EXHIBIT 4.2(iii)
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GUARANTEE AGREEMENT
Big Flower Holdings, Inc.
Relating to the Common Securities of
Big Flower Trust I
Dated as of October 20, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.......................................2
ARTICLE II
GUARANTEE
SECTION 2.1. Guarantee.........................................4
SECTION 2.2. Subordination.....................................5
SECTION 2.3. Waiver of Notice and Demand.......................5
SECTION 2.4. Obligations Not Affected..........................6
SECTION 2.5. Rights of Holders.................................6
SECTION 2.6. Guarantee of Payment..............................6
SECTION 2.7. Subrogation.......................................6
SECTION 2.8. Independent Obligations...........................7
SECTION 2.9. Acknowledgment by Guarantor.......................7
SECTION 2.10. Subordination.....................................7
ARTICLE III
LIMITATION OF TRANSACTIONS
SECTION 3.1. Limitation of Transactions........................7
ARTICLE IV
TERMINATION
SECTION 4.1. Termination.......................................8
ARTICLE V
SUBORDINATION OF GUARANTEE
SECTION 5.1. Guarantee Subordinate to Guarantor
Secured Indebtedness............................9
SECTION 5.2. Payment Over of Proceeds Upon
Dissolution, Etc................................9
SECTION 5.3. Payment Blockage Upon Acceleration
of Designated Senior
Indebtedness, Etc..............................10
SECTION 5.4. No Payment When Guarantor Secured
Indebtedness in Default........................11
SECTION 5.5. No Waiver of Subordination
Provisions.....................................12
SECTION 5.6. Reliance on Judicial Order or
Certificate of Liquidating
Agent..........................................12
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Page
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SECTION 5.7. Certain Conversions or Exchanges
Deemed Payment.................................12
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Successors and Assigns...........................13
SECTION 6.2. Amendments.......................................13
SECTION 6.3. Notices..........................................13
SECTION 6.4. Benefit..........................................14
SECTION 6.5. Interpretation...................................14
SECTION 6.6. Governing Law....................................15
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GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee Agreement"), dated as of
October 20, 1997, is executed and delivered by Big Flower Holdings, Inc., a
Delaware corporation (the "Guarantor") for the benefit of the Holders (as
defined herein) from time to time of the Common Securities (as defined herein)
of Big Flower Trust I, a Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the
"Trust Agreement"), dated as of October 14, 1997 among the Trustees named
therein, and the Guarantor, as Depositor, the Trust is issuing 72,000 of its 6%
Common Securities (liquidation preference $50 per common security) (the "Common
Securities") representing common undivided beneficial interests in the assets of
the Trust and having the terms set forth in the Trust Agreement;
WHEREAS, the Common Securities will be issued by the Trust and the
proceeds thereof, together with the proceeds from the issuance of the Trust's
Preferred Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with The Bank of New York, a New York banking corporation, as Property Trustee
under the Trust Agreement, as trust assets;
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Preferred Securities Guarantee") in substantially identical
terms to this Guarantee Agreement for the benefit of the holders of the
Preferred Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of Holders
to receive Guarantee Payments (as defined herein) under this Guarantee Agreement
shall be subordinated to the rights of holders of Preferred Securities to
receive Guarantee Payments (as defined in the Preferred Securities Guarantee)
under the Preferred Securities Guarantee;
NOW, THEREFORE, in consideration of the purchase by each Holder,
which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Trust Agreement as in effect on the date hereof.
"Bank Credit Agreement" means the Credit Agreement dated as of June
12, 1997, among Big Flower Press Holdings, Inc., the lenders party thereto in
their capacities as lenders thereunder, Credit Suisse First Boston, as
documentation agent, and Bankers Trust Company, as administrative agent,
together with the related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as such agreements
may be amended (including any amendment and restatement thereof), supplemented
or otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including,
without limitation, increasing the amount of available borrowings thereunder or
adding Subsidiaries of the Guarantor as additional borrowers or guarantors
thereunder) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"Designated Senior Indebtedness" means (x) all Guarantor Secured
Indebtedness under, or as a result of the Guarantor's guarantee of, indebtedness
pursuant to the Bank Credit Agreement and (y) at any time when no indebtedness
described in preceding clause (x) is outstanding, any issue of Guarantor Secured
Indebtedness with an aggregate principal amount in excess of $15.0 million that
is designated as "Designated Senior Indebtedness" by written notice from the
Guarantor to the Guarantee Trustee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by or on behalf of the Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required
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to be paid on the Common Securities, to the extent the Trust shall have funds on
hand available therefor at such time, (ii) the redemption price set forth in the
Trust Agreement, including premium, if any, all accrued and unpaid Distributions
to the date of redemption (the "Redemption Price"), with respect to the Common
Securities called for redemption by the Trust to the extent the Trust shall have
funds on hand available therefor, and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Trust, unless Debentures are
distributed to the Holders, the lesser of (a) the aggregate of the liquidation
preference of $50 per Common Security plus accrued and unpaid Distributions on
the Common Securities to the date of payment to the extent the Trust shall have
funds on hand available to make such payment and (b) the amount of assets of the
Trust remaining available for distribution to Holders in liquidation of the
Trust (in either case, the "Liquidation Distribution").
"Guarantor Secured Indebtedness" means the principal (including
without limitation all unpaid drawings with respect to letters of credit) of and
premium, if any, and interest (including interest accruing on or after the
filing of any petition in bankruptcy relating to the Guarantor at the relevant
contractual rate whether or not such claim for post-petition interest is allowed
in such proceeding) on, and all other amounts owing with respect to, the
following, whether outstanding on the date of execution of this Indenture or
thereafter incurred, created or assumed, to the extent (but only to the extent)
the same is secured by a lien, charge, mortgage or other encumbrance on property
or assets of the Guarantor or its subsidiaries (which term, as used in this
paragraph, shall not refer to Big Flower Trust I): (i) indebtedness of the
Guarantor for money borrowed (including purchase money obligations, except
indebtedness to trade creditors) or evidenced by debentures (other than the
Debentures), notes, bankers' acceptances or other corporate debentures or
similar instruments; (ii) all capital lease obligations of the Guarantor; (iii)
all obligations with respect to letters of credit; (iv) all obligations with
respect to currency hedging agreements, interest rate protection agreements and
other similar agreements; (v) all indebtedness of others of the type referred to
in the preceding clauses (i) through (iv) assumed by or guaranteed in any manner
by the Guarantor or in effect guaranteed by the Guarantor; and (vi) renewals,
extensions or refundings of any of the indebtedness referred to in the preceding
clauses (i), (ii), (iii), (iv) and (v) and in this clause (vi). For purposes of
the foregoing definition, all indebtedness secured by a lien, charge, mortgage
or other encumbrance or property or assets of the
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Guarantor or its subsidiaries shall be deemed to be secured for purposes of said
definition, notwithstanding any determination that the amount of indebtedness so
secured exceeds the value of the assets serving as security therefor and
notwithstanding any determination in any bankruptcy or other proceeding that a
portion of such indebtedness shall be treated as unsecured because of any
insufficiency in the value of the collateral securing such indebtedness. Without
limiting the foregoing, in any event all obligations of the Guarantor with
respect to (including its guaranties of obligations under) the Bank Credit
Agreement shall constitute Guarantor Secured Indebtedness.
"Holder" means any holder, as registered on the books and records of
the Trust, of any Common Securities.
"Indenture" means the 6% Convertible Subordinated Indenture dated as
of October 20, 1997, as supplemented and amended between the Guarantor and The
Bank of New York, as trustee.
"Payment Blockage Period" has the meaning specified in Section 5.3.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" means the Securities representing preferred
undivided beneficial interests in the assets of the Trust.
ARTICLE II
GUARANTEE
SECTION 2.1. Guarantee. The Guarantor irrevocably and
unconditionally agrees, subject to Section 2.2, 2.10 and Article 5, to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Trust), as and when due, regardless of
any defense, right of set-off or counterclaim which the Trust may have or assert
other than the defense of payment. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Trust to pay such amounts to the
Holders.
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SECTION 2.2. Subordination. Upon the occurrence and during the
continuation of an Event of Default (as defined in the Indenture), holders of
Preferred Securities shall have priority over Holders with respect to
distributions and payments on liquidation, redemption and otherwise.
SECTION 2.3. Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of this Guarantee Agreement and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Trust or any other person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 2.4. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Common Securities to be performed or
observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as so provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Common Securities
or the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Common Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Common Securities, or any
action on the part of the Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement,
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composition or readjustment of debt of, or other similar proceedings affecting,
the Trust or any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 2.4 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or any other person to
give notice to, or obtain the consent of, the Guarantor with respect to the
happening of any of the foregoing.
SECTION 2.5. Rights of Holders. The Guarantor expressly acknowledges
that any Holder may institute a legal proceeding directly against the Guarantor
to enforce its rights under this Guarantee Agreement, without first instituting
a legal proceeding against the Trust or any other person or entity.
SECTION 2.6. Guarantee of Payment. This Guarantee Agreement creates
a guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Trust) or upon distribution of
Debentures to Holders as provided in the Trust Agreement.
SECTION 2.7. Subrogation. The Guarantor shall be subrogated to all
(if any) rights of the Holders against the Trust in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement and shall have
the right to waive payment by the Trust pursuant to Section 2.3; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the
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Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 2.8. Independent Obligations. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Trust
with respect to the Common Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 2.4 hereof.
SECTION 2.9. Acknowledgment by Guarantor. The Guarantor acknowledges
its obligation to issue and deliver common stock of the Guarantor upon the
conversion of the Common Securities.
SECTION 2.10. Subordination. The Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank subordinate and subject
in right of payment to the prior payment in full in cash of all liabilities of
the Guarantor (including, without limitation, all Guarantor Secured Indebtedness
as provided in Article 5) and pari passu with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference stock of
any affiliate of the Guarantor.
ARTICLE III
LIMITATION OF TRANSACTIONS AND SUBORDINATION
SECTION 3.1. Limitation of Transactions. So long as any Common
Securities remain outstanding, the Guarantor shall not, and shall not permit any
subsidiary of the Guarantor to, (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor's capital stock or (ii) make any payment
of principal, interest or premium, if any, on or repay or repurchase or redeem
any debt securities (including guarantees of indebtedness for money borrowed) of
the Guarantor that rank pari passu with or junior to the Debentures (other than
(a) any dividend, redemption, liquidation, interest, principal or guarantee
payment by Guarantor where the payment is made by way of securities (including
capital stock) that rank pari passu with or junior to the securities on which
such dividend, redemption, interest, principal or guarantee payment is being
made, (b) redemptions or
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purchases of any rights pursuant to the Shareholders Rights Plan (as defined in
the Indenture), or any successor to such Shareholders Rights Plan, and the
declaration of a dividend of such rights or the issuance of preferred stock
under such plans in the future, (c) payments under this Agreement, (d) purchases
of Common Stock related to the issuance of Common Stock under any of the
Guarantor's benefit plans for its directors, officers or employees, (e) as a
result of a reclassification of the Guarantor's capital stock or the exchange or
conversion of one series or class of the Guarantor's capital stock for another
series or class of the Guarantor's capital stock and (f) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged) if at such time (x) there shall have occurred any event
of which the Guarantor has actual knowledge that (A) with the giving of notice
or the lapse of time, or both, would constitute an "Event of Default" under the
Indenture with respect to the Debentures and (B) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (y) the Guarantor shall
be in default with respect to its payment of any obligations under the Guarantee
or (z) the Guarantor shall have given notice of its selection of an Extension
Period (as defined in the Indenture) with respect to the Debentures and shall
not have rescinded such notice, or such Extension Period, or any extension
thereof, shall be continuing.
ARTICLE IV
TERMINATION
SECTION 4.1. Termination. This Guarantee Agreement shall terminate
and be of no further force and effect upon (i) full payment of the Redemption
Price of the Common Securities, (ii) the distribution of Debentures to the
Holders in exchange for all of the Common Securities, (iii) full payment of the
amounts payable in accordance with the Trust Agreement upon liquidation of the
Trust or (iv) upon the distribution, if any, of the Guarantor's common stock to
the Holders in respect of the conversion of all such Holders' Common Securities
into the Guarantor's common stock. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to the Common Securities or this Guarantee Agreement.
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ARTICLE V
SUBORDINATION OF GUARANTEE
SECTION 5.1. Guarantee Subordinate to Guarantor Secured
Indebtedness. The Guarantor covenants and agrees, and each Holder, by its
acceptance thereof, likewise covenants and agrees, that the payment of the
Guarantee Payments pursuant to this Guarantee Agreement are hereby expressly
made subordinate and subject in right of payment to the prior payment in full in
cash of all amounts then due and payable in respect of all Guarantor Secured
Indebtedness (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Guarantor Secured Indebtedness and that no payment of the
Guarantee Payments pursuant to this Guarantee Agreement may be made unless full
payment of all amounts then due for principal, premium, if any, and interest
then due on all Guarantor Secured Indebtedness by reason of the maturity thereof
(by lapse of time, acceleration or otherwise) has been made or duly provided for
in cash or in a manner satisfactory to the holders of such Guarantor Secured
Indebtedness.
SECTION 5.2. Payment Over of Proceeds Upon Dissolution, Etc. Upon
any distribution of the Guarantor's assets in connection with any dissolution,
winding up, liquidation or reorganization of the Guarantor, whether voluntary or
involuntary, in bankruptcy, insolvency or receivership proceedings (each such
event, if any, herein sometimes referred to as a "Proceeding"), or upon an
assignment for the benefit of creditors or otherwise: (i) all Guarantor Secured
Indebtedness (including without limitation all interest accruing on or after the
filing of any petition in bankruptcy relating to the Guarantor at the relevant
contractual rate, whether or not such claim for post-petition interest is
allowed in such Proceeding) must be paid in full in cash before the Holders are
entitled to any payments or distributions of any kind or character on account of
any Guarantee Payments pursuant to this Guarantee Agreement, and (ii) any
payment or distribution of the Guarantor's assets of any kind or character,
whether in cash, securities or other property, which would otherwise (but for
these subordination provisions) be payable or deliverable in respect of the
Guarantee Payments shall be paid or delivered directly to the holders of such
Guarantor Secured Indebtedness (or their representative or trustee) in
accordance with the priorities then existing among such holders until all
Guarantor Secured Indebtedness shall have been paid in full in cash before any
payment or distribution is made to the Holders.
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In the event that notwithstanding the subordination provisions set
forth herein, any payment or distribution of assets of any kind or character is
made at a time when the respective payment is not permitted to be made as a
result of the subordination provisions described above and before all Guarantor
Secured Indebtedness is paid in full in cash, the Holders receiving such payment
will be required to pay over such payment or distribution to the holders of such
Guarantor Secured Indebtedness.
The consolidation of the Guarantor with, or the merger of the
Guarantor into, another Person or the liquida tion or dissolution of the
Guarantor following the sale of all or substantially all of its properties and
assets as an entirety to another Person upon the terms and conditions set forth
in Article 8 of the Indenture shall not be deemed a Proceeding for the purposes
of this Section if the Person formed by such consolidation or into which the
Guarantor is merged or the Person which acquires by sale such properties and
assets as an entirety, as the case may be, shall, as a part of such
consolidation, merger, or sale comply with the conditions set forth in Article
8.
SECTION 5.3. Payment Blockage Upon Acceleration of Designated Senior
Indebtedness, Etc. During the continuance of any event of default with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated, upon the occurrence of (a) receipt by the Guarantee Trustee of
written notice from the holders of a majority of the outstanding principal
amount of the Designated Senior Indebtedness or their representative, or (b) if
such event of default results from the enforcement of this Guarantee Agreement
or any action by the Holders to obtain Guarantee Payments, the date of such
enforcement or action, no Guarantee Payments may be made by the Guarantor for a
period ("Payment Blockage Period") commencing on the earlier of the date of
receipt of such notice or the date of such enforcement or action and ending 179
days thereafter (unless such Payment Blockage Period shall be terminated by
written notice to the Guarantee Trustee from the holders of a majority of the
outstanding principal amount of such Designated Senior Indebtedness or their
representative who delivered such notice); provided, however, that
notwithstanding anything herein to the contrary, in no event will a Payment
Blockage Period extend beyond 179 days from the date on which such Payment
Blockage Period was commenced; provided further, that not more than one Payment
Blockage Period may be commenced with respect to the Guarantee Payments during
any period of 360 consecutive days. For all purposes of this Section, no event
of default
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which existed or was continuing on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Indebtedness initiating
such Payment Blockage Period shall be, or be made, the basis for the
commencement of a second payment Blockage Period by the holders of such
Designated Senior Indebtedness or their representative whether or not within a
period of 360 consecutive days unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days.
In the event that, notwithstanding the foregoing, the Guarantor shall make
any payment to the Guarantee Trustee or any Holder prohibited by the foregoing
provisions of this Section, and if such fact shall, at or prior to the time of
such payment, have been made known, as set forth in Section 8.7, to the
Guarantee Trustee or, as the case may be, such Holder, then and in such event
such payment shall be paid over and delivered forthwith to the Guarantor.
The provisions of this Section shall not apply to any payment with respect
to which Section 8.2 would be applicable.
SECTION 5.4. No Payment When Guarantor Secured Indebtedness in
Default. In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on, or any other amounts owning
with respect to, any Guarantor Secured Indebtedness when the same becomes due
and payable or in the event any judicial proceeding shall be pending with
respect to any such default, then, unless and until such default shall have been
cured or waived or shall have ceased to exist, no payment or distribution of any
kind or character, whether in cash or properties shall be made by the Guarantor
on account of any Guarantee Payment.
In the event that, notwithstanding the foregoing, the Guarantor
shall make any payment to any Holder prohibited by the foregoing provisions of
this Section, and if such fact shall, at or prior to the time of such payment,
have been made known, to such Holder, then and in such event such payment shall
be paid over and delivered forthwith to the Guarantor.
The provisions of this Section shall not apply to any payment with
respect to which Section 5.2 would be applicable.
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SECTION 5.5. No Waiver of Subordination Provisions. No right of any
present or future holder of any Guarantor Secured Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Guarantor or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Guarantor with the terms, provisions and covenants of this Guarantee
Agreement, regardless of any knowledge thereof that any such Holder may have or
be otherwise charged with.
SECTION 5.6. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Guarantor
referred to in this Article, the Holders shall be entitled to rely upon any
order or decree entered by any court of competent jurisdic tion in which a
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Holders, for
the purpose of ascertaining the Persons entitled to participate in such payment
or distribution, the holders of the Guarantor Secured Indebtedness and other
indebtedness of the Guarantor, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 5.7. Certain Conversions or Exchanges Deemed Payment. For
the purpose of this Article only, (a) the issuance and delivery of junior
securities upon conversion or exchange of Debentures shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest (including any Additional Interest) on the Debentures or on
account of the purchase or other acquisition of Debentures, and (b) the payment,
issuance or delivery of cash (including any payments for fractional shares),
property or securities (other than junior securities) upon conversion or
exchange of a Debenture shall be deemed to constitute payment on account of the
principal of such security. For the purpose of this Section, the term "junior
securities" means (i) shares of any stock of any class of the Guarantor and (ii)
securities of the Guarantor which are subordinated in right of payment to all
Guarantor Secured Indebtedness which may be outstanding at the time of issuance
or delivery of such securities to substantially the same extent as, or to a
greater extent than, the Debentures are so subordinated as provided in this
Article.
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ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Common Securities then outstanding.
SECTION 6.2. Amendments. Except with respect to any changes which do
not adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Guarantee Agreement may
only be amended with the prior approval of the Holders of not less than a
majority in liquidation preference of all the outstanding Common Securities. The
provisions of Article 6 of the Trust Agreement concerning meetings of the
holders of Preferred Securities shall apply to the giving of such approval.
SECTION 6.3. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or
such other address as the Guarantor may give notice of to the Holders:
Big Flower Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attention: General Counsel
(b) if given to the Trust, in care of the Administrative Trustees
(as defined in the Trust Agreement), at the Trust's address set forth below or
such other address as the Trust may give notice of to the Holders:
Big Flower Trust I
c/o Big Flower Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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Attention: General Counsel
(c) if given to any Holder, at the address set forth on the books
and records of the Trust.
All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 6.4. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the Common
Securities.
SECTION 6.5. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not
defined in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
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SECTION 6.6. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
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This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
BIG FLOWER HOLDINGS, INC.
as Guarantor
By:
--------------------------------
Name:
Title:
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