-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FGEWqpKNh6mYB88y16tKqJvzsBWRnQtat8/oWAjxBabDw4wZgMwkROPh+TrQ800K oJ5ByB1dlqhWDlXKMe1AGg== 0000950123-97-003906.txt : 19970508 0000950123-97-003906.hdr.sgml : 19970508 ACCESSION NUMBER: 0000950123-97-003906 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19960411 ITEM INFORMATION: Other events FILED AS OF DATE: 19970507 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAXAR CORP CENTRAL INDEX KEY: 0000075681 STANDARD INDUSTRIAL CLASSIFICATION: COMMERCIAL PRINTING [2750] IRS NUMBER: 135670050 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09493 FILM NUMBER: 97597074 BUSINESS ADDRESS: STREET 1: 105 CORPORATE PARK DRIVE CITY: WHITE PLAINS STATE: NY ZIP: 10604 BUSINESS PHONE: 914697-6800 MAIL ADDRESS: STREET 1: 275 N MIDDLETOWN ROAD CITY: PEARL RIVER STATE: NY ZIP: 10965 FORMER COMPANY: FORMER CONFORMED NAME: PACKAGING SYSTEMS CORP DATE OF NAME CHANGE: 19870401 8-K 1 FORM 8-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 11, 1996 PAXAR CORPORATION (Exact name of registrant as specified in its charter) New York 0-5610 13-5670050 (State or Other Jurisdiction (Commission File Number) (IRS Employer Ident. of Incorporation) No.) 105 Corporate Park Drive, White Plains, New York 10604 (Address of Principal Executive Offices) (Zip Code) (914) 697-6800 Registrant's telephone number, including area code 2 Item 5. Other Events. On April 11, 1997, Monarch Marking Systems, Inc., a Delaware corporation ("Monarch") and a wholly-owned subsidiary of PAXAR Corporation, a New York corporation (the "Registrant"), completed the purchase of $100 million of principal amount of Monarch's 12-1/2% Senior Notes due July 1, 2003 (the "Notes"), which constituted all of the issued and outstanding Notes. Pursuant to the terms of an Offer to Purchase and Consent Solicitation Statement dated March 13, 1997, as amended on March 20, 1997, and March 25, 1997 (as amended, the "Offer to Purchase"), Monarch offered (the "Tender Offer") to purchase all of the outstanding Notes from the holders thereof (the "Holders") that tendered their Notes on or before April 10, 1997 (the "Expiration Date") and also solicited (the "Solicitation") consents to the adoption of proposed amendments to the Indenture, dated as of June 29, 1995, between Monarch (as successor to Monarch Acquisition Corp.), as Issuer, and Fleet National Bank (formerly known as Shawmut Bank Connecticut, National Association), as Trustee, pursuant to which the Notes were issued (as supplemented, the "Indenture"). The purchase price for the Notes under the Tender Offer was an amount for each $1,000 principal amount of Notes tendered equal to (i) the greater of (A) $1,167.50 (the "Fixed Price") or (B) the price (the "Variable Price") equal to the present value of the Notes on the date on which payment for the Notes was to be made (the "Payment Date") determined on the basis of a yield (the "Tender Offer Yield") to June 30, 1999, which was the day immediately preceding the earliest redemption date of the Notes (the "Earliest Redemption Date"), equal to the sum of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30, 1999 (the "Reference Security"), as calculated by BT Securities Corporation (the "Dealer Manager") in accordance with standard market practice, based on the bid price for such Reference Security as of 2:00 P.M., New York City time, on March 26, 1997, the tenth business day immediately preceding the scheduled Expiration Date of the Tender Offer (the "Price Determination Date"), as currently displayed on the Bloomberg Government Pricing Monitor on "Page PX3" or any recognized quotation source selected by the Dealer Manager in its sole discretion if the Bloomberg Government Pricing Monitor is not available, plus (y) 75 basis points (such price being rounded to the nearest cent per $1,000 principal amount of Notes), plus (ii) accrued and unpaid interest, if any, up to, but not including, the Payment Date (the consideration referred to in clauses (i) and (ii) being hereinafter referred to as the "Total Consideration"), minus (iii) $30.00 per Note, which is equal to the Consent Payment, as referred to below (the Total Consideration minus the Consent Payment being hereafter referred to as the "Tender Offer Consideration"). The Total Consideration became payable on April 10, 1997, the date that the Notes were accepted for payment pursuant to the Tender Offer and Solicitation (the "Acceptance Date"). In connection with the Solicitation, Monarch offered to pay to each Holder that validly tendered its Notes a "Consent Fee" equal to 3% of the principal amount ($30 per $1,000) of the Notes (the "Consent Payment"), with such payment to be made promptly following the Acceptance Date. On the Price Determination Date, the Fixed Price of $1,167.50 per $1,000 principal amount of the Notes was greater than the Variable Price. Holders of all of the outstanding Notes tendered their Notes and provided their Consents on or before the Expiration Date, as provided in the Offer to Purchase. Accordingly, on April 11, 1997, the Payment Date, Monarch paid aggregate Total Consideration of $120,222,222 consisting of $100,000,000 of principal, $3,472,222 of accrued interest, a $13,750,000 premium, and an aggregate Consent Payment of $3,000,000. Upon payment of the Total Consideration, all of the outstanding Notes were canceled and the Indenture was terminated. Monarch financed the purchase of the Notes from cash on hand and a loan from the Registrant. The Registrant financed its loan to Monarch from loans under its existing $280 million line of credit. (c) Exhibits. 10.1 Dealer Manager Agreement, dated March 13, 1997, between Monarch Marking Systems, Inc. and BT Securities Corporation. 99.1 Offer to Purchase and Consent Solicitation Statement, dated March 13, 1997. 99.2 Amendment No. 1 to Offer to Purchase and Consent Solicitation Statement, dated March 20, 1997. 2 3 99.3 Amendment No. 2 to Offer to Purchase and Consent Solicitation Statement, dated March 25, 1997. 99.4 Consent and Letter of Transmittal, dated March 13, 1997. 99.5 Notice of Guaranteed Delivery, dated March 13, 1997. 99.6 Brokers' Letter, dated March 13, 1997. 3 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PAXAR CORPORATION (Registrant) Date: May 7, 1997 By: /s/ George Mitchell --------------------------- George Mitchell Treasurer 4 5 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 10.1 Dealer Manager Agreement, dated March 13, 1997, between Monarch Marking Systems, Inc. and BT Securities Corporation. 99.1 Offer to Purchase and Consent Solicitation Statement, dated March 13, 1997. 99.2 Amendment No. 1 to Offer to Purchase and Consent Solicitation Statement, dated March 20, 1997. 99.3 Amendment No. 2 to Offer to Purchase and Consent Solicitation Statement, dated March 25, 1997. 99.4 Consent and Letter of Transmittal, dated March 13, 1997. 99.5 Notice of Guaranteed Delivery, dated March 13, 1997. 99.6 Brokers' Letter, dated March 13, 1997. 5 EX-10.1 2 DEALER MANAGER AGREEMENT 1 EXHIBIT 10.1 DEALER MANAGER AGREEMENT March 13, 1997 BT SECURITIES CORPORATION One Bankers Trust Plaza New York, New York 10006 Ladies and Gentlemen: Monarch Marking Systems, Inc. (formerly known as Monarch Acquisition Corp.), a Delaware corporation (the "Company"), proposes to offer (the "Tender Offer") to the holders of its 12 1/2% Senior Notes due 2003 (the "Notes"), upon the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated March 13, 1997 (including all information incorporated by reference therein and exhibits, appendices and attachments thereto, as amended, modified or supplemented from time to time, the "Offer to Purchase"), to purchase for cash $100,000,000 in aggregate principal amount of the outstanding Notes. Concurrently with the Tender Offer, the Company is soliciting consents (the "Consent Solicitation") from holders of the Notes to amendments (the "Proposed Amendments") to certain of the provisions in the indenture governing the Notes (the "Indenture"), as described in the Offer to Purchase. Upon receipt of the Requisite Supermajority Consents (as defined in the Offer to Purchase) or, at the option of the Company, the Requisite Majority Consents (as defined in the Offer to Purchase) from holders of the Notes ("Holders"), the Company and Fleet National Bank (formerly known as Shawmut Bank Connecticut, National Association), the trustee under the Indenture (the "Trustee"), will enter into an amendment and/or a supplement to the Indenture (the "Supplemental Indenture") which will give effect to some or all, as the case may be, of the Proposed Amendments. Unless otherwise indicated, the use of the term Tender Offer herein shall be deemed to include the Consent Solicitation. The Company hereby confirms its agreement with you as follows: 1. Tender Offer Materials. The Company agrees to furnish you at its own expense with as many copies as you may reasonably request of the Offer to Purchase, Letter of Transmittal, Notice of Guaranteed Delivery, Broker/Dealer Letters, Client Letters and Taxpayer Guidelines (collectively, the "Letters of Transmittal"). The Offer to Purchase, together with all other attachments thereto, the Letters of Transmittal, as such materials may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof, are herein collectively referred to as the "Offering Materials". 2 The date or dates on which the Offering Materials are first mailed or otherwise distributed to Holders is hereinafter referred to as the "Commencement Date". 2. Retention. (a) The Company hereby retains you to act as exclusive financial advisor and dealer manager (the "Dealer Manager") to the Company in connection with the Tender Offer, until the earlier of May 31, 1997 or the date of the consummation of the Tender Offer (such date of consummation, the "Closing Date"). As financial advisor and Dealer Manager, you agree, in accordance with customary practice, to perform those services in connection with the Tender Offer as are customarily performed by investment banking concerns acting in such roles in connection with tender offers and consent solicitations of a like nature, including but not limited to soliciting tenders and consents pursuant to the Tender Offer and Consent Solicitation, communicating generally regarding the Tender Offer with brokers, dealers, commercial banks, and trust companies and other persons, including the holders of the Notes, and providing advice to the Company with respect to the terms and timing of the Tender Offer and assisting the Company in the preparation of the Offering Materials to the extent that such documents relate to the terms of the Tender Offer. (b) Subject to the last sentence of this clause (b), the Company agrees that any reference to the Dealer Manager in any Offering Materials or in any press release or other document or communication related to the Tender Offer or your activities in connection therewith is subject to the Dealer Manager's prior approval. If the Dealer Manager resigns or its engagement hereunder is terminated prior to the dissemination of the Offering Materials or any other release or communication, no reference shall be made therein to the Dealer Manager. In the event that applicable law requires a reference to any Dealer Manager, the Company agrees to provide the Dealer Manager with prompt notice of such requirement to provide the Dealer Manager a reasonable opportunity to seek an appropriate protective order or other remedy. (c) The Company authorizes the Dealer Manager to communicate with any information agent or depositary designated or retained by the Company with respect to the Tender Offer (respectively, the "Information Agent" and the "Depositary") regarding the Tender Offer. (d) In full payment for services rendered and to be rendered hereunder by the Dealer Manager, the Company agrees to pay the Dealer Manager's fees and to reimburse the Dealer Manager for expenses as follows: (i) An aggregate cash fee equal to $3.50 per $1,000 principal amount of Notes validly tendered and purchased 2 3 pursuant to the Tender Offer shall be paid by the Company on the Closing Date and such fee shall be paid irrespective of the termination of this Agreement prior to the dates set forth in Subsection 2(a). (ii) In addition to the compensation to be paid as provided in Subsection d(i) hereof, the Company shall pay, without regard to whether the Tender Offer is consummated, to or on behalf of the Dealer Manager, promptly as billed, all reasonable out-of-pocket expenses (including all reasonable fees and expenses of the Dealer Manager's legal counsel) incurred in connection with the Tender Offer. (iii) If the Dealer Manager resigns or the Company terminates the Dealer Manager's services for any reason prior to the Closing Date, the Dealer Manager and its legal counsel shall be entitled to receive all of the amounts provided for in Subsections d(i) and (ii) hereof up to and including the effective date of such resignation or termination, as the case may be. 3. Certain Covenants. The Company covenants with you as follows: (a) The Company will give the Dealer Manager notice of its intention to amend or supplement any Offering Materials, will furnish the Dealer Manager with copies of such amendment or supplement, and will not use any such amendment or supplement to which the Dealer Manager or counsel for the Dealer Manager shall reasonably object in writing or which is not in compliance with the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (b) If, during the Tender Offer, any event occurs as a result of which it shall, in the reasonable judgment of the Company or its counsel or the Dealer Manager or its counsel, be necessary to amend or supplement any of the Offering Materials in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or, if for any other reason it is necessary, in the reasonable judgment of any such person, at any time to amend or supplement any of the Offering Materials to comply in all material respects with the Exchange Act, and the rules and regulations of the Commission promulgated thereunder or any other law, rule or regulation, such person shall promptly inform the Company and the Dealer Manager, and (subject to Section 3(a) above) the Company shall promptly prepare and furnish copies to you of such amendments or supplements to such Offering Materials, so that either (i) the statements in the Offering Materials, as so amended or supplemented, will 3 4 not, in light of the circumstances under which they were made, be misleading or (ii) such compliance is effected. (c) The Company shall comply in all material respects with the applicable provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (the "Securities Act"), the Exchange Act, and the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Commission promulgated thereunder (the "Trust Indenture Act"), in connection with the Offering Materials, the Tender Offer and the transactions contemplated hereby and thereby; the Company will take on a timely basis all actions reasonably necessary or legally required in relation to the Tender Offer and all other actions contemplated by this Agreement and by the Offering Materials; and the Company will take all necessary corporate action to authorize any amendments to or modifications of the Tender Offer. (d) The Company will notify you, not less than two hours prior thereto, of the time when it proposes to commence the Tender Offer or, after commencement, to extend the Tender Offer; will notify you as promptly as practicable of its receipt of the Requisite Supermajority Consents and the Requisite Majority Consents; and will notify you as promptly as practicable following expiration of the Tender Offer on the Expiration Date (as defined in the Offering Materials), of the aggregate principal amount of Notes in respect of which a consent and/or tender has been verified to be in proper form, a consent and/or tender has been rejected and which are being processed. The Company shall promptly give you notice of any change in the Expiration Date. (e) The Company shall advise you promptly of (i) the occurrence of any event, or the discovery of any fact, which could reasonably be expected to cause the Company to amend, withdraw or terminate the Tender Offer, (ii) the occurrence of any event, or the discovery of any fact, which could reasonably be expected to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect, (iii) the issuance of any comment or order or the taking of any other action by the Commission or any other governmental or regulatory agency with respect to the Tender Offer (and, if in writing, will promptly furnish you a copy thereof), (iv) the occurrence of any event, or the discovery of any fact, which could reasonably be expected to cause the Company to amend or supplement any of the Offering Materials, (v) the issuance or the threatened issuance of any order or the taking of any other action by any administrative or judicial tribunal or governmental agency or instrumentality concerning the Tender Offer (and, if in writing, will promptly 4 5 furnish you a copy thereof) and (vi) any other information relating to the Tender Offer which you may from time to time reasonably request. 4. Expenses. In addition to the obligation of the Company to reimburse the Dealer Manager for its reasonable out-of-pocket expenses as provided in Subsection 2(d)(ii) hereof, the Company agrees to pay all costs and expenses incident to the performance of its obligations under this Agreement, whether or not the transactions contemplated herein are consummated or this Agreement is terminated pursuant to Section 8 hereof, including, but not limited to, all costs and expenses incident to (i) the printing, word processing or other production of documents with respect to such transactions, including any costs of printing the Offering Materials, the Supplemental Indenture and all other agreements related to the Tender Offer or the distribution of any legal investment memoranda, (ii) all arrangements relating to the delivery to the Dealer Manager of copies of the foregoing documents, (iii) the fees and disbursements of counsel, accountants and any other experts or advisors retained by the Company, (iv) the fees and disbursements of the Trustee, the Transfer Agent and Registrar, the Information Agent and the Depositary and (v) any meetings with Holders relating to the Tender Offer. 5. Representations and Warranties. The Company represents and warrants to and agrees with you that as of the Commencement Date and the Closing Date: (i) The Offering Materials, as amended and supplemented from time to time, do not, as of their respective dates, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they are made, not misleading, except that the representations and warranties set forth in this Section 5(i) do not apply to statements made in reliance upon and in conformity with information relating to the Dealer Manager furnished in writing by the Dealer Manager expressly for use in the Offer to Purchase. (ii) The Company has all the necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby and by the Offering Materials. The Company has taken all necessary corporate action to authorize the Tender Offer and the execution, delivery and performance of this Agreement and the Supplemental Indenture. (iii) The consummation of the Tender Offer, as contemplated by the Offering Materials, complies in all 5 6 material respects with all applicable provisions of the Securities Act, the Exchange Act and the Trust Indenture Act, and with all applicable rules or regulations of any governmental or regulatory authority or body, including applicable "Blue Sky" or similar state securities laws or statutes; and no consent or approval of, or filing with, any governmental or regulatory authority or body will be required by the Company in connection with this Agreement or the commencement or consummation of the Tender Offer other than those consents or approvals which will have been obtained and is, or will be, in full force and effect or any filing which will have been made prior to the commencement or consummation, as the case may be, of the Tender Offer. (iv) The Company has been duly incorporated and is validly existing in good standing as a corporation under the laws of its jurisdiction of incorporation, with all requisite corporate power and authority (corporate or otherwise) under such laws, and has all necessary authorizations, approvals, orders, licenses, franchises, consents, certificates and permits of and from regulatory or governmental officials, bodies and tribunals to own or lease its properties and conduct its businesses as now conducted as described in the Offering Materials, and is duly qualified to do business as a foreign corporation in good standing in all jurisdictions where the ownership or leasing of its properties or the conduct of its businesses requires such qualification, except where the failure to have such authorizations, approvals, orders, licenses, franchises, consents, certificates or permits or to be so qualified would not have a material adverse effect on the business, condition (financial or other), results of operations or business prospects of the Company and its subsidiaries, taken as a whole ("Material Adverse Effect"). (v) This Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the Dealer Manager, constitutes the valid and legally binding obligation of the Company enforceable against it in accordance with its terms, except that the enforcement hereof may be limited by subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally, and general principles of equity and the discretion of the court before which any proceeding therefor may be brought (regardless of whether such enforcement is considered in a proceeding in equity or at law). The Company is not (i) in violation of its 6 7 certificate of incorporation or bylaws, (ii) in violation of any statute, judgment, decree, order, rule or regulation applicable to it or any of its respective properties or assets which violation could reasonably be expected to have a Material Adverse Effect, or (iii) in default in the performance or observance of (including any default arising after notice or lapse of time or both) any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, permit, certificate or other agreement or instrument to which it is subject, which default could reasonably be expected to have a Material Adverse Effect. The execution, delivery and performance by the Company of this Agreement and the Supplemental Indenture and the consummation by the Company of the transactions contemplated hereby and thereby and by the Offering Materials will not conflict with or constitute or result in a breach or violation by the Company of any of (x) the terms or provisions of, or constitute a default (including any default arising after notice or lapse of time or both) by the Company or any of its subsidiaries under, any indenture, mortgage, deed of trust, loan agreement, note, lease, license, franchise agreement, or other agreement or instrument to which any of them is a party or to which any of their respective properties is subject, which conflict, breach, violation or default could reasonably be expected to have a Material Adverse Effect, (y) the certificate of incorporation or bylaws of the Company or any of its subsidiaries, or (z) any statute, judgment, decree, order, rule or regulation (excluding state securities and "Blue Sky" laws) of any court or governmental agency or other body applicable to the Company or any of its subsidiaries or any of their respective properties, which conflict, breach, violation or default could reasonably be expected to have a Material Adverse Effect. (vi) Except as described in the Offering Materials, there is not pending or, to the knowledge of the Company, threatened, any action, suit, proceeding, inquiry or investigation to which it or any of its subsidiaries, or to which any of their respective properties is subject, before or brought by any court or governmental agency or body, which could reasonably be expected to have a Material Adverse Effect. (vii) Except as stated in the Offering Materials and as provided herein, the Company has not agreed to pay and does not know of any outstanding material claims in the nature of a finder's fee, financial advisory fee, 7 8 origination fee or similar fee to be paid by it with respect to the transactions contemplated hereby. 6. Conditions of the Dealer Manager's Obligations. Your obligations to act and to continue to act (as the case may be) as Dealer Manager shall be subject to the accuracy in all material respects of the representations and warranties contained herein as of the Commencement Date as if made on and as of such date (except as expressly provided therein), to the performance in all material respects by the Company of its covenants and agreements hereunder and to the following additional conditions, unless waived in writing by the Dealer Manager: (a) There shall not have been any legal action, order, decree or other administrative proceeding instituted or threatened against the Company or any of its subsidiaries which could reasonably be expected to have a Material Adverse Effect, or against you relating to the Tender Offer and your activities in connection therewith or any of the other transactions contemplated by the Offering Materials. (b) The proceedings taken at or prior to the Closing Date in connection with the Tender Offer and any other transactions contemplated by the Offering Materials shall be in form and substance reasonably satisfactory to you and your counsel. (c) On the Commencement Date, you shall have received the opinion of Snow Becker Krauss P.C., counsel for the Company, substantially in the form of Exhibit A hereto. (d) On the Closing Date, you shall have received, dated as of such date, the opinion of Snow Becker Krauss P.C., counsel for the Company, substantially in the form of Exhibit B hereto. (e) Neither the Tender Offer nor any of the other transactions contemplated by the Offering Materials shall be enjoined (temporarily or permanently) and no restraining order or other injunctive order shall have been issued or any action, suit or proceeding shall have been commenced with respect to the Tender Offer, this Agreement, the Supplemental Indenture or any of the other transactions contemplated by the Offering Materials, before any court or governmental authority. (f) On the Closing Date, the Dealer Manager shall have received a certificate, dated such date, of the chief executive officer or the chief financial officer of the Company to the effect that: 8 9 (i) The representations and warranties in this Agreement are true and correct in all material respects as if made on and as of such date and the Company has performed all covenants and agreements and satisfied all conditions on its part to be performed or satisfied at or prior to such date (after giving effect to the Tender Offer and the other transactions contemplated by the Offering Materials); (ii) Subsequent to the date as of which information is given in the Offering Materials (as amended or supplemented), as of the date of such certificate, there has not been any change or any development which, singly or in the aggregate, could reasonably be expected to result in a Material Adverse Effect on the Company; and (iii) Neither the Tender Offer, nor any of the other transactions contemplated hereby or by the Offering Materials has been enjoined (temporarily or permanently). (g) On or before the Closing Date, to the extent Requisite Supermajority Consents or, at the option of the Company, the Requisite Majority Consents have been received, the Company and the Trustee and all other necessary parties shall have executed and delivered the Supplemental Indenture, which shall be reasonably satisfactory in form and substance to the Dealer Manager and Cahill Gordon & Reindel, counsel for the Dealer Manager, and the Supplemental Indenture shall be in full force and effect. On or before the Commencement Date and the Closing Date, you and your counsel shall have received such further documents, certificates and schedules relating to the business, corporate, legal and financial affairs of the Company and its subsidiaries and the Tender Offer as reasonably requested. In the event that any of the foregoing conditions is not met when required to be met, then you shall be entitled to withdraw as Dealer Manager in connection with the Tender Offer without any liability or penalty to you or any other "indemnified party" (as defined in Section 7) and without loss of any right to the payment of all expenses and fees payable under this Agreement. 7. Indemnification. The Company agrees to indemnify and hold harmless the Dealer Manager and the respective affiliates, the directors, officers, agents, representatives and employees of the Dealer Manager or its affiliates and each other person, if any, controlling the Dealer Manager (each an "indemnified party") from and against any and all losses, actions, claims, damages or liabilities, and will reimburse any indemnified party for all costs and expenses (including counsel fees) as they are incurred by 9 10 such indemnified party in connection with investigating, preparing to defend or defending any such action or claim caused by or arising out of, or in connection with, the Tender Offer (whether or not consummated), including, but not limited to, actions, claims, liabilities or expenses arising out of or based upon any breach of any agreement or representation of the Company contained in this Agreement, the structuring and development of the Tender Offer, an untrue statement or alleged untrue statement of a material fact in any of the Offering Materials or an omission or an alleged omission to state a material fact in any of the Offering Materials necessary to make the statements therein not misleading, or the transmittal of the Offering Materials to Holders, or which arise out of or are based upon any failure to accept Notes or consents properly tendered pursuant to the Tender Offer; provided, however, that the Company will not be liable to any indemnified party to the extent that any claims, liabilities, losses, damages, costs or expenses are finally determined by a court of competent jurisdiction to have resulted primarily from the gross negligence or willful misconduct of such indemnified party. The Company will not, without the prior written consent of the Dealer Manager, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought by an indemnified party hereunder (whether or not any indemnified party is a party to such claim, action, suit or proceeding), unless such settlement, compromise or consent includes an unconditional written release (in form and substance reasonably satisfactory to the indemnified parties) of the indemnified parties from all liability arising out of such claim, action, suit or proceeding. Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the Company under this Section 7, notify the Company of the commencement thereof; but the omission so to notify the Company will not relieve the Company from any liability which it may have to any indemnified party otherwise than under this Section 7. In case any such action is brought against any indemnified party, and it notifies the Company of the commencement thereof, the Company will be entitled to participate therein and, to the extent it may wish to, may assume the defense thereof, with counsel satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the Company and the indemnified party shall have concluded that there may be one or more legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the Company, then the Company shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such indemnified party or parties shall have the right to select separate counsel to defend such 10 11 action on behalf of such indemnified party or parties. After notice from the Company to such indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the Company will not be liable to such indemnified party under this Section 7 for any legal or other expenses, other than costs of investigation subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately preceding sentence (it being understood, however, that in connection with such action the Company shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Dealer Manager, representing the indemnified parties, who are parties to such action or actions) or (ii) the Company has authorized the employment of counsel for the indemnified party at the expense of the Company. After such notice from the Company to such indemnified party, the Company will not be liable for the losses, costs and expenses of any settlement of such action effected by such indemnified party without the consent of the Company. If such indemnified party waives all of its rights under this Section 7, the indemnified party may effect such a settlement without the consent of the Company. In circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 7 is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), the Company, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the Company on the one hand and the indemnified party or parties on the other from the Tender Offer or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company on the one hand and the indemnified party or parties on the other in connection with such losses, claims, damages or liabilities (or actions in respect thereof). The relative benefits received by the Company on the one hand and the indemnified parties on the other shall be deemed to be in the same proportion as (i) the aggregate principal amount of Notes solicited for tender and consent pursuant to the Tender Offer bears to (ii) the fees and expenses paid or proposed to be paid by the Company to the Dealer Manager under this Agreement. The indemnity, reimbursement and contribution obligations of the Company under this Agreement shall be in addition to any rights that the Dealer Manager or any other indemnified party may have at 11 12 common law or otherwise. The Company and the Dealer Manager agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Company on the one hand and the indemnified parties on the other hand were treated as one entity for such purpose) or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this paragraph. For purposes of this paragraph, each person, if any, who controls the Dealer Manager within the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall have the same rights to contribution as the Dealer Manager. 8. Termination. (a) This Agreement may be terminated (i) by the Dealer Manager at any time upon notice to the Company if (A) the Company shall mail or otherwise distribute or propose to mail or otherwise distribute any supplement to any Offering Materials to which the Dealer Manager shall reasonably object or which shall be reasonably disapproved by its counsel, (B) at any time prior to the Closing Date, the Tender Offer is terminated or withdrawn for any reason (other than the failure of the Dealer Manager to perform its obligations hereunder) or any restraining order or other injunctive order shall have been issued or any action, suit or proceeding shall have been commenced with respect to the Tender Offer, this Agreement or any of the other transactions contemplated by the Offering Materials, before any court or governmental authority which makes it inadvisable for the Dealer Manager, in its discretion, to continue to act as Dealer Manager hereunder, (C) any of the conditions specified in Section 6 shall not have been fulfilled, or (D) there is a good faith disagreement between the Dealer Manager and the Company with respect to a material term or condition of the Tender Offer or the Offering Materials, or (ii) by the Company upon notice to the Dealer Manager, if there is a good faith disagreement between the Dealer Manager and the Company with respect to a material term or condition of the Tender Offer or the Offering Materials. (b) Termination of this Agreement pursuant to this Section 8 shall be without liability of any party to any other party except as provided in Section 11 hereof. 9. Notices. Any notices required to be given in writing pursuant to any of the provisions of this Agreement shall be mailed, air couriered or delivered (a) to the Company: Monarch Marking Systems, Inc. 170 Monarch Drive Miamisburg, Ohio 45342 Attention: Arthur Hershaft, Chairman with a copy to: 12 13 Paxar Corporation 105 Corporate Park Drive White Plains, New York 10604 Attention: Arthur Hershaft, Chairman and Chief Executive Officer - and - Snow Becker Krauss P.C. 605 Third Avenue New York, NY 10158 Attention: Eric Honick, Esq. or (b) to the Dealer Manager: BT Securities Corporation One Bankers Trust Plaza New York, New York 10006 Attention: Jim Clayton with a copy to: Cahill Gordon & Reindel 80 Pine Street New York, New York 10005 Attention: Gerard M. Meistrell, Esq. Any such notice may be made by telecopier or telephone, but if so made shall be subsequently confirmed in writing. 10. Tombstone. The Company acknowledges that the Dealer Manager may at any time after the Closing Date place an announcement in such newspapers and periodicals as it may choose, at the Company's cost, stating that it acted as financial advisor to the Company in connection with the Tender Offer, provided that the Dealer Manager will submit a copy of any such announcements to the Company for its prior approval, which approval shall not be unreasonably withheld or delayed. 11. Survival. The provisions of Section 2(d) hereof, the indemnity and contribution agreements contained in Section 7 hereof, the representations and warranties and agreements set forth in Section 5 hereof and Section 12 hereof shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of the Dealer Manager, or by or on behalf of any affiliate of the Dealer Manager or any person controlling the Dealer Manager or affiliate, (ii) consummation of the Tender Offer or (iii) any termination of this Agreement or of the Dealer Manager's engagement hereunder, and shall be binding upon and shall inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the Dealer Manager and the indemnified parties referred to in Section 7 hereof. 13 14 12. APPLICABLE LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAWS, AND ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR CONTEMPLATED BY THIS AGREEMENT IS HEREBY WAIVED. YOU HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY. 13. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 14. Headings. The section headings in this Agreement have been inserted as a matter of convenience of reference only and are not a part hereof. 15. Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, understandings and arrangements, oral or written, among the parties hereto with respect to the subject matter hereof. 14 15 If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Dealer Manager. Very truly yours, MONARCH MARKING SYSTEMS, INC. By: /s/ Arthur Hershaft --------------------------------- Name: Arthur Hershaft Title: Chairman The foregoing Agreement is hereby confirmed and accepted as of the date first above written. BT SECURITIES CORPORATION By: /s/ James A. Clayton - --------------------------------- Name: James A. Clayton Title: Managing Director 15 16 Exhibit A Form of Commencement Date Opinion of Snow Becker Krauss P.C. 1. The Company has been duly incorporated, is validly existing and in good standing under the laws of the State of Delaware. 2. The Company has the full corporate power and authority to execute, deliver and perform its obligations under the Dealer Manager Agreement. 3. To the best of our knowledge, there is no action, suit, proceeding or investigation pending or threatened against or affecting the Company in any court or before any governmental authority or arbitration board or tribunal that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the Tender Offer, the Consent Solicitation or any of the other transactions contemplated by the Offering Materials. 4. The Dealer Manager Agreement has been duly authorized, executed and delivered by the Company, and (assuming due authorization, execution and delivery by the Dealer Manager) is the legally valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and by general principles of equity and the discretion of the court before which any proceeding therefor may be brought (regardless of whether such enforcement is considered in a proceeding in equity or at law). 5. The execution and delivery of the Dealer Manager Agreement by the Company and the performance of its obligations thereunder will not result in the violation by the Company of its certificate of incorporation and bylaws or in the breach of or a default by the Company under any Indenture, mortgage, deed or trust, loan agreement, note, lease or other agreement or instrument known to us to be applicable to the Company or to which or any of its properties is subject. 1 17 6. None of (i) the execution or delivery of the Dealer Manager Agreement by the Company, (ii) performance by the Company of its obligations under the Dealer Manager Agreement or (iii) the making of the Tender Offer and Consent Solicitation by the Company, violates any Federal or New York State statute, law, rule or regulation or any provision of the Delaware General Corporation Laws known to us or any judgment, decree, order, rule or regulation of any court or other governmental authority applicable to the Company or any of its subsidiaries (other than blue sky laws, rules or regulations as to which we express no opinion). In addition, we have participated in conferences with officers and other representatives of the Company and its subsidiaries, representatives of the independent public accountants for the Company and its subsidiaries, and your representatives, at which the contents of the Offering Materials and related matters were discussed and, although we are not passing upon, and do not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Offering Materials, during the course of such participation (relying as to materiality to a large extent upon the statements of officers and other representatives of the Company and its subsidiaries), no facts came to our attention that caused us to believe that the Offering Materials contain an untrue statement of a material fact or omit to state a 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; it being understood that we express no opinion with respect to the financial statements and other financial and statistical data included in the Offering Materials. 2 18 Exhibit B Form of Closing Date Opinion of Snow Becker Krauss P.C. 1. The Company has been duly incorporated, is validly existing and in good standing under the laws of the State of Delaware. 2. The Company has the full corporate power and authority to execute, deliver and perform its obligations under the Dealer Manager Agreement. 3. To the best of our knowledge, there is no action, suit, proceeding or investigation pending or threatened against or affecting the Company in any court or before any governmental authority or arbitration board or tribunal that seeks to restrain, enjoin, prevent the consummation of or otherwise challenge the Tender Offer, the Consent Solicitation or any of the other transactions contemplated by the Offering Materials. 4. The Supplemental Indenture relating to the Notes has been duly authorized, executed and delivered by the Company and (assuming due authorization, execution and delivery by the Trustee) is the legally valid and binding agreement of the Company, enforceable against it in accordance with its terms, except that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and by general principles of equity and the discretion of the court before which any proceeding therefor may be brought (regardless of whether such enforcement is considered in a proceeding in equity or at law). 5. The execution and delivery of the Supplemental Indenture by the Company will not result in the violation by the Company of its certificate of incorporation and bylaws or any statute, rule or regulation known to us to be applicable to the Company, or in the breach of or a default by the Company under any indenture, mortgage, deed of trust, loan agreement, note, lease, license or other agreement or instrument known to us to be applicable to the Company or to which any of its properties is subject. 6. None of (i) the execution or delivery of the Dealer Manager Agreement by the Company, (ii) performance by the Company of its obligations under the Dealer Manager Agreement or (iii) the making of the Tender Offer and Consent Solicitation by the Company, violates any Federal or New York State statute, law, rule 3 19 or regulation or any provision of the Delaware General Corporation Laws known to us or any judgment, decree, order, rule or regulation of any court or other governmental authority applicable to the Company or any of its subsidiaries (other than blue sky laws, rules or regulations as to which we express no opinion). 7. To the best of our knowledge, no consent, approval, authorization or order of, or filing with, any court or governmental agency or body is required for the purchase of the Notes (other than blue sky laws, rules or regulations as to which we express no opinion). 8. The changes affected by the Supplemental Indenture conform to the description thereof in the Offering Materials, as amended or supplemented to the date hereof, in all material respects. 9. The Indenture, as amended by the Supplemental Indenture, complies with the Trust Indenture Act. 10. The consummation of the Tender Offer and the Consent Solicitation on the terms set forth in the Offering Materials, as amended and supplemented to the date hereof, will not conflict with or result in a violation of Section 14(e) of the Exchange Act and the rules and regulations promulgated thereunder. In addition, we have participated in conferences with officers and other representatives of the Company and its subsidiaries, representatives of the independent public accountants for the Company and its subsidiaries, and your representatives, at which the contents of the Offering Materials, as amended and supplemented to the date hereof, and related matters were discussed and, although we are not passing upon, and do not assume any responsibility for, the accuracy, completeness or fairness of the statements contained in the Offering Materials, as amended and supplemented to the date hereof (relying as to materiality to a large extent upon the statements of officers and other representatives of the Company and its subsidiaries), no facts came to our attention that caused us to believe that any of the Offering Materials, as amended and supplemented to the date hereof, contain an untrue statement of a material fact or omit to state a 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 it being understood that we express no opinion with respect to the financial statements and other 4 20 financial and statistical data included in any of the Offering Materials, as amended or supplemented to the date hereof. 5 EX-99.1 3 OFFER TO PURCHASE 1 Exhibit 99.1 OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT MONARCH MARKING SYSTEMS, INC. OFFER TO PURCHASE FOR CASH ALL OF ITS OUTSTANDING 12-1/2% SENIOR NOTES DUE JULY 1, 2003 ($100 MILLION PRINCIPAL AMOUNT OUTSTANDING) AND SOLICITATION OF CONSENTS FOR AMENDMENT OF RELATED INDENTURE THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997 UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE"). HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW). TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT, SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS RELEASE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING. Monarch Marking Systems, Inc., a Delaware corporation (the "Company"), hereby offers (the "Tender Offer") to purchase for cash, upon the terms and subject to the conditions set forth in this Offer to Purchase and Consent Solicitation Statement (as it may be supplemented and amended from time to time, the "Statement") and in the accompanying Consent and Letter of Transmittal (as it may be supplemented and amended from time to time, the "Consent and Letter of Transmittal" and, together with this Statement, the "Offer"), all of its outstanding 12-1/2% Senior Notes due July 1, 2003 (the "Notes"). In conjunction with the Tender Offer, the Company hereby solicits (the "Solicitation") consents (the "Consents") to the adoption of the proposed amendments (the "Proposed Amendments") to the indenture, dated as of June 29, 1995, between the Company, as Issuer, and Fleet National Bank (formerly known as Shawmut Bank Connecticut, National Association), as Trustee (the "Trustee"), pursuant to which the Notes were issued (as supplemented through the date hereof, the "Indenture"). 2 Adoption of the Proposed Amendments may have adverse consequences for Holders who elect not to tender Notes in the Offer. See "Certain Significant Considerations" and "Proposed Amendments to the Indenture." The consideration for each $1,000 principal amount of Notes tendered pursuant to the Tender Offer and Solicitation shall be equal to (i) the greater of (A) $1,167.50 or (B) the price (calculated as described on Schedule I to this Statement) equal to the present value of the Notes on the Payment Date (as defined below) determined on the basis of a yield (the "Tender Offer Yield") to June 30, 1999, which is the day immediately preceding the earliest redemption date of the Notes (the "Earliest Redemption Date"), equal to the sum of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30, 1999 (the "Reference Security"), as calculated by the Dealer Manager in accordance with standard market practice, based on the bid price for such Reference Security as of 2:00 P.M., New York City time, on March 26, 1997, the tenth business day immediately preceding the scheduled Expiration Date (the "Price Determination Date"), as currently displayed on the Bloomberg Government Pricing Monitor on "Page PX3" or any recognized quotation source selected by the Dealer Manager in its sole discretion if the Bloomberg Government Pricing Monitor is not available, plus (y) 75 basis points (such price being rounded to the nearest cent per $1,000 principal amount of Notes), plus (ii) accrued and unpaid interest, if any, up to, but not including, the Payment Date (the consideration referred to in clauses (i) and (ii) being hereafter referred to as the "Total Consideration"), payable on the date that the Notes are accepted for payment pursuant to the Tender Offer and Solicitation (the"Acceptance Date"). There will be no separate payment for the Consents. Pursuant to the terms of the Indenture, the earliest date upon which the Notes may be redeemed is July 1, 1999, at a price equal to 106.250% of the principal amount of the Notes. In the event the Tender Offer and Solicitation is extended for any period longer than ten business days from the previously scheduled Expiration Date, a new Price Determination Date will be established, which will be the tenth business day immediately preceding the Expiration Date as so extended. The Proposed Amendments will be effected by a supplemental indenture (the "Supplemental Indenture") in the form of an amended and restated indenture, which is to be executed on or promptly after the Consent Date. The "Consent Date" will be one business day following the announcement (by press release) by the Company that it has received the Requisite Supermajority Consents or, at the option of the Company, Requisite Majority Consents to the Proposed Amendments, as described below. "Requisite Supermajority Consents" shall be the Consents of Holders who hold not less than a 75% in aggregate principal amount of the Notes then outstanding (excluding for such purposes any Notes owned at the time by the Company or any of its affiliates). If the Company receives the Requisite Supermajority Consents, all of the Proposed Amendments will become operative on the Acceptance Date. Nevertheless, the Company reserves the right and option to cause the Consent Date to occur if it has received Requisite Majority Consents at any time before the Expiration Date. "Requisite Majority Consents" shall be the Consents of Holders who hold not less than a majority in aggregate principal amount of the Notes then outstanding (excluding for such purposes any Notes owned by the Company or any of its affiliates). If the Consent Date occurs after the Company receives Requisite Majority Consents, but before it receives Requisite Supermajority Consents, substantially all (but not all) of the Proposed Amendments will become operative on the Acceptance Date. See "The Proposed -ii- 3 Amendments to the Indenture." Although the Supplemental Indenture will be executed on or promptly after 12:00 midnight, New York City time, on the Consent Date, none of the Proposed Amendments will become operative unless and until the Tender Offer is consummated on the Acceptance Date. The Indenture, without giving effect to the Proposed Amendments, will remain in effect until all or substantially all of the Proposed Amendments become operative on the Acceptance Date. If the Tender Offer is terminated or withdrawn, or the Notes are not accepted for payment for any reason, none of the Proposed Amendments will become operative. HOLDERS WHO TENDER NOTES IN THE TENDER OFFER ARE OBLIGATED TO CONSENT TO ALL OF THE PROPOSED AMENDMENTS. PURSUANT TO THE TERMS OF THE CONSENT AND LETTER OF TRANSMITTAL, THE COMPLETION, EXECUTION AND DELIVERY THEREOF BY A HOLDER IN CONNECTION WITH THE TENDER OF NOTES WILL BE DEEMED TO CONSTITUTE THE CONSENT OF SUCH TENDERING HOLDER TO ALL OF THE PROPOSED AMENDMENTS. Holders may not revoke Consents without withdrawing the previously tendered Notes to which such Consents relate. Tenders of Notes may be withdrawn and consents may be validly revoked at any time prior to the Consent Date, but, subject to the limited exceptions set forth below, not thereafter. A valid withdrawal of tendered Notes on or prior to 12:00 midnight, New York City time, on the Consent Date will constitute the current valid revocation of such Holder's related Consent. If, after the Consent Date, the Company (i) reduces the principal amount of Notes subject to the Tender Offer or (ii) changes the Total Consideration, then previously tendered Notes may be validly withdrawn until the expiration of ten business days after the date that notice of such reduction or change is first published, given or sent to Holders by the Company. In addition, tenders of Notes may be validly withdrawn if the Tender Offer is terminated without any Notes being purchased thereunder. In the event of a termination of the Tender Offer, the Notes tendered pursuant to the Offer will be promptly returned to the tendering Holders. The Total Consideration that a tendering Holder is entitled to receive pursuant to the Tender Offer and the Solicitation will be paid promptly after the Acceptance Date (the "Payment Date"). Under no circumstances will any interest be payable because of any delay in the transmission of funds to Holders. Subject to applicable securities laws and the terms set forth in the Offer, the Company reserves the right (i) to waive any and all conditions to the Tender Offer or the Solicitation, (ii) to extend or to terminate the Tender Offer or the Solicitation, or (iii) otherwise to amend the Tender Offer or the Solicitation in any respect. An aggregate of $100 million in principal amount of Notes is presently outstanding. The purpose of the Tender Offer is to acquire all of the Notes. The purpose of the Solicitation and the Proposed Amendments is to eliminate or modify certain covenants and other provisions contained in the Indenture in order to improve the operating and financial flexibility of the Company. Notwithstanding any other provision of the Tender Offer or the Solicitation, the Company's obligation to accept for payment, and to pay for, Notes validly tendered pursuant to the Tender Offer and Solicitation is conditioned upon (i) the execution of the Supplemental Indenture following receipt of the Requisite Supermajority Consents or, at the option of the Company, Requisite Majority Consents to the Proposed Amendments (the "Amendment Condition") and (ii) the General Conditions (defined -iii- 4 herein), including the ability of PAXAR Corporation ("PAXAR"), the Company's parent corporation, to borrow under its existing credit facility and to contribute the proceeds thereof to the Company to finance all or a portion of the consideration due in connection with the Tender Offer and Solicitation and any related fees. The Company may waive any of the conditions of the Tender Offer and Solicitation, in whole or in part, at any time and from time to time. See "The Tender Offer and the Consent Solicitation--Conditions of the Tender Offer and the Consent Solicitation" and "Certain Information Concerning the Company -- Recent Developments." See "Certain Significant Considerations" and "Certain Federal Income Tax Considerations" for discussions of certain factors that should be considered in evaluating the Tender Offer and the Solicitation. IN THE EVENT THAT THE TENDER OFFER AND THE SOLICITATION ARE WITHDRAWN OR OTHERWISE NOT COMPLETED, THE TOTAL CONSIDERATION WILL NOT BE PAID OR BECOME PAYABLE TO HOLDERS OF THE NOTES WHO HAVE VALIDLY TENDERED THEIR NOTES AND DELIVERED CONSENTS IN CONNECTION WITH THE TENDER OFFER AND THE SOLICITATION. NEITHER THE COMPANY NOR THE DEALER MANAGER MAKE ANY RECOMMENDATION AS TO WHETHER OR NOT HOLDERS SHOULD TENDER NOTES IN RESPONSE TO THE TENDER OFFER OR PROVIDE CONSENTS TO THE PROPOSED AMENDMENTS IN RESPONSE TO THE SOLICITATION. Any questions or requests for assistance may be directed to the Dealer Manager at its address and telephone number set forth below. Requests for additional copies of this Statement, the Consent and Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Dealer Manager. Beneficial owners may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Tender Offer and the Solicitation. The Dealer Manager for the Tender Offer and the Solicitation is: BT Securities Corporation One Bankers Trust Plaza 130 Liberty Street New York, New York 10006 (212) 775-2467 Attn: High Yield Capital Markets The date of this Offer to Purchase and Consent Solicitation is March 13, 1997. -iv- 5 IMPORTANT Any Holder desiring to tender Notes and deliver Consents should either (i) in the case of a Holder who holds physical certificates evidencing such Notes, complete and sign the Consent and Letter of Transmittal (or a facsimile thereof) in accordance with the instructions therein, have his or her signature thereon guaranteed (if required by Instruction 1 of the Consent and the Letter of Transmittal) and send or deliver such manually signed Consent and Letter of Transmittal (or a manually signed facsimile thereof, together with certificates evidencing such Notes and any other required documents to Fleet National Bank, as Depositary (the "Depositary"), or (ii) in the case of a Holder who holds Notes in book-entry form, request such Holder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such Holder pursuant to the procedures for book-entry delivery herein. See "The Tender Offer and the Consent Solicitation -- Procedures for Tendering Notes and Delivering Consents." A beneficial owner who has Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such beneficial owner desires to tender and deliver Consents for Notes so registered. The Depository Trust Company ("DTC") has authorized DTC participants that hold Notes on behalf of beneficial owners of Notes through DTC to tender their Notes and Consents as if they were Holders. To effect a tender and consent, DTC participants should either (i) complete and sign the Consent and Letter of Transmittal or a facsimile thereof, have the signature thereon guaranteed if required by Instruction 1 of the Consent and Letter of Transmittal, and mail or deliver the Consent and Letter of Transmittal or such facsimile to DTC pursuant to the procedure set forth in "The Tender Offer and the Consent Solicitation - Procedures for Tendering Notes and Delivering Consents" or (ii) transmit their acceptance to DTC through the DTC Automated Tender Offer Program ("ATOP") for which the transaction will be eligible and follow the procedure for book-entry transfer set forth in "The Tender Offer and the Consent Solicitation -- Procedures for Tendering Notes and Delivering Consents." A beneficial owner of Notes that are held of record by a custodian bank, depositary, broker, trust company or other nominee must instruct such Holder to tender the Notes on the beneficial owner's behalf. A Letter of Instructions is included in the solicitation materials provided along with this Statement which may be used by a beneficial owner in this process to effect the tender. Any Holder who desires to tender Notes but who cannot comply with the procedures set forth herein for tender on a timely basis or whose certificates for Notes are not immediately available may tender the Notes by following the procedures for guaranteed delivery set forth under "The Tender Offer and the Consent Solicitation -- Procedures for Tendering Notes and Delivering Consents - -- Guaranteed Delivery." Tendering Holders will not be obligated to pay brokerage fees or commissions. Questions and requests for assistance may be directed to the Dealer Manager at its address and telephone number set forth on the back cover of this Statement. Additional copies of this Statement, the Consent and Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may -v- 6 be obtained from the Dealer Manager. Beneficial owners may also contact their brokers, dealers, commercial banks or trust companies through which they hold the Notes with questions and requests for assistance. This Statement constitutes neither an offer to purchase nor a solicitation of consents in any jurisdiction in which, or to or from any person to or from whom, it is unlawful to make such offer or solicitation under applicable securities or blue sky laws. The delivery of this Statement shall not under any circumstances create any implication that the information contained herein is correct as of any time subsequent to the date hereof or that there has been no change in the information set forth herein or in any attachments hereto or in the affairs of the Company or its subsidiaries or affiliates since the date hereof. No dealer, salesperson or other person has been authorized to give any information or to make any representation not contained in this Statement and, if given or made, such information or representation may not be relied upon as having been authorized by the Company or the Dealer Manager. -vi- 7 TABLE OF CONTENTS SUMMARY..................................................................... 1 AVAILABLE INFORMATION....................................................... 4 INCORPORATION OF DOCUMENTS BY REFERENCE..................................... 4 CERTAIN SIGNIFICANT CONSIDERATIONS.......................................... 5 Effects of the Proposed Amendments..................................... 5 Limited Trading Market................................................. 5 Tax Matters ........................................................... 6 CERTAIN INFORMATION CONCERNING THE COMPANY.................................. 6 General................................................................ 6 Recent Developments.................................................... 6 THE TENDER OFFER AND THE CONSENT SOLICITATION............................... 8 Purposes of the Tender Offer and the Consent Solicitation ............. 8 Terms of the Tender Offer and the Solicitation......................... 8 Conditions of the Tender Offer and the Consent Solicitation ...........11 Expiration Date; Extension; Amendment; Termination.....................13 Acceptance for Payment and Payment for Notes; Acceptance of Consents ..14 Procedures for Tendering Notes and Delivering Consents.................15 Tender of and Consent for Notes....................................15 Tender of Notes Held in Physical Form..............................15 Tender of Notes Held Through a Custodian...........................16 Tender of Notes Held Through DTC...................................16 Book-Entry Delivery Procedures.....................................16 Signature Guarantees...............................................17 Guaranteed Delivery................................................17 Backup U.S. Federal Income Tax Withholding.........................19 Determination of Validity..........................................19 Withdrawal of Tenders and Revocation of Consents.......................19 Backup Withholding.....................................................20 Source and Amount of Funds.............................................20 Dealer Manager.........................................................21 Depositary ............................................................21 Fees and Expenses......................................................21 Miscellaneous..........................................................22 -vii- 8 PROPOSED AMENDMENTS TO THE INDENTURE..................................23 Purposes and Effects.............................................23 Proposed Amendments .............................................23 Deletion of Restrictive Covenants ............................23 Amendments to Section 4.10 ...................................24 Amendments to Section 5.01 ...................................25 Amendments to Section 6.01 ...................................25 Deletions of Definitions .....................................25 Conforming Amendments ........................................25 Approval.........................................................25 CERTAIN FEDERAL INCOME TAX CONSIDERATIONS.............................26 Sale of Notes Pursuant to the Tender Offer.......................26 Tax Considerations for Non-Tendering Holders.....................27 Information Reporting............................................28 Backup Withholding and Substitute Form W-9.......................28 MISCELLANEOUS.........................................................29 SCHEDULE I............................................................30 SCHEDULE II...........................................................31 -viii- 9 SUMMARY The following summary is qualified in its entirety by reference to, and should be read in conjunction with, the information appearing elsewhere in this Statement and the more detailed information contained in the documents incorporated by reference herein. The Company: Monarch Marking Systems, Inc. The Notes: 12-1/2% Senior Notes due 2003 The Tender Offer: The Company is offering to purchase all of the outstanding Notes at the price per Note set forth below. Expiration Date: The Expiration Date shall be 12:00 midnight, New York City time, on April 10, 1997, unless extended by the Company. The Consent Solicitation: The Company is also seeking Consents from Holders of the Notes to certain Proposed Amendments to the Indenture. Total Consideration for the Tender Offer and the Solicitation: The greater of (A) $1,167.50 per $1,000 principal amount of the Notes or (B) the present value on the Payment Date of the Notes, determined on the basis of a Tender Offer Yield to June 30, 1999, the day before the Earliest Redemption Date, equal to the sum of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30, 1999, as of 2:00 P.M., New York City time, on March 26, 1997, the tenth business day immediately preceding the scheduled Expiration Date plus (y) 75 basis points, plus accrued and unpaid interest, if any, up to, but not including the Payment Date. No additional consideration will be paid for the Consents. Consent Date: The Consent Date shall be one business day following the announcement (by press release) by the Company that it has received the Requisite Supermajority Consents to the Proposed Amendments. If the Company obtains the Requisite Supermajority Consents, all of the Proposed Amendments will become operative. Nevertheless, the Company reserves the right and option to cause the Consent Date to occur at any time if it has obtained 10 Requisite Majority Consents prior to the Expiration Date, in which case substantially all (but not all) of the Proposed Amendments will become operative. See "The Proposed Amendments to the Indenture." The Company will execute the Supplemental Indenture on or promptly after 12:00 midnight, New York City time, on the Consent Date. Requisite Supermajority Consents: Duly executed (and not revoked) Consents to the Proposed Amendments from Holders representing 75% in aggregate principal amount of the outstanding Notes (excluding for such purposes any Notes owned at such time by the Company or any of its affiliates). Requisite Majority Consents: Duly executed (and not revoked) Consents to the Proposed Amendments from Holders representing a majority in aggregate principal amount of the outstanding Notes (excluding for such purposes any Notes owned at such time by the Company or any of its affiliates). Payment Date: The Payment Date shall be promptly after the Acceptance Date. Conditions of the Tender and Solicitation: The Company's obligation to accept for purchase and pay for the Notes validly tendered is subject to and conditioned upon the following: (i) there having been validly tendered (and not withdrawn) prior to the Expiration Date not less than 75% in aggregate principal amount of the Notes outstanding or, at the option of the Company, a majority in aggregate principal amount of the Notes outstanding, (ii) the execution of the Supplemental Indenture following receipt of the Requisite Supermajority Consents or Requisite Majority Consents, as the case may be, and (iii) satisfaction of the General Conditions. The Company may waive any of the conditions of the Tender Offer and Solicitation, in whole or in part, at any time and from time to time. How to Tender Notes or Deliver Consents: See "The Tender Offer and the Consent Solicitation-- Procedures for Tendering Notes and Delivering Consents." For further information, call the Dealer Manager or consult your broker, dealer, commercial bank or trust company for -2- 11 assistance. Withdrawal Rights: Tenders of Notes may be withdrawn and Consents may be revoked at any time prior to 12:00 midnight, New York City time, on the Consent Date. A valid withdrawal of tendered Notes prior to 12:00 midnight, New York City time, on the Consent Date will constitute the concurrent valid revocation of such Holder's related Consent. To revoke Consents delivered in connection with tendered Notes, Holders must withdraw the related tendered Notes. Subject to certain conditions, after the Consent Date, Holders may also validly withdraw tendered Notes if, after the Consent Date, the Company reduces the principal amount of Notes subject to the Tender Offer or changes the Total Consideration. Certain Considerations: See "Certain Significant Considerations" for a discussion of certain factors that should be considered in evaluating the Tender Offer and the Solicitation. Dealer Manager: BT Securities Corporation ("BT Securities") is serving as dealer manager (the "Dealer Manager") in connection with the Tender Offer and the Consent Solicitation. Its telephone number is (212) 775-2467. Depositary: Fleet National Bank is serving as depositary (the "Depositary") in connection with the Tender Offer and the Consent Solicitation. Its telephone number is (860) 986-7908. The Depositary is also the Trustee under the Indenture. -3- 12 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy and information statements and other information filed by the Company with the Commission pursuant to the informational requirements of the Exchange Act may be inspected and copied at the Public Reference Section maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices maintained by the Commission: New York Regional Office, 7 World Trade Center, 15th Floor, New York, New York 10048, and Chicago Regional Office, Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such material may also be accessed electronically, by means of the Commission's home page on the Internet (http://www.sec.gov). INCORPORATION OF DOCUMENTS BY REFERENCE The following documents, heretofore filed by the Company with the Commission, are hereby incorporated by reference: 1. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995; and 2. The Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1996, June 30, 1996 and September 30, 1996. Each document filed by the Company subsequent to the date of this Statement pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, or filed pursuant to the Securities Act of 1933, as amended (the "Securities Act") prior to the Expiration Date shall be deemed to be incorporated by reference in this Statement and shall be part hereof from the date of filing of such document. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Statement to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Statement. The Company will provide without charge to each person, including any beneficial owner, to whom a copy of this Statement has been delivered, upon the written or oral request of any such person, a copy of any document described above (other than exhibits, unless specifically requested). Requests for such copies should be directed to Monarch Marking Systems, Inc., 170 Monarch Lane, Miamisburg, Ohio 45342, Attention: Secretary; telephone number:937-865-2000. -4- 13 CERTAIN SIGNIFICANT CONSIDERATIONS The following considerations, in addition to the other information set forth herein, should be considered carefully by holders and beneficial owners of Notes. EFFECTS OF THE PROPOSED AMENDMENTS If the Proposed Amendments become operative, holders of Notes that are not purchased pursuant to the Tender Offer for any reason will no longer be entitled to the benefits of certain provisions contained in the Indenture that have been modified by the Proposed Amendments. The modification of the Indenture would provide the Company with increased operating and financial flexibility. The Indenture, as so amended, will continue to govern the terms of all Notes that remain outstanding. The elimination (or, in certain cases, amendment) of restrictive covenants and other provisions would permit the Company and its subsidiaries to, among other things, incur indebtedness, pay dividends or make other restricted payments, incur liens or make investments that would otherwise not have been permitted pursuant to the Indenture. In addition, immediately following the amendment of the Indenture after the adoption of the Proposed Amendments, the Company will guarantee PAXAR's indebtedness under PAXAR's Credit Agreement, as discussed under "Certain Information Concerning the Company--Recent Developments." It is possible that any such actions that the Company or its subsidiaries would be permitted to take as a result of the Proposed Amendments would increase the risk with respect to the Company faced by the non-tendering Holders or otherwise adversely affect the interests of the non-tendering Holders. See "Proposed Amendments." LIMITED TRADING MARKET There currently is a limited public trading market for the Notes, which from time to time trade in the over-the-counter market. Prices and trading volumes of the Notes in the over-the-counter market are not reported and can be difficult to monitor. Quotations for securities that are not widely traded, such as the Notes, may differ from actual trading prices and should be viewed as approximations. Holders are urged to contact their brokers with respect to current information regarding the Notes. To the extent that Notes are tendered and accepted for payment in the Tender Offer, the trading market for Notes that remain outstanding may be significantly more limited, which might adversely affect the liquidity of the Notes. One of the Proposed Amendments would authorize the deletion of the Indenture covenant requiring the Company (i) to file with the Commission all information documents and reports required to be filed pursuant to Section 13 or 15(d) of the Exchange Act, whether or not the Company is subject to such filing requirements, and (ii) to provide any Holder with such information concerning the Company necessary to permit such Holder to sell notes pursuant to Rule 144A under the Securities Act. If the Proposed Amendments are adopted, the Company intends to cease providing such information. The extent of any private market and the availability of price quotations for the Notes will depend upon a number of factors, including the -5- 14 principal amount and the number of holders of Notes remaining at such time. An issue of securities with a smaller outstanding market value available for trading (the "float") may command a lower price than would a comparable issue of securities with a greater float. Therefore, the market price for Notes that are not tendered in the Tender Offer may be affected adversely to the extent that the amount of Notes purchased pursuant to the Tender Offer further reduces the float. The reduced float also may tend to make the trading prices of the Notes that are not so purchased more volatile. As a result, there can be no assurance that any trading market for the Notes will exist after consummation of the Tender Offer and the Solicitation. TAX MATTERS See "Certain Federal Income Tax Considerations" for a discussion of certain tax matters that should be considered in evaluating the Tender Offer and the Solicitation. CERTAIN INFORMATION CONCERNING THE COMPANY GENERAL The Company is a leading manufacturer and marketer of marking equipment and supplies in the United States and also sells, directly and through distributors, marking equipment and supplies in 75 other countries around the world. Information concerning the Company's historical business activities and financial position and results of operations can be found in the documents referenced under "Incorporation of Documents by Reference." RECENT DEVELOPMENTS Through a series of transactions, the Company recently became a wholly-owned subsidiary of PAXAR Corporation ("PAXAR"). PAXAR is a leading manufacturer and distributor of label systems, labels, tags and related supplies and services for apparel manufacturers and retailers. The Company believes that its acquisition by PAXAR will strengthen the Company's marketing presence both in the United States and internationally and will enable the Company to capitalize on cross-market sales opportunities associated with joint marketing of the Company's and PAXAR's products. Prior to the consummation of the transactions described below, PAXAR and Odyssey Partners, L.P. ("Odyssey") each owned 495 shares of the Common Stock, $.001 par value, of Monarch Holdings, Inc. ("Holdings"), which, in turn, owned all of the issued and outstanding capital stock of the Company. Thomas Loemker ("Loemker"), the Chairman of Holdings and a director of PAXAR, and John W. Paxton ("Paxton"), the President and Chief Executive Officer of the Company, each owned 10 shares of Holdings Common Stock. On March 3, 1997, PAXAR acquired 495 shares of Holdings Common Stock (the "Odyssey Shares") from Odyssey in consideration of of $100 million in cash and a note and the issuance of Warrants to purchase one million shares of PAXAR Common Stock at an exercise price of $17.50 per share and Warrants to purchase 200,000 -6- 15 shares of PAXAR Common Stock at an exercise price of $21.875 per share. Concurrently with PAXAR's purchase of the Holdings Shares from Odyssey, PAXAR entered into a Credit Agreement (the "Credit Agreement") with Fleet Bank and certain other lenders named therein (collectively, the "Lenders"). Under the Credit Agreement, the Lenders agreed to make loans of up to $280 million to PAXAR and its subsidiaries. PAXAR applied a portion of the proceeds of loans under the Credit Agreement to pay the cash portion of the purchase price for the Odyssey Shares. After consummation of PAXAR's purchase of the Odyssey Shares and the execution of the Credit Agreement, PAXAR merged Holdings, as a 98% owned subsidiary, into PAXAR and issued 125,129 shares of PAXAR Common Stock to each of Loemker and Paxton in exchange for their ten shares of Holdings Common Stock. PAXAR also exchanged options to purchase PAXAR Common Stock for options of equivalent value to purchase Holdings Common Stock held by Holdings management. As a result of such merger, the Company became a wholly-owned subsidiary of PAXAR. The Company expects to procure all or a portion of the financing required to pay the Total Consideration from PAXAR, which will borrow under its existing Credit Agreement to provide such financing to the Company. The ability of PAXAR to borrow under its existing Credit Agreement in order to provide such financing to the Company is one of the General Conditions to the Tender Offer. See "The Tender Offer and the Consent Solicitation--Conditions of the Tender Offer and Consent Solicitation." -7- 16 THE TENDER OFFER AND THE CONSENT SOLICITATION PURPOSES OF THE TENDER OFFER AND THE CONSENT SOLICITATION The purpose of the Tender Offer, which is conditioned, among other things, on the Amendment Condition, is to acquire all of the outstanding Notes. From time to time in the future, the Company or its affiliates may seek to acquire any Notes which remain outstanding following expiration of the Tender Offer, through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise, upon such terms and at such prices as it may determine, which may be more or less than the Total Consideration and could be for cash or other consideration. Alternatively, pursuant to the provisions of the Notes and the Indenture, as then amended, the Company may choose, among other things, to effect a defeasance in accordance with the terms of the Indenture, as then amended. There can be no assurance as to which, if any, of these alternatives (or combinations thereof) the Company may pursue. The purpose of the Solicitation and the Proposed Amendments is to amend or eliminate certain of the principal restrictive covenants contained in the Indenture, and thereby enhance the operating and financial flexibility of the Company and its subsidiaries. After 12:00 midnight, New York City time, on the Consent Date, subject to certain limited exceptions, tenders of Notes may not be withdrawn and Consents theretofore granted may not be revoked. TERMS OF THE TENDER OFFER AND THE SOLICITATION Upon the terms and subject to the conditions of the Tender Offer (including, if the Tender Offer is extended or amended, the terms and conditions of any such extension or amendment), the Company is offering to purchase for cash all of the outstanding Notes at a price for each $1,000 principal amount of Notes tendered pursuant to the Tender Offer, equal to the Total Consideration. The Total Consideration is equal to (i) the greater of (A) $1,167.50 or (B) the present value of the Notes on the Payment Date, determined on the basis of a Tender Offer Yield to June 30, 1999, the day before to the Earliest Redemption Date of July 1,1999, equal to the sum of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30, 1999 (the "Reference Security"), as calculated by the Dealer Manager in accordance with standard market practice, based on the bid price for such Reference Security as of 2:00 p.m., New York City time, on March 26, 1997, the tenth business day immediately preceding the scheduled Expiration Date (the "Price Determination Date"), as currently displayed on the Bloomberg Government Pricing Monitor on "Page PX3" or any recognized quotation source selected by the Dealer Manager in its sole discretion if the Bloomberg Pricing Monitor is not available, plus (y) 75 basis points, such price being rounded to the nearest cent per $1,000 principal amount of Notes, plus (ii) accrued and unpaid interest, if any, up to, but not including, the Payment Date (the consideration referred to in clauses (i) and (ii) being referred to as the "Total Consideration"), payable on the date that the Notes are accepted for payment pursuant to the Offer (the "Acceptance Date"). In the event the Tender Offer is extended for any period longer than ten business days from the previously scheduled Expiration Date, a new Price Determination -8- 17 Date will be established, which shall be the tenth business day immediately preceding the Expiration Date as so extended. In addition, upon the terms and subject to the conditions of the Solicitation (including, if the Solicitation is extended or amended, the terms of any such extension or amendment), the Company is also soliciting Consents to the Proposed Amendments to the Indenture. There will be no separate payment for the Consents. Although the yield on the Reference Security on the Price Determination Date (and the Tender Offer Yield) will only be determined from the source noted above, information regarding the closing yield of the Reference Security may also be found in The Wall Street Journal and The New York Times. The yield on the Reference Security as of 2:00 p.m., New York City time, on March 12, 1997 was 6.122%. Accordingly, if such yield were determined to be the yield on the Reference Security on the Price Determination Date and April 15, 1997 were to be the Payment Date for the Notes, the Tender Offer Yield, the purchase price, and the Total Consideration per $1,000 principal amount of Notes would be 6.872%, $1,167.34 and $1,203.10, respectively. A hypothetical calculation of the Total Consideration demonstrating the application of the assumptions and methodologies to be used in pricing the Offer is set forth in Schedule II hereto. Since the purchase price per $1,000 principal amount of the Notes is less than $1,167.50 in this example, a purchase price of $1,167.50 would be used to determine the Total Consideration. If at any time following a Price Determination Date the Company extends the Tender Offer for any period of not more than ten business days, the Total Consideration for each Note tendered pursuant to the Tender Offer prior to 12:00 midnight, New York City time, on the Consent Date, shall remain the Total Consideration as determined on such Price Determination Date. If, however, the Company extends the Tender Offer for any period longer than ten business days from the previously scheduled Expiration Date based upon which such Price Determination Date had been established, a new Price Determination Date shall be established (such new Price Determination Date to be the tenth business day immediately preceding the Expiration Date as so extended) and the Consideration for each Note tendered pursuant to the Tender Offer prior to 12:00 midnight, New York City time, on the Expiration Date, shall be calculated based on the Tender Offer Yield as of such new Price Determination Date. Promptly after a Price Determination Date, but in any event before 9:00 a.m., New York City time, on the following business day, the Company will publicly announce the pricing information referred to above by press release to the Dow Jones News Service. IF THE NOTES ARE ACCEPTED FOR PAYMENT PURSUANT TO THE TENDER OFFER, HOLDERS WHO VALIDLY TENDERED THEIR NOTES PURSUANT TO THE TENDER OFFER PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE WILL RECEIVE THE TOTAL CONSIDERATION. BECAUSE THE TOTAL CONSIDERATION MAY BE BASED ON A FIXED SPREAD PRICING FORMULA LINKED TO A YIELD ON A REFERENCE SECURITY, THE TOTAL CONSIDERATION MAY BE AFFECTED BY CHANGES IN SUCH YIELD DURING THE TERM OF THE TENDER OFFER PRIOR TO THE PRICE DETERMINATION DATE. -9- 18 Holders who tender Notes in the Tender Offer are obligated to consent to the Proposed Amendments. Pursuant to the terms of the Consent and Letter of Transmittal, the completion, execution and delivery thereof by a Holder in connection with the tender of Notes will be deemed to constitute the Consent of such tendering Holder to all of the Proposed Amendments. Holders may not deliver Consents without tendering the related Notes. All Notes validly tendered in accordance with the procedures set forth herein and not withdrawn in accordance with the procedures set forth herein on or prior to the Expiration Date will, upon the terms and subject to the conditions hereof, including the Amendment Condition, be accepted for payment by the Company, and payment will be made therefor, promptly after the Expiration Date. The Proposed Amendments will be effected by the execution of the Supplemental Indenture (in the form of an Amended and Restated Indenture) on the Consent Date. The "Consent Date" will be one business day following the announcement (by press release) by the Company that it has received the Requisite Supermajority Consents to the Proposed Amendments. If the Company obtains the Requisite Supermajority Consents, all of the Proposed Amendments become operative. Nevertheless, the Company reserves the right and option to cause the Consent Date to occur if it has obtained Requisite Majority Consents at any time prior to the Expiration Date, in which case substantially all (but not all) of the Proposed Amendments will become operative on the Acceptance Date. "Requisite Supermajority Consents" shall be the consent of the Holders holding not less than 75% in aggregate principal amount of the Notes then outstanding (excluding any Notes owned at the time by the Company or any of its affiliates). "Requisite Majority Consents" shall be the consent of the Holders holding not less than a majority in aggregate principal amount of the Notes then outstanding (excluding any Notes owned at the time by the Company or any of its affiliates). See "The Proposed Amendments to the Indenture." None of the Proposed Amendments will become operative unless and until the Tender Offer is consummated on the Acceptance Date. The "Acceptance Date" is the date that the Company accepts Notes for purchase pursuant to the Tender Offer. The Indenture, without giving effect to the Proposed Amendments, will remain in effect until the Proposed Amendments become operative on the Acceptance Date. If the Tender Offer is terminated or withdrawn, or the Notes are not accepted for payment, none of the Proposed Amendments will become operative. Tenders of Notes may be validly withdrawn and Consents may be validly revoked at any time prior to 12:00 midnight, New York City time, on the Consent Date, but, except as set forth below, not thereafter. A valid withdrawal of tendered Notes prior to 12:00 midnight, New York City time, on the Consent Date will constitute the concurrent valid revocation of such Holder's related Consent. In order for a Holder to revoke a Consent, such Holder must withdraw the related tendered Notes. If, after the Consent Date, the Company (i) reduces the principal amount of Notes subject to the Tender Offer or (ii) changes the Total Consideration, then previously tendered Notes may be validly withdrawn until the expiration of ten business days after the date that notice of any such reduction or change is first published, given or sent to Holders by the Company. In addition, tenders of Notes may be validly withdrawn if the Tender Offer is terminated without any Notes being -10- 19 purchased thereunder. In the event of a termination of the Tender Offer, the Notes tendered pursuant to the Tender Offer will be promptly returned to the tendering Holder. The Company's obligation to accept, and pay for, Notes validly tendered pursuant to the Tender Offer and Solicitation is conditioned upon (a) the Amendment Condition and (b) the General Conditions, including the ability of PAXAR to borrow under its existing Credit Agreement and to contribute the proceeds thereof to the Company to finance all or a portion of the consideration due in connection with this Tender Offer and Solicitation and any related fees. Subject to applicable securities laws and the terms set forth in this Statement, the Company reserves the right, prior to the Expiration Date, (i) to waive any and all conditions to the Tender Offer or the Solicitation, (ii) to extend or to terminate the Tender Offer or Solicitation or (iii) otherwise to amend the Tender Offer or the Solicitation in any respect. See "-- Conditions of the Tender Offer and the Consent Solicitation." The rights reserved by the Company in this paragraph are in addition to the Company's rights to terminate the Tender Offer and Solicitation described elsewhere in this Statement. Any extension, amendment or termination will be followed as promptly as practicable by public announcement thereof, the announcement in the case of an extension of the Tender Offer to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which any public announcement may be made, the Company shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to the Dow Jones News Service. If the Company makes a material change in the terms of the Tender Offer or the Solicitation or the information concerning the Tender Offer or the Solicitation, the Company will disseminate additional Tender Offer and Solicitation materials and extend the Tender Offer or, if applicable, the Solicitation, to the extent required by law. If the Solicitation is amended prior to the Consent Date in a manner determined by the Company to constitute a material adverse change to the Holders, the Company promptly will disclose such amendment and, if necessary, extend the Solicitation for a period deemed by the Company to be adequate to permit Holders to withdraw their Notes and revoke their Consents. See "-- Withdrawal of Tenders and Revocation of Consents." CONDITIONS OF THE TENDER OFFER AND THE CONSENT SOLICITATION Notwithstanding any other provision of the Tender Offer and the Consent Solicitation, the Company will not be required to accept for payment, or to pay for, Notes tendered pursuant to the Tender Offer may terminate, extend or amend the Tender Offer and the Solicitation and may, subject to Rule 14e-1 under the Exchange Act, postpone the acceptance of Notes so tendered if (a) the Amendment Condition shall not have been satisfied or (b) any of the General Conditions shall not have been satisfied. For purposes of the foregoing provisions, all the "General Conditions" shall be deemed to have been satisfied unless any of the following conditions shall occur prior to the Acceptance Date: (i) PAXAR shall be unable to borrow under its existing Credit Agreement or to -11- 20 contribute the proceeds of such borrowing to the Company to finance all or a portion of the consideration due in connection with the Tender Offer and Solicitation and any related fees; (ii) there shall have been instituted or threatened or be pending any action or proceeding before or by any court or governmental regulatory or administrative agency or instrumentality, or by any other person, in connection with the Tender Offer or the Solicitation that is, or is reasonably likely to be, in the sole judgment of the Company, materially adverse to the business, operations, properties, condition (financial or otherwise), assets, liabilities or prospects of the Company; (iii) any order, statute, rule, regulation, executive order, stay, decree, judgment or injunction shall have been proposed, enacted, entered, issued, promulgated, enforced or deemed applicable by any court or governmental, regulatory or administrative agency or instrumentality that, in the sole judgment of the Company, would or might prohibit, prevent, restrict or delay consummation of the Tender Offer or the Solicitation or that is, or is reasonably likely to be, materially adverse to the business, operations, properties, condition (financial or otherwise), assets, liabilities or prospects of the Company; (iv) there shall have occurred or be likely to occur any event that, in the sole judgment of the Company, would or might prohibit, prevent, restrict or delay consummation of the Tender Offer or the Solicitation or that will, or is reasonably likely to, materially impair the contemplated benefits to the Company of the Tender Offer or the Solicitation, or otherwise result in the consummation of the Tender Offer or the Solicitation not being or not being reasonably likely to be in the best interests of the Company; (v) the Trustee under the Indenture shall have objected in any respect to, or taken any action that could, in the sole judgment of the Company, adversely affect the consummation of, the Tender Offer or the Solicitation or the Company's ability to cause the Proposed Amendments to be effected, or shall have taken any action that challenges the validity or effectiveness of the procedures used by the Company in soliciting the Consents to the Proposed Amendments (including the form thereof) or in making the Tender Offer or the Solicitation or the acceptance of, or payment for, any of the Notes; or (vi) there shall have occurred (a) any general suspension of, or limitation on prices for, trading in securities in the United States securities or financial markets, (b) any significant adverse change in the trading prices for the Notes or in the Company's other securities, or any financial markets, (c) a material impairment in the trading market for debt securities that could, in the sole -12- 21 judgment of the Company, affect the Tender Offer or the Solicitation, (d) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (e) any limitation (whether or not mandatory) by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, on, or other event that, in the reasonable judgment of the Company, might affect, the extension of credit by, banks or other lending institutions, (f) a commencement of a war or armed hostilities or other national or international calamity directly or indirectly involving the United States, or (g) in the case of any of the foregoing existing on the date hereof, a material acceleration or worsening thereof. The conditions to the Tender Offer and the Solicitation are for the sole benefit of the Company and may be asserted by the Company in its sole discretion regardless of the circumstances giving rise to such conditions or may be waived by the Company, in whole or in part, at any time and from time to time, in its sole discretion, whether or not any other condition of the Tender Offer and the Solicitation is also waived. Any determination by the Company concerning the events described in this section shall be final and binding upon all persons. EXPIRATION DATE; EXTENSION; AMENDMENT; TERMINATION The Tender Offer and the Solicitation will expire at 12:00 midnight, New York City time, on April 10, 1997, unless extended by the Company. The Company expressly reserves the right to extend the Tender Offer and the Solicitation on a daily basis or for such period or periods as it may determine in its sole discretion from time to time by giving written or oral notice to the Depositary and by making a public announcement by press release (which shall include disclosure of the approximate principal amount of Notes deposited to date) to the Dow Jones News Service prior to 9:00 A.M., New York City time, the next business day following the previously scheduled Expiration Date. During any extension of the Tender Offer and the Solicitation, all Notes previously tendered and not accepted for payment will remain subject to the Tender Offer and the Solicitation and, subject to the terms and conditions of the Tender Offer and the Solicitation, may be accepted for payment by the Company. Notwithstanding anything herein to the contrary, the Company expressly reserves the absolute right, in its sole discretion, to (a) waive any condition to the Tender Offer and the Solicitation, (b) amend any term of the Tender Offer and the Solicitation and (c) modify the Total Consideration. The Tender Offer and the Solicitation may be modified independently of each other. If the Company makes a material change in the terms of either the Tender Offer or the Solicitation, the Company will disseminate additional Tender Offer and Solicitation materials and will extend the Tender Offer and the Solicitation, in each case to the extent required by applicable law. If the Company reduces the principal amount of Notes subject to the Tender Offer or changes the cash purchase price for the Notes subject to the Tender Offer and the Solicitation, the Company will, to the extent required by applicable law, cause the Tender Offer and the Solicitation to be extended, -13- 22 if necessary, so that the Tender Offer and the Solicitation remain open at least until the expiration of ten business days from the date that notice of such decrease or change is first published, sent or given by the Company to Holders. For purposes of the Tender Offer and the Solicitation, the term "business day" means any day other than a Saturday, Sunday or federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time. The Company expressly reserves the right, in its sole discretion, to terminate the Tender Offer, including if any of the conditions applicable thereto set forth above under "-- Conditions of the Tender Offer and the Consent Solicitation" shall not have been satisfied or waived by the Company. Any such termination will be followed promptly by public announcement thereof. The Tender Offer and the Solicitation may not be terminated independently of each other. In the event the Company shall terminate the Tender Offer, it shall give immediate notice thereof to the Depositary, and all Notes theretofore tendered and not accepted for payment and all Consents theretofore delivered shall be returned promptly to the tendering and delivering holders thereof and the Supplemental Indenture, if previously entered into, will terminate. See "-- Withdrawal of Tenders and Revocation of Consents" below and "-- Conditions of the Tender Offer and the Consent Solicitation" above. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR NOTES; ACCEPTANCE OF CONSENTS Upon the terms and subject to the conditions of the Tender Offer (including if the Tender Offer is extended or amended, the terms and conditions of any such extension or amendment) and applicable law, the Company will purchase, by accepting for payment, and will promptly pay for, all Notes validly tendered pursuant to the Tender Offer and Solicitation (and not withdrawn, or if withdrawn validly retendered) after the Acceptance Date, such payment to be made by the deposit in immediately available funds by the Company promptly after the Acceptance Date with the Depositary, which will act as agent for tendering Holders for the purpose of receiving payment from the Company and transmitting such payment to tendering Holders. Under no circumstances will interest be paid by the Company by reason of any delay in making payment. The Company expressly reserves the right, in its sole discretion and subject to Rule 14e-l(c) under the Exchange Act, to delay acceptance for payment of, or payment for, Notes in order to comply, in whole or in part, with any applicable law. In all cases, payment by the Depositary to Holders or beneficial owners of the consideration for Notes purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates representing such Notes or timely confirmation of a book-entry transfer of such Notes into the Depositary's account at DTC pursuant to the procedures set forth herein, (ii) a properly completed and duly executed Consent and Letter of Transmittal (or manually signed facsimile thereof) or a properly transmitted Agent's Message (as defined below) and (iii) any other documents required by the Consent and Letter of Transmittal. For purposes of the Solicitation, Consents received by the Depositary will be deemed to have been accepted if, as and when (i) the Company and the Trustee execute the Supplemental Indenture on or promptly after 12:00 midnight, New York City time, on the Consent Date, and (ii) the -14- 23 Company has accepted the Notes for purchase and payment pursuant to the Tender Offer. For purposes of the Tender Offer, tendered Notes will be deemed to have been accepted for payment, if, as and when the Company gives oral or written notice thereof to the Depositary. If any tendered Notes are not purchased pursuant to the Tender Offer for any reason, such Notes not purchased will be returned, without expense, to the tendering Holder promptly (or, in the case of Notes tendered by book-entry transfer, such Notes will be credited to the account maintained at DTC from which such Notes were delivered) after the expiration or termination of the Tender Offer. Tendering Holders will not be obligated to pay brokerage fees or commissions or, except as set forth in the Instructions to the Consent and Letter of Transmittal, transfer taxes on the purchase of Notes pursuant to the Tender Offer. It is a condition precedent to the Company's obligation to purchase the Notes pursuant to the Tender Offer, among other conditions, that the Supplemental Indenture have been executed. It is a condition subsequent to effectiveness of the Proposed Amendments contained in the Supplemental Indenture that the Company accept for payment all the Notes validly tendered (and not withdrawn) pursuant to the Tender Offer (in which event, the Company will be obligated to promptly pay all the Total Consideration for the Notes so accepted). See "-- Conditions of the Tender Offer and the Consent Solicitation." PROCEDURES FOR TENDERING NOTES AND DELIVERING CONSENTS THE TENDER OF NOTES PURSUANT TO THE TENDER OFFER AND IN ACCORDANCE WITH THE PROCEDURES DESCRIBED BELOW WILL CONSTITUTE THE DELIVERY OF A CONSENT WITH RESPECT TO THE NOTES TENDERED. HOLDERS WHO DESIRE TO TENDER THEIR NOTES PURSUANT TO THE TENDER OFFER AND RECEIVE THE TOTAL CONSIDERATION ARE REQUIRED TO DELIVER CONSENTS TO THE PROPOSED AMENDMENTS. HOLDERS MAY NOT DELIVER CONSENTS WITHOUT VALIDLY TENDERING THEIR NOTES PURSUANT TO THE TENDER OFFER. Tender of and Consent for Notes. The tender by a Holder of Notes (and subsequent acceptance of such tender by the Company) pursuant to one of the procedures set forth below will constitute a binding agreement between such Holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Consent and Letter of Transmittal. Only Holders are authorized to tender their Notes and consent to the Proposed Amendments. The procedures by which the Notes may be tendered and Consents given by beneficial owners that are not Holders will depend upon the manner in which the Notes are held. Tender of Notes Held in Physical Form. To effectively tender Notes held in physical form pursuant to the Tender Offer, a properly completed Consent and Letter of Transmittal (or a facsimile thereof duly executed by the Holder thereof), and any other documents required by the Consent and Letter of Transmittal, must be received by the Depositary at its address set forth on the back cover -15- 24 of this Statement (or delivery of Notes may be effected through the deposit of Notes with DTC and making book-entry delivery as set forth below) on or prior to the Consent Date or the Expiration Date, as applicable; provided, however, that the tendering Holder may instead comply with the guaranteed delivery procedure set forth below. Consents and Letters of Transmittal and Notes should be sent only to the Depositary and should not be sent to the Company, the Dealer Manager or the Trustee. Tender of Notes Held Through a Custodian. To effectively tender Notes that are held of record by a custodian bank, depositary, broker, trust company or other nominee, the beneficial owner thereof must instruct such Holder to tender the Notes on the beneficial owner's behalf. A Letter of Instructions is included in the Solicitation materials provided with this Statement which may be used by a beneficial owner in this process to effect the tender. Any beneficial owner of Notes held of record by DTC or its nominee, through authority granted by DTC, may direct the DTC participant through which such beneficial owner's Notes are held in DTC to tender, on such beneficial owner's behalf. Tender of Notes Held Through DTC. To effectively tender Notes that are held through DTC, DTC participants should transmit their acceptance through ATOP for which the transaction will be eligible and DTC will then edit and verify the acceptance and send an Agent's Message to the Depositary for its acceptance. Delivery of tendered Notes must be made to the Depositary pursuant to the book-entry delivery procedures set forth below or the tendering DTC participant must comply with the guaranteed delivery procedures set forth below. THE METHOD OF DELIVERY OF NOTES AND CONSENTS AND LETTERS OF TRANSMITTAL, ANY REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OF AN AGENT'S MESSAGE TRANSMITTED THROUGH ATOP, IS AT THE ELECTION AND RISK OF THE PERSON TENDERING NOTES AND DELIVERING CONSENTS AND LETTERS OF TRANSMITTAL AND, EXCEPT AS OTHERWISE PROVIDED IN THE CONSENT AND LETTER OF TRANSMITTAL DELIVERY, WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE CONSENT DATE OR EXPIRATION DATE, AS APPLICABLE, TO PERMIT DELIVERY TO THE DEPOSITARY PRIOR TO SUCH DATE. Except as provided below, unless the Notes being tendered are deposited with the Depositary on or prior to the Consent Date or the Expiration Date, as applicable (accompanied by a properly completed and duly executed Consent, as applicable, and a Consent and Letter of Transmittal or a properly transmitted Agent's Message), the Company may, at its option, treat such tender as defective for purposes of the right to receive the Total Consideration. Payment for the Notes will be made only against deposit of the tendered Notes and delivery of all other required documents. Book-Entry Delivery Procedures. The Depositary will establish accounts with respect to the Notes at DTC for purposes of the Tender Offer within two business days after the date of this Statement, and any financial institution that is a participant in DTC may make book entry delivery -16- 25 of the Notes by causing DTC to transfer such Notes into the Depositary's account in accordance with DTC's procedures for such transfer. However, although delivery of Notes may be effected through book-entry transfer into the Depository's account at DTC, the Consent and Letter of Transmittal (or facsimile thereof), with any required signature guarantees or an Agent's Message in connection with a book-entry transfer, and any other required documents, must, in any case, be transmitted to and received by the Depositary at one or more of its addresses set forth on the back cover of this Statement on or prior to the Consent Date or the Expiration Date, as applicable, or the guaranteed delivery procedure described below must be complied with. Delivery of documents to DTC does not constitute delivery to the Depositary. The confirmation of a book-entry transfer into the Depositary's account at DTC as described above is referred to herein as a "Book-Entry Confirmation." The term "Agent's Message" means a message transmitted by DTC to, and received by, the Depositary and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participants in DTC described in such Agent's Message, stating, the aggregate principal amount of Notes which have been tendered by such participants pursuant to the Tender Offer and for which Consents have thereby been delivered and that such participants have received this Statement and the Consent and Letter of Transmittal and agree to be bound by the terms of this Statement and the Consent and Letter of Transmittal, and the Company may enforce such agreement against such participants. Signature Guarantees. Signatures on all Consents and Letters of Transmittal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchange Medallion Program (a "Medallion Signature Guarantor"), unless the Notes tendered thereby are tendered (i) by a registered Holder of Notes (or by a participant in DTC whose name appears on a security position listing as the owner of such Notes) who has not completed either the box entitled "Special Delivery Instructions" or "Special Payment or Issuance Instructions" on the Consent and Letter of Transmittal, or (ii) for the account of a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. ("NASD") or a commercial bank or trust company having any office or correspondent in the United States (each of the foregoing being referred to as an "Eligible Institution"). See Instruction 1 of the Consent and Letter of Transmittal. If the Notes are registered in the name of a person other than the signer of the Consent and Letter of Transmittal or if Notes not accepted for payment or not tendered are to be returned to a person other than the registered Holder, then the signatures on the Consents and Letters of Transmittal accompanying the tendered Notes must be guaranteed by a medallion Signature Guarantor as described above. See Instructions 1 and 5 of the Consent and Letter of Transmittal. Guaranteed Delivery. If a Holder desires to deliver Consents and tender Notes pursuant to the Tender Offer and Solicitation and time will not permit the Consents and Letter of Transmittal, certificates representing such Notes and all other required documents to reach the Depositary, or the procedures for book-entry transfer cannot be completed, on or prior to the Consent Date or the Expiration Date, as applicable, such Holder may nevertheless deliver its Consents, and such Notes may nevertheless be tendered, with the effect such delivery and tender will be deemed to have been -17- 26 received prior to the Consent Date or the Expiration Date, respectively, if all the following conditions are satisfied. (i) the tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Company herewith, or an Agent's Message with respect to guaranteed delivery is received by the Depositary prior to 12:00 midnight, New York City time, on the Consent Date or Expiration Date, as applicable, as provided below; and (iii) the certificates for the tendered Notes, in proper form for transfer (or a Book Entry Confirmation of the transfer of such Notes into the Depositary's account at DTC as described above), together with a Consent and Letter of Transmittal (or facsimile thereof) properly completed and duly executed, with any required signature guarantees and any other documents required by the Consent and Letter Transmittal or a properly transmitted Agent's Message, are received by the Depositary within three business days after the date of execution of the Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be sent by hand delivery, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. Notwithstanding any other provision hereof, payment of the Total Consideration for Notes tendered and accepted for payment pursuant to the Offer will, in all cases, be made only after timely receipt (i.e., prior to 12:00 midnight, New York City time, on the Expiration Date) by the Depositary of the tendered Notes (or Book-Entry Confirmation of the transfer of such Notes into the Depositary's account at DTC as described above or a properly executed Agent's Message for guaranteed delivery), and a Consent and Letter of Transmittal (or facsimile thereof) with respect to such Notes, properly completed and duly executed, with any required signature guarantees and any other documents required by the Consent and Letter of Transmittal, or a properly transmitted Agent's Message. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE COMPANY BY REASON OF ANY DELAY IN MAKING PAYMENT TO ANY PERSON USING THE GUARANTEED DELIVERY PROCEDURES. THE TOTAL CONSIDERATION FOR NOTES TENDERED PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES WILL BE THE SAME AS THAT FOR NOTES DELIVERED TO THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE, EVEN IF THE NOTES TO BE DELIVERED PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES ARE NOT SO DELIVERED TO THE DEPOSITARY, AND THEREFORE PAYMENT BY THE DEPOSITARY ON ACCOUNT OF SUCH NOTES IS NOT MADE, UNTIL AFTER THE PAYMENT DATE. -18- 27 Backup U.S. Federal Income Tax Withholding. To prevent backup U.S. federal income tax withholding each tendering Holder of Notes must provide the Depositary with such Holder's correct taxpayer identification number and certify that such Holder is not subject to backup U.S. federal income tax withholding by completing the Substitute Form W 9 included in the Consent and Letter of Transmittal. Determination of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tendered Notes and Consents pursuant to any of the procedures described above will be determined by the Company in the Company's sole discretion (whose determination shall be final and binding). The Company reserves the absolute right to reject any or all tenders of any Notes or Consents determined by it not to be in proper form or, in the case of Notes, if the acceptance for payment, or payment for, such Notes may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right, in its sole discretion, to waive any of the conditions of the Tender Offer and Solicitation or any defect or irregularity in any tender with respect to Notes or the giving of any Consents of any particular Holder, whether or not similar defects or irregularities are waived in the case of other Holders. The Company's interpretation of the terms and conditions of the Tender Offer and Solicitation (including the Consent and Letter of Transmittal and the Instructions thereto) will be final and binding. None of the Company, the Depositary, the Dealer Manager, the Trustee or any other person will be under any duty to give notification of any defects or irregularities in tenders or consents or will incur any liability for failure to give any such notification. If the Company waives its right to reject a defective tender of Notes, the Holder will be entitled to the Total Consideration. WITHDRAWAL OF TENDERS AND REVOCATION OF CONSENTS Tenders of Notes may be withdrawn and the concurrent Consents may be revoked at any time prior to 12:00 midnight, New York City time, on the Consent Date but, subject to the exceptions indicated below, not thereafter if the Company accepts the Notes for payment. A valid withdrawal of tendered Notes effected prior to 12;00 midnight, New York City time, on the Consent Date will constitute the concurrent valid revocation of such Holder's related Consent. In order for a Holder to revoke a Consent. such Holder must withdraw the related tendered Notes. Except as set forth below, tenders of Notes may not be withdrawn, and Consents may not be revoked, after 12:00 midnight, New York City time, on the Consent Date. In order for a Holder to revoke a Consent, such Holder must withdraw the related tendered Notes. If the Company (i) reduces the principal amount of Notes subject to the Tender Offer or (ii) changes the Total Consideration, then previously tendered Notes may be validly withdrawn until the expiration of ten business days after the date that notice of any such reduction or change its first published, given or sent to Holders by the Company. In addition, tenders of Notes may be validly withdrawn if the Offer is terminated without any Notes being purchased thereunder. In the event of a termination of the Offer, the Notes tendered pursuant to the Tender Offer will be promptly returned to the tendering Holder. For a withdrawal of a tender of Notes (and the concurrent revocation of Consents) to be effective, a written telegraphic or facsimile transmission notice of withdrawal must be received by -19- 28 the Depositary prior to 12:00 midnight, New York City time, on the Consent Date at its address set forth on the back cover of this Statement. Any such notice of withdrawal must (i) specify the name of the person who tendered the Notes to be withdrawn, (ii) contain the description of the Notes to be withdrawn and identify the certificate number or numbers shown on the particular certificates evidencing such Notes (unless such Notes were tendered by book-entry transfer) and the aggregate principal amount represented by such Notes and (iii) be signed by the Holder of such Notes in the same manner as the original signature on the Consent and Letter of Transmittal by which such Notes were tendered (including any required signature guarantees), if any, or be accompanied by (x) documents of transfer sufficient to have the Trustee register the transfer of the Notes into the name of the person withdrawing such Notes and (y) a properly completed irrevocable proxy that authorized such person to effect such revocation on behalf of such Holder. If the Notes to be withdrawn have been delivered or otherwise identified to the Depositary, a signed notice of withdrawal is effective immediately upon written or facsimile notice of withdrawal even if physical release is not yet effected. Any Notes properly withdrawn will be deemed to be not validly tendered for purposes of the Tender Offer, and will constitute the concurrent valid revocation of such Holder's Consent. Withdrawal of Notes (and the concurrent revocation of Consents) can only be accomplished in accordance with the foregoing procedures. All questions as to the validity (including time of receipt) of notices of withdrawal and revocation of Consents will be determined by the Company, in the Company's sole discretion (whose determination shall be final and binding). None of the Company, the Depositary, the Dealer Manager, the Trustee or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or revocation of Consents, or incur any liability for failure to give any such notification. BACKUP WITHHOLDING For a discussion of federal income tax considerations relating to backup withholding, see "Certain Federal Income Tax Considerations--Backup Withholding and Substitute Form W-9." SOURCE AND AMOUNT OF FUNDS The total amount of funds required by the Company to pay the Total Consideration in connection with the Tender Offer and Solicitation is estimated to be approximately $120,500,000 (assuming 100% of the outstanding principal amount of Notes is tendered prior to the Consent Date and is accepted for payment). The Company intends to pay all or a portion of the aggregate consideration due in connection with the Tender Offer and Solicitation from the proceeds of a loan under PAXAR's Credit Agreement, which PAXAR will contribute to the Company. The Company will use its own cash reserves to pay any remaining balance of such consideration not financed through PAXAR. -20- 29 DEALER MANAGER The Company has retained BT Securities to act as Dealer Manager in connection with the Tender Offer and the Solicitation. In its capacity as Dealer Manager, BT Securities may contact holders regarding the Tender Offer and the Solicitation and may request brokers, dealers, commercial banks, trust companies and other nominees to forward the Statement and related materials to beneficial owners of Notes. BT Securities will be paid customary fees for its services as Dealer Manager and will be reimbursed for its reasonable out-of-pocket expenses incurred in connection therewith (including the reasonable fees and disbursements of counsel). The Company has also agreed to indemnify BT Securities and its affiliates against certain liabilities under federal or state law or otherwise caused by, relating to or arising out of the Tender Offer and the Solicitation. The Dealer Manager does not assume any responsibility for the accuracy or completeness of the information concerning the Company or its affiliates contained herein or for any failure by the Company to disclose events which may have occurred and may affect the significance or accuracy of such information. Unless otherwise indicated, all information contained in this Statement has been supplied by the Company. The Company assumes full responsibility for the accuracy or completeness of such information. Requests for assistance or additional copies of this Statement and the Consent and Letter of Transmittal should be directed to the Deal Manager, at its address set forth on the back cover of this Statement. DEPOSITARY Fleet National Bank has been appointed Depositary for the Tender Offer and the Consent Solicitation. All deliveries and correspondence sent to the Depositary should be directed to its address set forth on the back cover of this Statement. FEES AND EXPENSES In addition to the fees and expenses payable to the Dealer Manager, the Company will pay the Depositary reasonable and customary fees for their services (and will reimburse them for their reasonable out-of-pocket expenses in connection therewith), and will pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Statement and related documents to the beneficial owners of the Notes and in handling or forwarding tenders for purchase. In addition, the Company has agreed to indemnify the Depositary against certain liabilities in connection with their services, including liabilities under the federal securities laws. The Company will pay all transfer taxes, if any, applicable to the purchase of Notes pursuant to the Tender Offer. If, however, Notes for principal amounts not accepted for tender are to be -21- 30 delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Notes, or if tendered Notes are to be registered in the name of any person other than the person signing the Consent and Letter of Transmittal, of if a transfer tax is imposed for any reason other than the purchase of Notes pursuant to the Tender Offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such tax or exemption therefrom is not submitted, then the amount of such transfer tax will be deducted from the Total Consideration otherwise payable to such tendering holder. MISCELLANEOUS In connection with the Tender Offer and the Solicitation, directors, officers and employees of the Company (who will not be specifically compensated for such services) may solicit tenders and consents by use of the mails, personally or by telephone, telegram or facsimile transmissions. -22- 31 PROPOSED AMENDMENTS TO THE INDENTURE PURPOSES AND EFFECTS The primary purpose of the Proposed Amendments is to provide the Company with greater operating and financial flexibility. The Supplemental Indenture (in the form of an Amended and Restated Indenture) will be executed promptly on or after the Consent Date after receipt of the Requisite Supermajority Consents or, at the option of the Company, the Requisite Majority Consents. However, none of the Proposed Amendments will become operative until the Acceptance Date. Each Holder, by executing and delivering a Consent, will consent to all of the Proposed Amendments. PROPOSED AMENDMENTS Set forth below is a summary description of the proposed modifications to the Indenture for which the Consents of the holders are being solicited hereby. This description is qualified by reference to the full provisions of the existing Indenture and the provisions of the proposed Supplemental Indenture, which may be obtained from the Company. The capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the form of the Supplemental Indenture. The Proposed Amendments are as follows: Deletion of Restrictive Covenants If the Company receives the Requisite Supermajority Consents or, at the option of the Company, the Requisite Majority Consents, the Proposed Amendments would delete in their entirety the following restrictive covenants and references thereto from the Indenture as well as the events of default relating to such restrictive covenants. Section 4.03 - Limitations on Restricted Payments. Restricts the Company and its Subsidiaries from making restricted payments, including (i) dividends or distributions in respect of, or purchase or redemption of, capital stock of the Company, or (ii) repurchases, redemptions or retirements of capital stock of the Company. Section 4.04 - Limitation on Indebtedness. Prohibits the Company from Incurring any Indebtedness other than certain Permitted Indebtedness unless no Event of Default has occurred and is continuing and certain financial ratios are satisfied. Section 4.06 - Payment of Taxes and Other Claims. Requires the Company to pay all material taxes and other governmental charges and all lawful claims for -23- 32 materials, labor and supplies that, if unpaid, might become a Lien on the Company's property. Section 4.12 - Limitation on Transactions with Affiliates and Related Persons. Restricts the Company and its Restricted Subsidiaries from engaging in transactions with Affiliates. Section 4.13 - Limitations on Dividends and Other Payment Restrictions Affecting Subsidiaries. Restricts the Company and its Subsidiaries from permitting to exist any encumbrance or restriction on the ability of any Subsidiary of the Company (i) to pay dividends or make any other distributions in respect of its Capital Stock or pay any Indebtedness or other obligation owed to the Company or any other Subsidiary of the Company, (ii) to make loans or advances to the Company or any Subsidiary of the Company or (iii) to transfer any of its property or assets to the Company. Section 4.14 - Limitations on Liens. Restricts the Company and its Subsidiaries from incurring any liens upon any of their properties or assets except those in existence on the Issue Date and Permitted Liens. Section 4.17 - Limitation on Preferred Stock of Subsidiaries. Prohibits any of the Company's Subsidiaries from issuing any Preferred Stock. In addition, if the Company receives the Requisite Supermajority Consents prior to the Consent Date, the Proposed Amendments would delete in their entirety the following restrictive covenants and references thereto from the Indenture as well as the events of default relating to such restrictive covenants. Section 4.15 - Change of Control. Provides for repurchase of the Notes by the Company upon the occurrence of a Change of Control. Section 4.16 - Limitation on Sale of Assets. Restricts the Company and its Subsidiaries from making certain asset sales. If the Company receives the Requisite Supermajority Consents or, at the option of the Company, the Requisite Majority Consents, the Proposed Amendments would also modify the following provisions of the Indenture. Amendments to Section 4.10 Section 4.10 ("SEC Reports") requires the Company to file certain information with the Securities and Exchange Commission and to provide Holders with certain information and reports. -24- 33 The Proposed Amendments would delete all requirements in this section other than the requirement that the Company provide the Trustee with certain financial information concerning the Company. Amendments to Section 5.01 Section 5.01 of the Indenture ("Merger, Consolidation, and Sale of Assets") places limitations on the ability of the Company to consolidate or merge with another company or sell, convey, assign, transfer, lease or otherwise dispose of all or substantially all of its properties and assets. The Proposed Amendments would delete all requirements in this section other than the requirements that the Surviving Corporation be an entity organized under the laws of the United States or any jurisdiction thereof and that the Company deliver an Officer's Certificate and Opinion of Counsel to the effect that such transaction complies with the Indenture. Amendments to Section 6.01 The Proposed Amendments would modify the "Events of Default" to eliminate (a) references to restrictive covenants which are being deleted, as provided above, (b) the cross default provisions (Sections 6.01(4) and 6.01(5)) and (c) the bankruptcy provisions (Sections 6.01(b) and 6.01(7)). Deletions of Definitions The Proposed Amendments would delete certain definitions from the Indenture when references to such definitions would be eliminated as a result of the foregoing. Conforming Amendments The Proposed Amendments would modify certain other sections of the Indenture to conform with the foregoing changes. IF THE PROPOSED AMENDMENTS BECOME OPERATIVE, THE HOLDERS OF UNTENDERED NOTES WILL BE BOUND THEREBY. APPROVAL Pursuant to the terms of the Indenture, the Proposed Amendments, other than the deletion of Sections 4.15 and 4.16 of the Indenture, require the written consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Notes; the deletion of Sections 4.15 and 4.16 require the written consent of Holders of not less than 75% in aggregate principal amount of the outstanding Notes. In each instance, outstanding Notes do not include any Notes owned at the time by the Company or any of its affiliates. The valid tender by a Holder of Notes pursuant to the Tender Offer will be deemed to -25- 34 constitute the giving of a Consent by such Holder to the Proposed Amendments with respect to such Notes. CERTAIN FEDERAL INCOME TAX CONSIDERATIONS The following discussion summarizes certain federal income tax consequences resulting from the sale of the Notes pursuant to the Tender Offer and the adoption of the Proposed Amendments. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder, Internal Revenue Service ("IRS") rulings, and judicial decisions, all as in effect on the date hereof, and all of which are subject to change, possibly with retroactive effect. This summary does not address all of the federal income tax consequences that may be relevant to a Holder in light of such Holder's particular tax situation or to certain classes of Holders subject to special treatment under the federal income tax laws (for example, dealers in securities, banks, insurance companies, subchapter S corporations, nonresident aliens, foreign corporations, tax exempt entities, employee stock ownership plans, individual retirement and other tax-deferred accounts, and persons who hold the Notes as a hedge, who have otherwise hedged the risk of holding Notes, who hold the Notes as part of a straddle with other investments, or who hold the Notes in connection with a conversion transaction), nor does it address any aspect of gift, estate, state, local or foreign taxation. This discussion is directed at Holders who are United States persons and assumes that the Notes are held as "capital assets" within the meaning of section 1221 of the Code. HOLDERS OF NOTES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF TENDERING OR FAILING TO TENDER NOTES, INCLUDING THE APPLICATION AND EFFECT OF ANY GIFT, ESTATE, STATE, LOCAL, FOREIGN OR OTHER TAX LAWS. SALE OF NOTES PURSUANT TO THE TENDER OFFER A sale of Notes by a Holder pursuant to the Tender Offer will be a taxable transaction to such Holder for federal income tax purposes. A Holder will generally recognize capital gain (subject to the market discount rules discussed below) or loss on the sale of a Note in an amount equal to the difference between (i) the amount of cash received for such Note, other than the portion of such amount that is properly allocable to accrued but unpaid interest, which will be taxed as ordinary income, and (ii) the Holder's "adjusted tax basis" for such Note at the time of the sale. Such capital gain or loss will be long-term if the Holder held the Note for more than one year at the time of such sale. Generally, a Holder's adjusted tax basis for a Note will be equal to the cost of the Note to such Holder, less principal payments received on the Note. If applicable, a Holder's tax basis in a Note also would be increased by any market discount previously included in income by such Holder pursuant to an election to include market discount in gross income currently as it accrues, and would be reduced by the accrual of amortizable bond premium which the Holder has previously elected to -26- 35 deduct from gross income on an annual basis. Certain limitations exist on the deduction of capital losses by both corporations and individual taxpayers. If a portion of the cash received by a Holder in a sale pursuant to the Tender Offer is properly treated as a separate fee for consenting to the Proposed Amendments, it is possible that such amount would be taxable as ordinary income to such Holder (rather than as sale proceeds, discussed above). Tendering Holders of Notes should consult their own tax advisors with respect to the tax consequences to them of the receipt of cash in a sale pursuant to the Tender Offer. An exception to the capital gain treatment described above may apply to a Holder who purchased a Note at a "market discount". Subject to a statutory de minimis exception, market discount is the excess of the "face amount" of such Note over the Holder's tax basis in such Note immediately after its acquisition by such Holder. In general, unless the Holder has elected to include market discount in income currently as it accrues, any gain realized by a Holder on the sale of a Note having market discount in excess of a de minimis amount will be treated as ordinary income to the extent of the market discount that has accrued (on a straight line basis or, at the election of the Holder, on a constant interest basis) while such Note was held by the Holder. TAX CONSIDERATIONS FOR NON-TENDERING HOLDERS The federal income tax consequences to non-tendering Holders of the adoption of the Proposed Amendments will depend on whether or not, under IRS regulations, the adoption of the Proposed Amendments results in a "significant modification" of the Notes. If the adoption of the Proposed Amendments does not result in a significant modification of the Notes, a non-tendering Holder should not recognize any income, gain, or loss for United States federal income tax purposes as a result of the adoption of the Proposed Amendments. The Company does not believe that the adoption of the Proposed Amendments will result in a significant modification of the Notes. Consequently, a non-tendering Holder should not recognize any income, gain, or loss for United States federal income tax purposes as a result of the adoption of the Proposed Amendments. Notwithstanding the above, the Internal Revenue Service could assert that the adoption of the Proposed Amendments resulted in a significant modification of the Notes. If it were determined that a significant modification of the Notes occurred as a result of the adoption of the Proposed Amendments, Holders who retain their Notes may be treated as having exchanged their Notes for new Notes (the "Modified Notes") in a taxable transaction. In such a deemed exchange, a Holder would recognize taxable gain or loss equal to the difference between the amount realized by the Holder in the deemed exchange and the Holder's tax basis in the Notes. The Holder's amount realized in the deemed exchange would be the fair market value of the Modified Notes at the time the deemed exchange occurred. All or a portion of any recognized gain would be subject to ordinary income treatment if the Holder acquired the Notes at a market discount. Subject to a statutory de minimis exception, if the fair market value of the Notes at the time of the deemed exchange were less than their stated redemption price at maturity, the Modified Notes would have original issue discount -27- 36 ("OID") for United States federal income tax purposes, and each Holder of a Modified Note would be required to include OID in income as it accrued under a constant yield method in advance of cash payments attributable to such income (regardless of whether the Holder was a cash or accrual basis taxpayer). Finally, the Holder would have a new holding period for the modified Notes that did not include such Holder's holding period for the Notes. INFORMATION REPORTING Information statements will be provided to the IRS and to Holders whose Notes are sold pursuant to the Tender Offer reporting the payment of the consideration for the Notes (except with respect to Holders that are exempt from the information reporting rules, such as corporations). BACKUP WITHHOLDING AND SUBSTITUTE FORM W-9 Certain Holders whose Notes are accepted for payment are required to provide the Depositary (as payer) with such Holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 (included as part of the Consent and Letter of Transmittal). If the Holder is an individual, the TIN is his or her social security number. If the Depositary is not provided with the correct TIN, the Holder may be subject to a $50 penalty imposed by the IRS. In addition, payments that are made to such Holder may be subject to backup withholding. Certain Holders (including, among others, corporations) are not subject to these backup withholding and reporting requirements. If backup withholding applies, the Depositary is required to withhold 31% of any payment made to the Holder. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be offset by the amount of tax withheld. If backup withholding results in an overpayment of federal income taxes, a refund may be obtained from the IRS provided the required information is furnished. To prevent backup withholding, the Holder or other payee is required to complete the Substitute Form W-9 on the Consent and Letter of Transmittal certifying that the TIN provided on such form is correct and that such Holder or other payee is not subject to backup withholding. THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSIDERATIONS DOES NOT CONSIDER THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY HOLDER'S SITUATION OR STATUS. THE SUMMARY IS BASED ON THE PROVISIONS OF THE CODE, REGULATIONS, PROPOSED REGULATIONS, RULINGS AND JUDICIAL DECISIONS NOW IN EFFECT, ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY ON A RETROACTIVE BASIS. HOLDERS OF NOTES (INCLUDING HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES) SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM, INCLUDING THE TAX CONSEQUENCES UNDER STATE. LOCAL, FOREIGN AND OTHER LAWS, OF THE SALE OF THE NOTES AND THE ADOPTION OF THE PROPOSED AMENDMENTS. -28- 37 MISCELLANEOUS The Tender Offer and the Solicitation is not being made to (nor will tenders of Notes be accepted from or on behalf of) Holders in any jurisdiction in which the making or acceptance of the Tender Offer and the Solicitation would not be in compliance with the laws of such jurisdiction. However, the Company, in its sole discretion, may take such action as it may deem necessary to make the Tender Offer and the Solicitation in any such jurisdiction, and may extend the Tender Offer and the Solicitation to Holders of Notes in such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE COMPANY WHICH IS NOT CONTAINED IN THIS STATEMENT OR IN THE CONSENT AND LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON. -29- 38 SCHEDULE I YLD = Tender Offer Yield as a decimal number. CPN = the normal rate of interest payable on a Note expressed as a decimal number. N = the number of semi-annual interest payments, based on the Earliest Redemption Date, from (but not including) the expected Payment Date to (and including) the Earliest Redemption Date. S = the number of days from and including the semi-annual interest payment date immediately preceding the expected Payment Date up to, but not including, the expected Payment Date. The number of days is computed using the 30/360 day-count method. exp = Exponentiate. The term to the left of "exp" is raised to the power indicated by the term to the right of "exp". rv = the assumed redemption amount based on the Earliest Redemption Date, for each Note per $1,000 principal amount of Note (as rounded to the nearest one hundredth of one percent). Purchase Price = rv N 1,000(CPN/2) --------------------------- + (Sigma) [ ------------------------- ] - 1,000 (CPN/2)(S/180) (1 + YLD/2) exp ( N- S/180) k = 1 (1 + YLD/2) exp (k - S/180)
Accrued and Unpaid Interest = 1,000 (CPN/2)(S/180) Total Consideration = Purchase Price + Accrued and Unpaid Interest 39 SCHEDULE II This Schedule provides a hypothetical illustration of the Purchase Price of the 12-1/2% Notes due July 1, 2003 of Monarch Marking Systems, Inc., based on hypothetical data, and should, therefore, be used solely for the purpose of obtaining an understanding of the calculation of the Purchase Price, as quoted at hypothetical rates and times, and should not be used or relied upon for any other purpose. Since the Purchase Price per $1,000 principal amount of the Notes is less than $1,167.50 in this example, the Total Consideration would be determined by using a Purchase Price of $1,167.50. 12-1/2% NOTES DUE JULY 1, 2003 Earliest Redemption Date: July 1, 1999 Reference Security: 6-3/4% U.S. Treasury Note due June 30, 1999 as currently displayed on the Bloomberg Current Pricing Monitor on "Page PX5". Fixed Spread: .75 (75 basis points) Example: Assumed Price Determination Date and Time: 2:00 P.M. New York City time, March 12, 1997 Assume Payment Date: April 15, 1997 Assumed Reference Security = 6.122% Yield as of Assumed Price Determination Date and Time YLD = 6.872% CPN = 12.5% N = 5 S = 103 Purchase Price: = $1,167.34 Accrued and Unpaid Interest = $ 35.76 Total Consideration = $1,203.10 40 Facsimile copies of the Consent and Letter of Transmittal, properly completed and validly executed, will be accepted. Consents and Letters of Transmittal, certificates for Notes and any other required documents should be sent or delivered by each Holder of Notes or such Holder's broker, dealer, commercial bank or trust company to the Depositary at one of its addresses set forth below. The Depositary for the Tender Officer and the Consent Solicitation is: Fleet National Bank By Registered or Certified Mail By Hand By Overnight Courier Fleet National Bank Fleet National Bank Fleet National Bank Corporate Trust Operations Corporate Trust Operations Corporate Trust Operations CT OP TO6D Customer Service Window, CT OP TO6D P.O. Box 1440 5th Floor 1 Talcolt Plaza Hartford, Connecticut 06143 1 Talcott Plaza Hartford, Connecticut 06103 Attention: Patricia Williams Hartford, Connecticut 06106 Attention: Patricia Williams Attention: Patricia Williams By Facsimile Transmission (860) 986-7908 Attention: Patricia Williams Confirm by Telephone: (860) 986-1271
Requests for assistance or additional copies of this Statement, and the Consent and Letter of Transmittal, should be directed to the Dealer Manager. You may also contact your broker, dealer, commercial bank, trust company or nominee for assistance concerning the Offer. The Dealer Manager for the Tender Offer and the Solicitation is: BT Securities Corporation 130 Liberty Street, 30th Floor New York, NY 10006 212-775-2467 THE DATE OF THIS OFFER TO PURCHASE AND CONSENT SOLICITATION IS MARCH 13, 1997. EX-99.2 4 AMENDMENT #1 TO OFFER TO PURCHASE 1 Exhibit 99.2 AMENDMENT NO. 1 TO OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT OF MONARCH MARKING SYSTEMS, INC. Offer to Purchase for Cash All Outstanding 12-1/2% Senior Notes due July 1, 2003 THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997 UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE"). HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW). TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT, SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS RELEASE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING. Amendment No. 1 to the Offer to Purchase and Consent Solicitation Statement of Monarch Marking Systems, Inc., dated as of March 13, 1997 (the "Statement"). Subject to the terms and conditions set forth in the Statement, Monarch Marking Systems, Inc., a Delaware corporation (the "Company"), has offered (the "Tender Offer") to purchase for cash all of its outstanding 12-1/2% Senior Notes due July 1, 2003 (the "Notes") and has solicited consents to the adoption of the proposed amendments to the indenture, dated as of June 29, 1995, between the Company, as Issuer, and Fleet National Bank, as Trustee, pursuant to which the Notes were issued. The Company wishes to amend the Tender Offer as set forth below. Reference is made to the "Expiration Date; Extension; Amendment; Termination" provision of the Statement in which the Company expressly reserved the right to amend any term of the Tender Offer and the Solicitation and modify the Total Consideration. Capitalized terms not otherwise defined herein have the meanings set forth in the Statement. 1. The consideration to be paid pursuant to the Tender Offer and Solicitation as set forth in the Statement is hereby amended and restated in its entirety to read as follows: 2 The consideration for each $1,000 principal amount of Notes tendered pursuant to the Tender Offer and Solicitation shall be equal to (i) the greater of (A) $1,167.50 or (B) the price (calculated as described on Schedule I to this Statement) equal to the present value of the Notes on the Payment Date (as defined below) determined on the basis of a yield (the "Tender Offer Yield") to June 30, 1999, which is the day immediately preceding the earliest redemption date of the Notes (the "Earliest Redemption Date"), equal to the sum of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30, 1999 (the "Reference Security"), as calculated by the Dealer Manager in accordance with standard market practice, based on the bid price for such Reference Security as of 2:00 P.M., New York City time, on March 26, 1997, the tenth business day immediately preceding the scheduled Expiration Date (the "Price Determination Date"), as currently displayed on the Bloomberg Government Pricing Monitor on "Page PX5" or any recognized quotation source selected by the Dealer Manager in its sole discretion if the Bloomberg Government Pricing Monitor is not available, plus (y) 75 basis points (such price being rounded to the nearest cent per $1,000 principal amount of Notes), plus (ii) accrued and unpaid interest, if any, up to, but not including, the Payment Date (the consideration referred to in clauses (i) and (ii) being hereafter referred to as the "Total Consideration"), minus (iii) $20.00 per Note, which is equal to the Consent Payment, as defined below (the Total Consideration minus the Consent Payment being hereafter referred to as the "Tender Offer Consideration"), payable on the date that the Notes are accepted for payment pursuant to the Tender Offer and Solicitation (the "Acceptance Date"). Pursuant to the terms of the Indenture, the earliest date upon which the Notes may be redeemed is July 1, 1999, at a price equal to 106.250% of the principal amount of the Notes. In the event the Tender Offer and Solicitation is extended for any period longer than ten business days from the previously scheduled Expiration Date, a new Price Determination Date will be established, which will be the tenth business day immediately preceding the Expiration Date as so extended. In conjunction with the Tender Offer, the Company hereby solicits (the "Solicitation") consents to the adoption of the proposed amendments to the indenture, dated as of June 29, 1995, between the Company, as Issuer, and Fleet National Bank (formerly known as Shawmut Bank Connecticut, National Association), as Trustee (the "Trustee"), pursuant to which the Notes were issued (as supplemented through the date hereof, the "Indenture"). Subject to the terms and conditions set forth in this Statement and the Consent and Letter of Transmittal, the Company hereby offers to pay to each holder of Notes (a "Holder") who validly tenders Notes and thereby delivers Consents to the Proposed Amendments on or prior to 12:00 midnight, New York City time, on the Expiration Date, an amount in cash equal to 2% of the principal amount ($20 per $1,000 principal amount) of the Notes for which Consents have been validly delivered and not validly revoked (the "Consent Payment"), with such payment to be made promptly following the Acceptance Date if, but only if, the Notes are 2 3 accepted for payment pursuant to the terms of the Offer. If a Holder's Notes are not properly tendered pursuant to the Offer on or prior to 12:00 midnight, New York City time on the Expiration Date (and Consents thereby delivered with respect to such Notes), such Holder will not receive the Consent Payment, even though the Proposed Amendments will be effective as to all Notes that are not purchased in the Offer. Adoption of the Proposed Amendments may have adverse consequences for Holders who elect not to tender Notes in the Offer. See "Certain Significant Considerations" and "Proposed Amendments to the Indenture." 2. The "Sale of Notes Pursuant to the Tender Offer" section of the "Certain Federal Income Tax Considerations" provision of the Statement is hereby amended and restated in its entirety to read as follows: SALE OF NOTES PURSUANT TO THE TENDER OFFER A sale of Notes by a Holder pursuant to the Tender Offer will be a taxable transaction to such Holder for federal income tax purposes. A Holder will generally recognize capital gain (subject to the market discount rules discussed below) or loss on the sale of a Note in an amount equal to the difference between (i) the amount of cash received for such Note, other than the portion of such amount that is properly allocable to accrued but unpaid interest, which will be taxed as ordinary income, and (ii) the Holder's "adjusted tax basis" for such Note at the time of the sale. Such capital gain or loss will be long-term if the Holder held the Note for more than one year at the time of such sale. Generally, a Holder's adjusted tax basis for a Note will be equal to the cost of the Note to such Holder, less principal payments received on the Note. If applicable, a Holder's tax basis in a Note also would be increased by any market discount previously included in income by such Holder pursuant to an election to include market discount in gross income currently as it accrues, and would be reduced by the accrual of amortizable bond premium which the Holder has previously elected to deduct from gross income on an annual basis. Certain limitations exist on the deduction of capital losses by both corporations and individual tax payers. Tendering Holders of Notes should consult their own tax advisors with respect to the tax consequences to them of the receipt of cash in a sale pursuant to the Tender Offer. An exception to the capital gain treatment described above may apply to a Holder who purchased a Note at a "market discount." Subject to a statutory de minimis exception, market discount is the excess of the "face amount" of such Note over the Holder's tax basis in such Note immediately after its acquisition by such Holder. In general, unless the Holder has elected to include market discount in income currently as it accrues, any gain realized by a Holder on the sale of a Note having market discount in excess of a de minimis amount will be treated as ordinary income to the extent of the market discount that has accrued (on a straight line basis or, at the election of the Holder, on a constant interest basis) while such Note was held by the Holder. 3 4 Consent Payment Although there is no legal authority directly on point, the Consent Payment may be treated as either (i) additional consideration in exchange for the tendered Notes, in which case such amounts would be taken into account in determining the amount of capital gain or loss on the exchange (see "Sale of Notes Pursuant to the Tender Offer" above) or (ii) separate consideration for consenting to the Proposed Amendments. In the event that the Consent Payment is treated as separate consideration for consenting to the Proposed Amendments, Holders who receive the Consent Payment might be treated as receiving either (i) additional interest with respect to the Notes or (ii) a fee for consenting to certain transactions or waiving certain rights. In either case, the Consent Payment would be taxable to such Holders as ordinary income in an amount equal to the cash received. The Company intends to treat the Consent Payment as a fee for consenting to certain transactions or waiving certain rights. 3. Except as otherwise amended by this Amendment No. 1 to the Statement, the Statement shall remain in full force and effect. NEITHER THE COMPANY NOR THE DEALER MANAGER MAKE ANY RECOMMENDATION AS TO WHETHER OR NOT HOLDERS SHOULD TENDER NOTES IN RESPONSE TO THE TENDER OFFER OR PROVIDE CONSENTS TO THE PROPOSED AMENDMENTS IN RESPONSE TO THE SOLICITATION. Any questions or requests for assistance may be directed to the Dealer Manager at its address and telephone number set forth below. Requests for additional copies of this Amendment No. 1 to the Statement, the Statement, the Consent and Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Dealer Manager. Beneficial owners may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Tender Offer and the Solicitation. The Dealer Manager for the Tender Offer and the Solicitation is: BT Securities Corporation One Bankers Trust Plaza 130 Liberty Street New York, New York 10006 (212) 775-2467 Attn: High Yield Capital Markets The date of this Amendment No. 1 to the Offer to Purchase and Consent Solicitation Statement of Monarch Marking Systems, Inc. is March 20, 1997. 4 EX-99.3 5 AMENDMENT #2 TO OFFER TO PURCHASE 1 Exhibit 99.3 AMENDMENT NO. 2 TO OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT OF MONARCH MARKING SYSTEMS, INC. Offer to Purchase for Cash All Outstanding 12-1/2% Senior Notes due July 1, 2003 THIS OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997 UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE"). HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW). TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT, SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS RELEASE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING. Amendment No. 2 to the Offer to Purchase and Consent Solicitation Statement of Monarch Marking Systems, Inc., dated as of March 13, 1997 (the "Statement"). Subject to the terms and conditions set forth in the Statement, Monarch Marking Systems, Inc., a Delaware corporation (the "Company"), has offered (the "Tender Offer") to purchase for cash all of its outstanding 12-1/2% Senior Notes due July 1, 2003 (the "Notes") and has solicited consents to the adoption of the proposed amendments to the indenture, dated as of June 29, 1995, between the Company, as Issuer, and Fleet National Bank, as Trustee, pursuant to which the Notes were issued. The Company wishes to amend the Tender Offer as set forth below. Reference is made to the "Expiration Date; Extension; Amendment; Termination" provision of the Statement in which the Company expressly reserved the right to amend any term of the Tender Offer and the Solicitation and modify the Total Consideration. Capitalized terms not otherwise defined herein have the meanings set forth in the Statement. 1. The consideration to be paid pursuant to the Tender Offer and Solicitation as set forth in the Statement is hereby amended and restated in its entirety to read as follows: The consideration for each $1,000 principal amount of Notes tendered pursuant to the Tender Offer and Solicitation shall be equal to (i) the greater of (A) $1,167.50 or 2 (B) the price (calculated as described on Schedule I to this Statement) equal to the present value of the Notes on the Payment Date (as defined below) determined on the basis of a yield (the "Tender Offer Yield") to June 30, 1999, which is the day immediately preceding the earliest redemption date of the Notes (the "Earliest Redemption Date"), equal to the sum of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30, 1999 (the "Reference Security"), as calculated by the Dealer Manager in accordance with standard market practice, based on the bid price for such Reference Security as of 2:00 P.M., New York City time, on March 26, 1997, the tenth business day immediately preceding the scheduled Expiration Date (the "Price Determination Date"), as currently displayed on the Bloomberg Government Pricing Monitor on "Page PX5" or any recognized quotation source selected by the Dealer Manager in its sole discretion if the Bloomberg Government Pricing Monitor is not available, plus (y) 75 basis points (such price being rounded to the nearest cent per $1,000 principal amount of Notes), plus (ii) accrued and unpaid interest, if any, up to, but not including, the Payment Date (the consideration referred to in clauses (i) and (ii) being hereafter referred to as the "Total Consideration"), minus (iii) $30.00 per Note, which is equal to the Consent Payment, as defined below (the Total Consideration minus the Consent Payment being hereafter referred to as the "Tender Offer Consideration"), payable on the date that the Notes are accepted for payment pursuant to the Tender Offer and Solicitation (the "Acceptance Date"). Pursuant to the terms of the Indenture, the earliest date upon which the Notes may be redeemed is July 1, 1999, at a price equal to 106.250% of the principal amount of the Notes. In the event the Tender Offer and Solicitation is extended for any period longer than ten business days from the previously scheduled Expiration Date, a new Price Determination Date will be established, which will be the tenth business day immediately preceding the Expiration Date as so extended. In conjunction with the Tender Offer, the Company hereby solicits (the "Solicitation") consents to the adoption of the proposed amendments to the indenture, dated as of June 29, 1995, between the Company, as Issuer, and Fleet National Bank (formerly known as Shawmut Bank Connecticut, National Association), as Trustee (the "Trustee"), pursuant to which the Notes were issued (as supplemented through the date hereof, the "Indenture"). Subject to the terms and conditions set forth in this Statement and the Consent and Letter of Transmittal, the Company hereby offers to pay to each holder of Notes (a "Holder") who validly tenders Notes and thereby delivers Consents to the Proposed Amendments on or prior to 12:00 midnight, New York City time, on the Expiration Date, an amount in cash equal to 3% of the principal amount ($30 per $1,000 principal amount) of the Notes for which Consents have been validly delivered and not validly revoked (the "Consent Payment"), with such payment to be made promptly following the Acceptance Date if, but only if, the Notes are accepted for payment pursuant to the terms of the Offer. If a Holder's Notes are not properly tendered pursuant to the Offer on or prior to 12:00 midnight, New York City time on the Expiration Date (and Consents thereby delivered with respect to such Notes), such Holder will not receive 2 3 the Consent Payment, even though the Proposed Amendments will be effective as to all Notes that are not purchased in the Offer. Adoption of the Proposed Amendments may have adverse consequences for Holders who elect not to tender Notes in the Offer. See "Certain Significant Considerations" and "Proposed Amendments to the Indenture." 2. The "Sale of Notes Pursuant to the Tender Offer" section of the "Certain Federal Income Tax Considerations" provision of the Statement is hereby amended and restated in its entirety to read as follows: SALE OF NOTES PURSUANT TO THE TENDER OFFER A sale of Notes by a Holder pursuant to the Tender Offer will be a taxable transaction to such Holder for federal income tax purposes. A Holder will generally recognize capital gain (subject to the market discount rules discussed below) or loss on the sale of a Note in an amount equal to the difference between (i) the amount of cash received for such Note, other than the portion of such amount that is properly allocable to accrued but unpaid interest, which will be taxed as ordinary income, and (ii) the Holder's "adjusted tax basis" for such Note at the time of the sale. Such capital gain or loss will be long-term if the Holder held the Note for more than one year at the time of such sale. Generally, a Holder's adjusted tax basis for a Note will be equal to the cost of the Note to such Holder, less principal payments received on the Note. If applicable, a Holder's tax basis in a Note also would be increased by any market discount previously included in income by such Holder pursuant to an election to include market discount in gross income currently as it accrues, and would be reduced by the accrual of amortizable bond premium which the Holder has previously elected to deduct from gross income on an annual basis. Certain limitations exist on the deduction of capital losses by both corporations and individual tax payers. Tendering Holders of Notes should consult their own tax advisors with respect to the tax consequences to them of the receipt of cash in a sale pursuant to the Tender Offer. An exception to the capital gain treatment described above may apply to a Holder who purchased a Note at a "market discount." Subject to a statutory de minimis exception, market discount is the excess of the "face amount" of such Note over the Holder's tax basis in such Note immediately after its acquisition by such Holder. In general, unless the Holder has elected to include market discount in income currently as it accrues, any gain realized by a Holder on the sale of a Note having market discount in excess of a de minimis amount will be treated as ordinary income to the extent of the market discount that has accrued (on a straight line basis or, at the election of the Holder, on a constant interest basis) while such Note was held by the Holder. Consent Payment Although there is no legal authority directly on point, the Consent Payment may be treated as either (i) additional consideration in exchange for the tendered Notes, in which case such amounts would be taken into account in determining the amount of capital gain or loss on the exchange (see 3 4 "Sale of Notes Pursuant to the Tender Offer" above) or (ii) separate consideration for consenting to the Proposed Amendments. In the event that the Consent Payment is treated as separate consideration for consenting to the Proposed Amendments, Holders who receive the Consent Payment might be treated as receiving either (i) additional interest with respect to the Notes or (ii) a fee for consenting to certain transactions or waiving certain rights. In either case, the Consent Payment would be taxable to such Holders as ordinary income in an amount equal to the cash received. The Company intends to treat the Consent Payment as a fee for consenting to certain transactions or waiving certain rights. 3. Except as otherwise amended by this Amendment No. 2 to the Statement, the Statement shall remain in full force and effect. NEITHER THE COMPANY NOR THE DEALER MANAGER MAKE ANY RECOMMENDATION AS TO WHETHER OR NOT HOLDERS SHOULD TENDER NOTES IN RESPONSE TO THE TENDER OFFER OR PROVIDE CONSENTS TO THE PROPOSED AMENDMENTS IN RESPONSE TO THE SOLICITATION. Any questions or requests for assistance may be directed to the Dealer Manager at its address and telephone number set forth below. Requests for additional copies of this Amendment No. 2 to the Statement, Amendment No. 1 to the Statement, the Statement, the Consent and Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Dealer Manager. Beneficial owners may also contact their broker, dealer, commercial bank or trust company for assistance concerning the Tender Offer and the Solicitation. The Dealer Manager for the Tender Offer and the Solicitation is: BT Securities Corporation One Bankers Trust Plaza 130 Liberty Street New York, New York 10006 (212) 775-2467 Attn: High Yield Capital Markets The date of this Amendment No. 2 to the Offer to Purchase and Consent Solicitation Statement of Monarch Marking Systems, Inc. is March 25, 1997. 4 EX-99.4 6 CONSENT AND LETTER OF TRANSMITTAL 1 Exhibit 99.4 CUSIP 608908-AA-7 CONSENT AND LETTER OF TRANSMITTAL TO TENDER AND TO GIVE CONSENT TO CERTAIN PROPOSED AMENDMENTS WITH RESPECT TO THE 12-1/2% SENIOR NOTES DUE JULY 1, 2003 OF MONARCH MARKING SYSTEMS, INC. PURSUANT TO THE OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT DATED MARCH 13, 1997 THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997 UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE"). HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW). TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT, SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS RELESE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING. The Depositary for the Offer to Purchase and Consent Solicitation: Fleet National Bank By Resigstered or Certified Mail By Hand By Overnight Courier Fleet National Bank Fleet National Bank Fleet National Bank Corporate Trust Operations Corporate Trust Operations Corporate Trust Operations CT OP TO6D Customer Service Window, 5th Floor CT OP TO6D P.O. Box 1440 1 Talcott Plaza 1 Talcolt Plaza Hartford, Connecticut 06143 Hartford, Connecticut 06106 Hartford, Connecticut 06103 Attention: Patricia Williams Attention: Patricia Williams Attention: Patricia Williams
By Facsimile Transmission (860) 986-7908 Attention: Patricia Williams Confirm by Telephone: (860) 986-1271 HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE THE TENDER OFFER CONSIDERATION PURSUANT TO THE OFFER MUST VALIDLY TENDER (OR RETENDER IF SUCH HOLDERS HAVE PRIOR TO THE CONSENT DATE PREVIOUSLY WITHDRAWN OR REVOKED) THEIR NOTES TO THE DEPOSITARY PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE EXPIRATION DATE. TENDERS MAY NOT BE WITHDRAWN AND CONSENTS MAY NOT BE REVOKED AT ANY TIME FOLLOWING 12:00 MIDNIGHT NEW YORK CITY TIME ON THE CONSENT DATE. 2 Delivery of this Consent and Letter of Transmittal to an address, or transmission of instructions via facsimile other than as set forth above will not constitute a valid delivery. The instructions accompanying this Consent and Letter of Transmittal should be read carefully before this Consent and Letter of Transmittal is completed. This Consent and Letter of Transmittal should be used only to tender the Notes and to thereby consent (the "Consent") to the adoption of the proposed amendments (the "Proposed Amendments") to (i) the Indenture dated as of June 29, 1995, pursuant to which the Notes were issued (the "Indenture") as described in the Offer to Purchase and Consent Solicitation Statement of Monarch Marking Systems, Inc., dated March 13, 1997 (as the same may be amended or supplemented from time to time, the "Statement"). HOLDERS WHO TENDER NOTES ARE REQUIRED TO CONSENT TO ALL OF THE PROPOSED AMENDMENTS. THE COMPLETION, EXECUTION AND DELIVERY OF THIS CONSENT AND LETTER OF TRANSMITTAL WILL BE DEEMED TO CONSTITUTE THE CONSENT OF THE TENDERING HOLDER TO THE PROPOSED AMENDMENTS. HOLDERS OF NOTES MAY NOT TENDER NOTES WITHOUT DELIVERING CONSENTS. This Consent and Letter of Transmittal is to be used (i) if Notes are to be physically delivered to the Depositary, (ii) if delivery of Notes is to be made by book-entry transfer to the account maintained by the Depositary at the Depository Trust Company ("DTC") pursuant to the procedures set forth in the Statement under the caption "The Tender Offer and the Consent Solicitation-- Procedures for Tendering Notes and Delivering Consents - Book-Entry Delivery Procedures" or (iii) if Notes are being tendered in accordance with the guaranteed delivery procedures set forth in the Statement under, the caption "The Tender Offer and Consent Solicitation--Procedures for Tendering Notes and Delivering Consents--Guaranteed Delivery." Delivery of documents to DTC does not constitute delivery to the Depositary. Holders of Notes that are tendering by book-entry transfer to the Depositary's account at DTC can execute the tender through the DTC Automated Tender Offer Program ("ATOP") for which the transaction will be eligible. DTC participants that are accepting the Offer should transmit their acceptance to DTC, which will edit and verify the acceptance and execute a book-entry delivery to the Depositary's account at DTC. DTC will then send an Agent's Message to the Depositary for its acceptance. Delivery of the Agent's Message by DTC will satisfy the terms of the Offer as to execution and delivery of a Consent and Letter of Transmittal by the participant identified in the Agent's Message. DTC participants may also accept the Offer by submitting a notice of guaranteed delivery through ATOP. Holders whose Notes are not available or who cannot deliver their Notes and all other documents required hereby to the Depositary prior to, or on, the Expiration Date may nevertheless tender their Notes (and thereby consent to the Proposed Amendments) in accordance with the guaranteed delivery procedures set forth in the Statement under the caption "The Tender Offer and the Consent Solicitation--Procedures for Tendering Notes and Delivering Consents--Guaranteed Delivery." See Instruction 2 herein. -2- 3 THE TENDER OFFER AND THE SOLICITATION ARE NOT BEING MADE TO (NOR WILL TENDERS OF NOTES BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURISDICTION ON WHICH THE MAKING OR ACCEPTANCE OF THE TENDER OFFER OR SOLICITATION WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. All capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Statement. Holders who wish to consent to the Proposed Amendments and tender their Notes must complete the box below entitled "Method of Delivery" and complete columns (1) through (3) in the box herein entitled "Description of Notes Tendered and With Respect to Which Consent is Given" and sign in the appropriate box below. Holders who complete this Consent and Letter of Transmittal will be deemed to have consented to all of the Proposed Amendments with respect to, and to have tendered, all Notes listed in the box. Holders may not tender Notes without delivering Consents with respect to such Notes nor may Holders consent to the Proposed Amendments without tendering their Notes. -3- 4 METHOD OF DELIVERY / / CHECK HERE IF CERTIFICATES FOR TENDERED NOTES ARE ENCLOSED HEREWITH. / / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY SPECIFIED ABOVE AND COMPLETE THE FOLLOWING: NAME OF TENDERING INSTITUTION: __________________________________ NAME OF BOOK-ENTRY TRANSFER FACILITY: / / THE DEPOSITORY TRUST COMPANY ACCOUNT NUMBER: _______________ TRANSACTION CODE NUMBER: _______ / / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: NAME(S) OF REGISTERED OWNER(S):_________________________________________ WINDOW TICKET NUMBER (IF ANY):__________________________________________ DATE OF EXECUTION OF NOTICE OF GUARANTEED DELIVERY:_____________________ NAME OF ELIGIBLE INSTITUTION WHICH GUARANTEED DELIVERY:_________________ IF DELIVERED BY A BOOK-ENTRY TRANSFER FACILITY, CHECK BOX OF BOOK-ENTRY TRANSFER FACILITY: / / THE DEPOSITORY TRUST COMPANY ACCOUNT NUMBER:__________________TRANSACTION CODE NUMBER:_______________ -4- 5 DESCRIPTION OF NOTES TENDERED AND WITH RESPECT TO WHICH CONSENT IS GIVEN*
Name(s) and Address(es) of Holder(s) Notes Tendered and With Respect to Which Consent (Please fill in, if blank, is Given (Attach additional schedule, if necessary exactly as name(s) appear(s) on Notes) (1) (2) (3) Security Number(s) Total Principal Amount of Notes Tendered _____________________ ______________________ _____________________ ______________________ _____________________ ______________________ _____________________ ______________________
- -------------------- *You must consent to all of the Proposed Amendments with respect to all Notes tendered. Completion of this Consent and Letter of Transmittal will constitute the tender of all Notes delivered and a Consent to all of the Proposed Amendments with respect to all such Notes. -5- 6 NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: By execution hereof, the undersigned hereby acknowledges receipt of the Offer to Purchase and Consent Solicitation Statement dated March 13, 1997 (as the same may be amended or supplemented from time to time, the "Statement") of Monarch Marking Systems, Inc. (the "Company"), and this Consent and Letter of Transmittal and instructions hereto (the "Consent and Letter of Transmittal"), relating to (a) the Company's offer to purchase (the "Tender Offer") all of its outstanding 12-1/2% Notes due July 1, 2003 (the "Notes") upon the terms and subject to the conditions set forth in the Statement, and (b) the Company's solicitation (the "Solicitation") of consents (the "Consents") from holders of the Notes to the proposed amendments (the "Proposed Amendments") to the indenture dated as of June 29, 1995 (the "Indenture"), between the Company and Fleet National Bank (formerly known as Shawmut Bank Connecticut, National Association), as Trustee (the "Trustee"). Holders of Notes may not tender Notes without delivering their corresponding Consents in the Solicitation. Upon the terms and subject to the conditions of the Tender Offer and the Solicitation as set forth in the Statement, the receipt of which is hereby acknowledged, the undersigned hereby consents to all of the Proposed Amendments and hereby tenders to the Company the principal amount of Notes indicated above. The undersigned acknowledges that the Proposed Amendments require the receipt by the Company of the Requisite Supermajority Consents (Consents from holders representing at least 75% in aggregate principal amount of the outstanding Notes) or, at the option of the Company, Requisite Majority Consents, (Consents from Holders representing at least a majority in aggregate principal amount of the outstanding Notes) on or prior to April 10, 1997 (the "Expiration Date"). Subject to, and effective upon, the acceptance for payment of the principal amount of Notes tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to, and any and all claims in respect of or arising or having arisen as a result of the undersigned's status as a holder of, all Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Depositary as the true and lawful agent and attorney-in-fact of the undersigned with respect to such Notes, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver such Notes, or transfer ownership of such Notes on the account books maintained by DTC, together with all accompanying evidences of transfer and authenticity, to or upon the order of the Company, (b) present such Notes for transfer on the register, (c) deliver the Consent contained herein to the Company and the Trustee and (d) receive all benefits and otherwise all rights of beneficial ownership of such Notes, all in accordance with the terms of the Tender Offer and the Solicitation. The undersigned agrees and acknowledges that, by the execution and delivery hereof, the undersigned makes and provides the written Consent, with respect to the Notes tendered hereby, to all of the Proposed Amendments, as permitted by Section 902 of the Indenture. The undersigned -6- 7 understands that the Consent provided hereby shall remain in full force and effect and may only be revoked under the circumstances described herein and in the Statement. Upon receipt of the Requisite Supermajority Consents or, at the option of the Company, Requisite Majority Consents, the Company will enter into the supplemental indenture (in the form of an amended and restated indenture, the "Supplemental Indenture") reflecting the Proposed Amendments. See "The Tender Offer and the Consent Solicitation--Terms of the Offer and the Solicitation" in the Statement. However, none of the Proposed Amendments will become operative unless and until the Tender Offer is consummated on the date the Company accepts Notes for purchase pursuant to the Tender Offer. The undersigned authorizes the Depositary to deliver certification to the Company and the Trustee that the Consent to the Proposed Amendments duly executed by the Holder of the Notes tendered hereby (or the agent thereof duly appointed by written proxy delivered to the Depositary) has been received and authorizes the Company and the Trustee under the Indenture to rely on such certification. Tenders of Notes pursuant to the Tender Offer may be withdrawn and Consents may be revoked, subject to the procedures described in the Statement under "The Tender Offer and the Consent Solicitation--Withdrawal of Tenders and Revocation of Consents" and Instruction 4 herein, at any time on or prior to the Consent Date. Tenders of any Notes may also be withdrawn if the Tender Offer and the Solicitation is terminated without any such Notes being purchased thereunder, or as otherwise provided herein or in the Statement. The undersigned hereby represents and warrants that the undersigned (a) has full power and authority to tender, sell, assign and transfer the Notes tendered hereby, and that when such Notes are accepted for payment by the Company, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and that none of such Notes will be subject to any adverse claim or right, and (b) either has full power and authority to consent to the Proposed Amendments or is delivering a validly executed Consent (which is included in this Consent and Letter of Transmittal) from a person or entity having such power and authority. The undersigned, upon request, will execute and deliver all additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Notes tendered hereby, to perfect the undersigned's Consent to the Proposed Amendments or to the execution of the Supplemental Indenture. The undersigned understands that tenders of Notes pursuant to any of the procedures described in the Statement under the caption "The Tender Offer and the Consent Solicitation--Procedures for Tendering Notes and Delivering Consents" and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Tender Offer and the Solicitation. The Company's acceptance of such Notes for payment will constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Tender Offer and the Solicitation. All authority conferred or agreed to be conferred by this Consent and Letter of Transmittal shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Consent and Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives. -7- 8 Unless otherwise indicated herein in the box entitled "Special Payment Instructions", please issue the check for the Total Consideration with respect to Notes accepted for payment, and return any certificates for Notes not tendered or not accepted for payment, in the name(s) of the registered holder(s) appearing above under "Description of Notes Tendered and With Respect to Which Consent is Given." Similarly, unless otherwise indicated herein in the box entitled "Special Delivery Instructions", please mail the check for the Total Consideration with respect to Notes accepted for payment, together with any certificates for Notes not tendered or not accepted for payment (and any accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Notes Tendered and With Respect to Which Consent is Given." If both the "Special Payment Instructions" box and the "Special Delivery Instructions" box are completed, please issue the check for the Total Consideration with respect to any Notes accepted for payment, and return any certificates for Notes not tendered or not accepted for payment, in the name(s) of, and mail the check and any such Notes not tendered or not accepted for payment, in the name(s) of, and mail the check and any such certificates to the person(s) at the address(es) so indicated. The undersigned recognizes that the Company has no obligations pursuant to the "Special Payment Instructions" box or "Special Delivery Instructions" box provisions of this Consent and Letter of Transmittal to transfer any Note from the name of the registered holder(s) thereof if the Company does not accept for payment any of the principal amount of such Notes. -8- 9 SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 5, 6 and 7) To be completed ONLY if certificates for Notes in a principal amount not tendered or not accepted for payment and/or the check for the related consideration are to be issued in the name of someone other than the undersigned, or if Notes are to be returned by credit to an account maintained by DTC. Issue Check and/or Notes to: Name:___________________________________________________________________________ (Please Print) Address:________________________________________________________________________ Zip Code ________________________________________________________________________________ Taxpayer Identification Number (You must also complete Substitute Form W-9 below) Credit unaccepted Notes tendered by book-entry transfer to: / / The Depository Trust Company account set forth below: ________________________________________________________________________________ (DTC account number) SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 5, 6 and 7) To be completed ONLY if certificates for Notes in a principal amount not tendered or not accepted for payment and/or the check for the related consideration are to be sent to someone other than the undersigned at an address other than that shown above. Deliver Check and/or Notes to: Name:___________________________________________________________________________ (Please Print) Address:________________________________________________________________________ Zip Code ________________________________________________________________________________ Taxpayer Identification Number (You must also complete Substitute Form W-9 below) -9- 10 SIGN HERE (To Be Completed by All Tendering and Consenting Holders of Notes Regardless of Whether Notes Are Being Physically Delivered Herewith) The completion, excecution and delivery of this Consent and Letter of Transmittal will be deemed to constitute a Consent to all of the Proposed Amendments. If the signature(s) appearing below is (are) not of the registered holder(s) of the Notes (or the agent thereof duly appointed by written proxy delivered to the Depositary), then the registered holder(s) must sign the form of Consent appearing in the "Consent Box" on the next page. X_______________________________________________________________________________ X_______________________________________________________________________________ (Signature(s) of Holder(s) or Authorized Signatory) Must be signed by the registered holder(s) of Notes exactly as their name(s) appear(s) on certificate(s) for the Notes or by person(s) authorized to become registered holder(s) by endorsements and documents transmitted with this Consent and Letter of Transmittal. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, agent or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5 herein. Name(s):________________________________________________________________________ ________________________________________________________________________________ (Please Print) Capacity (full title):__________________________________________________________ Address:________________________________________________________________________ ________________________________________________________________________________ (Including Zip Code) Area Code and Telephone No.:____________________________________________________ -10- 11 SIGNATURE GUARANTEE (See Instructions 1 and 5 below) ________________________________________________________________________________ (Name of Eligible Institution Guaranteeing Signature(s)) ________________________________________________________________________________ (Address (including zip code) and Telephone No. (including area code) of Firm) ________________________________________________________________________________ (Authorized Signature) ________________________________________________________________________________ (Printed Name) ________________________________________________________________________________ (Title) Date: ______________, 1997 -11- 12 CONSENT BOX IF THIS CONSENT AND LETTER OF TRANSMITTAL IS SIGNED BY A HOLDER OF NOTES WHO IS NOT EITHER (X) THE REGISTERED HOLDER OR (Y) THE AGENT THEREOF DULY APPOINTED BY WRITTEN PROXY DELIVERED TO THE DEPOSITARY, THEN THE REGISTERED HOLDER MUST SIGN THE FOLLOWING CONSENT (OR A SEPARATE DOCUMENT SUBSTANTIALLY IN THE FORM OF THE FOLLOWING CONSENT), WHICH DOCUMENT MUST BE DELIVERED TO THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE, WITH SIGNATURES GUARANTEED BY AN ELIGIBLE INSTITUTION, IN ORDER FOR SUCH HOLDER TO RECEIVE THE TENDER OFFER CONSIDERATION. Pursuant to the Tender Offer and Solicitation, the undersigned holder(s) of the Notes tendered pursuant to this Consent and Letter of Transmittal hereby Consent(s) to all of the Proposed Amendments. X_______________________________________________________________________________ X_______________________________________________________________________________ (Signature(s) of Holder(s)) Dated: ________________________, 1997 Must be signed by the holder(s) exactly as name(s) appear(s) on Notes. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, agent or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5 herein. Name(s):________________________________________________________________________ ________________________________________________________________________________ (Please Print) Capacity (full title):__________________________________________________________ Address:________________________________________________________________________ ________________________________________________________________________________ (Including Zip Code) Area Code and Telephone No.:____________________________________________________ -12- 13 SIGNATURE GUARANTEE (See Instructions 1 and 5 below) ________________________________________________________________________________ (Name of Eligible Institution Guaranteeing Signature(s)) ________________________________________________________________________________ (Address (including zip code) and Telephone No. (including area code) of Firm) ________________________________________________________________________________ (Authorized Signature) ________________________________________________________________________________ (Printed Name) ________________________________________________________________________________ (Title) Date:___________________ , 1997 -13- 14 INSTRUCTIONS Forming Part of the Terms and Conditions of the Tender Offer and the Solicitation 1. GUARANTEE OF SIGNATURES. All signatures on this Consent and Letter of Transmittal or a notice of withdrawal must be guaranteed by a financial institution that is a member of the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion Program or the New York Stock Exchange Medallion Signature Program (each of the foregoing being referred to herein as an "Eligible Institution"), unless (i) this Consent and Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Consent and Letter of Transmittal, shall include DTC) of the Notes tendered herewith and neither the "Special Payment Instructions" box nor the "Special Delivery Instructions" box of this Consent and Letter of Transmittal has been completed or (ii) such Notes are tendered for the account of an Eligible Institution. See Instruction 5 herein. 2. DELIVERY OF CONSENT AND LETTER OF TRANSMITTAL AND NOTES; GUARANTEED DELIVERY PROCEDURES. This Consent and Letter of Transmittal is to be completed by Holders if (i) certificates representing Notes are to be physically delivered to the Depositary herewith by such Holders; (ii) tender of Notes is to be made by book-entry transfer to the Depositary's account at DTC pursuant to the procedures set forth under the caption "The Tender Offer and the Consent Solicitation--Procedures for Tendering Notes and Delivering Consents--Book-Entry Delivery Procedures" in the Statement; or (iii) tender of Notes is to be made according to the guaranteed delivery procedures set forth under the caption "The Tender Offer and the Consent Solicitation--Procedures for Tendering Notes and Delivering Consents-- Guaranteed Delivery" in the Statement; and such Holders desire to consent to the Proposed Amendments relating to the Notes, and in each case, instructions are not being transmitted through ATOP. All physically delivered Notes, or a confirmation of a book-entry transfer into the Depositary's account at DTC of all Notes delivered electronically, as well as a properly completed and duly executed Consent and Letter of Transmittal (or manually signed facsimile thereof) and any other documents required by this Consent and Letter of Transmittal, must be received by the Depositary at its address set forth herein prior to 12:00 midnight, New York City time, on the Consent Date or the Expiration Date, as applicable, or the tendering Holder must comply with the guaranteed delivery procedures set forth below. Delivery of documents to DTC does not constitute delivery to the Depositary. If a Holder desires to consent to the Proposed Amendments and tender Notes pursuant to the Tender Offer and Solicitation and time will not permit this Consent and Letter of Transmittal, certificates representing such Notes and all other required documents to reach the Depositary, or the procedures for book-entry transfer cannot be completed, on or prior to the Consent Date or the Expiration Date, as applicable, then such Holder must consent and tender such Notes pursuant to the guaranteed delivery procedures set forth under the caption "The Tender Offer and the Consent Solicitation--Procedures for Tendering Notes and Delivering Consents--Guaranteed Delivery" in the Statement. Pursuant to such procedures, (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially -14- 15 in the form provided by the Company, or an Agent's Message with respect to guaranteed delivery that is accepted by Company, must be received by the Depositary, either by hand delivery, mail, telegram or facsimile transmission prior to 12:00 midnight, New York City time, on the Consent Date or the Expiration Date, as applicable, and (iii) the certificates for all tendered Notes, in proper form for transfer (or confirmation of a book-entry transfer of all Notes delivered electronically into the Depositary's account at DTC pursuant to the procedures for such transfer set forth in the Statement), together with a properly completed and duly executed Consent and Letter of Transmittal (or manually signed facsimile thereof) and any required signature guarantee and any other documents required by this Consent and Letter of Transmittal or a properly transmitted Agent's Message, must be received by the Depositary within three business days after the date of the execution of such Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF THIS CONSENT AND LETTER OF TRANSMITTAL, THE NOTES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE OR AGENT'S MESSAGE DELIVERED THROUGH ATOP, IS AT THE OPTION AND RISK OF THE TENDERING HOLDER. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed for such documents to reach the Depositary. Except as otherwise provided in this Instruction 2, delivery will be deemed made only when actually received by the Depositary. No alternative, conditional or contingent tenders will be accepted. All tendering Holders, by execution of this Consent and Letter of Transmittal (or a facsimile thereof), waive any right to receive any notice of the acceptance of their Notes for payment. Notwithstanding any other provision hereof, the purchase of the Notes pursuant to the Tender Offer will in all cases be made only after timely receipt by the Depositary of certificates for such Notes and this Consent and Letter of Transmittal (or a facsimile thereof) in respect thereof, properly completed and duly executed, together with any required signature guarantees and any other documents required by the Statement and this Consent and Letter of Transmittal. All questions as to the validity, form, eligibility (including time of receipt), acceptance, withdrawal and revocation of tendered Notes and delivered Consents will be resolved by the Company, whose determination will be final and binding. The Company reserves the absolute right to reject any or all tenders and withdrawals of Notes and deliveries and revocations of Consents that are not in proper form or the acceptance of which would, in the opinion of the Company or counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of a tender or consent as to particular Notes. The Company's interpretation of the terms and conditions of the Tender Offer (including the instructions in this Consent and Letter of Transmittal) will be final and binding. Unless waived, any irregularities in connection with tenders and withdrawals of Notes and deliveries and revocations of Consents must be cured within such time as the Company shall determine. Tenders and withdrawals of Notes and deliveries and revocations of Consents will not be deemed to have been made until such irregularities have been cured or waived. Any Notes received by the Depositary that are not properly tendered or delivered and to -15- 16 which the irregularities have not been cured or waived will be returned by the Depositary to the tendering holder unless otherwise provided in this Consent and Letter of Transmittal as soon as practicable following the Expiration Date. None of the Company, the Depositary, the Dealer Manager, the Trustee or any other person shall be obligated to give notification of defects or irregularities in any tender, withdrawal, delivery or revocation or shall incur any liability for failure to give any such notification. 3. INADEQUATE SPACE. If the space provided herein under "Description of Notes Tendered and With Respect to Which Consent is Given" is inadequate, the certificate numbers of the Notes and the principal amount of Notes tendered should be listed on a separate schedule and attached hereto. 4. WITHDRAWAL OF TENDERS; REVOCATION OF CONSENTS. Tenders of Notes may be withdrawn and the concurrent Consents may be revoked at any time prior to 12:00 midnight, New York City time, on the Consent Date (but, subject to the exceptions indicated below) not thereafter if the Company accepts the Notes for payment). A valid withdrawal of tendered Notes effected prior to 12:00 midnight, New York City time, on the Consent Date will constitute the concurrent valid revocation of such Holder's related Consent. In order for a Holder to revoke a Consent, such Holder must withdraw the related tendered Notes. Except as set forth below, tenders of Notes may not be withdrawn, and Consents may not be revoked, after 12:00 midnight, New York City time, on the Consent Date. In order for a Holder to revoke a Consent, such Holder must withdraw the related tendered Notes. If the Company (i) reduces the principal amount of Notes subject to the Tender Offer or (ii) changes the Tender Offer Consideration, then previously tendered Notes may be validly withdrawn until the expiration of ten business days after the date that notice of any such reduction or change its first published, given or sent to Holders by the Company. In addition, tenders of Notes may be validly withdrawn if the Tender Offer is terminated without any Notes being purchased thereunder. In the event of a termination of the Offer, the Notes tendered pursuant to the Tender Offer will be promptly returned to the tendering Holder. For a withdrawal of a tender of Notes (and the concurrent revocation of Consents) to be effective, a written telegraphic or facsimile transmission notice of withdrawal must be received by the Depositary prior to 12:00 midnight, New York City time, on the Consent Date at its address set forth on the back cover of this Statement. Any such notice of withdrawal must (i) specify the name of the person who tendered the Notes to be withdrawn, (ii) contain the description of the Notes to be withdrawn and identify the certificate number or numbers shown on the particular certificates evidencing such Notes (unless such Notes were tendered by book entry transfer) and the aggregate principal amount represented by such Notes and (iii) be signed by the Holder of such Notes in the same manner as the original signature on the Consent and Letter of Transmittal by which such Notes were tendered (including any required signature guarantees), if any, or be accompanied by (x) documents of transfer sufficient to have the Trustee register the transfer of the Notes into the name of the person withdrawing such Notes and (y) a properly completed irrevocable proxy that authorized such person to effect such revocation on behalf of such Holder. If the Notes to be withdrawn have -16- 17 been delivered or otherwise identified to the Depositary, a signed notice of withdrawal is effective immediately upon written or facsimile notice of withdrawal even if physical release is not yet effected. Any Notes properly withdrawn will be deemed to be not validly tendered for purposes of the Tender Offer, and will constitute the concurrent valid revocation of such Holder's Consent. Withdrawal of Notes (and the concurrent revocation of Consents) can only be accomplished in accordance with the foregoing procedures. All questions as to the validity (including time of receipt) of notices of withdrawal and revocation of Consents will be determined by the Company, in the Company's sole discretion (whose determination shall be final and binding). None of the Company, the Depositary, the Dealer Manager, the Trustee or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or revocation of Consents, or incur any liability for failure to give any such notification. 5. SIGNATURES ON CONSENT AND LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS. If this Consent and Letter of Transmittal is signed by the registered holder(s) of the Notes tendered hereby, the signature(s) must correspond to the name(s) as written on the face of the Notes without alteration, enlargement or any other change whatsoever. If this Consent and Letter of Transmittal is signed by a participant in DTC whose name is shown as the owner of the Notes tendered hereby, the signature must correspond with the name shown on the security position listing as the owner of the Notes. IF THIS CONSENT AND LETTER OF TRANSMITTAL IS EXECUTED BY A HOLDER OF NOTES WHO IS NOT EITHER (X) THE REGISTERED HOLDER OR (Y) THE AGENT THEREOF DULY APPOINTED BY WRITTEN PROXY DELIVERED TO THE DEPOSITARY, THEN THE REGISTERED HOLDER MUST SIGN THE CONSENT SET FORTH ABOVE WITH THE SIGNATURE OF SUCH REGISTERED HOLDER GUARANTEED BY AN ELIGIBLE INSTITUTION. If any Notes tendered hereby are owned of record by two or more persons, all such persons must sign this Consent and Letter of Transmittal. If any Notes tendered hereby are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Consents and Letters of Transmittal, and any necessary accompanying documents, as there are different registrations of such Notes. If this Consent and Letter of Transmittal is signed by the registered holder of Notes tendered hereby, no endorsements of such Notes or separate bond powers are required, unless payment is to be made to, or Notes not tendered or not accepted for payment are to be issued in the name of, a person other than the registered holder(s), in which case the Notes tendered hereby must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Notes. Signatures on such Notes and bond powers must be -17- 18 guaranteed by an Eligible Institution. See Instruction 1 herein. If this Consent and Letter of Transmittal, any Consents, or any Notes or bond powers are signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Company of such person's authority so to act must be submitted with this Consent and Letter of Transmittal. 6. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable to the purchase of Notes pursuant to the Tender Offer. If, however, Notes for principal amounts not accepted for tender are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Notes, or if tendered Notes are to be registered in the name of any person other than the person signing the Consent and Letter of Transmittal, of if a transfer tax is imposed for any reason other than the purchase of Notes pursuant to the Tender Offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such tax or exemption therefrom is not submitted, then the amount of such transfer tax will be deducted from the Tender Offer Consideration otherwise payable to such tendering holder. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the payment of the Tender Offer Consideration or Consent Payment with respect to any Notes tendered hereby is to be issued, Notes not tendered or not accepted for payment are to be issued in the name of a person other than the person(s) signing this Consent and Letter of Transmittal or if such check or any such Note is to be sent to someone other than the person(s) signing this Consent and Letter of Transmittal or to the person(s) signing this Consent and Letter of Transmittal, but at an address other than that shown in the box entitled "Description of Notes Tendered and With Respect to Which Consent is Given", the appropriate boxes in this Consent and Letter of Transmittal must be completed. If no such instruction is given, the Tender Offer Consideration, Consent Payment and/or Notes not accepted for payment or not tendered, as the case may be, will be sent to the person signing this Consent and Letter of Transmittal or, at the Company's option, paid and delivered by crediting the account at DTC designated in the box entitled "Special Payment Instructions." 8. TAXPAYER IDENTIFICATION NUMBER. Each tendering holder is required to provide the Depositary with the holder's correct taxpayer identification number ("TIN"), generally, the holder's Social Security or Federal Employer Identification number, on Substitute Form W-9, which is provided under "Important Tax Information" below, and to certify whether such person is subject to backup withholding of federal income tax. 9. CONFLICTS. In the event of any conflict between the terms of the Statement and the terms of this Consent and Letter of Transmittal, the terms of the Statement will control. -18- 19 10. WAIVER OF CONDITIONS. The Company reserves the absolute right, subject to applicable law, to amend in any respect or waive any of the specified conditions in the Tender Offer and the Solicitation in the case of any particular Note tendered or Consent delivered. 11. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. If a Holder desires to tender Notes pursuant to the Tender Offer, but any such Note has been mutilated, lost, stolen or destroyed, such Holder should write to or telephone the Trustee, at the address listed below, concerning the procedures for obtaining replacement certificates for such Note, arranging for indemnification or any other matter that requires handling by the Trustee: Fleet National Bank 777 Main Street, CT M00238 Hartford, Connecticut 06115 Attention: Corporate Trust Administration Telephone: (860) 986-4545 12. REQUESTS FOR ASSISTANCE OR ADDITION COPIES. Questions relating to the procedure for tendering, as well as requests for additional copies of the Statement and the related Consents and Letter of Transmittal, may be directed to the Dealer Manager, BT Securities Corporation, 130 Liberty Street, 30th Floor, New York, New York, 10006, (212) 775-2467 (collect). -19- 20 IMPORTANT TAX INFORMATION Under federal income tax law, certain holders whose Notes are accepted for payment are required to provide the Depositary (as payer) with such holder's correct taxpayer identification number ("TIN") on a Substitute Form W-9 (included below). If the holder is an individual, the TIN is his or her social security number. If the Depositary is not provided with the correct TIN, the holder may be subject to a $50 penalty imposed by the IRS. In addition, payments that are made to such holder may be subject to backup withholding. Certain holders (including, among others, corporations) are not subject to these backup withholding and reporting requirements. If backup withholding applies, the Depositary is required to withhold 31% of any payment made to the holder. A corporation, however, must complete the Substitute Form W-9, including providing its TIN and indicating that it is exempt from backup withholding, in order to establish its exemption from backup withholding. In order for a foreign individual to qualify as an exempt recipient, that holder must submit to the Depositary a properly complete Internal Revenue Service Form W-8 signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements can be obtained from the Dealer Manager. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of persons subject to backup withholding will be offset by the amount of tax withheld. If backup withholding results in an overpayment of federal income taxes, a refund may be obtained from the IRS provided the required information is furnished. To prevent backup withholding, the holder or other payee is required to complete a Substitute Form W-9 certifying that the TIN provided on such form is correct and that such holder or other payee is not subject to backup withholding. THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSIDERATIONS DOES NOT CONSIDER THE PARTICULAR FACTS AND CIRCUMSTANCES OF ANY HOLDER'S SITUATION OR STATUS. THE SUMMARY IS BASED ON THE PROVISIONS OF THE CODE, REGULATIONS, PROPOSED REGULATIONS, RULINGS AND JUDICIAL DECISIONS NOW IN EFFECT, ALL OF WHICH ARE SUBJECT TO CHANGE, POSSIBLY ON A RETROACTIVE BASIS. HOLDERS OF NOTES (INCLUDING HOLDERS OF NOTES WHO DO NOT TENDER THEIR NOTES) SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM, INCLUDING THE TAX CONSEQUENCES. UNDER STATE. LOCAL, FOREIGN AND OTHER LAWS, OF THE SALE OF THE NOTES AND THE ADOPTION OF THE PROPOSED AMENDMENTS. FOR ADDITIONAL INFORMATION, SEE "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS" IN THE STATEMENT. -20- EX-99.5 7 NOTICE OF GUARANTEED DELIVERY 1 Exhibit 99.5 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF AND DELIVERY OF CONSENTS WITH RESPECT TO 12-1/2% SENIOR NOTES DUE JULY 1, 2003 OF MONARCH MARKING SYSTEMS, INC. PURSUANT TO THE OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT DATED MARCH 13, 1997 This Notice of Guaranteed Delivery or a form substantially equivalent hereto must be used to accept the Tender Offer and simultaneously to consent to the proposed amendments (the "Proposed Amendments") to the indenture pursuant to which the 12-1/2% Senior Notes due July 1, 2003 (the "Notes") of Monarch Marking Systems, Inc. (the "Company") were issued, as amended to date (the "Indenture"), if time will not permit the Consent and Letter of Transmittal, certificates representing the Notes or any other required documents to reach the Depositary, or the procedures for book-entry transfer cannot be completed, on or prior to the Expiration Date (as defined below) or the Consent Date (as defined below), as applicable. This form may be delivered by an Eligible Institution by hand delivery, telegram, facsimile transmission or mail to the Depositary as set forth below. All capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Offer to Purchase and Consent Solicitation Statement dated March 13, 1997 (as the same may be amended or supplemented from time to time, the "Statement") of the Company. THE TENDER OFFER AND SOLICITATION ARE NOT BEING MADE TO (NOR WILL THE SURRENDER OF NOTES FOR PURCHASE BE ACCEPTED FROM OR ON BEHALF OF) HOLDERS IN ANY JURLSDICTION IN WHICH THE MAKING OR ACCEPTANCE OF THE TENDER OFFER OR SOLICITATION WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. THE TENDER OFFER AND THE SOLICITATION WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997 (THE "EXPIRATION DATE"). TENDERS OF NOTES MAY BE WITHDRAWN AND THE CORRESPONDING CONSENT MAY ONLY BE REVOKED UDNER THE CIRCUMSTANCES DESCRIBED IN THE STATEMENT. The Depositary for the Offer to Purchase and Consent Solicitation: Fleet National Bank By Registered or Certified Mail By Hand By Overnight Courier Fleet National Bank Fleet National Bank Fleet National Bank Corporate Trust Operations Corporate Trust Operations Corporate Trust Operations CT OP TO6D Customer Service Window, CT OP TO6D P.O. Box 1440 5th Floor, 1 Talcott Plaza 1 Talcolt Plaza Hartford, Connecticut 06143 Hartford, Connecticut 06106 Hartford, Connecticut 06103 Attention: Patricia Williams Attention: Patricia Williams Attention: Patricia Williams
By Facsimile Transmission (860) 986-7908 Attention: Patricia Williams Confirm by Telephone: (860) 986-1271 2 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on the Consent and Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Consent and Letter of Transmittal. 2 3 Ladies and Gentlemen: The undersigned hereby tender(s) to the Company, upon the terms and subject to the conditions set forth in the Statement and Consent and Letter of Transmittal, receipt of which is hereby acknowledged, the principal amount of Notes set forth below, pursuant to the guaranteed delivery procedures set forth in the Statement under the heading "The Tender Offer and the Consent Solicitation - Procedures for Tendering Notes and Delivering Consents - Guaranteed Delivery." The undersigned understand(s) that holders of Notes who tender Notes are obligated to consent to the Proposed Amendments as described in the Statement under the caption "Proposed Amendments to the Indenture" and, accordingly, the undersigned hereby consents to the Proposed Amendments and acknowledges that tendering such Notes in accordance with the Tender Offer constitutes a consent (a "Consent") with respect to such Notes. The undersigned hereby represents and warrants that the undersigned has full power and authority to give the Consent. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Company to be necessary or desirable for the perfection of the undersigned's Consent to all of the Proposed Amendments and to the execution of the supplemental indenture to the Indenture which effects such Proposed Amendments. The undersigned authorize(s) the Depositary to deliver this Notice of Guaranteed Delivery to the Company and the Trustee as evidence of the undersigned's Consent to all of the Proposed Amendments and as certification that Requisite Supermajority Consents or, at the option of the Company, Requisite Majority consents to the Proposed Amendments executed by Holders of Notes have been received. All authority herein conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall survive the death or incapacity of the undersigned and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and other legal representatives of the undersigned. 3 4 PLEASE SIGN AND COMPLETE Signature(s) of Registered Holders Address(es):______________________ __________________________________ or Authorized Signatory: __________________________________ _________________________________________ _________________________________________ Name(s) of Registered Holder(s): Area Code and Telephone No.: _________________________________________ __________________________________ _________________________________________ _________________________________________ Principal Amount of Notes Tendered: _________________________________________ Certificate No(s). of Notes (if available) _________________________________________ _________________________________________ If Notes will be delivered by a book-entry transfer, check trust company: / /The Depository Trust Company Transaction Code No.:____ Depository Account No. : ________ HOLDERS WHO TENDER NOTES ARE OBLIGATED TO CONSENT TO ALL OF THE PROPOSED AMENDMENTS. DELIVERY OF NOTES PURSUANT TO THIS NOTICE OF GUARANTEED DELIVERY WILL BE DEEMED TO CONSTITUTE A CONSENT TO ALL OF THE PROPOSED AMENDMENTS WITH RESPECT TO SUCH NOTES. This Notice of Guaranteed Delivery must be signed by the registered holder(s) of Notes exactly as their name(s) appear(s) on the Notes or by person(s) authorized to become registered holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, guardian, attorney-in-fact, officer of a corporation, executor, administrator, agent or other representative, such person must provide the following information. Please print name(s) and address(es) Name(s): _______________________________________________________________ _______________________________________________________________ Capacity: _______________________________________________________________ _______________________________________________________________ Address(es):_______________________________________________________________ _______________________________________________________________ Do not send Notes with this form. Notes should be sent to the Depositary, together with a properly completed and validly executed Consent and Letter of Transmittal. 4 5 GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a member of the Securities Transfer Agents Medallion Program, the Stock Exchange Medallion Program or the New York Stock Exchange Medallion Signature Program, hereby guarantees that, within three business days from the date of this Notice of Guaranteed Delivery, a properly completed and validly executed Consent and Letter of Transmittal (or a facsimile thereof), together with Notes tendered hereby in proper form for transfer (or confirmation of the book-entry transfer of such Notes into the Depositary's account at DTC pursuant to the procedures for book entry transfer set forth in the Statement under the caption "The Tender Offer and the Consent Solicitation--Procedures for Tendering Notes and Delivering Consents") and all other required documents will be deposited by the undersigned with the Depositary at its address set forth above. Name of Firm:________________________________ _______________________ Authorized Signature Address: ____________________________________ Name:_______________________ Title:______________________ Area Code and Telephone No.:_______________________________ Date:_______________________ DO NOT SEND NOTES WITH THIS FORM. ACTUAL SURRENDER OF NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND VALIDLY EXECUTED CONSENT AND LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS. 5 EX-99.6 8 BROKERS' LETTER 1 Exhibit 99.6 CUSIP 608908-AA-7 MONARCH MARKING SYSTEMS, INC. OFFER TO PURCHASE FOR CASH ALL OUTSTANDING 12-1/2% SENIOR NOTES DUE JULY 1, 2003 PURSUANT TO THE OFFER TO PURCHASE AND CONSENT SOLICITATION STATEMENT DATED MARCH 13, 1997 THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997, UNLESS EXTENDED (SUCH DATE, AS THE SAME MAY BE EXTENDED, THE "EXPIRATION DATE"). HOLDERS OF NOTES (AS DEFINED BELOW) MUST TENDER THEIR NOTES ON OR PRIOR TO THE EXPIRATION DATE IN ORDER TO RECEIVE THE TOTAL CONSIDERATION (AS DEFINED BELOW). TENDERED NOTES MAY BE WITHDRAWN AND CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THE CONSENT DATE (AS DEFINED BELOW) BUT, SUBJECT TO LIMITED EXCEPTIONS, NOT THEREAFTER. THE "CONSENT DATE" WILL OCCUR ON THE DATE WHICH IS ONE BUSINESS DAY FOLLOWING THE PUBLIC ANNOUNCEMENT (BY PRESS RELEASE) THAT THE COMPANY HAS RECEIVED DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING 75% IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING OR, AT THE OPTION OF THE COMPANY, DULY EXECUTED CONSENTS FROM HOLDERS REPRESENTING A MAJORITY IN PRINCIPAL AMOUNT OF THE NOTES THEN OUTSTANDING. To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: Enclosed for your consideration is an Offer to Purchase and Consent Solicitation Statement (the "Statement") and a form of Consent and Letter of Transmittal (the "Consent and Letter of Transmittal" and, together with the Statement, the "Offer"), relating to the offer by Monarch Marking Systems, Inc., a Delaware corporation (the "Company"), to purchase for cash all of its outstanding 12-1/2% Senior Notes due July 1, 2003 (the "Notes"). In conjunction with the Offer, the Company is soliciting (the "Solicitation") consents (the "Consents") for certain proposed amendments (the "Proposed Amendments") to the indenture dated as of June 29, 1995 (as supplemented through the date hereof, the "Indenture"), pursuant to which the Notes were issued. Capitalized terms used herein but not defined herein shall have the meanings ascribed to such terms in the Statement. 2 The consideration for each $1,000 principal amount of Notes tendered pursuant to the Tender Offer and Solicitation shall be equal to (I) the greater of (A) $1,167.50 or (B) the present value on the Payment Date (as defined below) of the Notes, determined on the basis of a yield (the "Tender Offer Yield") to June 30, 1999, which is the day before the earliest redemption date of the Notes (the "Earliest Redemption Date"), equal to the sum of (x) the yield on the 6-3/4% U.S. Treasury Note due June 30, 1999 (the "Reference Security"), as calculated by the Dealer Manager in accordance with standard market practice, based on the bid price for such Reference Security as of 2:00 p.m., New York City time, on March 26, 1997, the tenth business day immediately preceding the scheduled Expiration Date (the "Price Determination Date"), as displayed on the Bloomberg Government Pricing Monitor on "Page PX5" or any recognized quotation source selected by the Dealer Manager in its sole discretion if the Bloomberg Government Pricing Monitor is not available, plus (y) 75 basis points (such price being rounded to the nearest cent per $1,000 principal amount of Notes), plus (ii) accrued and unpaid interest, if any, up to, but not including, the Payment Date (the consideration referred to in clauses (i) and (ii) being hereinafter referred to as the "Total Consideration"). In the event the Tender Offer is extended for any period longer than ten business days from the previously scheduled Expiration Date, a new Price Determination Date will be established which shall be the tenth business day immediately preceding the Expiration Date as so extended. Enclosed herewith are copies of the following documents: 1. Statement dated March 13, 1997; 2. A Consent and Letter of Transmittal for your use and for the information of your clients, together with guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9 providing information relating to backup federal income tax withholding; 3. A Notice of Guaranteed Delivery to be used to accept the Tender Offer and the Solicitation if (i) the Notes and all other required documents cannot be delivered to the Depositary or (ii) the required procedures for book-entry transfer cannot be completed on or prior to the Consent Date or Expiration Date, as applicable; and 4. A form of letter which may be sent to your clients for whose account you hold the Notes in your name or in the name of a nominee, with space provided for obtaining such clients' instructions with regard to the Tender Offer and Solicitation. DTC Participants will be able to execute tender and deliver Consents through the DTC Automated Tender Offer Program. PLEASE NOTE THAT THE TENDER OFFER AND THE SOLICITATION WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON APRIL 10, 1997 UNLESS EXTENDED (THE "EXPIRATION DATE"). WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. 2 3 The Company will not pay any fees or commissions to any broker or dealer or other person for soliciting tenders of the Notes pursuant to the Tender Offer and the Solicitation. You will be reimbursed for customary mailing and handling expenses incurred by you in forwarding the enclosed materials to your clients as described in the Statement under the caption "The Tender Offer and the Consent Solicitation -- Fees and Expenses". Additional copies of the enclosed materials may be obtained from the Dealer Manager, at its address and telephone number set forth on the back cover of the enclosed Statement. Very truly yours, BT SECURITIES CORPORATION NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THE DEPOSITARY OR THE DEALER MANAGER OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH RESPECT TO THE TENDER OFFER AND SOLICITATION NOT CONTAINED IN THE STATEMENT OR THE CONSENT AND LETTER OF TRANSMITTAL. 3 -----END PRIVACY-ENHANCED MESSAGE-----