additional amounts in good faith without knowledge of such
increase;

 

(7)                                                                                  Indebtedness
which, when incurred and without respect to any election under
Section 1111(b) of Title 11, United States Code, is without recourse
to the Company; and

 

(8)                                                                                  any
Indebtedness which is, by its express terms, subordinated or junior in right of
payment to any other Indebtedness of the Company.

 

“Senior Debt Obligations” means all obligations of the
Company for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Senior Debt, and all guarantees by the Company of any of the
foregoing.

 

“Senior Notes” means the Company’s $350,000,000
aggregate principal amount of 10-7/8% Senior Notes due 2009.

 

31

 

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

 

“Senior Subordinated Indebtedness” means (x) with
respect to the Notes, any Indebtedness of the Company that specifically
provides that such Indebtedness is to rank pari  passu with the
Notes and is not by its express terms subordinate in right of payment to any
Indebtedness of the Company which is not Senior Debt and (y) with respect to a
Guarantee, any Indebtedness of a Guarantor that specifically provides that such
Indebtedness is to rank pari  passu with such Guarantor’s
Guarantee and is not by its express terms subordinate in right of payment to
any Indebtedness of such Guarantor which is not Guarantor Senior Debt.

 

“Series A Notes” means the 131⁄2% Senior Subordinated
Notes due 2009, Series A, issued, authenticated and delivered under this
Indenture, as amended or supplemented from time to time pursuant to the terms
of this Indenture substantially in the form set forth in Exhibit A-1.

 

“Series B Notes” means the 131⁄2% Senior Subordinated
Notes due 2009, Series B (the terms of which are identical to the Series A
Notes except that the Series B Notes shall be registered under the Securities
Act, and shall not contain the restrictive legend on the face of the form of
the Series A Notes) to the extent issued in exchange for the Series A Notes
pursuant to the terms of the Registration Rights Agreement and this Indenture
substantially in the form set forth in Exhibit A-2.

 

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

 

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

 

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

 

32

 

“Subsidiary” with respect to any Person, means:

 

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

 

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

 

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

 

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

 

“THL Investor” shall mean and include Thomas
H. Lee Equity Fund, IV, L.P., Thomas H. Lee Foreign Fund, IV, L.P.,
Thomas H. Lee Equity Fund IV, L.P., 1997 Thomas H. Lee Nominee Trust
and Thomas H. Lee Charitable Investment, L.P., or any limited or general
partner, stockholder, officer, employee or consultant of such THL Investor, or
any officer, employee or consultant of THL; provided that for the purposes of
making calculations under the definition of “Change of Control,” the aggregate
amount of equity of Vertis Holdings attributable to consultants of THL and
consultants of THL Investors may not exceed $3 million.

 

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

 

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

 

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

 

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

 

“Unrestricted Subsidiary” of any Person means:

 

33

 

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

 

(2)                                                                                  any
Subsidiary of an Unrestricted Subsidiary.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

SECTION 1.2                          Incorporation
by Reference of Trust Indenture Act.

 

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

 

(a)  “Commission” means the SEC;

 

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

 

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

 

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

 

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

 

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

 

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

 

35

 

SECTION 1.3                          Rules
of Construction.

 

Unless the context otherwise requires:

 

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

 

(b)  “or” is
exclusive;

 

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

 

(d)  provisions
apply to successive events and transactions;

 

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

 

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

 

ARTICLE II

THE SECURITIES

 

SECTION 2.1                          Form
and Dating.

 

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

 

SECTION 2.2                          Execution
and Authentication.

 

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

 

36

 

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

 

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

 

The Trustee shall authenticate Series A Notes for
original issue from time to time in the aggregate principal amount not to
exceed $293,500,000, upon receipt of an Officers’ Certificate.  In addition, the Trustee or an
authenticating agent shall authenticate Series B Notes to the extent
issued pursuant to the terms of the Registration Rights Agreement upon receipt
of an Officers’ Certificate.  The
aggregate principal amount of Notes outstanding at any time may not exceed
$293,500,000 except as provided in Section 2.7.

 

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

 

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

 

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

 

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

 

SECTION 2.3                          Registrar
and Paying Agent.

 

The Company shall maintain an office or agency (which
shall be located in the Borough of Manhattan in the City of New York, State of
New York) where Notes may be presented for registration of transfer or for
exchange (the “Registrar”), an office or agency (which shall be located in the
Borough of Manhattan, City of New York, State of New York) where Notes may be
presented for payment (the “Paying Agent”) and an office or agency

 

37

 

where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. 
The Registrar shall keep a register of the Notes and of their transfer
and exchange.  The Company may have one
or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any
additional paying agent.  The Company may
act as its own Paying Agent, except that for the purposes of payments on
account of principal on the Notes pursuant to Sections 4.12 and 4.15,
neither the Company nor any Affiliate of the Company may act as Paying Agent.

 

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

 

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

 

SECTION 2.4                          Paying
Agent To Hold Money in Trust.

 

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

 

SECTION 2.5                          Securityholder
Lists.

 

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

 

38

 

SECTION 2.6                          Transfer
and Exchange.

 

Subject to the provisions of Sections 2.14 and 2.15,
when Notes are presented to the Registrar or a co-Registrar with a request from
the Holder of such Notes to register the transfer or to exchange them for an
equal principal amount of Notes of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested; provided
that every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorneys duly authorized in writing.  To permit registrations of transfers and exchanges, the Company
shall issue and execute and the Trustee shall authenticate new Notes (together
with related Guarantees executed by the Guarantors) evidencing such transfer or
exchange.  No service charge shall be
made to the Securityholder for any registration of transfer or exchange.  The Company may require from the
Securityholder payment of a sum sufficient to cover any transfer taxes or other
governmental charge that may be imposed in relation to a transfer or exchange,
but this provision shall not apply to any exchange pursuant to
Section 2.10, 4.12, 4.15 or 9.5 (in which events the Company will be
responsible for the payment of such taxes). 
The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Notes and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article III,
except the unredeemed portion of any Note being redeemed in part.

 

SECTION 2.7                          Replacement
Notes.

 

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

 

39

 

SECTION 2.8                          Outstanding
Notes.

 

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

 

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

 

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

 

SECTION 2.9                          Treasury
Notes.

 

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

 

SECTION 2.10                    Temporary
Notes.

 

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

 

40

 

SECTION 2.11                    Cancellation.

 

The Company at any time may deliver Notes to the
Trustee for cancellation.  The Registrar
and the Paying Agent shall forward to the Trustee any Notes surrendered to them
for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel all Notes surrendered
for registration of transfer, exchange, payment, replacement or cancellation and
shall (subject to the record-retention requirements of the Exchange Act)
dispose of canceled Notes unless the Company directs the Trustee to return such
Notes to the Company.  The Company may
not reissue or resell, or issue new Notes to replace, Notes that the Company
has redeemed or paid, or that have been delivered to the Trustee for
cancellation.

 

SECTION 2.12                    Defaulted
Interest.

 

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

 

SECTION 2.13                    CUSIP
Number.

 

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

 

41

 

SECTION 2.14                    Book-Entry
Provisions for Global Securities.

 

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

 

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

 

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

 

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

 

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

 

(e)                                  The
Holder of any Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through

 

42

 

Agent Members, to
take any action which a Holder is entitled to take under this Indenture or the
Notes.

 

SECTION 2.15                    Special
Transfer Provisions.

 

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

 

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

 

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

 

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

 

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

 

(i)                                     the
Registrar shall register the transfer if such transfer is being made by a
proposed transferor who has checked the box provided for on the form of Note
stating, or has otherwise advised the Company and the Registrar in writing,
that the

 

43

 

sale has been made in compliance with the provisions
of Rule 144A to a transferee who has signed the certification provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Note for its own account or an
account with respect to which it exercises sole investment discretion and that
it and any such account is a QIB within the meaning of Rule 144A, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information and
that it is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration provided by
Rule 144A; and

 

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

 

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

 

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

 

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

 

44

 

ARTICLE III

REDEMPTION

 

SECTION 3.1                          Notices
to Trustee.

 

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

 

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

 

SECTION 3.2                          Selection
of Notes To Be Redeemed.

 

If less than all of the Notes are to be redeemed, the
Trustee shall select Notes to be so redeemed in compliance with applicable
legal requirements and the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not listed
on a national securities exchange, by lot, pro rata or in such other fair and
appropriate manner chosen at the discretion of the Trustee.

 

The Trustee shall make the selection from the Notes
outstanding and not previously called for redemption.  Notes in denominations of $1,000 or less may only be redeemed in
whole.  The Trustee may select for
redemption portions (equal to $1,000 or any integral multiple thereof) of the
principal of Notes that have denominations larger than $1,000.  Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for redemption.  The Trustee shall promptly notify the
Company in writing of the Notes selected for redemption and, in the case of any
Note selected for partial redemption, the principal amount of each certificate
selected for redemption.

 

SECTION 3.3                          Notice
of Redemption.

 

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

 

The notice shall identify the Notes to be redeemed and
shall state:

 

(a)  the
Redemption Date;

 

45

 

(b)  the
redemption price to be paid;

 

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

 

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

 

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

 

(f)  if any
Note is to be redeemed in part, the portion of the principal amount (equal to
$1,000 or any integral multiple thereof) of such Note to be redeemed and that,
on or after the Redemption Date, upon surrender of such Note, a new Note or
Notes in aggregate principal amount equal to the unredeemed portion thereof
will be issued without charge to the Securityholder;

 

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

 

(h)  the CUSIP
number, if any.

 

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

 

SECTION 3.4                          Effect
of Notice of Redemption.

 

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

 

SECTION 3.5                          Deposit
of Redemption Price.

 

Prior to 10:00 a.m. New York City time on the
Redemption Date, the Company shall deposit with the Paying Agent in immediately
available funds U.S. Legal Tender

 

46

 

sufficient to pay the redemption price of and accrued interest on all
Notes or portions thereof to be redeemed on that date.

 

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

 

SECTION 3.6                          Notes
Redeemed in Part.

 

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

 

ARTICLE IV

COVENANTS

 

SECTION 4.1                          Payment
of Notes.

 

The Company shall pay the principal of and interest on
the Notes on the dates and in the manner provided in the Notes and this
Indenture.

 

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

 

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

 

SECTION 4.2                          Maintenance
of Office or Agency.

 

The Company shall maintain in the Borough of
Manhattan, the City of New York, an office or agency, where Notes may be
surrendered for registration of transfer or exchange or for presentation for
payment and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. 
The Company will give

 

47

 

prompt written notice to the Trustee of the location, and any change in
the location, of such office or agency. 
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the address of the Trustee set forth in Section 13.2.

 

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

 

The Company hereby initially designates the Corporate
Trust Office of the Trustee set forth in Section 13.2 as an agency of the
Company in accordance with Section 2.3.

 

SECTION 4.3                          Corporate
Existence.

 

Subject to Article V hereof, the Company shall do or
cause to be done, at its own cost and expense, all things necessary to, and
will cause each of its Restricted Subsidiaries to, preserve and keep in full
force and effect the corporate existence and rights (charter and statutory),
licenses and/or franchises of the Company and each of its Restricted
Subsidiaries; provided that the Company shall not be required to
preserve any such right, license or franchise, or the corporate existence of
any of its Restricted Subsidiaries, if in the judgment of the Board of
Directors or management of the Company (i) such preservation or existence
is not desirable in the conduct of business of the Company or such Restricted
Subsidiary and (ii) the loss of such right, license or franchise or the
dissolution of such Restricted Subsidiary is not adverse in any material
respect to the Holders.

 

SECTION 4.4                          Payment
of Taxes and Other Claims.

 

The Company shall and shall cause each of its
Subsidiaries to pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon its or its Subsidiaries’ income,
profits or property and (b) all material lawful claims for labor,
materials and supplies which, if unpaid, would be reasonably likely to by law
become a Lien upon its property or the property of any of its Subsidiaries; provided
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
negotiations or proceedings and for which disputed amounts adequate reserves
(in the good faith judgment of

 

48

 

the Board of Directors or management of the Company) have been made in
accordance with GAAP.

 

SECTION 4.5                          Maintenance
of Properties.

 

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

 

SECTION 4.6                          Compliance
Certificates; Notice of Default.

 

(a)                                  The
Company shall deliver to the Trustee, within 120 days after the end of its
fiscal year, an Officers’ Certificate signed by the principal executive
officer, the principal financial officer or the principal accounting officer
complying with TIA § 314(a)(4) stating (i) that a review of the
activities of the Company and the activities of its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company and the Guarantors have
kept, observed, performed and fulfilled each of their respective obligations
under this Indenture, the Notes and the Guarantees and (ii) that, to the
best knowledge of such Officer after due inquiry, each of the Company and the
Guarantors has kept, observed, performed and fulfilled, in each case in all
material respects, each and every covenant and other obligation contained in
this Indenture, the Notes and the Guarantees and is not in default in the performance
or observance of any of the terms, provisions and conditions hereof and has not
failed to comply with any other obligation hereunder (or, if a Default, Event
of Default or failure to comply with any other obligation hereunder shall have
occurred, describing with particularity all such Defaults, Events of Default or
failures to comply with any other obligation hereunder of which such Officer
may have knowledge, including, but not limited to, their status and what action
the Company is taking or proposes to take with respect thereto).

 

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

 

49

 

SECTION 4.7                          Reports.

 

(a)                                  The
Company shall deliver to the Trustee and mail to each Holder, within 15 days
after the filing of the same with the SEC, copies of its annual report and of
the information, documents and other reports, if any, which the Company is
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act.  The Company shall also comply with
the other provisions of TIA § 314(a).

 

(b)                                 If
the Company is not subject to the requirements of such Section 13 or 15(d) of
the Exchange Act, the Company shall file with the SEC, to the extent permitted,
and distribute to the Trustee and to each Holder copies of the quarterly and
annual financial information and current reports on Form 8-K that would
have been required to be filed with the SEC pursuant to the Exchange Act had
the Company been subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act.  All such financial
information shall include consolidated financial statements (including
footnotes) prepared in accordance with GAAP. 
Such annual financial information shall also include an opinion thereon
expressed by an independent accounting firm of established national
reputation.  All such consolidated
financial statements shall be accompanied by a “Management’s Discussion and
Analysis of Financial Condition and Results of Operations.”  The financial information and current
reports to be distributed to Holders pursuant to this Section 4.7 shall be
filed with the Trustee and mailed to the Holders at their respective addresses
appearing in the register of the Notes maintained by the Registrar, within the
time periods specified in the SEC’s rules and regulations.

 

(c)                                  The
Company shall deliver to the Trustee and mail to each Holder, within the
applicable time periods provided in the Senior Subordinated Credit Agreement,
all information and reports which the lenders under the Senior Subordinated
Credit Agreement are entitled to receive from Vertis Holdings, the Company and
the Company’s Subsidiaries, as the case may be, in each case to the extent not
already provided under clauses (a) and (b) of this Section 4.7.

 

(d)                                 Delivery
of such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
its covenants (as to which the Trustee is entitled to conclusively rely
exclusively on an Officers’ Certificates).

 

SECTION 4.8                          Limitation
on Restricted Payments.

 

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

 

50

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)                               the aggregate amount of
Restricted Payments made subsequent to June 24, 2002 (the amount expended
for such purposes, if other than cash, being the fair market value of such
property as determined in good faith by the Board of Directors of the Company),
shall exceed the sum of (the “Restricted Payment Basket”):

 

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

 

(w)                               100%
of the aggregate Net Cash Proceeds received by the Company from any Person
(other than a Subsidiary of the Company) from the issuance and sale subsequent
to June 24, 2002 and on or prior to the Reference Date of Qualified
Capital Stock of the Company (including Capital Stock issued upon the
conversion of

 

51

 

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

 

(x)                                   without
duplication of any amounts included in clause (iii) (w) above, 100% of the
aggregate net cash proceeds of any equity contribution received by the Company
from a holder of the Company’s Capital Stock subsequent to June 24, 2002;
plus

 

(y)                                 to
the extent that any Investment (other than a Permitted Investment) that was
made after June 24, 2002 is sold for cash or otherwise liquidated or
repaid for cash, the Net Cash Proceeds received with respect to such sale,
liquidation or repayment of such Investment, but only to the extent not
included in the calculation of Consolidated Net Income.

 

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

 

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

 

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

 

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

 

(4)                                  the
making of distributions, loans or advances in an amount not to exceed
(x) $5.0 million to pay the ordinary operating costs of Vertis
Holdings (including, without limitation, directors fees, indemnification
obligations, professional fees and expenses) related to Vertis Holdings’
ownership of Capital Stock of the Company (other than to the Equity Investors
or their Affiliates) in any fiscal year plus

 

52

 

(y) any other amounts of corporate overhead expenses
payable by Vertis Holdings which were deducted in calculating the Consolidated
Net Income of the Company in accordance with GAAP;

 

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

 

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

 

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

 

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

 

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

 

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

 

In determining the aggregate amount of the Restricted
Payments Basket in accordance with clause (iii) of paragraph (a) above, amounts
expended pursuant to clauses (1), (6) and (10) of paragraph (b) shall be
included in such calculation.

 

53

 

SECTION 4.9                          Limitation
on Incurrence of Additional Indebtedness.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

54

 

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

 

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

 

(a)                                  applicable
law;

 

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

 

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

 

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

 

(e)                                  agreements
existing on the Issue Date;

 

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

 

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

 

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

 

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

 

(j)                                     agreements
governing Indebtedness permitted to be Incurred pursuant to Section 4.9,
provided that the provisions relating to such encumbrances or restrictions
contained in such Indebtedness are no less favorable to the Company in any material
respect as determined by the Board of Directors of the Company in their
reasonable and good faith judgment than the provisions contained in the Senior
Credit Facility as in effect on the Issue Date; or

 

55

 

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

 

SECTION 4.11                    Limitation
on Liens.

 

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

 

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

 

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

 

(3)                                  in
the case of Liens securing Senior Subordinated Indebtedness of the Company, the
Notes are equally and ratably secured by a Lien on such property, assets,
proceeds, income or profit; and

 

(4)                                  in
the case of Liens securing Senior Subordinated Indebtedness of a Guarantor,
such Guarantor’s Guarantee is equally and ratably secured by a Lien on such
property, assets, proceeds, income or profit.

 

SECTION 4.12                    Limitation
on Asset Sales.

 

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

 

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

 

56

 

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

 

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

 

(a)  to prepay any Senior Debt or Guarantor
Senior Debt and, in the case of any Senior Debt or Guarantor Senior Debt under
any revolving credit facility, effect a permanent reduction in the availability
under such revolving credit facility;

 

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

 

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

 

On the 361st day after an Asset Sale or such earlier
date, if any, as the Board of Directors of the Company or of such Restricted
Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset
Sale as set forth in clauses (3)(a), (3)(b) and (3)(c) of the immediately
preceding sentence (each, a “Net Proceeds Offer Trigger Date”), such aggregate
amount of Net Cash Proceeds which have not been applied on or before such Net
Proceeds Offer Trigger Date as permitted in clauses (3)(a), (3)(b) and (3)(c)
of the immediately preceding sentence (each a “Net Proceeds Offer Amount”)
shall be applied by the Company or such Restricted Subsidiary to make an offer
to purchase for cash (the “Net Proceeds Offer”) on a date (the “Net Proceeds
Offer Payment Date”) not less than 30 nor more than 60 days following the
applicable Net Proceeds Offer Trigger Date, from all Holders on a pro  rata

 

57

 

basis, that amount of Notes equal to the Net Proceeds Offer Amount at a
price in cash equal to 100% of the principal amount of the Notes to be
purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase; provided, however, that if at any time any
non-cash consideration received by the Company or any Restricted Subsidiary of
the Company, as the case may be, in connection with any Asset Sale is converted
into or sold or otherwise disposed of for cash (other than interest, dividends
or other earnings received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
hereunder as of the date of such conversion or disposition and the Net Cash
Proceeds thereof shall be applied in accordance with this covenant.

 

(b)                                 Notwithstanding
the foregoing, if a Net Proceeds Offer Amount is less than $20 million, the
application of the Net Cash Proceeds constituting such Net Proceeds Offer
Amount to a Net Proceeds Offer may be deferred until such time as such Net
Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer
Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to
such initial Net Proceeds Offer Amount from all Asset Sales by the Company and
its Restricted Subsidiaries aggregates at least $10 million, at which time
the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting
all Net Proceeds Offer Amounts that have been so deferred to make a Net
Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds
Offer Amounts is equal to $20 million or more shall be deemed to be a Net
Proceeds Offer Trigger Date).

 

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

 

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

 

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

 

(d)                                 Within
25 days following the Net Proceeds Offer Trigger Date, the Company shall mail
or cause the Trustee to mail (in the Company’s name and at its expense)

 

58

 

notice of a Net
Proceeds Offer to the Holders of the Notes at their last registered addresses
with a copy to the Trustee and the Paying Agent.  The Net Proceeds Offer shall remain open from the time of mailing
for at least 20 Business Days and until the close of business on the third
Business Day prior to the Net Proceeds Offer Payment Date.  The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Net Proceeds Offer.  The notice, which
shall govern the terms of the Net Proceeds Offer, shall state:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

On or before the Net Proceeds Offer Payment Date, the
Company shall (i) accept for payment, on a pro rata basis among the
Notes, Notes or portions thereof tendered pursuant to the Net Proceeds Offer,
(ii) deposit with the Paying Agent money, in immediately available funds,
in an amount sufficient to pay the purchase price of all Notes or portions
thereof so tendered and accepted and (iii) deliver to the Paying Agent the
Notes so accepted together with an Officers’ Certificate setting forth the
Notes or portions thereof tendered to and accepted for payment by the
Company.  The Paying Agent shall
promptly mail or deliver to Holders of Notes so accepted payment in an amount
equal to the purchase price, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Note equal in principal amount to any
unpurchased portion of the Note surrendered. 
Any Notes not so accepted shall be promptly mailed or delivered by the
Company to the Holder thereof.  The
Company will publicly announce the results of the Net Proceeds Offer on the
first Business Day following the Net Proceeds Offer Payment Date.  The Paying Agent shall promptly deliver to
the Company the balance of any moneys held by the Paying Agent after payment to
the Holders of Notes as aforesaid.

 

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

 

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

 

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

 

60

 

SECTION 4.13                    Limitations
on Transactions with Affiliates.

 

(a)                                  The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with, or for
the benefit of, any of its Affiliates (an “Affiliate Transaction”), other than
(x) Affiliate Transactions permitted under paragraph (b) below and (y)
Affiliate Transactions entered into on terms that are fair and reasonable to,
and in the best interests of, the Company or such Restricted Subsidiary, as the
case may be, as determined in good faith by the Company’s Board of Directors; provided, however, that
for a transaction or series of related transactions with an aggregate value of
$5.0 million or more, at the Company’s option (i) such determination shall
be made in good faith by a majority of the disinterested members of the Board
of the Directors of the Company or (ii) the Board of Directors of the Company
or any such Restricted Subsidiary party to such Affiliate Transaction shall
have received a favorable opinion from a nationally recognized investment
banking firm that such Affiliate Transaction is fair from a financial point of
view to the Company or such Restricted Subsidiary; provided, further, that
for a transaction or series of related transactions with an aggregate value of
$20.0 million or more, the Board of Directors of the Company shall have
received a favorable opinion from a nationally recognized investment banking
firm that such Affiliate Transaction is fair from a financial point of view to
the Company or such Restricted Subsidiary.

 

(b)                                 The
foregoing restrictions shall not apply to:

 

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

 

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

 

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

 

(4)                                  Restricted
Payments permitted by this Indenture;

 

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

 

(6)                                  Permitted
Investments or Permitted Liens;

 

61

 

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

 

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

 

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

 

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

 

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

 

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

 

Notwithstanding the foregoing, the Company shall only
pay one-half of any management or other fees or expenses permitted under
clauses (9), (10) and (11) to the Equity Investors or their Affiliates at
a time when a Default or an Event of Default exists; provided

 

62

 

that such unpaid fees and/or expenses shall be paid at such time as
such Default or Event of Default shall have been cured or waived.

 

SECTION 4.14                    Prohibition
on Incurrence of Senior Subordinated Debt.

 

Neither the Company nor any Guarantor shall incur
Indebtedness that is senior in right of payment to the Notes or such
Guarantor’s Guarantee and subordinate in right of payment to any other
Indebtedness of the Company or such Guarantor, as the case may be.

 

SECTION 4.15                    Change
of Control.

 

(a)                                  Upon
the occurrence of a Change of Control (the date of such occurrence, the “Change
of Control Date”), each Holder shall have the right to require that the Company
purchase all or a portion of such Holder’s Notes pursuant to an offer to
purchase (the “Change of Control Offer”) at a purchase price equal to 101% of
the aggregate principal amount thereof plus accrued interest thereon to the
date of repurchase.

 

Prior to the mailing of the notice to the Holders
provided for in paragraph (b) below but in any event within 30 days
following the date upon which the Company obtains actual knowledge of any
Change of Control, the Company hereby covenants to (i) repay in full and
terminate all commitments under Indebtedness under the Senior Credit Facility
and all other Senior Debt the terms of which require repayment upon a Change of
Control or offer to repay in full and terminate all commitments under all Indebtedness
under the Senior Credit Facility and all other such Senior Debt and to repay
the Indebtedness of each lender which has accepted such offer or
(ii) obtain the requisite consents under the Senior Credit Facility and
all other Senior Debt to permit the repurchase of the Notes as provided for in
paragraph (c) below.

 

The Company shall first comply with the covenant in
the immediately preceding sentence before it shall be required to repurchase
the Notes pursuant to this Section 4.15. 
The Company’s failure to comply with the covenant described in the
immediately preceding paragraph (and any failure to send the notice referred to
in clause (b) below as a result of the prohibition in the second preceding
sentence) may (with notice and lapse of time) constitute an Event of Default
described in Section 6.1(c) but shall not constitute an Event of Default
described in Section 6.1(a) or (b).

 

(b)                                 Notice
of a Change of Control Offer shall be sent, by first class mail, by the Company
within 30 days following the date upon which the Company obtains actual
knowledge that a Change of Control occurred to the Holders of Notes at their
last registered addresses with a copy to the Trustee and the Paying Agent.  The date on which Notes are purchased
pursuant to the Change of Control Offer shall be a business day that is no
earlier than 30 days nor later than 60 days from the date such notice is mailed
(the “Change of

 

63

 

Control Payment
Date”).  The Change of Control Offer
shall remain open from the time of mailing for at least 20 Business Days and
until 3:00 p.m., New York City time, on the third Business Day prior to the
Change of Control Payment Date.  The
notice, which shall govern the terms of the Change of Control Offer, shall
include such disclosures as are required by law and shall state:

 

(i)                                     that
the Change of Control Offer is being made pursuant to this Section 4.15
and that all Notes will be accepted for payment;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

64

 

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

 

(d)                                 The
Company shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act, and any other securities laws or regulations
(including Rule 14e-1 under the Exchange Act) in connection with the purchase
of Notes pursuant to a Change of Control Offer.  To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.15, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.15 by virtue
thereof.

 

SECTION 4.16                    Waiver
of Stay; Extension of Usury Laws.

 

The Company covenants (to the extent that it may
lawfully do so) that it shall not, nor shall it cause or permit any of the
Guarantors to, at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive the Company or any
Guarantor from paying all or any portion of the principal of or interest on the
Notes or the Guarantees, as applicable, as contemplated herein or in the Notes
and the Guarantees, wherever enacted, now or at any time hereafter in force, or
that may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each of the Company and the Guarantors hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

 

SECTION 4.17                    Limitation
on Guarantees by Restricted Subsidiaries.

 

The Company shall not permit any of its Domestic
Restricted Subsidiaries that is not a Guarantor (whether formed or acquired
before or after the Issue Date), directly or indirectly, by way of the pledge
of any intercompany note or otherwise, to assume, guarantee or in any other
manner become liable with respect to any Indebtedness of the Company (other

 

65

 

than:  (1) Indebtedness under
Currency Agreements in reliance on clause (5) of the definition of Permitted
Indebtedness; or (2) Interest Swap Obligations incurred in reliance on
clause (4) of the definition of Permitted Indebtedness), unless, in any such
case:

 

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

 

(2)                                                                                 (a)
if any such assumption, guarantee or other liability of such Restricted Subsidiary
is provided in respect of Senior Debt, the guarantee or other instrument
provided by such Restricted Subsidiary in respect of such Senior Debt may be
superior to such guarantee of the Notes pursuant to subordination provisions no
less favorable to the Holders of the Notes than those contained in this
Indenture and (b) if such assumption, guarantee or other liability of such
Restricted Subsidiary is provided in respect of Indebtedness that is expressly
subordinated to the Notes, the guarantee or other instrument provided by such
Restricted Subsidiary in respect of such Subordinated Obligation shall be
subordinated to such guarantee at least to the same extent that the Notes are
subordinated to Senior Debt.

 

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

 

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

 

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

 

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

 

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

 

66

 

SECTION 4.18                    Limitation
on Preferred Stock of Subsidiaries.

 

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

 

SECTION 4.19                    Conduct
of Business.

 

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

 

ARTICLE V

SUCCESSOR CORPORATION

 

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

 

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

 

(1)                                  either:

 

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

 

(b)                                 the
surviving Person is a corporation existing under the laws of the United States,
any state thereof or the District of Columbia and such surviving Person shall
expressly assume all the obligations of the Company under the Notes and this
Indenture;

 

(2)                                  immediately
after giving effect to such transaction (on a pro  forma basis,
including any Indebtedness incurred or anticipated to be incurred in connection
with such transaction and the other adjustments that are referred to in the
definition of “Consolidated Fixed Charge Coverage Ratio”), the Company or the
surviving Person

 

67

 

is able to incur
at least $1.00 of additional Indebtedness (other than Permitted Indebtedness)
in compliance with Section 4.9;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

68

 

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

 

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

 

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

 

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

 

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

 

SECTION 5.2                          Successor
Entity Substituted.

 

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

 

69

 

ARTICLE VI

DEFAULT AND REMEDIES

 

SECTION 6.1                          Events
of Default.

 

“Event of Default”, whenever used herein, means any
one of the following events (whatever the reason for such Event of Default and
whether or not it shall be occasioned or prohibited by the provisions of
Article X or Article XII and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

 

(a)                                     the
failure to pay interest on any Notes when the same becomes due and payable and
the default continues for a period of 30 days (whether or not such
payments shall be prohibited by the subordination provisions of this
Indenture);

 

(b)                                    the
failure to pay the principal on any Notes, when such principal becomes due and
payable, at maturity, upon redemption or otherwise (including the failure to
make a payment to purchase Notes tendered pursuant to a Change of Control Offer
or a Net Proceeds Offer) (whether or not such payments shall be prohibited by
the subordination provisions of this Indenture);

 

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

 

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

 

70

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(1)                                     commences
a voluntary case or proceeding, or

 

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

 

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

 

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

 

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

 

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

 

71

 

SECTION 6.2                          Acceleration.

 

(a)                                  If
an Event of Default (other than an Event of Default specified in Section 6.1(f)
or 6.1(g) above with respect to the Company) shall occur and be continuing,
then, and in every such case, unless the principal of all the Notes shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the then outstanding Notes, by notice
in writing to the Company and the Representative under the Senior Credit
Facility (and to the Trustee if given by Holders) (the “Acceleration Notice”),
may declare all of the unpaid principal of and accrued interest thereon to be,
and the same (x) shall become immediately due and payable, or (y) if
there are any amounts outstanding under the Senior Credit Facility, shall become
immediately due and payable upon the first to occur of an acceleration under
the Senior Credit Facility or five business days after receipt by the Company
and the Representative under the Senior Credit Facility of such Acceleration
Notice but only if such Event of Default is then continuing.  If an Event of Default specified in Section
6.1(f) or 6.1(g) with respect to the Company occurs and is continuing, all
unpaid principal of and accrued interest due and payable on all the outstanding
Notes shall ipso  facto become and be immediately due and payable
without any declaration, notice or other act on the part of the Trustee or any
Holder.

 

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

 

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

 

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

 

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

 

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

 

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

 

72

 

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

 

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

 

SECTION 6.3                          Other
Remedies.

 

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

 

The Trustee may maintain a proceeding even if it does
not possess any of the Notes or does not produce any of them in the proceeding,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.

 

SECTION 6.4                          Waiver
of Past Default.

 

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

 

SECTION 6.5                          Control
by Majority.

 

The Holders of a majority in aggregate principal
amount of the then outstanding Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it, including, without limitation, any remedies
provided for in Section 6.3.  However,
the Trustee may refuse to follow any direction that conflicts with law, the
Notes or this Indenture, or that the Trustee determines may be unduly
prejudicial to the rights of another Securityholder or that may involve the
Trustee in personal liability.

 

73

 

SECTION 6.6                          Limitation
on Suits.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

SECTION 6.7                          Rights
of Holders To Receive Payment.

 

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

 

SECTION 6.8                          Collection
Suit by Trustee.

 

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

 

74

 

SECTION 6.9                          Trustee
May File Proofs of Claim.

 

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

 

SECTION 6.10                    Priorities.

 

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

 

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

 

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

 

Third:  to the
Company.

 

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

 

SECTION 6.11                    Undertaking
for Costs.

 

In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the

 

75

 

costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. 
This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.7, or a suit by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the outstanding
Notes.

 

SECTION 6.12                    Rights
and Remedies Cumulative.

 

No right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

 

SECTION 6.13                    Delay
or Omission Not Waiver.

 

No delay or omission of the Trustee or of any Holder
of any Note to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. 
Every right and remedy given by this Article VI or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.

 

ARTICLE VII

TRUSTEE

 

SECTION 7.1                          Duties
of Trustee.

 

(a)                                  If
an Event of Default has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent Person would exercise
or use under the circumstances in the conduct of his own affairs.

 

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

 

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

 

76

 

(ii)                                     In
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. 
However, in the case of any such certificate or opinions which by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.

 

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

 

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

 

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

 

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

 

(d)                                 No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.

 

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

 

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

 

SECTION 7.2                          Rights
of Trustee.

 

Subject to Section 7.1:

 

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

 

77

 

signed or presented by the proper Person.  The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.

 

(b)            Before
the Trustee acts or refrains from acting with respect to any matter
contemplated by this Indenture, it may require an Officers’ Certificate or an
Opinion of Counsel, which shall conform to the provisions of
Section 13.5.  The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.

 

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

 

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

 

(e)            The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Holders, pursuant to the provisions of this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.

 

(f)                                       The
Trustee may consult with counsel of its selection and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.

 

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

 

(h)                                    The
Trustee may request that the Company deliver an Officers’ Certificate setting
forth the names of individuals and or titles of officers authorized at such time
to take specified actions pursuant to this Indenture, which Officers’
Certificate may be signed by any person authorized to sign an Officers’
Certificate,

 

78

 

including any person specified as so authorized in any
such certificate previously delivered and not superseded.

 

SECTION 7.3                          Individual
Rights of Trustee.

 

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

 

SECTION 7.4                          Trustee’s
Disclaimer.

 

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

 

SECTION 7.5                          Notice
of Defaults.

 

If a Default or an Event of Default with respect to
the Notes occurs and is continuing and is actually known to a Responsible Officer,
the Trustee shall mail to each Holder a notice of the Default or Event of
Default within 60 days after it occurs or, if later, within 10 days after such
Default or Event of Default becomes known to the Trustee, unless such Default
or Event of Default has been cured. 
Except in the case of a Default or Event of Default in the payment of
principal of or interest on any Note, including an acceleration, and the
failure to make payment when required by Sections 4.12 and 4.15, the
Trustee may withhold the notice to the Holders if and so long as a committee of
its Responsible Officers determines in good faith that withholding the notice
is in the interest of the Holders.

 

SECTION 7.6                          Reports
by Trustee to Holders.

 

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

 

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

 

79

 

SECTION 7.7                          Compensation
and Indemnity.

 

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

 

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

 

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

 

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

 

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

 

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SECTION 7.8                          Replacement
of Trustee.

 

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

 

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

 

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

 

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

 

(d)  the
Trustee becomes incapable of acting.

 

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

 

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

 

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

 

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

 

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

 

81

 

SECTION 7.9                          Successor
Trustee by Merger, Etc.

 

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

 

SECTION 7.10                    Eligibility;
Disqualification.

 

This Indenture shall always have a Trustee who
satisfies the requirements of TIA § 310(a)(1) and (2).  The Trustee shall have a combined capital
and surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.  The Trustee
shall comply with TIA § 310(b); provided that there shall be
excluded from the operation of TIA § 310(b)(1) any indenture or indentures
under which other securities, or certificates of interest or participation in
other securities, of the Company are outstanding if the requirements for such
exclusion set forth in TIA § 310(b)(1) are met.  The provisions of TIA § 310 shall apply to the Company, as
obligor of the Notes.

 

SECTION 7.11                    Preferential
Collection of Claims Against Company.

 

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

 

ARTICLE VIII

DISCHARGE OF INDENTURE; DEFEASANCE

 

SECTION 8.1                          Termination
of the Company’s Obligations.

 

The Company may terminate its obligations under the
Notes and the obligations of the Guarantors under the Guarantees, as the case
may be, and this Indenture, except those obligations referred to in the
penultimate paragraph of this Section 8.1, if all Notes previously
authenticated and delivered (other than destroyed, lost or stolen Notes which
have been replaced or paid or Notes for whose payment U.S. Legal Tender has
theretofore been deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company, as provided in Section 8.5) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:

 

82

 

(a)  either (i)
pursuant to Article III, the Company shall have given notice to the Trustee and
mailed a notice of redemption to each Holder of the redemption of all of the
Notes under arrangements satisfactory to the Trustee for the giving of such
notice or (ii) all Notes have otherwise become due and payable hereunder;

 

(b)  the
Company shall have irrevocably deposited or caused to be deposited with the
Trustee, as trust funds in trust solely for the benefit of the Holders for that
purpose, U.S. Legal Tender in such amount as is sufficient without
consideration of reinvestment of interest, to pay principal of, premium, if
any, and interest on the outstanding Notes to maturity or redemption; provided
that the Trustee shall have been irrevocably instructed to apply such U.S.
Legal Tender to the payment of said principal, premium, if any, and interest
with respect to the Notes; and provided, further, that from and
after the time of deposit, the money deposited shall not be subject to the
rights of holders of Senior Debt pursuant to the provisions of Article X and
Article XII;

 

(c)  no Default
or Event of Default with respect to this Indenture, the Notes or the Guarantees
shall have occurred and be continuing on the date of such deposit or shall
occur immediately after giving effect to such deposit and such deposit will not
result in a breach or violation of, or constitute a default under, any other
instrument to which the Company is a party or by which it is bound;

 

(d)  the
Company shall have paid all other sums payable by it hereunder; and

 

(e)  the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent providing for or
relating to the termination of the Company’s and the Guarantors’ obligations
under the Notes and the Guarantees, as the case may be, and this Indenture have
been complied with.  Such Opinion of
Counsel shall also state that such satisfaction and discharge does not result in
a default under the Senior Credit Facility (if then in effect) or any other
material agreement or material instrument then known to such counsel that binds
or affects the Company.

 

Notwithstanding the foregoing paragraph, the Company’s
obligations in Sections 2.5, 2.6, 2.7, 2.10, 4.1, 4.2, 7.7, 8.5 and 8.6 shall
survive until the Notes are no longer outstanding pursuant to the last
paragraph of Section 2.8.  After the
Notes are no longer outstanding, the Company’s obligations in Sections 7.7, 8.5
and 8.6 shall survive.

 

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

 

83

 

SECTION 8.2                          Legal
Defeasance and Covenant Defeasance.

 

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

 

(b)                                 Upon
the Company’s exercise under paragraph (a) hereof of the option applicable to
this paragraph (b), each of the Company and the Guarantors shall, subject to
the satisfaction of the conditions set forth in Section 8.3, be deemed to have
been discharged from its obligations with respect to all outstanding Notes on
the date the conditions set forth below are satisfied (hereinafter, “Legal
Defeasance”).  For this purpose, Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be “outstanding” only for the purposes of Section 8.4
hereof and the other Sections of this Indenture referred to in (i) and (ii)
below, and to have satisfied all its other obligations under such Notes and
this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), and Holders
of the Notes and any amounts deposited under Section 8.3 hereof shall
cease to be subject to any obligations to, or the rights of, any holder of
Senior Debt under Article X or otherwise, except for the following provisions,
which shall survive until otherwise terminated or discharged hereunder:  (i) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.4 hereof,
and as more fully set forth in such Section, payments in respect of the
principal of and interest on such Notes when and to the extent such payments
are due, (ii) the Company’s obligations with respect to such Notes under
Article II and Section 4.2 hereof, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and the Company’s obligations in connection
therewith, including Section 7.7 hereof and (iv) this Article VIII.  Subject to compliance with this Article
VIII, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.

 

(c)                                  Upon
the Company’s exercise under paragraph (a) hereof of the option applicable to
this paragraph (c), each of Vertis Holdings, the Company and the Guarantors
shall, subject to the satisfaction of the conditions set forth in Section 8.3
hereof, be released from its obligations under the covenants contained in
Sections 4.8 through 4.15, Sections 4.18 and 4.19 and Article V hereof with respect
to the outstanding Notes on and after the date the conditions set forth below
are satisfied (hereinafter, “Covenant Defeasance”), and the Notes shall
thereafter be deemed not “outstanding” for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
“outstanding” for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes) and Holders of
the Notes and any amounts deposited under Section 8.3 hereof shall cease
to be subject to any obligations to, or the rights of, any holder of Senior
Debt under Article X,

 

84

 

Article XII
or otherwise.  For this purpose, such
Covenant Defeasance means that, with respect to the outstanding Notes, the
Company and its Subsidiaries may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event or Default under Section 6.1(c)
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. 
In addition, upon the Company’s exercise under paragraph (a) hereof of
the option applicable to this paragraph (c), subject to the satisfaction of the
conditions set forth in Section 8.3 hereof, Sections 6.1(c) and 6.1(e) shall
not constitute Events of Default.

 

SECTION 8.3                          Conditions
to Legal Defeasance or Covenant Defeasance.

 

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

 

In order to exercise either Legal Defeasance or
Covenant Defeasance:

 

(a)  the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, U.S. Legal Tender or U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in accordance
with their terms, will provide, not later than one day before the due date of
any payment on the Notes, U.S. Legal Tender, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized firm
of independent public accountants, to pay the principal of, premium, if any, and
interest on the Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, of such principal or
installment of principal of or interest on the Notes; provided that the
Trustee shall have received an irrevocable written order from the Company
instructing the Trustee to apply such U.S. Legal Tender or the proceeds of such
U.S. Government Obligations to said payments with respect to the Notes;

 

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

 

85

 

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

 

(c)  in the
case of an election under Section 8.2(c) hereof, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States reasonably
acceptable to the Trustee confirming that the Holders of the Notes will not
recognize income, gain or loss for federal income tax purposes as a result of
such Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred;

 

(d)  no Default
or Event of Default or event which with notice or lapse of time or both would
become a Default or an Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the incurrence of Indebtedness all or a portion
of the proceeds of which will be used to defease the Notes pursuant to this
Article VIII concurrently with such incurrence) or insofar as Sections 6.1(f)
and 6.1(g) hereof are concerned, at any time in the period ending on the 91st
day after the date of such deposit;

 

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

 

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

 

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

 

(h)  the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that (i) the trust funds will not be subject to any rights of any holders
of Senior Debt, including, without limitation, those arising under this
Indenture, and (ii) assuming no intervening bankruptcy or insolvency of
the Company between the date of deposit and the 91st day following the deposit
and that no Holder is an insider of the Company, after the 91st day following
the deposit, the trust funds will not be subject to the effect of any
applicable Bankruptcy Law.

 

86

 

Notwithstanding the foregoing, the Opinion of Counsel
required by clause (b) above of this Section 8.3 need not be delivered if all
Notes not theretofore delivered to the Trustee for cancellation (i) have become
due and payable, (ii) will become due and payable on the Maturity Date
within one year or (iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.

 

SECTION 8.4                          Application
of Trust Money.

 

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

 

The Company shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the U.S.
Legal Tender or U.S. Government Obligations deposited pursuant to
Section 8.3 hereof or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of the outstanding Notes.

 

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

 

SECTION 8.5                          Repayment
to the Company.

 

Subject to this Article VIII, the Trustee and the
Paying Agent shall promptly pay to the Company upon request any excess U.S.
Legal Tender or U.S. Government Obligations held by them at any time and
thereupon shall be relieved from all liability with respect to such money.  The Trustee and the Paying Agent shall pay
to the Company upon request any money held by them for the payment of principal
or interest that remains unclaimed for two years; provided that the
Trustee or such Paying Agent, before being required to make any payment, may at
the expense of the Company cause to be published once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money notice that such money remains unclaimed and that after a date specified
therein which shall be at least 30 days from the date of such publication or
mailing any

 

87

 

unclaimed balance of such money then remaining will be repaid to the
Company.  After payment to the Company,
Holders entitled to such money must look to the Company for payment as general
creditors unless an applicable law designates another Person.

 

SECTION 8.6                          Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any
U.S. Legal Tender or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company’s obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to this Article VIII until such time as the Trustee or
Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with this Article VIII; provided
that if the Company has made any payment of interest on or principal of any
Notes because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the U.S. Legal Tender or U.S. Government Obligations held by the Trustee
or Paying Agent.

 

ARTICLE IX

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION 9.1                          Without
Consent of Holders.

 

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

 

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

 

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

 

(c)  to provide
for collateral for the Notes;

 

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

 

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

 

88

 

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

 

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

 

SECTION 9.2                          With
Consent of Holders.

 

Subject to Section 6.7 and the provisions of this
Section 9.2, the Company and the Guarantors, when authorized by resolutions of
their respective Boards of Directors (copies of which shall be delivered to the
Trustee), and the Trustee may amend or supplement this Indenture with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding. 
Subject to Section 6.7 and the provisions of this Section 9.2, the
Holders of, in the aggregate, at least a majority in principal amount of the
then outstanding Notes affected may waive compliance by the Company with any
provision of this Indenture without notice to any other Securityholder.  However, without the consent of each
Securityholder affected, an amendment, supplement or waiver, including a waiver
pursuant to Section 6.4 may not:

 

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

 

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

 

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

 

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

 

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

 

89

 

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

 

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

 

(h)                                 modify
or change any provision of this Indenture or the related definitions affecting
the subordination or ranking of the Notes or any Guarantee in a manner which
adversely affects the Holders; or

 

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

 

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

 

Notwithstanding the foregoing, no amendment shall
modify any provision of Article X or Article XII of this Indenture without
the consent of each holder of any then outstanding Designated Senior Debt.

 

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

 

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

 

SECTION 9.3                          Compliance
with Trust Indenture Act.

 

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

 

90

 

SECTION 9.4                          Revocation
and Effect of Consents.

 

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

 

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

 

After an amendment, supplement or waiver becomes
effective, it shall bind every Securityholder unless it makes a change
described in any of clauses (a) through (l) of Section 9.2.  In that case the amendment, supplement or
waiver shall bind each Holder of a Note who has consented to it.

 

SECTION 9.5                          Notation
on or Exchange of Notes.

 

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

 

SECTION 9.6                          Trustee
To Sign Amendments, Etc.

 

The Trustee shall sign any amendment, supplement or
waiver authorized pursuant to this Article IX if the amendment, supplement or
waiver does not adversely affect

 

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

 

ARTICLE X

SUBORDINATION

 

SECTION 10.1                    Notes
Subordinated to Senior Debt.

 

Anything herein to the contrary notwithstanding, the
Company, for itself and its successors, and each Holder, by his acceptance of
Notes, agrees that the payment of the principal of and interest on the Notes is
subordinated, to the extent and in the manner provided in this Article X, to the
prior payment in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Senior Debt, of all Senior
Debt Obligations (including the Senior Debt Obligations with respect to the
Senior Credit Facility, whether outstanding on the Issue Date or thereafter
incurred).

 

This Article X shall constitute a continuing
offer to all Persons who become holders of, or continue to hold, Senior Debt,
and such provisions are made for the benefit of the holders of Senior Debt and
such holders are made obligees hereunder and any one or more of them may
enforce such provisions.

 

SECTION 10.2                    Suspension
of Payment When Senior Debt Is in Default.

 

(a)                                  If
any default occurs and is continuing in the payment when due, whether at maturity,
upon any redemption, by declaration or otherwise, of any principal of, interest
on, unpaid drawings for letters of credit issued in respect of, or regularly
accruing fees with respect to, any Senior Debt (including, without limitation,
guarantees of the foregoing items which constitute Senior Debt) (a “Payment
Default”), then no payment or distribution of any kind or character shall be
made by or on behalf of the Company or any other Person on its or their behalf
with respect to any Obligations or to acquire any of the Notes for cash or
property or otherwise until such Payment Default (and all other Payment
Defaults) shall have been cured or waived in accordance with the terms of the
documentation governing the respective Senior Debt or ceased to exist or all
Senior Debt with respect to which any

 

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Payment Default
has occurred and is continuing shall have been discharged or paid in full in
cash or Cash Equivalents.

 

(b)                                 If
any event of default (other than a Payment Default) occurs and is continuing
with respect to any Designated Senior Debt (as such event of default is defined
in the instrument creating or evidencing such Designated Senior Debt)
permitting the holders of such Designated Senior Debt then outstanding to
accelerate the maturity thereof (a “Non-payment Default”), and if the
Representative for the respective issue of Designated Senior Debt gives notice
of the event of default to the Trustee stating that such notice is a payment
blockage notice (a “Payment Blockage Notice”), then during the period (the
“Payment Blockage Period”) beginning upon the delivery of such Payment Blockage
Notice and ending on the earlier of the 180th day after such delivery and the
date on which (x) all events of default with respect to all Designated
Senior Debt have been cured or waived or cease to exist, (y) all
Designated Senior Debt with respect to which any such event of default has
occurred and is continuing is discharged or paid in full in cash or Cash Equivalents,
or (z) the Trustee receives notice thereof from the Representative for the
respective issue of Designated Senior Debt terminating the Payment Blockage
Period, neither the Company nor any other Person on its behalf shall
(i) make any payment of any kind or character with respect to any
Obligations or (ii) acquire any of the Notes for cash or property or
otherwise.  Notwithstanding anything
herein to the contrary, (x) in no event will a Payment Blockage Period
extend beyond 180 days from the date the applicable Payment Blockage Notice is
received by the Trustee and (y) only one such Payment Blockage Period may
be commenced within any 360 consecutive days. 
For all purposes of this Section 10.2(b), no event of default which
existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Debt shall be, or be
made, the basis for the commencement of a second Payment Blockage Period by the
Representative of such Designated Senior Debt whether or not within a period of
360 consecutive days, unless such event of default shall have been cured or
waived for a period of not less than 90 consecutive days (it being acknowledged
that any subsequent action, or any breach of any financial covenants for a period
ending after the date of commencement of such Payment Blockage Period that, in
either case, would give rise to an event of default pursuant to any provisions
under which an event of default previously existed or was continuing shall
constitute a new event of default for this purpose).

 

(c)                                  In
the event that, notwithstanding the foregoing, any payment shall be received by
the Trustee, any Holder or any Paying Agent when such payment is prohibited by
the foregoing provisions of this Section 10.2, such payment shall be held
in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Debt (pro rata to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, as their respective interests may appear.  The Trustee and any Paying Agent shall be
entitled to rely on information regarding amounts then due and owing on the
Senior Debt, if any, received from the holders of Senior Debt (or their
Representatives)

 

93

 

or, if such
information is not received from such holders or their Representatives, from
the Company and only amounts included in the information provided to the
Trustee and any Paying Agent shall be paid to the holders of Senior Debt.

 

Nothing contained in this Article X shall limit
the right of the Trustee or the Holders to take any action to accelerate the
maturity of the Notes and all other Obligations pursuant to Article VI or
to pursue any rights or remedies hereunder; provided that all Senior
Debt thereafter due or declared to be due shall first be paid in full in cash
or Cash Equivalents before the Holders are entitled to receive any payment of
any kind or character with respect to Obligations.

 

SECTION 10.3                                Obligations
Subordinated to Prior Payment of All Senior Debt on Dissolution, Liquidation or
Reorganization of Company.

 

(a)                                  Upon
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any total or partial
liquidation, dissolution, winding-up, reorganization, assignment for the
benefit of creditors or marshaling of assets and liabilities of the Company or
in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Company or its assets, whether voluntary or
involuntary, all Senior Debt Obligations due or to become due shall first be
paid in full in cash or Cash Equivalents, or such payment duly provided for to
the satisfaction of the holders of Senior Debt, before any payment or
distribution of any kind or character is made on account of any Obligations or
for the acquisition of any of the Notes for cash or property or otherwise.  Upon any such dissolution, winding-up,
liquidation, reorganization, receivership or similar proceeding, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Holders or the Trustee would be
entitled, except for the provisions hereof, shall be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders, the Trustee or any
Paying Agent if received by them, directly to the holders of Senior Debt (pro
rata to such holders on the basis of the respective amounts of Senior Debt
held by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Debt may have
been issued, as their respective interests may appear, for application to the
payment of Senior Debt remaining unpaid until all such Senior Debt has been
paid in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Debt.

 

(b)                                 To
the extent any payment of Senior Debt (whether by or on behalf of the Company,
as proceeds of security or enforcement of any right of setoff or otherwise) is
declared to be fraudulent or preferential, set aside or required to be paid to
any receiver,

 

94

 

trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Debt or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.

 

It is further agreed that any diminution (whether
pursuant to court decree or otherwise, including without limitation for any of
the reasons described in the preceding sentence) of the Company’s obligation to
make any distribution or payment pursuant to any Senior Debt, except to the
extent such diminution occurs by reason of the repayment (which has not been
disgorged or returned) of such Senior Debt in cash or Cash Equivalents, shall
have no force or effect for purposes of the subordination provisions contained
in this Article X, with any turnover of payments as otherwise calculated
pursuant to this Article X to be made as if no such diminution had
occurred.

 

(c)                                  In
the event that, notwithstanding the foregoing, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, shall be received by any Holder when such payment or distribution
is prohibited by this Section 10.3, such payment or distribution shall be held
in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Debt (pro rata to such holders on the basis of the
respective amount of Senior Debt held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of Senior Debt remaining
unpaid until all such Senior Debt has been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Debt.

 

(d)                                 The
consolidation of the Company with, or the merger of the Company with or into,
another corporation, partnership, trust or limited liability company or the
liquidation or dissolution of the Company following the conveyance or transfer
of all or substantially all of its assets, to another corporation, partnership,
trust or limited liability company upon the terms and conditions provided in
Article V hereof and as long as permitted under the terms of the Senior
Debt shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, assume
the Company’s obligations hereunder in accordance with Article V hereof.

 

SECTION 10.4                                Payments
May Be Paid Prior to Dissolution.

 

Nothing contained in this Article X or elsewhere in
this Indenture shall prevent (i) the Company, except under the conditions
described in Sections 10.2 and 10.3, from making payments at any time for the
purpose of making payments of principal of and interest

 

95

 

on the Obligations, or from depositing with the Trustee or any Paying
Agent, any monies for such payments, or (ii) in the absence of actual
knowledge by the Trustee or any Paying Agent that a given payment would be
prohibited by Section 10.2 or 10.3, the application by the Trustee and any
Paying Agent of any monies deposited with them for the purpose of making such
payments of principal of, and interest on, the Obligations to the Holders
entitled thereto unless at least one Business Day prior to the date upon which
such payment would otherwise become due and payable Trustee and any Paying
Agent shall have actually received the written notice provided for in the first
sentence of Section 10.2(b) (provided that, notwithstanding the foregoing,
the Holders receiving any payments made in contravention of Section 10.2 and/or
10.3 (and the respective such payments) shall otherwise be subject to the
provisions of Section 10.2 and Section 10.3). 
The Company shall give prompt written notice to the Trustee and any
Paying Agent of any dissolution, winding-up, liquidation or reorganization of
the Company, although any delay or failure to give any such notice shall have
no effect on the subordination provisions contained herein.

 

SECTION 10.5                                Holders
To Be Subrogated to Rights of Holders of Senior Debt.

 

Subject to the payment in full in cash or Cash
Equivalents of all Senior Debt, the Holders shall be subrogated to the rights
of the holders of Senior Debt to receive payments or distributions of cash, property
or securities of the Company applicable to the Senior Debt until the
Obligations shall be paid in full; and, for the purposes of such subrogation,
no such payments or distributions to the holders of the Senior Debt by or on
behalf of the Company, or by or on behalf of the Holders by virtue of this
Article X, which otherwise would have been made to the Holders shall, as
between the Company and the Holders, be deemed to be a payment by the Company
to or on account of the Senior Debt, it being understood that the provisions of
this Article X are and are intended solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Debt, on the other hand.

 

SECTION 10.6                                Obligations
of the Company Unconditional.

 

Nothing contained in this Article X or elsewhere
in this Indenture is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Debt, and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and any interest on the Obligations as and when the
same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Company other than the holders of the Senior Debt, nor shall anything
herein or therein prevent any Holder or the Trustee on its behalf from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article X,
of the holders of Senior Debt

 

96

 

in respect of cash, property or securities of the Company received upon
the exercise of any such remedy.

 

SECTION 10.7                                Reliance
on Judicial Order or Certificate of Liquidating Agent.

 

Upon any payment or distribution of assets of the
Company referred to in this Article X, the Trustee, subject to the provisions
of Article VII hereof, and the Holders shall be entitled to rely upon any order
or decree made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization
or similar case or proceeding is pending, or upon a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the Senior Debt and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article X.

 

SECTION 10.8                                Subordination
Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior
Debt.

 

No right of any present or future holders of any
Senior Debt to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with.

 

Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Debt may, at any time and from time
to time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders and without impairing or releasing
the subordination provided in this Article X or the obligations hereunder
of the Holders to the holders of the Senior Debt, do any one or more of the
following:  (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Debt, or otherwise amend or supplement in any manner Senior Debt, or any
instrument evidencing the same or any agreement under which Senior Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt;
(iii) release any Person liable in any manner for the payment or
collection of Senior Debt; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.

 

97

 

SECTION 10.9                    Holders
Authorize Trustee To Effectuate Subordination of Obligations.

 

Each Holder authorizes and expressly directs the
Trustee on its behalf to take such action as may be necessary or appropriate to
effectuate, as between the holders of Senior Debt and the Holders, the
subordination provided in this Article X, and appoints the Trustee its
attorney-in-fact for such purposes, including, in the event of any dissolution,
winding-up, liquidation or reorganization of the Company (whether in
bankruptcy, insolvency, receivership, reorganization or similar proceedings or
upon an assignment for the benefit of credits or otherwise) tending towards
liquidation of the business and assets of the Company, the filing of a claim
for the unpaid balance of its Obligations and accrued interest in the form
required in those proceedings.

 

If the Trustee does not file a proper claim or proof
of debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of the
Senior Debt or their Representative are or is hereby authorized to have the
right to file and are or is hereby authorized to file an appropriate claim for
and on behalf of the Holders.  Nothing
herein contained shall be deemed to authorize the Trustee or the holders of
Senior Debt or their Representative to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Holder
thereof, or to authorize the Trustee or the holders of Senior Debt or their
Representative to vote in respect of the claim of any Holder in any such
proceeding.

 

SECTION 10.10              Amendments
or Modifications to Article X.

 

Notwithstanding anything to the contrary contained in
this Indenture, no amendment or modification to any provision of this
Article X or the related definitions used herein (other than to cure any
ambiguity, defect, mistake or inconsistency herein, so long as such amendment
or modification does not adversely affect the rights of the holders of any
Senior Debt then outstanding) shall be permitted without the consent of the
“Required Lenders,” as such term is used in the Senior Credit Facility.

 

SECTION 10.11              Article
X Not to Prevent Events of Default.

 

The failure to make a payment on account of principal
of or interest on the securities by reason of any provision of this
Article X shall not be construed as preventing the occurrence of a Default
or an Event of Default under Section 6.1.

 

98

 

SECTION 10.12              No
Fiduciary Duty of Trustee to Holders of Senior Debt.

 

The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt, and shall not be liable to any such holders
if it shall in good faith mistakenly pay over or distribute to the Holders of
Notes or the Company or any other Person, cash, property or securities to which
any holders of Senior Debt shall be entitled by virtue of this Article X
or otherwise.  Nothing in this Section
10.12 shall affect the obligation of any other such Person to hold such payment
for the benefit of, and to pay such payment over to, the holders of Senior Debt
or their Representative.

 

ARTICLE XI

GUARANTEE

 

SECTION 11.1                    Unconditional
Guarantee.

 

Each Guarantor hereby unconditionally, jointly and
severally, guarantees (each such guarantee to be referred to herein as a
“Guarantee”), subject to Article XII, to each of the Holders and to the
Trustee and their respective successors and assigns that (i) the principal
of and interest on the Notes will be promptly paid in full when due, subject to
any applicable grace period, whether at maturity, by acceleration or otherwise,
and interest on the overdue principal, if any, and interest on any interest, if
any, to the extent lawful, of the Notes and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (ii) in case of any extension of time of payment or renewal of any of
the Notes or of any such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, subject to any applicable grace period, whether at stated maturity, by
acceleration or otherwise, subject, however, in the case of clauses (i) and
(ii) above, to the limitations set forth in Section 11.5.  Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any of the Holders with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor.  Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and in
this Guarantee.  If any Holder or the
Trustee is required by any court or otherwise to return to the Company, any

 

99

 

Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or any Guarantor, any amount paid by
the Company or any Guarantor to the Trustee or such Holder, this Guarantee, to
the extent theretofore discharged, shall be reinstated in full force and
effect.  Each Guarantor further agrees
that, as between each Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article VI for the purposes of
this Guarantee, and (y) in the event of any acceleration of such
obligations as provided in Article VI, such obligations (whether or not due
and payable) shall forthwith become due and payable by each Guarantor for the
purpose of this Guarantee.

 

SECTION 11.2                    Subordination
of Guarantee.

 

The obligations of each Guarantor to the Holders and
to the Trustee pursuant to the Guarantee of such Guarantor and this Indenture
are expressly subordinate and subject in right of payment to the prior payment
in full of all Guarantor Senior Debt of such Guarantor, to the extent and in
the manner provided in Article XII.

 

SECTION 11.3                    Severability.

 

In case any provision of this Guarantee shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 11.4                    Release
of a Guarantor.

 

Upon (i) the release by the lenders under the
Senior Credit Facility and related documents of all guarantees of a Guarantor
and all Liens on the property and assets of such Guarantor relating to such
Indebtedness, (ii) the unconditional release of a Guarantor from its liability
in respect of the Indebtedness in connection with which such Guarantee was
executed and delivered in accordance with the first paragraph of Section 4.17,
(iii) any sale or other disposition (by merger or otherwise) to any Person
which is not a Restricted Subsidiary of the Company of all of the Company’s
Capital Stock in, or all or substantially all of the assets of, a Guarantor; provided
that (a) such sale or disposition of such Capital Stock or assets is
otherwise in compliance with the terms of this Indenture and (b) such
assumption, guarantee or other liability of such Guarantor has been released by
the holders of the other Indebtedness of the Company so guaranteed, (iv) the
Legal Defeasance of the Notes as described under Section 8.2, or (v) a Guarantor
being designated as an Unrestricted Subsidiary as described under the
definition of “Unrestricted Subsidiary,” such Guarantor shall be deemed
released from all obligations under this Article XI without any further
action required on the part of the Trustee or any Holder; provided that
any such termination shall occur only to the extent that all obligations of
such Guarantor under all of its guarantees of, and under all of its pledges of

 

100

 

assets or other security interests which secure, such Indebtedness of
the Company shall also terminate upon such release, sale or transfer.

 

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

 

SECTION 11.5                    Limitation
of Guarantor’s Liability.

 

Each Guarantor and by its acceptance hereof each of
the Holders hereby confirm that it is the intention of all such parties that
the guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law.  To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all
other contingent and fixed liabilities of such Guarantor (including, but not
limited to, the Guarantor Senior Debt of such Guarantor) and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to Section 11.7, result in the obligations of such Guarantor
under the Guarantee not constituting such fraudulent transfer or conveyance.

 

SECTION 11.6                    Consolidation,
Merger and Sale of Assets.

 

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

 

101

 

SECTION 11.7                    Contribution.

 

In order to provide for just and equitable contribution
among the Guarantors, the Guarantors agree, inter  se, that in the
event any payment or distribution is made by any Guarantor (a “Funding
Guarantor”) under its Guarantee, such Funding Guarantor shall be entitled to a
contribution from all other Guarantors in a pro  rata amount based
on the Adjusted Net Assets of each Guarantor (including the Funding Guarantor)
for all payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company’s obligations with respect to the Obligations.  “Adjusted Net Assets” of such Guarantor at
any date shall mean the lesser of (x) the amount by which the fair value
of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date
(other than liabilities of such Guarantor under Subordinated Obligation)), but
excluding liabilities under the Guarantee, of such Guarantor at such date and
(y) the amount by which the present fair salable value of the assets of
such Guarantor at such date exceeds the amount that will be required to pay the
probable liabilities of such Guarantor on its debts including, without
limitation, Guarantor Senior Debt (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date and after giving effect
to any collection from any Subsidiary of such Guarantor in respect of the
obligations of such Subsidiary under the Guarantee), excluding debt in respect
of the Guarantee of such Guarantor, as they become absolute and matured.

 

SECTION 11.8                    Waiver
of Subrogation.

 

Each Guarantor hereby irrevocably waives any claim or
other rights which it may now or hereafter acquire against the Company that
arise from the existence, payment, performance or enforcement of such
Guarantor’s obligations under its Guarantee and this Indenture, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder against the Company, whether or not such claim, remedy or right arises
in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights.  If any amount shall be paid to any Guarantor
in violation of the preceding sentence and the Notes shall not have been paid
in full, such amount shall be deemed to have been paid to such Guarantor for
the benefit of, and held in trust for the benefit of, the Holders, and shall,
subject to the provisions of Article X, Section 11.2 and Article XII,
forthwith be paid to the Trustee for the benefit of such Holders to be credited
and applied upon the Notes, whether matured or unmatured, in accordance with
the terms of this Indenture.  Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated by

 

102

 

this Indenture and that the waiver set forth in this Section 11.8 is
knowingly made in contemplation of such benefits.

 

SECTION 11.9                    Evidence
of Guarantee.

 

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

 

SECTION 11.10              Waiver
of Stay, Extension or Usury Laws.

 

Each Guarantor covenants that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other law that
would prohibit or forgive such Guarantor from performing its Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture; and
each Guarantor hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.

 

ARTICLE XII

SUBORDINATION OF GUARANTEE OBLIGATIONS

 

SECTION 12.1                    Guarantee
Obligations Subordinated to Guarantor Senior Debt.

 

Anything herein to the contrary notwithstanding, each
of the Guarantors, for itself and its successors, and each Holder by his
acceptance of Notes agrees that the payment of all Guarantee Obligations of
such Guarantor are subordinated, to the extent and in the manner provided in
this Article XII, to the prior payment in full in cash or Cash Equivalents, or
such payment duly provided for to the satisfaction of the holders of Guarantor
Senior Debt, of all Guarantor Senior Debt Obligations of such Guarantor
(including Guarantor Senior Debt Obligations with respect to the Senior Credit
Facility, whether outstanding on the Issue Date or thereafter incurred).

 

This Article XII shall constitute a continuing
offer to all Persons who become holders of, or continue to hold, Guarantor
Senior Debt, and such provisions are made for the

 

103

 

benefit of the holders of Guarantor Senior Debt and such holders are
made obligees hereunder and any one or more of them may enforce such
provisions.

 

SECTION 12.2                    Suspension
of Guarantee Obligations When Guarantor Senior Debt Is in Default.

 

(a)                                  If
any default occurs and is continuing in the payment when due, whether at
maturity, upon any redemption, by declaration or otherwise, of any principal
of, interest on, unpaid drawings for letters of credit issued in respect of, or
regularly accruing fees with respect to, any Guarantor Senior Debt (including,
without limitation, guarantees of the foregoing items which constitute
Guarantor Senior Debt), then no payment or distribution of any kind or character
shall be made by or on behalf of such Guarantor or any other Person on its or
their behalf with respect to any Guarantee Obligations or to acquire any of the
Notes for cash or property or otherwise until such Payment Default (and all
other Payment Defaults) shall have been cured or waived in accordance with the
terms of the documentation governing the respective Guarantor Senior Debt or
ceased to exist or all Guarantor Senior Debt with respect to which any Payment
Default has occurred and is continuing shall have been discharged or paid in
full in cash or Cash Equivalents.

 

(b)                                 During
any Payment Blockage Period (as determined in accordance with
Section 10.2(b), including the limitations set forth therein), neither any
Guarantor nor any other Person on any Guarantor’s behalf shall (i) make
any payment of any kind or character with respect to any Guarantee Obligations
or (ii) acquire any of the Notes for cash or property or otherwise.

 

(c)                                  In
the event that, notwithstanding the foregoing, any payment shall be received by
the Trustee, any Paying Agent or any Holder when such payment is prohibited by
the foregoing provisions of this Section 12.2, such payment shall be held
in trust for the benefit of, and shall be paid over or delivered to, the holders
of Guarantor Senior Debt (pro rata to such holders on the basis of the
respective amount of Guarantor Senior Debt held by such holders) or their
respective Representatives, as their respective interests may appear.  The Trustee and any Paying Agent shall be entitled
to rely on information regarding amounts then due and owing on the Guarantor
Senior Debt, if any, received from the holders of Guarantor Senior Debt (or
their Representatives) or, if such information is not received from such
holders or their Representatives, from a Guarantor and only amounts included in
the information provided to the Trustee and any Paying Agent shall be paid to
the holders of Guarantor Senior Debt.

 

104

 

SECTION 12.3                                Guarantee
Obligations Subordinated to Prior Payment of All Guarantor Senior Debt on
Dissolution, Liquidation or Reorganization of Such Guarantor.

 

(a)                                  Upon
any payment or distribution of assets of any Guarantor of any kind or
character, whether in cash, property or securities, to creditors upon any total
or partial liquidation, dissolution, winding-up, reorganization, assignment for
the benefit of creditors or marshaling of assets of such Guarantor or in a
bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to such Guarantor or its property, whether voluntary or
involuntary, all Guarantor Senior Debt Obligations due or to become due shall
first be paid in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Guarantor Senior Debt,
before the Holders shall be entitled to receive any payment or distribution of
any kind or character on account of any Guarantee Obligations or for the
acquisition of any of the Notes for cash or property or otherwise.  Upon any such dissolution, winding-up,
liquidation, reorganization, receivership or similar proceeding, any payment or
distribution of assets of such Guarantor of any kind or character, whether in
cash, property or securities, to which the Holders or the Trustee would be
entitled, except for the provisions hereof, shall be paid by such Guarantor or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the Holders or by the Trustee
if received by them, directly to the holders of Guarantor Senior Debt (pro
rata to such holders on the basis of the respective amounts of Guarantor
Senior Debt held by such holders) or their respective Representatives, or to
the trustee or trustees under any indenture pursuant to which any of such
Guarantor Senior Debt may have been issued, as their respective interests may
appear, for application to the payment of Guarantor Senior Debt remaining
unpaid until all such Guarantor Senior Debt has been paid in full in cash or
Cash Equivalents after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of Guarantor Senior Debt.

 

(b)                                 To
the extent any payment of Guarantor Senior Debt (whether by or on behalf of a
Guarantor, as proceeds of security or enforcement of any right of setoff or
otherwise) is declared to be fraudulent or preferential, set aside or required
to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then, if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent
or other similar Person, the Guarantor Senior Debt or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.

 

It is further agreed that any diminution (whether
pursuant to court decree or otherwise, including without limitation for any of
the reasons described in the preceding sentence) of any Guarantor’s obligation
to make any distribution or payment pursuant to any

 

105

 

Guarantor Senior Debt, except to the extent such diminution occurs by
reason of the repayment (which has not been disgorged or returned) of such
Guarantor Senior Debt in cash or Cash Equivalents, shall have no force or
effect for purposes of the subordination provisions contained in this
Article XII, with any turnover of payments as otherwise calculated
pursuant to this Article XII to be made as if no such diminution had
occurred.

 

(c)                                  In
the event that, notwithstanding the foregoing, any payment or distribution of
assets of any Guarantor of any kind or character, whether in cash, property or
securities, shall be received by any Holder when such payment or distribution
is prohibited by this Section 12.3, such payment or distribution shall be held
in trust for the benefit of, and shall be paid over or delivered to, the
holders of Guarantor Senior Debt (pro rata to such holders on the basis
of the respective amount of Guarantor Senior Debt held by such holders) or
their respective Representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Guarantor Senior Debt may have been
issued, as their respective interests may appear, for application to the
payment of Guarantor Senior Debt remaining unpaid until all such Guarantor
Senior Debt has been paid in full in cash or Cash Equivalents, after giving
effect to any concurrent payment, distribution or provision therefor to or for
the holders of such Guarantor Senior Debt.

 

(d)                                 The
consolidation of any Guarantor with, or the merger of any Guarantor with or
into, another corporation or the liquidation or dissolution of a Guarantor
following the conveyance or transfer of all or substantially all of its assets,
to another corporation upon the terms and conditions provided in Article V
and as long as permitted under the terms of the Guarantor Senior Debt shall not
be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, assume the Guarantee of such
Guarantor hereunder in accordance with Article V.

 

SECTION 12.4                                Payments
May Be Paid Prior to Dissolution.

 

Nothing contained in this Article XII or
elsewhere in this Indenture shall prevent (i) any Guarantor, except under
the conditions described in Sections 12.2 and 12.3, from making payments at any
time for the purpose of making payments on Guarantee Obligations, or from
depositing with the Trustee or any Paying Agent, any monies for such payments,
or (ii) in the absence of actual knowledge by the Trustee or any Paying
Agent that a given payment would be prohibited by Section 12.2 or 12.3, the
application by the Trustee and any Paying Agent of any monies deposited with
them for the purpose of making such payments on Guarantee Obligations to the
Holders entitled thereto unless at least one Business Day prior to the date
upon which such payment would otherwise become due and payable the Trustee and
any Paying Agent shall have actually received the written notice provided for
in the first sentence of Section 10.2(b) (provided that, notwithstanding
the foregoing, the Holders

 

106

 

receiving any payments made in contravention of Sections 12.2 and/or
12.3 (and the respective such payments) shall otherwise be subject to the
provisions of Section 12.2 and Section 12.3). 
Each Guarantor shall give prompt written notice to the Trustee and any
Paying Agent of any dissolution, winding-up, liquidation or reorganization of
such Guarantor, although any delay or failure to give any such notice shall
have no effect on the subordination provisions contained herein.

 

SECTION 12.5                                Holders
To Be Subrogated to Rights of Lenders of Guarantor Senior Debt.

 

Subject to the payment in full in cash or Cash
Equivalents of all Guarantor Senior Debt, the Holders shall be subrogated to
the rights of the holders of Guarantor Senior Debt of such Guarantor to receive
payments or distributions of cash, property or securities of such Guarantor
applicable to such Guarantor Senior Debt until all amounts owing on or in
respect of the Guarantee Obligations shall be paid in full; and, for the
purposes of such subrogation, no such payments or distributions to the holders
of such Guarantor Senior Debt by or on behalf of such Guarantor, or by or on
behalf of the Holders by virtue of this Article XII, which otherwise would
have been made to the Holders shall, as between such Guarantor and the Holders,
be deemed to be a payment by such Guarantor to or on account of such Guarantor
Senior Debt, it being understood that the provisions of this Article XII
are and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of Guarantor Senior Debt, on the
other hand.

 

SECTION 12.6                                Guarantee
Obligations of the Guarantors Unconditional.

 

Nothing contained in this Article XII or
elsewhere in this Indenture or in the Guarantees is intended to or shall
impair, as among the Guarantors, their creditors other than the holders of
Guarantor Senior Debt, and the Holders, the obligation of the Guarantors, which
is absolute and unconditional, to pay to the Holders all amounts due and
payable under the Guarantees as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders and creditors of the Guarantors other than the holders of
the Guarantor Senior Debt, nor shall anything herein or therein prevent any
Holder or the Trustee on its behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article XII of the holders of Guarantor Senior
Debt in respect of cash, property or securities of the Guarantors received upon
the exercise of any such remedy.

 

SECTION 12.7                                Reliance
on Judicial Order or Certificate of Liquidating Agent.

 

Upon any payment or distribution of assets of a
Guarantor referred to in this Article XII, the Trustee, subject to the
provisions of Article VII hereof, and the Holders shall

 

107

 

be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any insolvency, bankruptcy, receivership,
dissolution, winding-up, liquidation, reorganization or similar case or
proceeding is pending, or upon a certificate of the trustee in bankruptcy,
liquidating trustee, receiver, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Trustee or
the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Guarantor
Senior Debt and other Indebtedness of such Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XII.

 

SECTION 12.8                                Subordination
Rights Not Impaired by Acts or Omissions of the Guarantors or Lenders of
Guarantor Senior Debt.

 

No right of any present or future holders of any
Guarantor Senior Debt to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by any Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have
or otherwise be charged with.

 

Without in any way limiting the generality of the
foregoing paragraph, the holders of Guarantor Senior Debt may, at any time and
from time to time, without the consent of or notice to the Trustee, without
incurring responsibility to the Trustee or the Holders and without impairing or
releasing the subordination provided in this Article XII or the obligations
hereunder of the Holders to the holders of Guarantor Senior Debt, do any one or
more of the following:  (i) change
the manner, place or terms of payment or extend the time of payment of, or
renew or alter, Guarantor Senior Debt, or otherwise amend or supplement in any
manner Guarantor Senior Debt, or any instrument evidencing the same or any
agreement under which Guarantor Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Debt; (iii) release any Person liable
in any manner for the payment or collection of Guarantor Senior Debt; and
(iv) exercise or refrain from exercising any rights against the Guarantors
and any other Person.

 

SECTION 12.9                                Holders
Authorize Trustee To Effectuate Subordination of Guarantee Obligations.

 

Each Holder, by its acceptance of the Guarantee
Obligations, authorizes and expressly directs the Trustee on its behalf to take
such action as may be necessary or appropriate to effectuate, as between the
holders of Guarantor Senior Debt and the Holders, the subordination provided in
this Article XII, and appoints the Trustee its attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, liquidation
or reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership,

 

108

 

reorganization or similar proceedings or upon an assignment for the
benefit of credits or otherwise) tending towards liquidation of the business
and assets of any Guarantor, the filing of a claim for the unpaid balance under
its Guarantee Obligations and accrued interest in the form required in those
proceedings.

 

If the Trustee does not file a proper claim or proof
of debt in the form required in such proceeding prior to 30 days before the
expiration of the time to file such claim or claims, then the holders of the
Guarantor Senior Debt or their Representative are or is hereby authorized to
have the right to file and are or is hereby authorized to file an appropriate
claim for and on behalf of the Holders. 
Nothing herein contained shall be deemed to authorize the Trustee or the
holders of Guarantor Senior Debt or their Representative to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Guarantee
Obligations or the rights of any Holder, or to authorize the Trustee or the
holders of Guarantor Senior Debt or their Representative to vote in respect of
the claim of any Holder in any such proceeding.

 

SECTION 12.10                          This
Article XII Not To Prevent Events of Default.

 

The failure to make a payment on account of principal
of or interest on the Guarantee Obligations by reason of any provision of this
Article XII will not be construed as preventing the occurrence of an Event
of Default.

 

SECTION 12.11                          Amendments
or Modifications to Article XII.

 

Notwithstanding anything to the contrary contained in
this Indenture, no amendment or modification to any provision of this Article
XII or the related definitions used herein (other than to cure any ambiguity,
defect, mistake or inconsistency herein, so long as such amendment or
modification does not adversely affect the rights of the holders of any Guarantor
Senior Debt then outstanding) shall be permitted without the consent of the
“Required Lenders,” as such term is used in the Senior Credit Facility.

 

SECTION 12.12                          No
Fiduciary Duty of Trustee to Holders of Senior Debt.

 

The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Guarantor Senior Debt, and shall not be liable to any
such holders if it shall in good faith mistakenly pay over or distribute to the
Holders of Notes or the Company or any other Person, cash, property or securities
to which any holders of Guarantor Senior Debt shall be entitled by virtue of
this Article XII or otherwise. 
Nothing in this Section 12.12 shall affect the obligation of any other
such Person to hold such payment for the benefit of, and to pay such payment
over to, the holders of Guarantor Senior Debt or their Representative.

 

109

 

ARTICLE XIII

MISCELLANEOUS

 

SECTION 13.1                                Trust
Indenture Act Controls.

 

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

 

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

 

SECTION 13.2                                Notices.

 

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

 

(a)                                  if
to the Company or any Guarantor:

 

c/o Vertis, Inc.

250 W. Pratt Street

18th Floor

Baltimore, MD 
21201

Attention: 
Chief Financial Officer

Telecopier Number: 
(410) 528-9287

 

with a copy to:

 

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 
10004

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

Telecopier Number: 
(212) 558-3588

 

110

 

(b)                                 if
to the Trustee:

 

The Bank of New York

101 Barclay Street

New York, New York 
10286

Attention: 
Corporate Trust Administration

Telecopier Number: 
(212) 815-5704

 

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

 

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

 

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

 

SECTION 13.3                                Communications
by Holders with Other Holders.

 

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

 

SECTION 13.4                                Certificate
and Opinion of Counsel as to Conditions Precedent.                                      

 

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

 

111

 

(c) where applicable, a certificate or opinion by an independent
certified public accountant satisfactory to the Trustee that complies with TIA
§ 314(c).

 

SECTION 13.5                                Statements
Required in Certificate and Opinion of Counsel.

 

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

 

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

 

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

 

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

 

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

 

SECTION 13.6                                Rules
by Trustee, Paying Agent, Registrar.

 

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

 

SECTION 13.7                                Legal
Holidays.

 

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

 

SECTION 13.8                          Governing
Law.

 

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

 

112

 

SECTION 13.9                    No
Recourse Against Others.

 

No past, present or future director, officer,
employee, incorporator or stockholder of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, the Guarantees or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation.  Each Holder by accepting a Note waives and
releases all such liability.  The waiver
and release are part of the consideration for issuance of the Notes and the
Guarantees.

 

SECTION 13.10              Successors.

 

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

 

SECTION 13.11              Counterparts.

 

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

 

SECTION 13.12              Severability.

 

In case any provision in this Indenture, the Notes or
the Guarantees shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.

 

SECTION 13.13              Table
of Contents, Headings, Etc.

 

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

 

SECTION 13.14              No
Adverse Interpretation of Other Agreements.

 

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

 

113

 

SECTION 13.15              Benefits
of Indenture.

 

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

 

SECTION 13.16              Independence
of Covenants.

 

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

 

114

 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed as of the date first written above.

 

	
   

  	
  VERTIS, INC.,

  
	
   

  	
  as Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Geovanni Barris

  
	
   

  	
   

  	
  Name: Geovanni Barris

  
	
   

  	
   

  	
  Title:  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINTCO., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  

 

115

 

	
   

  	
  WEBCRAFT CHEMICALS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  ENTERON GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  BIG FLOWER
  DIGITAL SERVICES (DELAWARE), INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  BIG FLOWER DIGITAL LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BIG FLOWER
  DIGITAL SERVICES

  (DELAWARE), INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard, Jr.

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice Address for all Guarantors:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Vertis, Inc.

  
	
   

  	
   

  	
  250 W. Pratt Street

  
	
   

  	
   

  	
  18th Floor

  
	
   

  	
   

  	
  Baltimore, MD 
  21201

  
	
   

  	
   

  	
  Attention: 
  Chief Financial Officer

  
				

 

116

 

Telephone:  (410) 528-9800

Telecopy:   (410) 528-9287

 

117

 

EXHIBIT A-1

 

[FORM OF SERIES A
SECURITY]

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF U.S. PERSONS EXCEPT AS SET FORTH BELOW.  BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT
IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR
(C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) (AN “ACCREDITED INVESTOR”), (2) AGREES THAT IT WILL
NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) (F) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF THIS
SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE
PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY

 

A-1-1

 

REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT.  AS
USED HEREIN, THE TERMS “OFFSHORE TRANSACTION,” “UNITED STATES” AND “U.S.
PERSON” HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.

 

A-1-2

 

	
  No.

  	
   

  	
  $[             ]

  

 

VERTIS, INC.

 

131⁄2% SENIOR
SUBORDINATED NOTE DUE 2009

 

VERTIS, INC. promises to pay to
              
or registered assigns the principal sum of
[                   ]
Dollars on December 7, 2009.

 

Interest Payment Dates: 
June 1 and December 1

 

Record Dates:  May 15 and
November 15

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  

 

Dated: 
[                    ],
2003

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the 131⁄2% Senior Subordinated Notes due
2009 referred to in the within-mentioned Indenture.

 

	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

A-1-3

 

(REVERSE OF SECURITY)

 

131⁄2% SENIOR SUBORDINATED
NOTE DUE 2009

 

1.                                       Interest.  VERTIS, INC., a Delaware corporation (the
“Company”, which term shall include any successor thereto in accordance with
the Indenture), promises to pay, until the principal hereof is paid or made
available for payment, interest (including any Accrued Bankruptcy Interest) on
the principal amount set forth on the reverse side hereof at a rate of 131⁄2% per
annum.  Interest on the Notes
will accrue from and including the most recent date to which interest has been
paid or, if no interest has been paid, from and including the date of issuance
of such Notes through but excluding the date on which interest is paid.  Interest shall be payable in arrears on
June 1 and December 1 (each an “Interest Payment Date”).  Interest will be computed on the basis of a
360-day year of twelve full 30-day months.

 

To the extent a Note is issued for original issue
after February 28, 2003, the Holder of such Note is hereby obligated upon
original issuance of such Note to pay the Company in U.S. Legal Tender the
amount of accrued and unpaid interest on such Note from the later of
February 28, 2003 or the most recently completed Interest Payment Date to
the date of original issuance of such Note.

 

2.                                       Method
of Payment.  The Company will pay
interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the May 15 or
November 15 immediately preceding the Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments. 
The Company will pay principal, premium, if any, and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts.  At the
Company’s option, interest may be paid by check mailed to the registered
address of the Holder of this Note.

 

3.                                       Paying
Agent and Registrar.  Initially, The
Bank of New York (the “Trustee”) will act as Paying Agent and Registrar.  The Company may change any Paying Agent,
Registrar or co-Registrar without notice.

 

4.                                       Indenture.  The Company issued the Notes under an
Indenture dated as of February 28, 2003 (the “Indenture”) among the
Company, the Guarantors and the Trustee. 
This Note is one of an issue of Notes of the Company issued under the
Indenture.  The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code
§§ 77aaa-77bbbb)  as amended from
time to time.  The Notes are subject to
all such terms, and Securityholders are referred to the Indenture and such Act
for a statement of them.  Capitalized
terms used herein and not otherwise defined have the meanings set forth in the
Indenture.  The Notes are general
unsecured obligations of the Company limited in aggregate principal amount to
$293,500,000.

 

A-1-4

 

Under
Article XI of the Indenture, the payment on each Note is guaranteed on a
senior subordinated basis by the Guarantors.

 

5.                                       Optional
Redemption.  The Notes are not
redeemable before January 1, 2005. 
Thereafter, the Company may redeem the Notes at its option, in whole or
in part, upon not less than 30 nor more than 60 days’ notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve–month period commencing on January 1 of
the year set forth below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2005

  	
   

  	
  106.75

  	
  %

  
	
  2006

  	
   

  	
  104.50

  	
  %

  
	
  2007

  	
   

  	
  102.25

  	
  %

  
	
  2008 and
  thereafter

  	
   

  	
  100.00

  	
  %

  

 

In addition, the Company must pay accrued and unpaid
interest on the Notes redeemed.

 

6.                                       Notice
of Redemption.  Notice of redemption
will be mailed at least 30 days but not more than 60 days before the redemption
date to each holder of Notes to be redeemed at his registered address.  On and after the Redemption Date, unless the
Company defaults in making the redemption payment, interest ceases to accrue on
Notes or portions thereof called for redemption.

 

7.                                       Offers
to Purchase.  Sections 4.12 and 4.15
of the Indenture provide that after an Asset Sale, or upon the occurrence of a
Change of Control, and subject to further limitations contained therein, the
Company shall make an offer to purchase certain amounts of Notes in accordance
with the procedures set forth in the Indenture.

 

8.                                       Denominations,
Transfer, Exchange.  The Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  A Holder may
transfer or exchange Notes in accordance with the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay to it any taxes and fees required by law or permitted by the
Indenture.  The Registrar need not
transfer or exchange any Note or portion of a Note selected for redemption, or
transfer or exchange any Notes for a period of 15 days before a selection of
Notes to be redeemed.

 

9.                                       Persons
Deemed Owners.  The registered
holder of a Note may be treated as the owner of it for all purposes.

 

A-1-5

 

10.                                 Unclaimed
Money.  If money for the payment of
principal or interest remains unclaimed for two years, the Trustee or Paying
Agent will pay the money back to the Company at its request.  After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an “abandoned
property” law designates another Person.

 

11.                                 Amendment,
Supplement, Waiver.  The Company and
the Trustee may, without the consent of the holders of any outstanding Notes,
amend, waive or supplement the Indenture or the Notes for certain specified
purposes, including, among other things, curing ambiguities, defects or
inconsistencies, maintaining the qualification of the Indenture under the Trust
Indenture Act of 1939 or making any other change that does not adversely affect
the rights of any Holder.  Other
amendments and modifications of the Indenture or the Notes may be made by the
Company, the Guarantors and the Trustee with the consent of the Holders of not
less than a majority in aggregate principal amount of the outstanding Notes, subject
to certain exceptions requiring the consent of the Holders of the particular
Notes (and, in certain cases, holders of Designated Senior Debt) to be
affected.

 

12.                                 Successor
Corporation.  When a successor
corporation assumes all the obligations of its predecessor under the Notes and
the Indenture and the transaction complies with the terms of Article V of
the Indenture, the predecessor corporation will, subject to certain exceptions,
be released from those obligations.

 

13.                                 Defaults
and Remedies.  Events of Default
include:  default in payment of
principal of or premium on the Notes at maturity, or upon acceleration,
redemption or otherwise; default in payment of interest on any Note for 30
days; certain defaults under other Indebtedness; failure by the Company for 30
days after written notice to it from the Trustee or Holders of at least 25% in
principal amount of the then outstanding Notes, to comply with any of the other
agreements or covenants in or provisions of the Indenture or the Notes; certain
events of bankruptcy or insolvency with respect to the Company and its
Significant Subsidiaries; certain final judgments that remain undischarged for
60 days after being entered; any Guarantee of a Significant Subsidiary ceases
to be in full force and effect; and any Guarantor that is a Significant
Subsidiary shall deny its obligations under its Guarantee.  If an Event of Default occurs and is
continuing (and has not been waived in accordance with the provisions of the
Indenture), the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may declare all the Notes to be
immediately due and payable for an amount equal to 100% of the principal amount
of the Notes plus accrued interest to the date of payment, except that in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, all outstanding Notes become due and payable immediately without
further action or notice, subject to the rights of holders of Senior Debt.  Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. 
The Trustee may require indemnity satisfactory to it before it enforces
the Indenture or the Notes.  Subject to
certain limitations, Holders of a majority in principal amount of the then

 

A-1-6

 

outstanding
Notes may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice
of any continuing Default or Event of Default (except a Default or an Event of
Default in payment of principal, premium, if any, or interest) if and so long
as a committee of its Responsible Officers determines in good faith that
withholding notice is in their interests. 
The Company must furnish an annual compliance certificate to the
Trustee.

 

14.                                 Restrictive
Covenants.  The Indenture imposes
certain limitations on the ability of the Company and its Subsidiaries to,
among other things, pay dividends and make distributions with respect to or
repurchase or otherwise acquire or retire for value any of their equity
interests, make certain Investments, incur additional Indebtedness, enter into
transactions with Affiliates, incur Liens, sell assets, merge or consolidate
with any other Person and sell, lease, transfer or otherwise dispose of
substantially all of their properties or assets.  The limitations are subject to a number of important
qualifications and exceptions.  The
Company must annually report to the Trustee on compliance with such
limitations.

 

15.                                 Trustee
Dealings with Company.  The Trustee,
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee.

 

16.                                 No
Recourse Against Others.  No past,
present or future director, officer, employee, incorporator or stockholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation.  Each Holder by accepting a Note waives and
releases all such liability.  The waiver
and release are part of the consideration for the issuance of the Notes.

 

17.                                 Discharge
of Indenture; Defeasance.  The
Indenture contains provisions for defeasance at any time, upon compliance with
certain conditions set forth therein, of (i) the entire indebtedness of this
Note or (ii) certain restrictive covenants and Events of Default with respect
to this Note.

 

18.                                 Authentication.  This Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this Note.

 

19.                                 Abbreviations.  Customary abbreviations may be used in the
name of a Securityholder or an assignee, such as:  TEN COM (= tenants in common), TENANT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

20.                                 Subordination.  The Notes are subordinated to all Senior
Debt, which includes any Indebtedness permitted to be incurred pursuant to the
terms of the “Limitation on

 

A-1-7

 

Additional
Indebtedness” covenant in the Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes. 
The Guarantees in respect of the Notes are subordinated to all Guarantor
Senior Debt of each Guarantor, whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed or guaranteed.  Each Holder, by its acceptance hereof,
agrees to be bound by such provisions and authorizes and expressly directs the
Trustee, on its behalf, to take such action as may be necessary or appropriate
to effectuate the subordination provided for in the Indenture and appoints the
Trustee its attorney-in-fact for such purposes.

 

21.                                 Registration
Rights.  Pursuant to the
Registration Rights Agreement, the Company will be obligated to consummate an
exchange offer pursuant to which the Holder of this Note shall have the right
to exchange this Note for Notes of a separate series issued under the Indenture
(or a trust indenture substantially identical to the Indenture in accordance
with the terms of the Registration Rights Agreement) which have been registered
under the Securities Act, in like principal amount and having identical terms
as this Note.  The Holders of the Notes
shall be entitled to receive certain additional interest payments in the event
such exchange offer is not consummated and upon certain other conditions, all
pursuant to and in accordance with the terms of the Registration Rights
Agreement.

 

22.                                 GOVERNING
LAW.  THE INDENTURE AND THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

The provisions of this Note are expressly made subject
to the more detailed provisions set forth in the Indenture and the Registration
Rights Agreement, which shall for all purposes be controlling.  The Company will furnish to any Holder upon
written request and without charge a copy of the Indenture.  Requests may be made to:

 

VERTIS, INC.

250 W. Pratt Street

18th Floor

Baltimore, MD 
21201

Attention: 
Chief Financial Officer

 

A-1-8

 

ASSIGNMENT FORM

 

If you the holder want to assign this Note, fill in the form below and
have your signature guaranteed:

 

I or we assign and transfer this Note to

 

(Insert assignee’s social security or tax ID number)

 

 

(Print or type assignee’s name, address and zip code) and irrevocably
appoint

 

agent to transfer this Note on the books of the Company.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
  Your signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side
  of this Note)

  

 

Signature Guarantee:

 

A-1-9

 

OPTION OF HOLDER TO ELECT
PURCHASE

 

If you wish to have this Note purchased by the Company
pursuant to Section 4.12 or 4.15 of the Indenture, check the Box:  [  ]

 

If you wish to have a portion of this Note purchased
by the Company pursuant to Section 4.12 or 4.15 of the Indenture, state the
amount:

 

$           

 

 

	
  Date:

  	
   

  	
  Your signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side
  of this Note)

  

 

Signature Guarantee:

 

A-1-10

 

EXHIBIT A-2

 

[FORM OF SERIES B
SECURITIES]

 

	
  No.

  	
   

  	
  $                                     

  

 

VERTIS, INC.

 

131⁄2% SENIOR SUBORDINATED
NOTE DUE 2009

 

VERTIS, INC. promises to pay to
              
or registered assigns the principal sum of
              
Dollars on December 7, 2009.

 

Interest Payment Dates:  June 1
and December 1

 

Record Dates:  May 15 and November
15

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  

 

Dated: 
[                    ],
2003

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the 131⁄2% Senior Subordinated Notes due
2009 referred to in the within-mentioned Indenture.

 

	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

A-2-1

 

(REVERSE OF SECURITY)

 

131⁄2% SENIOR SUBORDINATED
NOTE DUE 2009

 

1.                                       Interest.  VERTIS, INC., a Delaware corporation (the
“Company”, which term shall include any successor thereto in accordance with
the Indenture), promises to pay, until the principal hereof is paid or made
available for payment, interest (including any Accrued Bankruptcy Interest) on
the principal amount set forth on the reverse side hereof at a rate of 131⁄2% per
annum.  Interest on the Notes
will accrue from and including the most recent date to which interest has been
paid or, if no interest has been paid, from and including the date of issuance
of such Notes through but excluding the date on which interest is paid.  Interest shall be payable in arrears on
June 1 and December 1 (each an “Interest Payment Date”).  Interest will be computed on the basis of a
360-day year of twelve full 30-day months.

 

To the extent a Note is issued for original issue
after February 28, 2003, the Holder of such Note is hereby obligated upon
original issuance of such Note to pay the Company in U.S. Legal Tender the
amount of accrued and unpaid interest on such Note from the later of February 28,
2003 or the most recently completed Interest Payment Date to the date of
original issuance of such Note.

 

2.                                       Method
of Payment.  The Company will pay
interest on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the May 15 or
November 15 immediately preceding the Interest Payment Date.  Holders must surrender Notes to a Paying
Agent to collect principal payments. 
The Company will pay principal, premium, if any, and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts.  At the
Company’s option, interest may be paid by check mailed to the registered
address of the Holder of this Note.

 

3.                                       Paying
Agent and Registrar.  Initially, The
Bank of New York (the “Trustee”) will act as Paying Agent and Registrar.  The Company may change any Paying Agent,
Registrar or co-Registrar without notice.

 

4.                                       Indenture.  The Company issued the Notes under an
Indenture dated as of February 28, 2003 (the “Indenture”) among the
Company, the Guarantors and the Trustee. 
This Note is one of an issue of Notes of the Company issued under the
Indenture.  The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code §§
77aaa-77bbbb)  as amended from time to
time.  The Notes are subject to all such
terms, and Securityholders are referred to the Indenture and such Act for a
statement of them.  Capitalized terms
used herein and not otherwise defined have the meanings set forth in the
Indenture.  The Notes are general
unsecured obligations of the Company limited in aggregate principal amount to
$293,500,000.

 

A-2-2

 

Under
Article XI of the Indenture, the payment of each Note is guaranteed on a
senior subordinated basis by the Guarantors.

 

5.                                       Optional
Redemption.  The Notes are not
redeemable before January 1, 2005. 
Thereafter, the Company may redeem the Notes at its option, in whole or
in part, upon not less than 30 nor more than 60 days’ notice, at the following
redemption prices (expressed as percentages of the principal amount thereof) if
redeemed during the twelve-month period commencing on January 1 of the
year set forth below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2005

  	
   

  	
  106.75

  	
  %

  
	
  2006

  	
   

  	
  104.50

  	
  %

  
	
  2007

  	
   

  	
  102.25

  	
  %

  
	
  2008 and
  thereafter

  	
   

  	
  100.00

  	
  %

  

 

In addition, the Company must pay accrued and unpaid
interest on the Notes redeemed.

 

6.                                       Notice
of Redemption.  Notice of redemption
will be mailed at least 30 days but not more than 60 days before the redemption
date to each holder of Notes to be redeemed at his registered address.  On and after the Redemption Date, unless the
Company defaults in making the redemption payment, interest ceases to accrue on
Notes or portions thereof called for redemption.

 

7.                                       Offers
to Purchase.  Sections 4.12 and 4.15
of the Indenture provide that after an Asset Sale, or upon the occurrence of a
Change of Control, and subject to further limitations contained therein, the
Company shall make an offer to purchase certain amounts of Notes in accordance
with the procedures set forth in the Indenture.

 

8.                                       Denominations,
Transfer, Exchange.  The Notes are
in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000.  A Holder may
transfer or exchange Notes in accordance with the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and to
pay to it any taxes and fees required by law or permitted by the
Indenture.  The Registrar need not
transfer or exchange any Note or portion of a Note selected for redemption, or
transfer or exchange any Notes for a period of 15 days before a selection of
Notes to be redeemed.

 

9.                                       Persons
Deemed Owners.  The registered
holder of a Note may be treated as the owner of it for all purposes.

 

A-2-3

 

10.                                 Unclaimed
Money.  If money for the payment of
principal or interest remains unclaimed for two years, the Trustee or Paying
Agent will pay the money back to the Company at its request.  After that, Holders entitled to the money
must look to the Company for payment as general creditors unless an “abandoned
property” law designates another Person.

 

11.                                 Amendment,
Supplement, Waiver.  The Company,
the Guarantors and the Trustee may, without the consent of the holders of any
outstanding Notes, amend, waive or supplement the Indenture or the Notes for
certain specified purposes, including, among other things, curing ambiguities,
defects or inconsistencies, maintaining the qualification of the Indenture
under the Trust Indenture Act of 1939 or making any other change that does not
adversely affect the rights of any Holder. 
Other amendments and modifications of the Indenture or the Notes may be
made by the Company, the Guarantors and the Trustee with the consent of the
Holders of not less than a majority in aggregate principal amount of the
outstanding Notes, subject to certain exceptions requiring the consent of the
Holders of the particular Notes (and, in certain cases, holders of Designated
Senior Debt) to be affected.

 

12.                                 Successor
Corporation.  When a successor
corporation assumes all the obligations of its predecessor under the Notes and
the Indenture and the transaction complies with the terms of Article V of
the Indenture, the predecessor corporation will, subject to certain exceptions,
be released from those obligations.

 

13.                                 Defaults
and Remedies.  Events of Default
include:  default in payment of
principal of or premium on the Notes at maturity, or upon acceleration,
redemption or otherwise; default in payment of interest on any Note for 30
days; certain defaults under other Indebtedness; failure by the Company or its
Subsidiaries for 30 days after written notice to it from the Trustee or Holders
of at least 25% in principal amount of the then outstanding Notes, to comply
with any of the other agreements or covenants in or provisions of the Indenture
or the Notes; certain events of bankruptcy or insolvency with respect to the
Company and its Significant Subsidiaries; certain final judgments that remain
undischarged for 60 days after being entered; any Guarantee of a Significant
Subsidiary ceases to be in full force and effect; and any Guarantor that is a
Significant Subsidiary shall deny its obligations under its Guarantee.  If an Event of Default occurs and is
continuing (and has not been waived in accordance with the provisions of the Indenture),
the Trustee or the Holders of at least 25% in aggregate principal amount of the
then outstanding Notes may declare all the Notes to be immediately due and
payable for an amount equal to 100% of the principal amount of the Notes plus
accrued interest to the date of payment, except that in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes become due and payable immediately without further action or
notice, subject to the rights of holders of Senior Debt.  Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. 
The Trustee may require indemnity satisfactory to it before it enforces
the Indenture or the Notes.  Subject to
certain limitations, Holders of a majority in principal

 

A-2-4

 

amount
of the then outstanding Notes may direct the Trustee in its exercise of any
trust or power.  The Trustee may
withhold from Holders notice of any continuing Default or Event of Default
(except a Default or an Event of Default in payment of principal, premium, if
any, or interest) if and so long as a committee of its Responsible Officers
determines in good faith that withholding notice is in their interests.  The Company must furnish an annual
compliance certificate to the Trustee.

 

14.                                 Restrictive
Covenants.  The Indenture imposes
certain limitations on the ability of the Company and its Subsidiaries to,
among other things, pay dividends and make distributions with respect to or
repurchase or otherwise acquire or retire for value any of their Equity
Interests, make certain Investments, incur additional Indebtedness, enter into
transactions with Affiliates, incur Liens, sell assets, merge or consolidate
with any other Person and sell, lease, transfer or otherwise dispose of
substantially all of their properties or assets.  The limitations are subject to a number of important
qualifications and exceptions.  The
Company must annually report to the Trustee on compliance with such
limitations.

 

15.                                 Trustee
Dealings with Company.  The Trustee,
in its individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee.

 

16.                                 No
Recourse Against Others.  No past,
present or future director, officer, employee, incorporator or stockholder of
the Company, as such, shall have any liability for any obligations of the
Company under the Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation.  Each Holder by accepting a Note waives and
releases all such liability.  The waiver
and release are part of the consideration for the issuance of the Notes.

 

17.                                 Discharge
of Indenture; Defeasance.  The
Indenture contains provisions for defeasance at any time, upon compliance with
certain conditions set forth therein, of (i) the entire indebtedness of this
Note or (ii) certain restrictive covenants and Events of Default with respect
to this Note.

 

18.                                 Authentication.  This Note shall not be valid until the
Trustee signs the certificate of authentication on the other side of this Note.

 

19.                                 Abbreviations.  Customary abbreviations may be used in the
name of a Securityholder or an assignee, such as:  TEN COM (= tenants in common), TENANT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).

 

20.                                 Subordination.  The Notes are subordinated to all Senior
Debt, which includes any Indebtedness permitted to be incurred pursuant to the
terms of the “Limitation on

 

A-2-5

 

Additional
Indebtedness” covenant in the Indenture, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes. 
The Guarantees in respect of the Notes are subordinated to all Guarantor
Senior Debt of each Guarantor, whether outstanding on the date of the Indenture
or thereafter created, incurred, assumed or guaranteed.  Each Holder, by its acceptance hereof,
agrees to be bound by such provisions and authorizes and expressly directs the Trustee,
on its behalf, to take such action as may be necessary or appropriate to
effectuate the subordination provided for in the Indenture and appoints the
Trustee its attorney-in-fact for such purposes.

 

21.                                 GOVERNING
LAW.  THE INDENTURE AND THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

The provisions of this Note are expressly made subject
to the more detailed provisions set forth in the Indenture, which shall for all
purposes be controlling.  The Company
will furnish to any Holder upon written request and without charge a copy of
the Indenture.  Requests may be made to:

 

VERTIS, INC.

250 W. Pratt Street

18th Floor

Baltimore, MD 
21201

Attention: 
Chief Financial Officer

 

A-2-6

 

ASSIGNMENT FORM

 

If you the holder want to
assign this Note, fill in the form below and have your signature guaranteed:

 

I or we assign and transfer this Note to

 

(Insert assignee’s social security or tax ID number)

 

(Print or type assignee’s name, address and zip code) and irrevocably
appoint

 

agent to transfer this Note on the books of the Company.  The agent may substitute another to act for
him.

 

	
  Date:

  	
   

  	
  Your signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side
  of this Note)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  
						

 

A-2-7

 

OPTION OF HOLDER TO ELECT
PURCHASE

 

If you wish to have this Note purchased by the Company
pursuant to Section 4.12 or 4.15 of the Indenture, check the Box:  [  ]

 

If you wish to have a portion of this Note purchased
by the Company pursuant to Section 4.12 or 4.15 of the Indenture, state the
amount:

 

$ _________________

 

 

	
  Date:

  	
   

  	
  Your signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign exactly as your name appears on the other side
  of this Note)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature Guarantee:

  	
   

  	
   

  	
   

  

 

A-2-8

 

EXHIBIT B

 

FORM OF LEGEND FOR
BOOK-ENTRY SECURITIES

 

Any Global Security authenticated and delivered
hereunder shall bear a legend (which would be in addition to any other legends
required in the case of a Restricted Security) in substantially the following
form:

 

THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A
SUCCESSOR DEPOSITORY.  THIS SECURITY IS
NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.

 

UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

 

B-1

 

EXHIBIT C

 

Form of Certificate To Be

Delivered in Connection with

Transfers to Non-QIB Accredited Investors

 

______________ ,
__________

 

The Bank of New York

101 Barclay Street

New York, NY   10286

 

Attention:  Corporate Trust
Administration

 

Re:                               Vertis,
Inc. (the “Company”) 131⁄2% Senior Subordinated Notes due 2009 (the “Securities”)

 

Ladies and Gentlemen:

 

In connection with our proposed purchase of
$                
aggregate principal amount of the Securities, we confirm that:

 

1.                                       We
have received such information as we deem necessary in order to make our
investment decision.

 

2.                                       We
understand that any subsequent transfer of the Securities is subject to certain
restrictions and conditions set forth in the Indenture and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Securities except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the “Securities Act”).

 

3.                                       We
understand that the offer and sale of the Securities have not been registered
under the Securities Act, and that the Securities may not be offered or sold
except as permitted in the following sentence. 
We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell or otherwise transfer
any Securities prior to the date which is two years after the original issuance
of the Securities, we will do so only (i) to the Company or any subsidiary
thereof, (ii) inside the United States in accordance with Rule 144A
under the Securities Act to a person whom we reasonably believe is a “qualified
institutional buyer” (as defined in Rule 144A under the Securities Act),
(iii) inside the United States to an accredited investor (as defined
below) that,

 

C-1

 

prior
to such transfer, furnishes (or has furnished on its behalf by a U.S.
broker-dealer) to you a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the Securities,
(iv) outside the United States in an offshore transaction in accordance
with Rule 904 of Regulation S under the Securities Act, (v) pur­suant
to the exemption from registration provided by Rule 144 under the
Securities Act (if available), or (vi) pur­suant to an effective
registration statement under the Securities Act, and we further agree to
provide to any Person purchasing any of the Securities from us a notice
advising such purchaser that resales of the Securities are restricted as stated
herein.

 

4.                                       We
understand that, on any proposed resale of any Securities, we will be required
to furnish to you and the Company such certification, legal opinions and other
information as you and the Company may reasonably require to confirm that the
proposed sale complies with the foregoing restrictions.  We further understand that the Securities
purchased by us will bear a legend to the foregoing effect.

 

5.                                       We
are an institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act)(an “accredited
investor”) and have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our investment
in the Securities, and we and any accounts for which we are acting are each
able to bear the economic risk of our or their investment, as the case may be.

 

6.                                       We
are acquiring the Securities purchased by us for our account or for one or more
accounts (each of which is an accredited investor) as to each of which we exercise
sole investment discretion.

 

C-2

 

You and the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  

 

C-3

 

EXHIBIT D

 

Form of Certificate To Be
Delivered

in Connection with Transfers

Pursuant to Regulation S

 

______________ ,
__________

 

The Bank of New York

101 Barclay Street

New York, NY   10286

 

Attention:  Corporate Trust
Administration

 

Re:                               Vertis,
Inc. (the “Company”) 131⁄2% Senior Subordinated Notes due 2009 (the “Securities”)

 

Dear Sirs:

 

In connection with our proposed sale of
$                       
aggregate principal amount of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we
represent that:

 

(1)                                  the
offer of the Securities was not made to a Person in the United States;

 

(2)                                  either
(a) at the time the buy offer was originated, the transferee was outside the
United States or we and any Person acting on our behalf reasonably believed
that the transferee was outside the United States, or (b) the transaction was
executed in, on or through the facilities of a designated off-shore securities
market and neither we nor any Person acting on our behalf knows that the
transaction has been pre-arranged with a buyer in the United States;

 

(3)                                  no
directed selling efforts have been made in the United States in contravention
of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as
applicable;

 

(4)                                  the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act; and

 

(5)                                  we
have advised the transferee of the transfer restrictions applicable to the
Securities.

 

D-1

 

You and the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceedings or official
inquiry with respect to the matters covered hereby.  Terms used in this certificate have the meanings set forth in
Regulation S.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  [Name of Transferor]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  

 

D-2

 

EXHIBIT E

 

[FORM OF
NOTATION ON NOTE

RELATING TO GUARANTEES]

 

GUARANTEES

 

The Guarantors (as defined in the Indenture (the
“Indenture”) referred to in the Note upon which this notation is endorsed and
each hereinafter referred to as a “Guarantor”) have unconditionally guaranteed
on a senior subordinated basis (such guarantee by each Guarantor being referred
to herein as the “Guarantee”) (i) the due and punctual payment of the
principal of and interest on the Notes in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise and
interest on the overdue principal, if any, and interest on any interest, if
any, to the extent lawful, of the Notes and all other obligations of the
Company to the Holders all in accordance with the terms set forth in of the
Indenture and (ii) in case of any extension of time of payment or renewal
of any Notes or of any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at stated
maturity, by acceleration or otherwise.

 

The obligations of each Guarantor to the Holders and
the Trustee of the Notes pursuant to the Guarantee and the Indenture are
expressly set forth and are expressly subordinated and subject in right of
payment to the prior payment in full of all Guarantor Senior Debt of such
Guarantor, to the extent and in the manner provided, in Article XII of the
Indenture, and reference is hereby made to such Indenture for the precise terms
of the Guarantee therein made.

 

No past, present or future stockholder, director,
officer, employee or incorporator, as such, of any of the Guarantors shall have
any liability for any obligation of the Guarantors under the Guarantee or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation.  Each
Holder of a Note by accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of the Guarantees.

 

	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PrintCo., Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-1

 

	
   

  	
  Webcraft, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Webcraft Chemicals, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Enteron Group, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-2

 

	
   

  	
  Big Flower Digital Services (Delaware), Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Big Flower Digital LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-3

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