Document:

Exhibit 10.17

 

 

 

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)(l)

  	
   

  	
  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)(l)

  	
   

  	
  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)(l)(A)

  	
   

  	
  6.5

  
	
   

  	
  (a)(l)(B)

  	
   

  	
  6.4

  
	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
  (b)

  	
   

  	
  6.7

  
	
   

  	
  (c)

  	
   

  	
  9.4

  
	
  § 317

  	
  (a)(l)

  	
   

  	
  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

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE
  I

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  1.1

  	
  Definitions

  	
  1

  
	
  SECTION
  1.2

  	
  Incorporation by Reference
  of Trust Indenture Act

  	
  35

  
	
  SECTION
  1.3

  	
  Rules of Construction

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  	
   

  
	
   

  	
   

  	
   

  
	
  THE
  SECURITIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.1

  	
  Form and Dating

  	
  36

  
	
  SECTION
  2.2

  	
  Execution and
  Authentication

  	
  36

  
	
  SECTION
  2.3

  	
  Registrar and Paying Agent

  	
  37

  
	
  SECTION
  2.4

  	
  Paying Agent To Hold Money
  in Trust

  	
  38

  
	
  SECTION
  2.5

  	
  Securityholder Lists

  	
  38

  
	
  SECTION
  2.6

  	
  Transfer and Exchange

  	
  39

  
	
  SECTION
  2.7

  	
  Replacement Notes

  	
  39

  
	
  SECTION
  2.8

  	
  Outstanding Notes

  	
  40

  
	
  SECTION
  2.9

  	
  Treasury Notes

  	
  40

  
	
  SECTION
  2.10

  	
  Temporary Notes

  	
  40

  
	
  SECTION
  2.1l

  	
  Cancellation

  	
  41

  
	
  SECTION
  2.12

  	
  Defaulted Interest

  	
  41

  
	
  SECTION
  2.13

  	
  CUSIP Number

  	
  41

  
	
  SECTION
  2,14

  	
  Book-Entry Provisions for
  Global Securities

  	
  42

  
	
  SECTION
  2.15

  	
  Special Transfer
  Provisions

  	
  43

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  	
   

  
	
   

  	
   

  	
   

  
	
  REDEMPTION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.1

  	
  Notices to Trustee

  	
  45

  
	
  SECTION
  3.2

  	
  Selection of Notes To Be
  Redeemed

  	
  45

  
	
  SECTION
  3.3

  	
  Notice of Redemption

  	
  45

  
	
  SECTION
  3.4

  	
  Effect of Notice of
  Redemption

  	
  46

  
	
  SECTION
  3.5

  	
  Deposit of Redemption
  Price

  	
  46

  
	
  SECTION
  3.6

  	
  Notes Redeemed in Part

  	
  47

  

 

iii

 

	
  ARTICLE
  IV

  	
   

  
	
   

  	
   

  	
   

  
	
  COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.1

  	
  Payment of Notes

  	
  47

  
	
  SECTION
  4.2

  	
  Maintenance of Office or
  Agency

  	
  47

  
	
  SECTION
  4.3

  	
  Corporate Existence

  	
  48

  
	
  SECTION
  4.4

  	
  Payment of Taxes and Other
  Claims

  	
  48

  
	
  SECTION
  4.5

  	
  Maintenance of Properties

  	
  49

  
	
  SECTION
  4.6

  	
  Compliance Certificates;
  Notice of Default

  	
  49

  
	
  SECTION
  4.7

  	
  Reports

  	
  50

  
	
  SECTION
  4.8

  	
  Limitation on Restricted
  Payments

  	
  50

  
	
  SECTION
  4.9

  	
  Limitation on Incurrence
  of Additional Indebtedness

  	
  54

  
	
  SECTION
  4.10

  	
  Limitation on Dividend and
  Other Payment Restrictions Affecting Subsidiaries

  	
  54

  
	
  SECTION
  4.11

  	
  Limitation on Liens

  	
  56

  
	
  SECTION
  4.12

  	
  Limitation on Asset Sales

  	
  56

  
	
  SECTION
  4.13

  	
  Limitations on
  Transactions with Affiliates

  	
  61

  
	
  SECTION
  4.14

  	
  Prohibition on Incurrence
  of Senior Subordinated Debt

  	
  63

  
	
  SECTION
  4.15

  	
  Change of Control

  	
  63

  
	
  SECTION
  4.16

  	
  Waiver of Stay; Extension
  of Usury Laws

  	
  65

  
	
  SECTION
  4.17

  	
  Limitation on Guarantees
  by Restricted Subsidiaries

  	
  65

  
	
  SECTION
  4.18

  	
  Limitation on Preferred
  Stock of Subsidiaries

  	
  67

  
	
  SECTION
  4.19

  	
  Conduct of Business

  	
  67

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V

  	
   

  
	
   

  	
   

  	
   

  
	
  SUCCESSOR
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  5.1

  	
  Limitation on Mergers,
  Consolidations or Sales of Assets

  	
  67

  
	
  SECTION
  5.2

  	
  Successor Entity
  Substituted

  	
  69

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  	
   

  
	
   

  	
   

  	
   

  
	
  DEFAULT
  AND REMEDIES

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  6.1

  	
  Events of Default

  	
  70

  
	
  SECTION
  6.2

  	
  Acceleration

  	
  72

  
	
  SECTION
  6.3

  	
  Other Remedies

  	
  73

  
	
  SECTION
  6.4

  	
  Waiver of Past Default

  	
  73

  
	
  SECTION
  6.5

  	
  Control by Majority

  	
  73

  
	
  SECTION
  6.6

  	
  Limitation on Suits

  	
  74

  
	
  SECTION
  6.7

  	
  Rights of Holders To
  Receive Payment

  	
  74

  
	
  SECTION
  6.8

  	
  Collection Suit by Trustee

  	
  74

  
	
  SECTION
  6.9

  	
  Trustee May File Proofs of
  Claim

  	
  75

  

 

iv

 

	
  SECTION
  6.10

  	
  Priorities

  	
  75

  
	
  SECTION
  6.1l

  	
  Undertaking for Costs

  	
  75

  
	
  SECTION
  6.12

  	
  Rights and Remedies
  Cumulative

  	
  76

  
	
  SECTION
  6.13

  	
  Delay or Omission Not
  Waiver

  	
  76

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  
	
   

  	
   

  	
   

  
	
  TRUSTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  7.1

  	
  Duties of Trustee

  	
  76

  
	
  SECTION
  7.2

  	
  Rights of Trustee

  	
  77

  
	
  SECTION
  7.3

  	
  Individual Rights of
  Trustee

  	
  79

  
	
  SECTION
  7.4

  	
  Trustee’s Disclaimer

  	
  79

  
	
  SECTION
  7.5

  	
  Notice of Defaults

  	
  79

  
	
  SECTION
  7.6

  	
  Reports by Trustee to
  Holders

  	
  79

  
	
  SECTION
  7.7

  	
  Compensation and Indemnity

  	
  80

  
	
  SECTION
  7.8

  	
  Replacement of Trustee

  	
  81

  
	
  SECTION
  7.9

  	
  Successor Trustee by
  Merger, Etc

  	
  82

  
	
  SECTION
  7.10

  	
  Eligibility;
  Disqualification

  	
  82

  
	
  SECTION
  7.11

  	
  Preferential Collection of
  Claims Against Company

  	
  82

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  	
   

  
	
   

  	
   

  	
   

  
	
  DISCHARGE
  OF INDENTURE; DEFEASANCE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  8.1

  	
  Termination of the
  Company’s Obligations

  	
  82

  
	
  SECTION
  8.2

  	
  Legal Defeasance and
  Covenant Defeasance

  	
  84

  
	
  SECTION
  8.3

  	
  Conditions to Legal Defeasance
  or Covenant Defeasance

  	
  85

  
	
  SECTION
  8.4

  	
  Application of Trust Money

  	
  87

  
	
  SECTION
  8.5

  	
  Repayment to the Company

  	
  87

  
	
  SECTION
  8.6

  	
  Reinstatement

  	
  88

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
   

  
	
   

  	
   

  	
   

  
	
  AMENDMENTS,
  SUPPLEMENTS AND WAIVERS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  9.1

  	
  Without Consent of Holders

  	
  88

  
	
  SECTION
  9.2

  	
  With Consent of Holders

  	
  89

  
	
  SECTION
  9.3

  	
  Compliance with Trust
  Indenture Act

  	
  90

  
	
  SECTION
  9.4

  	
  Revocation and Effect of
  Consents

  	
  91

  
	
  SECTION
  9.5

  	
  Notation on or Exchange of
  Notes

  	
  91

  
	
  SECTION
  9.6

  	
  Trustee To Sign
  Amendments, Etc

  	
  91

  

 

v

 

 

	
  ARTICLE
  X

  	
   

  
	
   

  	
   

  	
   

  
	
  SUBORDINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  10.1

  	
  Notes
  Subordinated to Senior Debt

  	
  92

  
	
  SECTION
  10.2 

  	
  Suspension of Payment When
  Senior Debt Is in Default

  	
  92

  
	
  SECTION
  10.3 

  	
  Obligations Subordinated
  to Prior Payment of All Senior Debt on Dissolution,  Liquidation

  	
   

  
	
   

  	
    or
  Reorganization of Company

  	
  94

  
	
  SECTION
  10.4 

  	
  Payments May Be Paid Prior
  to Dissolution

  	
  95

  
	
  SECTION
  10.5 

  	
  Holders To Be Subrogated
  to Rights of Holders of Senior Debt

  	
  96

  
	
  SECTION
  10.6 

  	
  Obligations of the Company
  Unconditional

  	
  96

  
	
  SECTION
  10.7 

  	
  Reliance on Judicial Order
  or Certificate of Liquidating Agent

  	
  97

  
	
  SECTION
  10.8 

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

  	
   

  
	
   

  	
    Debt

  	
  97

  
	
  SECTION
  10.9 

  	
  Holders Authorize Trustee
  To Effectuate Subordination of Obligations

  	
  98

  
	
  SECTION
  10.10 

  	
  Amendments or
  Modifications to Article X

  	
  98

  
	
  SECTION
  10.11 

  	
  Article X Not to Prevent
  Events of Default

  	
  98

  
	
  SECTION
  10.12

  	
  No Fiduciary Duty of
  Trustee to Holders of Senior Debt

  	
  99

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XI

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTEE

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  11.1

  	
  Unconditional Guarantee

  	
  99

  
	
  SECTION
  11.2

  	
  Subordination of Guarantee

  	
  100

  
	
  SECTION
  11.3

  	
  Severability

  	
  100

  
	
  SECTION
  11.4

  	
  Release of a Guarantor

  	
  100

  
	
  SECTION
  11.5

  	
  Limitation of Guarantor’s
  Liability

  	
  101

  
	
  SECTION
  11.6

  	
  Consolidation, Merger and
  Sale of Assets

  	
  101

  
	
  SECTION
  11.7

  	
  Contribution

  	
  102

  
	
  SECTION
  11.8

  	
  Waiver of Subrogation

  	
  102

  
	
  SECTION
  11.9

  	
  Evidence of Guarantee

  	
  103

  
	
  SECTION
  11.10

  	
  Waiver of Stay, Extension
  or Usury Laws

  	
  103

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XII

  	
   

  
	
   

  	
   

  	
   

  
	
  SUBORDINATION
  OF GUARANTEE OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  12.1

  	
  Guarantee Obligations
  Subordinated to Guarantor Senior Debt

  	
  103

  

 

vi

 

	
  SECTION
  12.2

  	
  Suspension of Guarantee
  Obligations When Guarantor Senior Debt Is in Default

  	
  104

  
	
  SECTION
  12.3 

  	
  Guarantee Obligations
  Subordinated to Prior Payment of All

  	
   

  
	
   

  	
    Guarantor
  Senior Debt on Dissolution, Liquidation or Reorganization of Such Guarantor

  	
  105

  
	
  SECTION
  12.4 

  	
  Payments May Be Paid Prior
  to Dissolution

  	
  106

  
	
  SECTION
  12.5 

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

  	
  107

  
	
  SECTION
  12.6 

  	
  Guarantee Obligations of
  the Guarantors Unconditional

  	
  107

  
	
  SECTION
  12.7 

  	
  Reliance on Judicial Order
  or Certificate of Liquidating Agent

  	
  107

  
	
  SECTION
  12.8 

  	
  Subordination Rights Not
  Impaired by Acts or Omissions of

  	
  108

  
	
   

  	
  the Guarantors or Lenders of Guarantor Senior Debt

  	
   

  
	
  SECTION
  12.9 

  	
  Holders Authorize Trustee
  To Effectuate Subordination of Guarantee Obligations

  	
  108

  
	
  SECTION
  12.10

  	
  This Article XII Not To
  Prevent Events of Default

  	
  109

  
	
  SECTION
  12.11 

  	
  Amendments or
  Modifications to Article XII

  	
  109

  
	
  SECTION
  12.12

  	
  No Fiduciary Duty of
  Trustee to Holders of Senior Debt

  	
  109

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  XIII

  	
   

  
	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  13.1

  	
  Trust Indenture Act
  Controls

  	
  110

  
	
  SECTION
  13.2

  	
  Notices

  	
  110

  
	
  SECTION
  13.3

  	
  Communications by Holders
  with Other Holders

  	
  111

  
	
  SECTION
  13.4

  	
  Certificate and Opinion of
  Counsel as to Conditions Precedent

  	
  111

  
	
  SECTION
  13.5

  	
  Statements Required in
  Certificate and Opinion of Counsel

  	
  112

  
	
  SECTION
  13.6

  	
  Rules by Trustee, Paying
  Agent, Registrar

  	
  112

  
	
  SECTION
  13.7

  	
  Legal Holidays

  	
  112

  
	
  SECTION
  13.8

  	
  Governing Law

  	
  112

  
	
  SECTION
  13.9

  	
  No Recourse Against Others

  	
  113

  
	
  SECTION
  13.10

  	
  Successors

  	
  113

  
	
  SECTION
  13.11

  	
  Counterparts

  	
  113

  
	
  SECTION
  13.12

  	
  Severability

  	
  113

  
	
  SECTION
  13.13

  	
  Table of Contents,
  Headings, Etc

  	
  113

  
	
  SECTION
  13.14

  	
  No Adverse Interpretation
  of Other Agreements

  	
  113

  
	
  SECTION
  13.15

  	
  Benefits of Indenture

  	
  114

  
	
  SECTION
  13.16

  	
  Independence of Covenants

  	
  114

  

 

 

vii

 

	
  Exhibit
  A-l

  	
  — 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

 

DEFINITlONS 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. l (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-l from S&P or at
least P-l 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 111 l(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 properly, 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)(l), (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 111l(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-l 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-l 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-l (“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-l (“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-l 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-l 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.l(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)(l) 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)(l) 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)(l) 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 § 31l(a), excluding any creditor
relationship listed in TIA § 31l(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. l(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.
l(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 TLA;

 

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 (1) 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 XIII, 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 TTA §§ 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 TTA § 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, Paving 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: Sr. V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBSIDIARY
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINTCO.,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard,
  Jr. 

  
	
   

  	
   

  	
  Title: Sr. V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard,
  Jr. 

  
	
   

  	
   

  	
  Title: Sr. V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT
  CHEMICALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard,
  Jr. 

  
	
   

  	
   

  	
  Title: Sr. V.P.

  

 

 

	
   

  	
  ENTERON GROUP, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard,
  Jr. 

  
	
   

  	
   

  	
  Title: Sr. V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BIG
  FLOWER DIGITAL SERVICES

  (DELAWARE), INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard,
  Jr. 

  
	
   

  	
   

  	
  Title: Sr. V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BIG FLOWER DIGITAL LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  BIG
  FLOWER DIGITAL SERVICES

  (DELAWARE), INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Howard, Jr.

  
	
   

  	
   

  	
  Name: John V. Howard,
  Jr. 

  
	
   

  	
   

  	
  Title: Sr. V.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  Notice Address for all
  Guarantors:

  
	
   

  	
   

  
	
   

  	
   

  	
  Vertis, Inc.

  
	
   

  	
   

  	
  250 W. Pratt Street

  
	
   

  	
   

  	
  18th Floor

  
	
   

  	
   

  	
  Baltimore, MD 21201

  
	
   

  	
   

  	
  Attention: 

  	
  Chief Financial

  Officer

  
	
   

  	
   

  	
  Telephone:

  	
  (410) 528-9800

  
	
   

  	
   

  	
  Telecopy: 

  	
  (410) 528-9287

  
					

 

 

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:

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK,

  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Geovanni Barris

  
	
   

  	
   

  	
  Name: GEOVANNI BARRIS 

  
	
   

  	
   

  	
  Title: VICE PRESIDENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PRINTCO.,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT,
  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  WEBCRAFT
  CHEMICALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

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 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-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:

  	
   

  
						

 

 

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: o

 

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:

  	
   

  
						

 

EXHIBIT A-2

 

[FORM OF
SERIES B SECURITIES]

 

	
  No.

  	
   

  	
  $

  

 

VERTIS,
INC.

 

131/2% SENIOR SUBORDINATED NOTE
DUE 2009

 

 

	
  sum of

  	
   

  	
  VERTIS, INC. promises to pay to

  Dollars on December 7, 2009.

  	
   

  	
  or registered assigns the principal

  

 

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 l31/2% 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:

  	
   

  
						

 

 

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: o

 

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:

  	
   

  	
   

  
							

 

 

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)(l), (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-3EXHIBIT 4.1

 

	
  Number

  A-

  	
  Incorporated Under the Laws of the State of
  Delaware

  	
  Shares

  -0-

  Cusip No.

  53071M 10 4

  

 

LIBERTY MEDIA CORPORATION

 

Series A Liberty Interactive
Common Stock, par value $.01 per share

 

Specimen Certificate

 

This Certifies that                                                    
is the owner of                                                    
FULLY PAID AND NON-ASSESSABLE SHARES OF SERIES A LIBERTY INTERACTIVE COMMON
STOCK, PAR VALUE $0.01 PER SHARE, OF LIBERTY MEDIA CORPORATION (hereinafter
called the “Corporation”) transferable on the books of the Corporation by the
holder hereof in person or by duly authorized attorney upon surrender of the
Certificate properly endorsed. This Certificate is not valid unless
countersigned by the Transfer Agent and registered by the Registrar.

 

Witness, the seal of the Corporation and the signatures
of its duly authorized officers.

 

Dated:

 

	
   

  	
  Liberty
  Media Corporation

  [Corporate Seal]

  	
   

  
	
   

  	
   

  	
   

  
	
  President  

  	
   

  	
  Secretary

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