EXHIBIT 1.1
PREMIER GRAPHICS, INC.
AND ITS GUARANTORS
$130,000,000
11 1/2% Senior Notes due 2005
PURCHASE AGREEMENT
DECEMBER 8, 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
$130,000,000
11 1/2% Senior Notes Due 2005
PREMIER GRAPHICS, INC.
AND ITS GUARANTORS
PURCHASE AGREEMENT
December 8, 1998
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
As Initial Purchasers
c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Premier Graphics, Inc., a Delaware corporation (the "Company"), proposes to
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issue and sell to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation ("DLJ"),
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Prudential Securities Incorporated and ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc. (each, an
"Initial Purchaser" and, collectively, the "Initial Purchasers") an aggregate
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of $130,000,000 in principal amount of its 11 1/2% Senior Notes due 2005 (the
"Restricted Notes"), subject to the terms and conditions set forth herein. The
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Restricted Notes are to be issued pursuant to the provisions of an indenture
(the "Indenture"), to be dated as of the Closing Date (as defined below), among
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the Company, the Guarantors (as defined below) and United States Trust Company
of New York, as trustee (the "Trustee"). The Restricted Notes and the Exchange
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Notes (as defined below), issuable in exchange therefor, are collectively
referred to herein as the "Notes." The Notes will be guaranteed (the
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"Guarantees") initially by Master Graphics, Inc., a Tennessee corporation and
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the sole parent of the Company, and Harperprints, Inc., a North Carolina
corporation (each, a "Guarantor" and collectively the "Guarantors").
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Capitalized terms used but not defined herein shall have the meanings given to
such terms in the Indenture.
1. Offering Memorandum. The Restricted Notes will be offered and sold to
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the Initial Purchasers pursuant to one or more exemptions from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
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Company and the Guarantors have prepared a preliminary offering memorandum,
dated November 24, 1998 (the "Preliminary Offering Memorandum"), and a final
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offering memorandum, dated December 8, 1998 (the "Offering Memorandum"),
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relating to the Restricted Notes and the Guarantees.
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Upon original issuance thereof, and until such time as the same is no longer
required pursuant to the Indenture, the Restricted Notes (and all securities
issued in exchange therefor, in substitution thereof or upon conversion thereof)
shall bear the following legend:
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS,
EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION
HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B)
IT IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER REGULATION D UNDER THE
SECURITIES ACT (AN "IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (E) TO AN AIA THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER
IS IN COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN
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EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE
OR AN INTEREST ▇▇▇▇▇▇ IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED
STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION
S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS
NOTE IN VIOLATION OF THE FOREGOING.
2. Agreements to Sell and Purchase. On the basis of the representations,
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warranties and covenants contained in this Agreement, and subject to the terms
and conditions contained herein, the Company agrees to issue and sell to the
Initial Purchasers, and each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, the principal amount of Restricted Notes
set forth opposite the name of such Initial Purchaser on Schedule A HERETO AT A
PURCHASE PRICE EQUAL TO 97% OF THE PRINCIPAL AMOUNT THEREOF (THE "PURCHASE
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PRICE").
3. Terms of Offering. The Initial Purchasers have advised, and represent
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and warrant to, the Company that the Initial Purchasers will make offers and
sales (the "Exempt Resales") of the Restricted Notes purchased hereunder on the
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terms set forth in the Offering Memorandum, as amended or supplemented, solely
to (i) persons whom the Initial Purchasers reasonably believe to be "qualified
institutional buyers" ("QIBs"), and (ii) to persons permitted to purchase the
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Restricted Notes in offshore transactions in reliance upon Regulation S under
the Act (each a "Regulation S Purchaser") (QIB's and Regulation S Purchasers
----------------------
being referred to herein as the "Eligible Purchasers"). The Initial Purchasers
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will offer the Restricted Notes to Eligible Purchasers initially at a price
equal to the percentage of the principal amount thereof set forth on the cover
page of the Offering Memorandum.
Holders (including subsequent transferees) of the Restricted Notes
will have the registration rights set forth in the registration rights agreement
(the "Registration Rights Agreement"), to be dated the Closing Date, in
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substantially the form of Exhibit A hereto, for so long as such Restricted Notes
constitute "Transfer Restricted Securities" (as defined in the Registration
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Rights Agreement). Pursuant to the Registration Rights Agreement, the Company
and the Guarantors will agree to file with the Securities and Exchange
Commission (the "Commission") under the circumstances set forth therein (i) a
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registration statement under the Act (the "Exchange Offer Registration
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Statement") relating to the Company's 11 1/2% Senior Notes due 2005 (the
"Exchange Notes"), to be offered in exchange for the Restricted Notes (such
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offer to exchange being referred to as the "Exchange Offer") and the Guarantees
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thereof and/or (ii) a shelf registration statement pursuant to Rule 415 under
the Act (the "Shelf Registration Statement" and, together with the Exchange
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Offer Registration Statement, the "Registration Statements") relating to the
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resale by certain holders of the Restricted Notes and to use its reasonable best
efforts to cause such Registration Statements to be declared and remain
effective and usable for the periods specified in the Registration Rights
Agreement and to consummate the Exchange Offer. This Agreement, the Indenture,
the Notes, the Guarantees and the Registration Rights Agreement are herein
referred to collectively as the "Operative Documents."
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4. Delivery and Payment.
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(a) Delivery of, and payment of the Purchase Price for, the
Notes shall be made at the offices of Baker, Donelson, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
Memphis, Tennessee, or such other location as may be mutually acceptable. Such
delivery and payment shall be made at 9:00 a.m. New York City time, on December
11, 1998 or at such other time or date as shall be agreed upon by the Initial
Purchasers and the Company in writing. The time and date of such delivery and
the payment for the Notes are herein called the "Closing Date."
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(b) One or more of the Restricted Notes in definitive global
form, registered in the name of Cede & Co., as nominee of The Depository Trust
Company ("DTC"), having an aggregate principal amount corresponding to the
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aggregate principal amount of the Restricted Notes (collectively, the "Global
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Notes"), shall be delivered by the Company to the Initial Purchasers (or as the
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Initial Purchasers direct) in each case with any transfer taxes thereon duly
paid by the Company against payment by the Initial Purchasers of the Purchase
Price thereof by wire transfer in same day funds to the order of the Company.
The Global Notes shall be made available to the Initial Purchasers for
inspection not later than 9:30 a.m., New York City time, on the business day
immediately preceding the Closing Date.
5. Agreements of the Company and the Guarantors. Each of the Company and
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the Guarantors hereby agrees with the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Restricted Notes for
offering or sale in any jurisdiction designated by the Initial Purchasers
pursuant to Section 5(e) hereof, or the initiation of any proceeding by any
state securities commission or any other federal or state regulatory authority
for such purpose and (ii) of the happening of any event during the period
referred to in Section 5(c) below that makes any statement of a material fact
made in the Preliminary Offering Memorandum or the Offering Memorandum untrue or
that requires any additions to or changes in the Preliminary Offering Memorandum
or the Offering Memorandum in order to make the statements therein not
misleading. The Company and the Guarantors shall use their best efforts to
prevent the issuance of any stop order or order suspending the qualification or
exemption of any Restricted Notes under any state securities or Blue Sky laws
and, if at any time any state securities commission or other federal or state
regulatory authority shall issue an order suspending the qualification or
exemption of any Restricted Notes under any state securities or Blue Sky laws,
the Company and the Guarantors shall use their best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any amendments
or supplements thereto, as the Initial Purchasers may reasonably request for the
time period specified in Section 5(c). Subject to the Initial Purchasers'
compliance with their representations and warranties and agreements set forth in
Section 7 hereof, the Company consents to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection with
Exempt Resales.
(c) During such period as in the opinion of counsel for the
Initial Purchasers an Offering Memorandum is required by law to be delivered in
connection with Exempt Resales by the Initial Purchasers and in connection with
market-making activities of the Initial Purchasers for so long as any Restricted
Notes are outstanding, (i) not to make any amendment or supplement to the
Offering
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Memorandum of which the Initial Purchasers shall not previously have been
advised or to which the Initial Purchasers shall reasonably object after being
so advised and (ii) to prepare promptly upon the Initial Purchasers' reasonable
request based on the opinion of its counsel, any amendment or supplement to the
Offering Memorandum which may be necessary or advisable in connection with such
Exempt Resales or such market-making activities.
(d) If, during the period referred to in Section 5(c) above,
any event shall occur or condition shall exist as a result of which, in the
opinion of counsel to the Initial Purchasers, it becomes necessary to amend or
supplement the Offering Memorandum in order to make the statements therein, in
the light of the circumstances when such Offering Memorandum is delivered to an
Eligible Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchasers, it is necessary to amend or supplement the Offering
Memorandum to comply with any applicable law, forthwith to prepare an
appropriate amendment or supplement to such Offering Memorandum so that the
statements therein, as so amended or supplemented, will not, in the light of the
circumstances when it is so delivered, be misleading, or so that such Offering
Memorandum will comply with applicable law, and to furnish to the Initial
Purchasers and such other persons as the Initial Purchasers may designate such
number of copies thereof as the Initial Purchasers may reasonably request.
(e) Prior to the sale of all Restricted Notes pursuant to
Exempt Resales as contemplated hereby, to cooperate with the Initial Purchasers
and counsel to the Initial Purchasers in connection with the registration or
qualification of the Restricted Notes for offer and sale to the Initial
Purchasers and pursuant to Exempt Resales under the securities or Blue Sky laws
of such jurisdictions as the Initial Purchasers may reasonably request and to
continue such registration or qualification in effect so long as required for
Exempt Resales and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification; provided, however, that neither the Company nor any Guarantor
shall be required in connection therewith to qualify as a foreign corporation in
any jurisdiction in which it is not now so qualified or to take any action that
would subject it to general consent to service of process or taxation other than
as to matters and transactions relating to the Preliminary Offering Memorandum,
the Offering Memorandum or Exempt Resales, in any jurisdiction in which it is
not now so subject.
(f) So long as the Notes are outstanding, (i) to mail and make
generally available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company, the
Guarantors and their subsidiaries on a consolidated basis or of Master Graphics,
Inc. if such report is required to be made available pursuant to Section 4.6 of
the Indenture (and a similar financial report of all unconsolidated
subsidiaries, if any), all such financial reports to include a consolidated
balance sheet, a consolidated statement of operations, a consolidated statement
of cash flows and a consolidated statement of shareholders' equity as of the end
of and for such fiscal year, together with comparable information as of the end
of and for the preceding year, certified by the independent public accountants
of the Company or Master Graphics, Inc., as applicable, and (ii) to mail and
make generally available as soon as practicable after the end of each quarterly
period (except for the last quarterly period of each fiscal year) to such
holders, a consolidated balance sheet, a consolidated statement of operations
and a consolidated statement of cash flows (and similar financial reports of all
unconsolidated subsidiaries, if any) as of the end of and for such period, and
for the period from the beginning of such year to the close of such quarterly
period, together with comparable information for the corresponding periods of
the preceding year of the Company or Master Graphics, Inc., as applicable.
(g) So long as the Notes are outstanding, to furnish to the
Initial Purchasers as soon as available copies of all reports or other
communications furnished by the Company or any of the Guarantors to its security
holders or furnished to or filed with the Commission or any national securities
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exchange on which any class of securities of the Company or any of the
Guarantors is listed and such other publicly available information concerning
the Company and/or its subsidiaries as the Initial Purchasers may reasonably
request.
(h) So long as any of the Restricted Notes remain outstanding
and during any period in which the Company and the Guarantors are not subject to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), to make available to any holder of Restricted Notes in
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connection with any sale thereof and any prospective purchaser of such
Restricted Notes from such holder, the information ("Rule 144A Information")
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required by Rule 144A(d)(4) under the Act.
(i) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of the Company
and the Guarantors under this Agreement, including: (i) the fees, disbursements
and expenses of counsel to the Company and the Guarantors and accountants of the
Company and the Guarantors in connection with the sale and delivery of the
Restricted Notes to the Initial Purchasers and pursuant to Exempt Resales, and
all other fees and expenses in connection with the preparation, printing, filing
and distribution of the Preliminary Offering Memorandum, the Offering Memorandum
and all amendments and supplements to any of the foregoing (including financial
statements), including the mailing and delivering of copies thereof to the
Initial Purchasers and persons designated by it in the quantities specified
herein, (ii) all costs and expenses related to the transfer and delivery of the
Restricted Notes to the Initial Purchasers and pursuant to Exempt Resales,
including any transfer or other taxes payable thereon, (iii) all costs of
printing or producing this Agreement, the other Operative Documents and any
other agreements or documents in connection with the offering, purchase, sale or
delivery of the Restricted Notes, (iv) all expenses in connection with the
registration or qualification of the Restricted Notes and the Guarantees for
offer and sale under the securities or Blue Sky laws of the several states and
all costs of printing or producing any preliminary and supplemental Blue Sky
memoranda in connection therewith (including the filing fees and fees and
disbursements of counsel for the Initial Purchasers in connection with such
registration or qualification and memoranda relating thereto), (v) the cost of
printing certificates representing the Restricted Notes and the Guarantees, (vi)
all expenses and listing fees in connection with the application for quotation
of the Restricted Notes in the National Association of Securities Dealers, Inc.
("NASD") Private Offerings, Resales and Trading through Automatic Linkages
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Market ("PORTAL"), (vii) the fees and expenses of the Trustee and the Trustee's
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counsel in connection with the Indenture, the Notes and the Guarantees, (viii)
the costs and charges of any transfer agent, registrar and/or depositary
(including DTC), (ix) any fees charged by rating agencies for the rating of the
Notes, (x) all costs and expenses of the Exchange Offer and any Registration
Statement, as set forth in the Registration Rights Agreement, and (xi) and all
other costs and expenses incident to the performance of the obligations of the
Company and the Guarantors hereunder for which provision is not otherwise made
in this Section.
(j) To use its best efforts to effect the inclusion of the
Restricted Notes in PORTAL and to maintain the listing of the Restricted Notes
on PORTAL for so long as the Restricted Notes are outstanding.
(k) To obtain the approval of DTC for "book-entry" transfer of
the Notes, and to comply with all of its agreements set forth in the
representation letters of the Company and the Guarantors to DTC relating to the
approval of the Notes by DTC for "book-entry" transfer.
(l) Except as described in the Offering Memorandum, during the
period beginning on the date hereof and continuing to and including the Closing
Date, not to offer, sell, contract to sell or otherwise transfer or dispose of
any debt securities of the Company or any Guarantor or any
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warrants, rights or options to purchase or otherwise acquire debt securities of
the Company or any Guarantor substantially similar to the Notes and the
Guarantees (other than (i) the Notes and the Guarantees and (ii) commercial
paper issued in the ordinary course of business), without the prior written
consent of the Initial Purchasers.
(m) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Restricted Notes to the Initial
Purchasers or pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Restricted Notes under the Act.
(n) Not to voluntarily claim, and to actively resist any
attempts to claim, the benefit of any usury laws against the holders of any
Notes and the related Guarantees.
(o) To cause the Exchange Offer to be made in the appropriate
form to permit Exchange Notes and guarantees thereof by the Guarantors
registered pursuant to the Act to be offered in exchange for the Restricted
Notes and the Guarantees and to comply with all applicable federal and state
securities laws in connection with the Exchange Offer.
(p) To comply with all of its agreements set forth in the
Registration Rights Agreement.
(q) To use its best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by it prior
to the Closing Date and to satisfy all conditions precedent to the delivery of
the Restricted Notes and the Guarantees.
6. Representations, Warranties and Agreements of the Company and the
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Guarantors. As of the date hereof, each of the Company and the Guarantors
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represents and warrants to, and agrees with, the Initial Purchasers that:
(a) The Preliminary Offering Memorandum and the Offering
Memorandum do not, and any supplement or amendment to them will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that the
representations and warranties contained in this paragraph (a) shall not apply
to statements in or omissions from the Preliminary Offering Memorandum or the
Offering Memorandum (or any supplement or amendment thereto) based upon
information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(b) Each of the Company and the Guarantors has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to carry on its business as described in the Preliminary Offering
Memorandum and the Offering Memorandum and to own, lease and operate its
properties, and each is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition or
results of operations of the Company and the Guarantors, taken as a whole (a
"Material Adverse Effect"). Neither the Company nor Harperprints, Inc. has any
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subsidiaries. The only
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subsidiaries of Master Graphics, Inc. are the Company and Harperprints, Inc.
(c) All outstanding shares of capital stock of the Guarantors
and the Company have been duly authorized and validly issued and are fully paid,
non-assessable, are owned by Master Graphics, Inc., and not subject to any
preemptive or similar rights.
(d) All of the outstanding shares of capital stock of the
Company and Harperprints, Inc. are owned by Master Graphics, Inc., free and
clear of any security interest, claim, lien, encumbrance or adverse interest of
any nature (each, a "Lien"), other than the security interests of General
Electric Capital Corporation and Deutsche Financial Services Corporation and the
right of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ to reacquire the common stock of Harperprints, Inc. upon
the occurrence of certain events.
(e) This Agreement has been duly authorized, executed and
delivered by the Company and each of the Guarantors.
(f) The Indenture has been duly authorized by the Company and
each of the Guarantors and, on the Closing Date, will have been validly executed
and delivered by the Company and each of the Guarantors. When the Indenture has
been duly executed and delivered by the Company and each of the Guarantors, the
Indenture will be a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in accordance with
its terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability. On the Closing Date, the
Indenture will conform in all material respects to the requirements of the Trust
Indenture Act of 1939, as amended (the "TIA" or "Trust Indenture Act"), and the
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rules and regulations of the Commission applicable to an indenture which is
qualified thereunder.
(g) The Restricted Notes have been duly authorized and, on the
Closing Date, will have been validly executed and delivered by the Company. When
the Restricted Notes have been issued, executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by the
Initial Purchasers in accordance with the terms of this Agreement, the
Restricted Notes will be entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company, enforceable in accordance with
their terms except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability. On the Closing Date,
the Restricted Notes will conform as to legal matters to the description thereof
contained in the Offering Memorandum.
(h) On the Closing Date, the Exchange Notes will have been
duly authorized by the Company. When the Exchange Notes are issued, executed and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, the Exchange Notes will be entitled to the benefits of the Indenture
and will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(i) The notation of the Guarantees to be endorsed on the
Restricted Notes by each Guarantor has been duly authorized by such Guarantor
and, on the Closing Date, will have been duly executed and delivered by each
such Guarantor. When the Restricted Notes have been issued, executed and
authenticated in accordance with the Indenture and delivered to and paid for by
the Initial Purchasers in
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accordance with the terms of this Agreement, the Guarantee of each Guarantor
will be entitled to the benefits of the Indenture and will be the valid and
binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of equitable
remedies may be limited by equitable principles of general applicability. On the
Closing Date, the Guarantees will conform as to legal matters to the description
thereof contained in the Offering Memorandum.
(j) The notation of the Guarantees to be endorsed on the
Exchange Notes by each Guarantor has been duly authorized by such Guarantor and,
when issued, will have been duly executed and delivered by each such Guarantor.
When the Exchange Notes have been issued, executed and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, the Guarantee
of each Guarantor endorsed thereon will be entitled to the benefits of the
Indenture and will be the valid and binding obligation of such Guarantor,
enforceable against such Guarantor in accordance with its terms, except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability. When the Exchange Notes are issued, authenticated and
delivered, the Guarantees will continue to conform as to legal matters to the
description thereof in the Offering Memorandum.
(k) The Registration Rights Agreement has been duly authorized
by the Company and each of the Guarantors and, on the Closing Date, will have
been duly executed and delivered by the Company and each of the Guarantors. When
the Registration Rights Agreement has been duly executed and delivered, the
Registration Rights Agreement will be a valid and binding agreement of the
Company and each of the Guarantors, enforceable against the Company and each
Guarantor in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability. On the Closing Date, the Registration Rights Agreement will
conform as to legal matters to the description thereof in the Offering
Memorandum.
(l) Neither the Company nor any of the Guarantors is in
violation of its respective charter or by-laws or in default in the performance
of any obligation, agreement, covenant or condition contained in any indenture,
loan agreement, mortgage, lease or other agreement or instrument that is
material to the Company and the Guarantors, taken as a whole, to which the
Company or any of the Guarantors is a party or by which the Company or any of
the Guarantors or their respective property is bound.
(m) The execution, delivery and performance of this Agreement
and the other Operative Documents by the Company and each of the Guarantors,
compliance by the Company and each of the Guarantors with all provisions hereof
and thereof and the consummation of the transactions contemplated hereby and
thereby will not (i) require any consent, approval, authorization or other order
of, or qualification with, any court or governmental body or agency (except such
as may be required under the securities or Blue Sky laws of the various states),
(ii) conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the charter or by-laws of the Company or any of the
Guarantors or any indenture, loan agreement, mortgage, lease or other agreement
or instrument that is material to the Company and the Guarantors, taken as a
whole, to which the Company or any of the Guarantors is a party or by which the
Company or any of the Guarantors or their respective property is bound, (iii)
violate or conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency having
jurisdiction over the Company, any of the Guarantors or their
9
respective property, (iv) result in the imposition or creation of (or the
obligation to create or impose) a Lien under, any agreement or instrument to
which the Company or any of the Guarantors is a party or by which the Company or
any of the Guarantors or their respective property is bound, or (v) result in
the termination, suspension or revocation of any Authorization (as defined
below) of the Company or any of its subsidiaries or result in any other
impairment of the rights of the holder of any such Authorization.
(n) There are no legal or governmental proceedings pending or
threatened to which the Company or any of the Guarantors is or could be a party
or to which any of their respective property is or could be subject, which might
result, singly or in the aggregate, in a Material Adverse Effect.
(o) Except as disclosed in the Offering Memorandum, neither
the Company nor any of the Guarantors has violated any foreign, federal, state
or local law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), any provisions of the Employee
------------------
Retirement Income Security Act of 1974, as amended ("ERISA"), or any provisions
-----
of the Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the aggregate, would
not have a Material Adverse Effect.
(p) Except as disclosed in the Offering Memorandum, there are
no costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, have a Material Adverse
Effect.
(q) Each of the Company and the Guarantors has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
(each, an "Authorization") of, and has made all filings with and notices to, all
-------------
governmental or regulatory authorities and self-regulatory organizations and all
courts and other tribunals, including without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business, except where the failure to
have any such Authorization or to make any such filing or notice would not,
singly or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the Company and
the Guarantors is in compliance with all the terms and conditions thereof and
with the rules and regulations of the authorities and governing bodies having
jurisdiction with respect thereto; and no event has occurred (including, without
limitation, the receipt of any notice from any authority or governing body)
which allows or, after notice or lapse of time or both, would allow, revocation,
suspension or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the rights of
the holder of any such Authorization; except where such burden or failure to be
valid and in full force and effect or to be in compliance, the occurrence of any
such event or the presence of any such restriction would not, singly or in the
aggregate, have a Material Adverse Effect and such Authorizations contain no
restrictions that are burdensome to the Company or any of the Guarantors.
(r) The accountants, KPMG Peat Marwick LLP, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
PLC, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Company, LLP, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
P.C., ▇.▇. ▇▇▇▇▇ & Company, P.A., ▇▇▇▇▇▇ & Company, P.C., that have certified
the financial statements and supporting schedules included in the Preliminary
Offering Memorandum and the Offering Memorandum are independent public
accountants with respect to the Company and the Guarantors, as required by the
Act and the Exchange Act. The historical financial statements, together with
related schedules and notes, set forth in the Preliminary Offering Memorandum
and the Offering Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under the Act.
10
(s) The historical financial statements, together with related
schedules and notes forming part of the Offering Memorandum (and any amendment
or supplement thereto), present fairly the consolidated financial position,
results of operations and changes in financial position of Master Graphics, Inc.
and its subsidiaries on the basis stated in the Offering Memorandum at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as disclosed therein; and the other financial and
statistical information and data set forth in the Offering Memorandum (and any
amendment or supplement thereto) are, in all material respects, accurately
presented and prepared on a basis consistent with such financial statements and
the books and records of Master Graphics, Inc.
(t) The pro forma financial statements included in the
Preliminary Offering Memorandum and the Offering Memorandum have been prepared
on a basis consistent with the historical financial statements of the Company
and the Guarantors and give effect to assumptions used in the preparation
thereof on a reasonable basis and in good faith and such pro forma financial
statements comply as to form in all material respects with the requirements
applicable to pro forma financial statements included in registration statements
on Form S-1 under the Act. The other pro forma financial and statistical
information and data included in the Offering Memorandum are, in all material
respects, accurately presented and prepared on a basis consistent with the pro
forma financial statements.
(u) Neither the Company nor any of the Guarantors is and,
after giving effect to the offering and sale of the Restricted Notes and the
application of the net proceeds thereof as described in the Offering Memorandum,
will be, an "investment company," as such term is defined in the Investment
Company Act of 1940, as amended.
(v) There are no contracts, agreements or understandings
between the Company or any Guarantor and any person granting such person the
right to require the Company or such Guarantor to file a registration statement
under the Act with respect to any securities of the Company or such Guarantor or
to require the Company or such Guarantor to include such securities with the
Notes and Guarantees registered pursuant to any Registration Statement.
(w) Neither the Company nor any of the Guarantors nor any
agent thereof acting on the behalf of them has taken, and none of them will
take, any action that might cause this Agreement or the issuance or sale of the
Restricted Notes to violate Regulation T (12 C.F.R. Part 220), Regulation U (12
C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors
of the Federal Reserve System.
(x) No "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the Act (i) has
imposed (or has informed the Company or any Guarantor that it is considering
imposing) any condition (financial or otherwise) on the Company's or any
Guarantor's retaining any rating assigned to the Company, any Guarantor or any
securities of the Company or any Guarantor or (ii) has indicated to the Company
or any Guarantor that it is considering (a) the downgrading, suspension, or
withdrawal of, or any review for a possible change that does not indicate the
direction of the possible change in, any rating so assigned or (b) any change in
the outlook for any rating of the Company, any Guarantor or any securities of
the Company or any Guarantor.
(y) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there has not occurred any material
11
adverse change or any development involving a prospective material adverse
change in the condition, financial or otherwise, or the earnings, business,
management or operations of the Company and the Guarantors, taken as a whole,
(ii) there has not been any adverse change or any development involving a
prospective adverse change in the capital stock or in the long-term debt of the
Company or any of the Guarantors and (iii) neither the Company nor any of the
Guarantors has incurred any material liability or obligation, direct or
contingent.
(z) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, contains all the information specified in,
and meeting the requirements of, Rule 144A(d)(4) under the Act with the
exception of the Company's financial statements which are omitted pursuant to
the Securities Exchange Commission Staff Accounting Bulletin No. 53 and
Harperprints financial statements which are omitted in reliance on previous
staff no-action letters.
(aa) When the Restricted Notes and the Guarantees are issued
and delivered pursuant to this Agreement, neither the Restricted Notes nor the
Guarantees will be of the same class (within the meaning of Rule 144A under the
Act) as any security of the Company or the Guarantors that is listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that is quoted in a United States automated inter-dealer quotation system.
(bb) No form of general solicitation or general advertising (as
defined in Regulation D under the Act) was used by the Company, the Guarantors
or any of their respective representatives (other than the Initial Purchasers,
as to whom the Company and the Guarantors make no representation) in connection
with the offer and sale of the Restricted Notes contemplated hereby, including,
but not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. No securities of the same class as the
Restricted Notes have been issued and sold by the Company within the six-month
period immediately prior to the date hereof.
(cc) Prior to the effectiveness of any Registration Statement,
the Indenture is not required to be qualified under the TIA.
(dd) None of the Company, the Guarantors nor any of their
respective affiliates or any person acting on its or their behalf (other than
the Initial Purchasers, as to whom the Company and the Guarantors make no
representation) has engaged or will engage in any directed selling efforts
within the meaning of Regulation S under the Act ("Regulation S") with respect
------------
to the Restricted Notes or the Guarantees.
(ee) The sale of the Restricted Notes pursuant to Regulation S
is not part of a plan or scheme to evade the registration provisions of the Act.
(ff) No registration under the Act of the Restricted Notes or
the Guarantees is required for the sale of the Restricted Notes and the
Guarantees to the Initial Purchasers as contemplated hereby or for the Exempt
Resales assuming the accuracy of the Initial Purchasers' representations and
warranties and agreements set forth in Section 7 hereof.
(gg) Each certificate signed by any officer of the Company or
any Guarantor and delivered to the Initial Purchasers or counsel for the Initial
Purchasers shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Initial Purchasers as to the matters covered thereby.
12
(hh) The Company and the Guarantors have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and the Guarantors, in each case free and clear of all Liens and defects, except
such as are described in the Offering Memorandum or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and the Guarantors. Except
as otherwise described in the Offering Memorandum, the Company and the
Guarantors do not own any real property or buildings and any real property and
buildings held under lease by the Company and the Guarantors are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and the Guarantors, in each case except as
described in the Offering Memorandum.
(ii) All indebtedness of the Company and the Guarantors that
will be repaid with the proceeds of the issuance and sale of the Restricted
Notes was incurred, and the indebtedness represented by the Restricted Notes is
being incurred, for proper purposes and in good faith and each of the Company
and the Guarantors was, at the time of the incurrence of such indebtedness that
will be repaid with the proceeds of the issuance and sale of the Restricted
Notes, and will be on the Closing Date (after giving effect to the application
of the proceeds from the issuance of the Restricted Notes) solvent, and had at
the time of the incurrence of such indebtedness that will be repaid with the
proceeds of the issuance and sale of the Restricted Notes and will have on the
Closing Date (after giving effect to the application of the proceeds from the
issuance of the Restricted Notes) sufficient capital for carrying on their
respective business and were, at the time of the incurrence of such indebtedness
that will be repaid with the proceeds of the issuance and sale of the Restricted
Notes, and will be on the Closing Date (after giving effect to the application
of the proceeds from the issuance of the Restricted Notes) able to pay their
respective debts as they mature.
(jj) The Company, the Guarantors and their respective
affiliates and all persons acting on their behalf (other than the Initial
Purchasers, as to whom the Company and the Guarantors make no representation)
have complied with and will comply with the offering restrictions requirements
of Regulation S in connection with the offering of the Restricted Notes outside
the United States and, in connection therewith, the Offering Memorandum will
contain the disclosure required by Rule 902(h).
(kk) Master Graphics, Inc. is a "reporting issuer" as defined
in Rule 902 under the Act.
Each of the Company and the Guarantors acknowledges that the Initial
Purchasers and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchasers will rely upon the accuracy and
truth of the foregoing representations and hereby consents to such reliance.
7. Initial Purchasers' Representations and Warranties. Each of the
--------------------------------------------------
Initial Purchasers represents and warrants to, and agrees with, the Company and
the Guarantors:
(a) Such Initial Purchaser is either a QIB or an Accredited
Institution, in either case, with such knowledge and experience in financial and
business matters as is necessary in order to evaluate the merits and risks of an
investment in the Restricted Notes.
(b) Such Initial Purchaser (A) is not acquiring the Restricted
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Restricted
13
Notes in a transaction that would violate the Act or the securities laws of any
state of the United States or any other applicable jurisdiction and (B) will be
reoffering and reselling the Restricted Notes only to (x) QIBs in reliance on
the exemption from the registration requirements of the Act provided by Rule
144A and (y) in offshore transactions in reliance upon Regulation S under the
Act.
(c) Such Initial Purchaser agrees that no form of general
solicitation or general advertising (within the meaning of Regulation D under
the Act) has been or will be used by such Initial Purchaser or any of its
representatives in connection with the offer and sale of the Restricted Notes
pursuant hereto, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.
(d) Such Initial Purchaser agrees that, in connection with
Exempt Resales, such Initial Purchaser will solicit offers to buy the Restricted
Notes only from, and will offer to sell the Restricted Notes only to, Eligible
Purchasers. Each Initial Purchaser further agrees that it will offer to sell the
Restricted Notes only to, and will solicit offers to buy the Restricted Notes
only from (A) Eligible Purchasers that the Initial Purchaser reasonably believes
are QIBs and (B) Regulation S Purchasers, in each case, that agree that (x) the
Restricted Notes purchased by them may be resold, pledged or otherwise
transferred within the time period referred to under Rule 144(k) (taking into
account the provisions of Rule 144(d) under the Act, if applicable) under the
Act, as in effect on the date of the transfer of such Restricted Notes, only (I)
to the Company or any of its subsidiaries, (II) to a person whom the seller
reasonably believes is a QIB purchasing for its own account or for the account
of a QIB in a transaction meeting the requirements of Rule 144A under the Act,
(III) in an offshore transaction (as defined in Rule 902 under the Act) meeting
the requirements of Rule 904 of the Act, (IV) in a transaction meeting the
requirements of Rule 144 under the Act, (V) to an Accredited Institution that,
prior to such transfer, furnishes the Trustee a signed letter containing certain
representations and agreements relating to the registration of transfer of such
Restricted Note and, if such transfer is in respect of an aggregate principal
amount of Restricted Notes less than $250,000, an opinion of counsel acceptable
to the Company that such transfer is in compliance with the Act, (VI) in
accordance with another exemption from the registration requirements of the Act
(and based upon an opinion of counsel acceptable to the Company) or (VII)
pursuant to an effective registration statement and, in each case, in accordance
with the applicable securities laws of any state of the United States or any
other applicable jurisdiction and (y) they will deliver to each person to whom
such Restricted Notes or an interest therein is transferred a notice
substantially to the effect of the foregoing.
(e) Such Initial Purchaser and its affiliates or any person
acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Restricted Notes or the Guarantees.
(f) The Restricted Notes, if any, offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S have been and will
be offered and sold only in offshore transactions.
(g) The sale of the Restricted Notes offered and sold by such
Initial Purchaser pursuant hereto in reliance on Regulation S is not part of a
plan or scheme to evade the registration provisions of the Act.
(h) Such Initial Purchaser agrees that it has not offered or
sold and will not offer or sell the Restricted Notes in the United States or to,
or for the benefit or account of, a U.S. Person (other than a distributor), in
each case, as defined in Rule 902 under the Act (i) as part of its distribution
at any time and (ii) otherwise until 40 days after the later of the commencement
of the
14
offering of the Restricted Notes pursuant hereto and the Closing Date, other
than in accordance with Regulation S of the Act or another exemption from the
registration requirements of the Act. Such Initial Purchaser agrees that, during
such 40-day restricted period, it will not cause any advertisement with respect
to the Restricted Notes (including any "tombstone" advertisement) to be
published in any newspaper or periodical or posted in any public place and will
not issue any circular relating to the Restricted Notes, except such
advertisements as are permitted by and include the statements required by
Regulation S.
(i) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Restricted Notes by it to any distributor, dealer or
person receiving a selling concession, fee or other remuneration during the 40-
day restricted period referred to in Rule 903(c)(2) under the Act, it will send
to such distributor, dealer or person receiving a selling concession, fee or
other remuneration a confirmation or notice to substantially the following
effect:
"The Restricted Notes covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of your distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A or to Accredited
Institutions in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with any subsequent
sale by you of the Restricted Notes covered hereby in reliance on
Regulation S during the period referred to above to any distributor, dealer
or person receiving a selling concession, fee or other remuneration, you
must deliver a notice to substantially the foregoing effect. Terms used
above have the meanings assigned to them in Regulation S."
Such Initial Purchaser acknowledges that the Company and the
Guarantors and, for purposes of the opinions to be delivered to each Initial
Purchaser pursuant to Section 9 hereof, counsel to the Company and the
Guarantors and counsel to the Initial Purchaser will rely upon the accuracy and
truth of the foregoing representations and such Initial Purchaser hereby
consents to such reliance.
8. Indemnification.
---------------
(a) The Company and each Guarantor agree, jointly and
severally, to indemnify and hold harmless the Initial Purchasers, their
directors, their officers and each person, if any, who controls such Initial
Purchasers within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, from and against any and all losses, claims, damages, liabilities
and judgments (including, without limitation, any legal or other expenses
incurred in connection with investigating or defending any matter, including any
action, that could give rise to any such losses, claims, damages, liabilities or
judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Offering Memorandum (or any amendment or
supplement thereto), the Preliminary Offering Memorandum or any Rule 144A
Information provided by the Company or any Guarantor to any holder or
prospective purchaser of Restricted Notes pursuant to Section 5(h) or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to the Initial Purchasers furnished in
writing to the Company by such Initial Purchasers; provided, however, that the
foregoing indemnity agreement with respect to any Preliminary Offering
Memorandum shall not inure to the benefit of any Initial Purchaser who failed to
deliver a Final Offering Memorandum (as then amended or supplemented, provided
by the Company to the several Initial Purchasers in the requisite quantity and
on
15
a timely basis to permit proper delivery on or prior to the Closing Date) to
the person asserting any losses, claims, damages and liabilities and judgements
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Offering Memorandum, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, if such material
misstatement or omission or alleged material misstatement or omission was cured
in the Final Offering Memorandum.
(b) The Initial Purchasers agree to indemnify and hold
harmless the Company and the Guarantors, and their respective directors and
officers and each person, if any, who controls (within the meaning of Section 15
of the Act or Section 20 of the Exchange Act) the Company or the Guarantors, to
the same extent as the foregoing indemnity from the Company and the Guarantors
to the Initial Purchasers but only with reference to information relating to the
Initial Purchasers furnished in writing to the Company by the Initial Purchasers
expressly for use in the Preliminary Offering Memorandum or the Offering
Memorandum.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
----------- -----
person against whom such indemnity may be sought (the "indemnifying party") in
------------ -----
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), the Initial Purchasers shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Initial Purchasers). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities
Corporation, in the case of the parties indemnified pursuant to Section 8(a),
and by the Company, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall indemnify and hold harmless the indemnified party
from and against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of any action (i) effected with its written consent
or (ii) effected without its written consent if the settlement is entered into
more than twenty business days after the indemnifying party shall have received
a request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the
16
indemnified party, unless such settlement, compromise or judgment (i) includes
an unconditional release of the indemnified party from all liability on claims
that are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this
Section 8 is unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages, liabilities or judgments referred to therein, then
each indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors, on the one hand, and the Initial Purchasers on the
other hand from the offering of the Restricted Notes or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Guarantors, on the one hand and the Initial Purchasers, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Restricted Notes (after underwriting discounts and commissions,
but before deducting expenses) received by the Company, and the total discounts
and commissions received by the Initial Purchasers bear to the total price to
investors of the Restricted Notes, in each case as set forth in the table on the
cover page of the Offering Memorandum. The relative fault of the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Guarantors, on the one hand, or the Initial Purchasers, on the other hand, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
The Company and the Guarantors, and the Initial Purchasers agree that
it would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or judgments
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred
by such indemnified party in connection with investigating or defending any
matter, including any action, that could have given rise to such losses, claims,
damages, liabilities or judgments. Notwithstanding the provisions of this
Section 8, the Initial Purchasers shall not be required to contribute any amount
in excess of the amount by which the total discounts and commissions received by
such Initial Purchasers exceeds the amount of any damages which the Initial
Purchasers have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(e) The remedies provided for in this Section 8 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
9. Conditions of Initial Purchasers' Obligations. The obligations of the
---------------------------------------------
Initial Purchasers to purchase the Restricted Notes under this Agreement are
subject to the satisfaction of each of the following conditions:
17
(a) All the representations and warranties of the Company and
the Guarantors contained in this Agreement shall be true and correct on the
Closing Date with the same force and effect as if made on and as of the Closing
Date.
(b) On or after the date hereof, (i) there shall not have
occurred any downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or withdrawal
of, or of any review (or of any potential or intended review) for a possible
change that does not indicate the direction of the possible change in, any
rating of the Company or any Guarantor or any securities of the Company or any
Guarantor (including, without limitation, the placing of any of the foregoing
ratings on credit watch with negative or developing implications or under review
with an uncertain direction) by any "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under the
Act, (ii) there shall not have occurred any change, nor shall any notice have
been given of any potential or intended change, in the outlook for any rating of
the Company or any Guarantor or any securities of the Company or any Guarantor
by any such rating organization and (iii) no such rating organization shall have
given notice that it has assigned (or is considering assigning) a lower rating
to the Notes than that on which the Notes were marketed.
(c) Since the respective dates as of which information is
given in the Offering Memorandum other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto subsequent to the
date of this Agreement), (i) there shall not have occurred any adverse change or
any development involving a prospective change in the condition, financial or
otherwise, or the earnings, business, management or operations of the Company
and its subsidiaries, taken as a whole, or Master Graphics, Inc. and its
subsidiaries, taken as a whole, (ii) there shall not have been any material
adverse change or any development involving a prospective material adverse
change in the capital stock or in the long-term debt of the Company or any of
the Guarantors and (iii) neither the Company nor any of the Guarantors shall
have incurred any liability or obligation, direct or contingent, the effect of
which, in any such case described in clause 9(c)(i), 9(c)(ii) or 9(c)(iii), in
your judgment, is material and adverse and, in your judgment, makes it
impracticable to market the Restricted Notes on the terms and in the manner
contemplated in the Offering Memorandum.
(d) The Initial Purchasers shall have received on the Closing
Date a certificate dated the Closing Date, signed by the President and the
Secretary of the Company and each of the Guarantors, confirming the matters set
forth in Sections 6(x), 9(a) and 9(b) and stating that each of the Company and
the Guarantors has complied with all the agreements and satisfied all of the
conditions herein contained and required to be complied with or satisfied on or
prior to the Closing Date.
(e) The Initial Purchasers shall have received on the Closing
Date an opinion (satisfactory to you and counsel for the Initial Purchasers),
dated the Closing Date, of Baker, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the
Company and the Guarantors, to the effect that:
(i) each of the Company and the Guarantors has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation and has
the corporate power and authority to carry on its business as
described in the Offering Memorandum and to own, lease and operate its
properties;
(ii) each of the Company and the Guarantors is duly
qualified and is in good standing as a foreign corporation authorized
to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of
18
property requires such qualification, or application has been made and
is pending except where the failure to be so qualified would not have
a Material Adverse Effect;
(iii) all the outstanding shares of capital stock of
the Company and each of the Guarantors have been duly authorized and
validly issued and are fully paid, non-assessable and not subject to
any preemptive or similar rights;
(iv) all of the outstanding shares of capital stock of
the Company and Harperprints, Inc. are owned by Master Graphics, Inc.,
free and clear of any Lien other than the security interests of
General Electric Capital Corporation and Deutsche Financial Services
Corporation and the right of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ to reacquire the common
stock of Harperprints, Inc. upon the occurrence of certain events. The
Company and Harperprints, Inc. are the only subsidiaries of Master
Graphics, Inc.;
(v) each of the Company and the Guarantors have the
corporate power and authority to perform the obligations under this
Agreement, the Indenture, the Notes, the Guarantees and the
Registration Rights Agreement;
(vi) the Restricted Notes have been duly authorized
and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Company, enforceable in accordance with
their terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(vii) the guarantees of each Guarantor have been duly
authorized and, when the Restricted Notes are executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers in accordance with
the terms of this Agreement, the Guarantees endorsed thereon will be
entitled to the benefits of the Indenture and will be valid and
binding obligations of the Guarantors, enforceable in accordance with
their terms except as (x) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (y) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(viii) the Indenture has been duly authorized, executed
and delivered by the Company and each Guarantor and is a valid and
binding agreement of the Company and each Guarantor, enforceable
against the Company and each Guarantor in accordance with its terms
except as (x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(y) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;
(ix) this Agreement has been duly authorized, executed
and delivered
19
by the Company and each of the Guarantors;
(x) The Registration Rights Agreement has been duly
authorized, executed and delivered by the Company and the Guarantors
and is a valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in
accordance with its terms, except as (x) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (y) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(xi) the Exchange Notes have been duly authorized;
(xii) the statements under the captions "Risk Factors,"
"Description of Notes, " "Certain Federal Income Tax Considerations,"
"ERISA Considerations" and "Plan of Distribution" in the Offering
Memorandum, insofar as such statements constitute a summary of the
legal matters, fairly present in all material respects such legal
matters;
(xiii) neither the Company nor any of the Guarantors is
in violation of its respective charter or by-laws and, to the best of
such counsel's knowledge after due inquiry, neither the Company nor
any of the Guarantors is in default in the performance of any
obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and the Guarantors, taken
as a whole, to which the Company or any of the Guarantors is a party
or by which the Company or any of the Guarantors or their respective
property is bound;
(xiv) the execution, delivery and performance of this
Agreement and the other Operative Documents by the Company and each of
the Guarantors, the compliance by the Company and each of the
Guarantors with all provisions hereof and thereof and the consummation
of the transactions contemplated hereby and thereby will not (i)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency (except
such as may be required under the securities or Blue Sky laws of the
various states), (ii) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, the charter or by-laws
of the Company or any of the Guarantors or any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and the Guarantors, taken as a whole, to which
the Company or any of the Guarantors is a party or by which the
Company or any of the Guarantors or their respective property is
bound, (iii) violate or conflict with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental
body or agency having jurisdiction over the Company, any of the
Guarantors or their respective property, (iv) result in the imposition
or creation of (or the obligation to create or impose) a Lien under,
any agreement or instrument to which the Company or any of the
Guarantors is a party or by which the Company or any of the Guarantors
or their respective property is bound, or (v) to the knowledge of such
counsel result in the termination, suspension or revocation of any
Authorization of the Company or any of the Guarantors or result in any
other impairment of the rights of the holder of any such
Authorization.
20
(xv) after due inquiry, such counsel does not know of
any legal or governmental proceedings pending or threatened to which
the Company or any of the Guarantors is or could be a party or to
which any of their respective property is or could be subject, which
might result, singly or in the aggregate, in a Material Adverse
Effect.
(xvi) except as disclosed in the Offering Memorandum,
neither the Company nor any of the Guarantors has violated any
Environmental Law or any provisions of ERISA, any provisions of the
Foreign Corrupt Practices Act or the rules and regulations promulgated
thereunder, except for such violations which, singly or in the
aggregate, would not have a Material Adverse Effect;
(xvii) each of the Company and the Guarantors has such
Authorizations of, and has made all filings with and notices to, all
governmental or regulatory authorities and self-regulatory
organizations and all courts and other tribunals, including without
limitation, under any applicable Environmental Laws, as are necessary
to own, lease, license and operate its respective properties and to
conduct its business, except where the failure to have any such
Authorization or to make any such filing or notice would not, singly
or in the aggregate, have a Material Adverse Effect. Each such
Authorization is valid and in full force and effect and each of the
Company and the Guarantors is in compliance with all the terms and
conditions thereof and with the rules and regulations of the
authorities and governing bodies having jurisdiction with respect
thereto; and no event has occurred (including the receipt of any
notice from any authority or governing body) which allows or, after
notice or lapse of time or both, would allow, revocation, suspension
or termination of any such Authorization or results or, after notice
or lapse of time or both, would result in any other impairment of the
rights of the holder of any such Authorization; and such
Authorizations contain no restrictions that are burdensome to the
Company or any of the Guarantors; except where such failure to be
valid and in full force and effect or to be in compliance, the
occurrence of any such event or the presence of any such restriction
would not, singly or in the aggregate, have a Material Adverse Effect;
(xviii) neither the Company nor any of the Guarantors is
and, after giving effect to the offering and sale of the Restricted
Notes and the application of the net proceeds thereof as described in
the Offering Memorandum, will be, an "investment company" as such term
is defined in the Investment Company Act of 1940, as amended;
(i) to the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings (other
than the Registration Rights Agreement) between the Company or any
Guarantor and any person granting such person the right to require the
Company or such Guarantor to file a registration statement under the
Act with respect to any securities of the Company or such Guarantor or
to require the Company or such Guarantor to include such securities
with the Notes and Guarantees registered pursuant to any Registration
Statement;
(xix) the Indenture complies as to form in all material
respects with the requirements of the TIA, and the rules and
regulations of the Commission
21
applicable to an indenture which is qualified thereunder; it is not
necessary in connection with the offer, sale and delivery of the
Restricted Notes to the Initial Purchasers in the manner contemplated
by this Agreement or in connection with the Exempt Resales to qualify
the Indenture under the TIA;
(xx) no registration under the Act of the Restricted
Notes is required for the sale of the Restricted Notes to the Initial
Purchasers as contemplated by this Agreement or for the Exempt Resales
assuming that (i) each Initial Purchaser is a QIB or a Regulation S
Purchaser, (ii) the accuracy of, and compliance with, the Initial
Purchasers' representations and agreements contained in Section 7 of
this Agreement and (iii) the accuracy of the representations of the
Company and the Guarantors set forth in Sections 5(f) and 6(dd), (ee)
and (ff) of this Agreement; and
(xxi) such counsel has participated in conferences with
officers and other representatives of the Company, representatives of
the Company's accountants, the Initial Purchasers' representatives and
counsel for the Initial Purchasers, at which conferences the contents
of the Offering Memorandum and related matters were discussed and,
although such counsel is not passing upon and do not assume any
responsibility for and shall not be deemed to have independently
verified the accuracy, completeness or fairness of the statements
contained in the Offering Memorandum no facts have come to the
attention of such counsel that lead such counsel to believe that the
Offering Memorandum contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading or
that the Offering Memorandum on the date thereof or on the date hereof
(other than the financial statements and notes thereto and the other
financial information, including the information referred to under the
caption "Experts" as to which such counsel does not comment) contained
any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
The opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ described in
Section 9(e) above shall be rendered to you at the request of the Company and
the Guarantors and shall so state therein. In giving such opinion with respect
to the matters covered by Section 9(e)(xxi), ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
may state that their opinion and belief are based upon their participation in
the preparation of the Offering Memorandum and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, of ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇,
L.L.P., counsel for the Initial Purchasers, in form and substance reasonably
satisfactory to the Initial Purchasers.
(g) The Initial Purchasers shall have received, at the time
this Agreement is executed and at the Closing Date, letters dated the date
hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Initial Purchasers from KPMG Peat Marwick LLP, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to the Initial Purchasers
with respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(h) The Restricted Notes shall have been approved by the NASD
for trading
22
and duly listed in PORTAL.
(i) The Initial Purchasers shall have received a counterpart,
conformed as executed, of the Indenture which shall have been entered into by
the Company, the Guarantors and the Trustee.
(j) The Company and the Guarantors shall have executed the
Registration Rights Agreement and the Initial Purchasers shall have received an
original copy thereof, duly executed by the Company and the Guarantors.
(k) Neither the Company nor the Guarantors shall have failed
at or prior to the Closing Date to perform or comply with any of the agreements
herein contained and required to be performed or complied with by the Company or
the Guarantors, as the case may be, at or prior to the Closing Date.
(l) Master Graphics, Inc. shall have restructured no less than
$12.5 million of outstanding Seller Notes and Replacement Notes into Seller
Deferral Notes as defined and described in the Offering Memorandum.
(m) The Company shall have consummated the acquisition of all
of the outstanding capital stock of Technigrafiks, Inc., and merged
Technigrafiks, Inc. into the Company (with the Company being the surviving
corporation) prior to or simultaneously with the Closing.
(n) The firm of Baker, Donelson, Bearman & ▇▇▇▇▇▇▇▇ shall
permit the Initial Purchasers and their counsel to rely on its opinion rendered
to the Company in connection with the purchase of Technigrafics, Inc.
10. Effectiveness of Agreement and Termination. This Agreement shall
------------------------------------------
become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the
Closing Date by the Initial Purchasers by written notice to the Company if any
of the following has occurred: (i) any outbreak or escalation of hostilities or
other national or international calamity or crisis or change in economic
conditions or in the financial markets of the United States or elsewhere that,
in the Initial Purchasers' judgment, is material and adverse and, in the Initial
Purchasers' judgment, makes it impracticable to market the Restricted Notes on
the terms and in the manner contemplated in the Offering Memorandum, (ii) the
suspension or material limitation of trading in securities or other instruments
on the New York Stock Exchange, the American Stock Exchange, the Chicago Board
of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade
or the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company or any Guarantor on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and the Guarantors, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
11. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall
23
be addressed as follows: (i) if to the Company or any Guarantor, to Premier
Graphics, Inc. c/o Master Graphics, Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (telephone number: ▇▇▇-▇▇▇-▇▇▇▇)and (ii) if to the Initial
Purchasers, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, Prudential
Securities Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc. c/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Department, or in any case to such other address as the
person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Guarantors and the Initial
Purchasers set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Restricted Notes, regardless of (i) any investigation, or statement as
to the results thereof, made by or on behalf of the Initial Purchasers, the
officers or directors of the Initial Purchasers, any person controlling the
Initial Purchasers, the Company, any Guarantor, the officers or directors of the
Company or any Guarantor, or any person controlling the Company or any
Guarantor, (ii) acceptance of the Restricted Notes and payment for them
hereunder and (iii) termination of this Agreement.
If for any reason the Restricted Notes are not delivered by or on
behalf of the Company as provided herein (other than as a result of any
termination of this Agreement pursuant to Section 10), the Company and each
Guarantor, jointly and severally, agree to reimburse the Initial Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
incurred by them. Notwithstanding any termination of this Agreement, the Company
shall be liable for all expenses which it has agreed to pay pursuant to Section
5(i) hereof. The Company and each Guarantor also agree, jointly and severally,
to reimburse the Initial Purchasers and their officers, directors and each
person, if any, who controls such Initial Purchasers within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act for any and all fees and
expenses (including without limitation the fees and expenses of counsel)
incurred by them in connection with enforcing their rights under this Agreement
(including without limitation its rights under Section 8).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Guarantors,
the Initial Purchasers, the Initial Purchasers' directors and officers, any
controlling persons referred to herein, the directors and officers of the
Company and the Guarantors and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Restricted Notes from the
Initial Purchasers merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York, without regard to the conflict of law rules
thereof.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
24
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.
Very truly yours,
PREMIER GRAPHICS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
MASTER GRAPHICS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
HARPERPRINTS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
PRUDENTIAL SECURITIES INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇ & COMPANY, INC.
By: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
SECURITIES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President Investment Banking
SCHEDULE A
Initial Purchasers Principal Amount
------------------ ----------------
of Notes
--------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation................. $ 94,250,000
Prudential Securities Incorporated........ $ 29,250,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc.............. $ 6,500,000
Total..................................... $130,000,000
EXHIBIT A
Form of Registration Rights Agreement